Kenya says No to the IMF

Kenya’s eruption of protests, riots and government repression is the result of decades of failed western financial prescriptions writes Fadhel Kaboub in The Guardian  

It took several days of peaceful popular uprisings, violent confrontations with the police and the army, the illegal arrests and detention of protesters, the tragic death of several protesters at the hands of state security forces, and the burning of its parliament building for the Kenyan government to finally withdraw a finance bill that would have imposed the most extreme form of austerity in Kenya’s history.

Protesters held signs directly blaming the International Monetary Fund (IMF) for last year’s increases in VAT taxes, fuel and food prices, and for the new tax hikes proposed in the now defunct 2024 finance bill. This was in fact what the IMF has imposed on Kenya under the 2021 loan agreement for a 38-month program unlocking $3.9bn subject to periodic reviews designed to verify that Nairobi is actually doing what the IMF wants: to increase taxes, reduce subsidies and cut government waste (a code word for privatisation of state-owned enterprises).

Protesters also know that IMF-imposed austerity is backed by the United States, which, as the main shareholder in the organization, essentially holds a veto power on its programs. And every Kenyan knows that President William Ruto has become the new darling of the US and the G7 for agreeing to send Kenyan troops to Haiti, for not being too radical in his demands for reforming international financial architecture, for being conservative in representing Africa’s position in climate negotiations, and for accepting financing terms that favor the interests of foreign investors.

Kenya can have democracy or neocolonial extraction, but not both – because democracy means addressing the demands of the Kenyan people for jobs, healthcare, education, housing, transportation and basic social protections under a fair and equitable fiscal regime, while colonial extraction means the destruction of economic and monetary sovereignty, austerity for the poor, extravagant lifestyles for the elites, corruption, injustice and socioeconomic exclusion under a fiscal regime that accelerates the engines of economic entrapment.

One cannot democratize a system that hasn’t been structurally and economically decolonized yet. Despite Kenya’s democratic institutions, transparent elections, independent judiciary, freedom of speech and vibrant civil society spaces, its elected governments systematically undermine the social and economic demands of Kenya’s population – less because those governments wish to ignore the mandate given to them by the electorate, but because they face financial pressures from abroad that force them to prioritize external debt service and the financial needs of creditors and foreign investors.

In 2019, Kenya used 19% of its export revenues to service external debt; today that number has jumped up to nearly 50%. When a country uses half of its export revenues to pay interest on its external debt instead of investing in the basic pillars of development and prosperity, it is not surprising to see the kind of revolt that we have seen in Nairobi against the 2024 finance bill.

This makes Kenya a classic case of an economy steered from abroad, by colonial design rather than by accident.

The fact that Kenya is in a debt trap after decades of following IMF policy prescriptions means that either the IMF is incompetent or it is engaging in intentional economic entrapment. I believe it’s the latter. It is time to end the entrapment and to decolonize the Kenyan economy.

Decolonizing the Kenyan economy means escaping the colonial roles that were imposed on Kenya to serve as 1) the source of cheap raw materials, 2) the consumer of industrial output and technologies from the global north and 3) the recipient of obsolete technologies and outsourced assembly line manufacturing that is no longer needed in the industrialized countries, thus locking Kenya permanently at the bottom of the global value chain.

In fact, Kenya’s external debt crisis is the symptom of neocolonial structural traps that include food, energy and manufacturing deficits. First, Kenya’s largest agricultural exports are tea, cut flowers and coffee (colonial cash crops), while its imports include core crops like wheat, rice and corn. Second, Kenya’s largest import items are refined petroleum products.

And third, the kind of manufacturing that Kenya was allowed to have requires importing the machines, the fuel to power its factories, the intermediate components to be assembled by low-cost labor and even the packaging. As a result, Kenya’s exports have low value-added content, while its imports have high value-added content, which is why Kenya is locked at the bottom of the global value chain like the rest of the global south.

These structural trade deficits constantly weaken the Kenyan shilling relative to the US dollar, and with a weaker currency anything Kenya imports (food, fuel, medicine) becomes more expensive. Therefore, Kenya imports inflation with the most sensitive consumer items, which forces the Kenyan government to protect the most vulnerable people with defensive Band-Aid policies like food and fuel subsidies and exchange-rate management policies that require more external borrowing to stabilize the value of the shilling, thus accelerating the external debt crisis.

Decolonizing the Kenyan economy requires strategic investments in food sovereignty, agroecology, renewable energy sovereignty, and regional and Pan-African industrial policies. These are precisely the agenda items that are never discussed with G7, EU and US counterparts when they roll out the red carpet for President Ruto.

Unfortunately, despite being aware of these structural traps, Ruto has opted to listen to policy advice from global north institutions rather than Kenyan and Pan-African independent experts, thinktanks and civil society organizations.

Instead of limiting his demands for reforming the global financial architecture to lower borrowing rates, Ruto should be demanding the transfer of life-saving technologies to decolonize African economies, debt cancellation (not restructuring) and grants (not loans) for climate action. That would be the foundation for a finance bill that will meet the democratic needs and aspirations of the Kenyan people.

Cuba’s extraordinary global medical record shames the US blockade

From Ebola to earthquakes, Havana’s doctors have saved millions. Obama must lift this embargo

• 
• • Seumas Milne
  • The Guardian, Wednesday 3 December 2014 20.07 GMT

Illustration: Eva Bee

Four months into the internationally declared Ebola emergency that has devastated west Africa, Cuba leads the world in direct medical support to fight the epidemic. The US and Britain have sent thousands of troops and, along with other countries, promised aid – most of which has yet to materialise. But, as the World Health Organisation has insisted, what’s most urgently needed are health workers. The Caribbean island, with a population of just 11m and official per capita income of $6,000 (£3,824), answered that call before it was made. It was first on the Ebola frontline and has sent the largest contingent of doctors and nurses – 256 are already in the field, with another 200 volunteers on their way.

While western media interest has faded with the receding threat of global infection, hundreds of British health service workers have volunteered to join them. The first 30 arrived in Sierra Leone last week, while troops have been building clinics. But the Cuban doctors have been on the ground in force since October and are there for the long haul.

The need could not be greater. More than 6,000 people have already died. So shaming has the Cuban operation been that British and US politicians have felt obliged to offer congratulations. John Kerry described the contribution of the state the US has been trying to overthrow for half a century “impressive”. The first Cuban doctor to contract Ebola has been treated by British medics, and US officials promised they would “collaborate” with Cuba to fight Ebola.

But it’s not the first time that Cuba has provided the lion’s share of medical relief following a humanitarian disaster. Four years ago, after the devastating earthquake in impoverished Haiti, Cuba sent the largest medical contingent and cared for 40% of the victims. In the aftermath of the Kashmir earthquake of 2005, Cuba sent 2,400 medical workers to Pakistan and treated more than 70% of those affected; they also left behind 32 field hospitals and donated a thousand medical scholarships.

That tradition of emergency relief goes back to the first years of the Cuban revolution. But it is only one part of an extraordinary and mushrooming global medical internationalism. There are now 50,000 Cuban doctors and nurses working in 60 developing countries. As Canadian professor John Kirk puts it: “Cuban medical internationalism has saved millions of lives.” But this unparalleled solidarity has barely registered in the western media.

Cuban doctors have carried out 3m free eye operations in 33 countries, mostly in Latin America and the Caribbean, and largely funded by revolutionary Venezuela. That’s how Mario Teran, the Bolivian sergeant who killed Che Guevara on CIA orders in 1967, had his sight restored 40 years later by Cuban doctors in an operation paid for by Venezuela in the radical Bolivia of Evo Morales. While emergency support has often been funded by Cuba itself, the country’s global medical services are usually paid for by recipient governments and have now become by far Cuba’s largest export, linking revolutionary ideals with economic development. That has depended in turn on the central role of public health and education in Cuba, as Havana has built a low-cost biotech industry along with medical infrastructure and literacy programmes in the developing countries it serves – rather than sucking out doctors and nurses on the western model.

Internationalism was built into Cuba’s DNA. As Guevara’s daughter, Aleida, herself a doctor who served in Africa, says: “We are Afro-Latin Americans and we’ll take our solidarity to the children of that continent.” But what began as an attempt to spread the Cuban revolution in the 60s and became the decisive military intervention in support of Angola against apartheid in the 80s, has now morphed into the world’s most ambitious medical solidarity project.

Its success has depended on the progressive tide that has swept Latin America over the past decade, inspired by socialist Cuba’s example during the years of rightwing military dictatorships. Leftwing and centre-left governments continue to be elected and re-elected across the region, allowing Cuba to reinvent itself as a beacon of international humanitarianism.

But the island is still suffocated by the US trade embargo that has kept it in an economic and political vice for more than half a century. If Barack Obama wants to do something worthwhile in his final years as president he could use Cuba’s role in the Ebola crisis as an opening to start to lift that blockade and wind down the US destabilisation war.

There are certainly straws in the wind. In what looked like an outriding operation for the administration, the New York Times published six editorials over five weeks in October and November praising Cuba’s global medical record, demanding an end to the embargo, attacking US efforts to induce Cuban doctors to defect, and calling for a negotiated exchange of prisoners.

The paper’s campaign ran as the UN general assembly voted for the 23rd time, by 188 votes to 2 (US and Israel), to demand the lifting of the US blockade, originally imposed in retaliation for the nationalisation of American businesses and now justified on human rights grounds – by a state allied to some of the most repressive regimes in the world.

The embargo can only be scrapped by congress, still stymied by the heirs of the corrupt US-backed dictatorship which Fidel Castro and Guevara overthrew. But the US president has executive scope to loosen it substantially and restore diplomatic ties. He could start by releasing the remaining three “Miami Five” Cuban intelligence agents jailed 13 years ago for spying on anti-Cuba activist groups linked to terrorism.

The obvious moment for Obama to call time on the 50-year US campaign against Cuban independence would be at next April’s Summit of the Americas – which Latin American governments had threatened to boycott unless Cuba was invited. The greatest contribution those genuinely concerned about democratic freedoms in Cuba can make is to get the US off the country’s back.

If the blockade really were to be dismantled, it would not only be a vindication of Cuba’s remarkable record of social justice at home and solidarity abroad, backed by the growing confidence of an independent Latin America. It would also be a boon for millions around the world who would benefit from a Cuba unshackled – and a demonstration of what can be achieved when people are put before corporate profit.