An analysis of Kenya’s economic and trade performance that highlights a comparison with East Asian ‘Tiger’ economies
The objective of this paper is to examine the economic performances of the East African Community (EAC) members (Kenya, Tanzania, Uganda, Burundi and Rwanda). Emphasis will be placed on examining Kenya, and the overall question is: ‘Why is Kenya not an East Asian Tiger economy (Hong Kong, Singapore, South Korea, and Taiwan)?’ with respect to the dynamic economic growth of these Asian economies and the role of manufacturing in that growth. We fully recognise that this is a topic that has been intensely studied by many professionals, and that this short note is likely to raise more questions than answers. We at least hope that those some of points offered here are pertinent to the debate.
In summary, we find that although the Kenyan economy has done well by EAC and indeed African standards, it falls short of the stellar trademark performance of the so-called Asian Tiger economies. It is generally accepted that the key to the Asian Tiger economies has been trade, led by industrial exports, and while Kenya (and recently Tanzania) has led the EAC countries in trade as a share of the Gross Domestic Product (GDP) it does not compare with the Tigers. Probably as a consequence of this, EAC GDP growth rates do not compare with those of the Tigers and, in particular, we suggest that the dramatic increases in population in the EAC (and surrounding region) are a factor in the disappointing GDP per capita performance as well. Additionally, the role of governance is generally thought to be a factor in development, and the facts show that EAC members fall in the global bottom third in this measure.
However, our cursory analysis also shows that several Asian countries (notably China and the newer ‘Tiger Cubs’ also rank very low on this index, and we suggest that perhaps governance may be something that follows development as much as contributing to it. Finally, we offer some thoughts for Kenya’s way forward that are consistent with building the stronger foundations that have generally been a major factor in Asian development.
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