Monday, 30 July 2007

A village path out of poverty

WITH its multitude of problems, Africa is often treated like some ailing patient by international agencies, with regular bulletins on the continent’s vital signs issuing from its bedside. And in case it ever gets out of the intensive-care ward, it also has a daunting rehabilitation programme to keep up with: the UN’s Millennium Development Goals (MDGS), agreed on in 2000, which set such targets as halving the proportion of people living on less than $1 a day by 2015.

Other continents have the same targets, but as the most egregious examples of poverty, poor health and underdevelopment are usually to be found in Africa, that is where most of the world’s attention is focused.

The latest bulletins on Africa’s progress bring the usual mix of good and bad news. A combined World Bank-IMF report on the MDGS strikes some hopeful notes. There has been a reduction in child deaths in Burkina Faso and Mozambique, for instance, and the report cites a decline in HIV/AIDS infection rates in such high-prevalence countries as Uganda and Zimbabwe. But the report also says that African countries are still not doing enough to meet their targets on poverty reduction.

A report from the United Nations Children’s Fund is still gloomier. Whereas China managed to cut its proportion of underweight children by more than half between 1990 and 2002, in Africa over a quarter of children under five are still underweight, “a catastrophe for development”. Moreover, in east and southern Africa the number of underweight children has actually increased.

It is this sort of statistic that fires up Jeffrey Sachs, a macroeconomist who serves as the head of the UN’s Millennium Project, which aims to see the MDGS achieved. The sometimes pathetic performance of African countries, and in particular their governments, is not, he believes, a fair reflection of the desire and capacity of ordinary Africans to pull themselves out of poverty. Governments, often corrupt, can do only so much anyway. To have a real chance of ending poverty, more needs to be spent at the bottom.

In short, Africa’s leap forward must begin, barefoot and with hoe in hand, in the villages where up to 80% of poor Africans actually live.

To this end, Sachs has set up 12 ‘research villages’ in 10 African countries, to pioneer models of development. Another 66 villages have been added to the experiment in clusters around the original 12. The hope is for 1,000 such villages by 2009. Each village will receive help from the Millennium Project amounting to $250 (over sh400,000) per person over five years.

Take the experience of three of the villages: Alafia, near Timbuktu in Mali; Koraro, in the Tigrayan highlands of Ethiopia; and Sauri, in the verdant lowlands of western Kenya. The Millennium Project is trying to show how a few simple reforms, seven in all, can substantially improve lives and provide livelihoods.

These are: fertiliser and seed to improve food yield; anti-malarial bed nets; improved water sources; diversification from staple into cash crops; a school feeding programme; deworming for all; and the introduction of new technologies, such as energy-saving stoves and mobile phones.

Progress is most advanced in Sauri, the first Millennium village. There, committees of elders (and some not so elderly) have taken responsibility for almost every innovation, proving themselves to be competent and resourceful.
According to Glenn Denning, of the Millennium Project’s Nairobi office, the incidence of malaria in Sauri has dropped by at least 50% since the distribution of free bed nets. Food yield has more than doubled.

A school feeding programme, whereby farmers give a portion of their harvest to the village schools, has had a dramatic effect. Children stay in school longer and, with a bowl of maize and beans in their belly, are able to concentrate. Since school feeding began, Sauri has risen from 108th to 2nd in district exam results, out of 253 schools.

Almost two years into its five-year boost, there are signs of economic activity in Sauri as well. Several shops have opened. A few people have purchased mobile phones, one or two have managed to invest in dairy cows, and many more are diversifying into cash crops. Most significantly, there are 200 new households in a village of 5,000 people, some of whom have returned from towns.

But is the Millennium Village concept capable of having any real impact across the whole continent? Sachs concedes that the seven reforms can, in the short term at least, be repeated only with “resources from the outside”. This makes the model unduly dependent on foreign aid, a common complaint of Africans about many Western-inspired development projects. Some also claim the villages suck in resources from neighbouring districts.

However, it is still early days, and the ease with which Sachs has raised money from hard-nosed American businessmen is significant. If you want to help the poor, there is hardly a better investment.

Half the children in Sauri carry a range of worms. Some of the worms, such as the hookworm, are disabling. It would cost about the same as a cup of coffee in New York City to deworm a child in Sauri for a year, so the equation goes.

Africa’s Millennium research villages
Koraro, Ethiopia
Potou, Senegal
Tiby, Mali
Pampaida, Nigeria
Ikaram, Nigeria
Ruhiira, Uganda
Sauri, Kenya
Dertu, Kenya
Mbola, Tanzania
Mwandama, Malawi
Bonsaaso, Ghana
Mayange, Rwanda

The Economist

Friday, 27 July 2007

THE PRIVATE SECTOR: ‘Public resources will never be enough’

THE PRIVATE SECTOR: ‘Public resources will never be enough’
Published: November 20 2006 15:40 | Last updated: November 20 2006 15:40

By David White

For three days last month the taps ran dry in most of Dar es Salaam, Tanzania’s main city with a population of 3m. The incident, caused by a broken main, was an ironic postscript to a bitter saga over management of the city’s water supply, which led to three British executives being summarily deported from the country last year.

In a project largely financed by the World Bank, the African Development Bank and the European Investment Bank, a 10-year contract to manage technical and commercial operations was awarded after a competitive tender to a consortium headed by Biwater of the UK.

But less than two years after operations started, the contract was broken off amid mutual recriminations. Non-governmental organisations such as the World Development Movement had inveighed against the deal. The Tanzanian government said the consortium failed to improve delivery of water, while Biwater launched a sweeping attack against alleged misuse of international aid.

A case taken by the company to the International Centre for Settlement of Investment Disputes is expected to reach a verdict by next April. Following the bust-up, Tanzania formed a new state company to run the city’s water. But this has not proved to be an automatic solution.

Passions run high over all forms of privatisation and private-sector involvement in public utilities. But many experts and officials at international institutions say there is no option between public and private sectors. Infrastructure needs, they argue, will never be met without the resources of both.

A change of thinking has taken place at the World Bank since the 1990s when hopes were vested in the private sector’s ability to fill the gap in financing a broad range of infrastructure and donors were more preoccupied with social programmes. “It is more sexy to lend to a school than a thermal power station,” notes a World Bank official.

It has become clear that areas such as transport will continue to depend heavily on injections of public investment and donor support, but public money will have to used in different ways to combine with commercial interests. Mobilisation of capital, including private-sector capital, is one of the “pillars” of the New Partnership for Africa’s Development (Nepad), the economic revival initiative launched five years ago.

One result of the debt relief granted under the Highly Indebted Poor Countries programme has been to restrict the access of most African countries to new soft loans, to avoid a renewed debt build-up. Tim Turner, acting director for the private sector at the African Development Bank, says that, with limited amounts of funding available on concessional terms under this “debt diet”, the money needs to be used to make infrastructure commercially viable for private enterprise to run. By taking part in the deals, the bank can chaperone commercial lenders, advise governments and monitor adherence to environmental and transparency standards, he says.

Africa can also bring to bear its own private savings. South Africa’s Public Investment Corporation, which manages pension funds, is backing a Pan-African Infrastructure Development Fund, aiming initially to raise $1bn for long-term equity investments with participation from other pension funds and the AfDB.

“The private sector in Africa is going to take off whether we like it or not,” says Mr Turner.

Experts distinguish, however, between marketable services such as telecommunications and electricity generation and others such as roads and drainage, where opportunities for private investors are less clear-cut. Private investments in projects such as the Chad-Cameroon oil pipeline, in operation since 2003, and the West Africa Gas Pipeline have necessitated backing from the World Bank to mitigate political risk.

In transport, there are few examples of outright privatisation other than airlines but there is a range of partnership and concession arrangements for airports, ports and railways. “When it comes to the construction of roads, we might be coming to the last bastion,” says an official at the United Nations Economic Commission for Africa, which advises Nepad and regional bodies. Public-private partnerships have, however, been used for several toll roads in South Africa, including a 500km motorway corridor from Witbank, east of Johannesburg, to the Mozambique capital Maputo. Elsewhere on the continent, a toll road is planned east of Lagos in Nigeria and another is being considered running inland from Dakar in Senegal.

John Janks, a partner of international law firm White & Case in Johannesburg, who has been closely involved with public-private partnership deals, says no ventures are yet so entrenched that they can serve as outstanding models. Luthuli central hospital, on the outskirts of South Africa’s eastern port city of Durban, has been one notable success, however.

He emphasises the importance of having an appropriate regulatory framework in place beforehand, and warns: “The private sector is particularly concerned about over-regulation.”

A big obstacle to private management of public services has been governments’ reluctance to accept the setting of commercial tariffs. Many partnership projects have been slowed down as a result.

Water provokes the most heated debate, despite the arguable success of long-standing arrangements in places such as Abidjan in Ivory Coast and Dakar. Senegal. Many experts argue that objections to private management on tariff grounds are ill-founded, since people without access to piped supplies pay significantly higher prices to vendors, for water that may be contaminated. “Poor people pay more for water than anyone else anywhere,” comments one specialist.

Kordjé Bedoumra, the AfDB’s water and sanitation director, says it is hard to reach a conclusion about private involvement in the sector from experience so far. “But I think there won’t be much choice,” he adds. Companies need assistance to improve their financial position and gain access to capital markets. “Public resources are not enough,” he says, “and they’ll never be enough.”

FINANCING: Big changes in bid for credibility

FINANCING: Big changes in bid for credibility
Published: November 20 2006 15:40 | Last updated: November 20 2006 15:40

By David White

Africa had its own multilateral financing institution before Asia did. But one of its handicaps in comparison with other developing regions is never having had a regional funding agency with as much clout or resources as the Asian Development Bank in Asia and the Pacific, or the older and larger Inter-American Development Bank in Latin America and the Caribbean.

The African Development Bank, with 53 African and 24 non-African countries as members, has had a reputation for being sluggish and unresponsive, complex in its processes, slow in disbursing funds, and discreet in its public profile. Founded in 1964 and headquartered in Abidjan, it moved in a hurry to escape Ivory Coast’s political turmoil four years ago, to offices in Tunis. Staff say the previous management ran it like Fort Knox, the US bullion depository. Modern histories of Africa mostly ignore its existence altogether.

Since Donald Kaberuka, former Rwandan finance minister, took over as president last September, backed by donors, he has set about overhauling the bank for a much bigger and more central role in development financing on the continent.

This has involved radical changes, replacing four out of five vice-presidents and the secretary-general, reorganising departments, moving more staff into operational posts, opening field offices and powering up the bank’s economics department. In its bid for new credibility, the bank aims to brand itself as “the first port of call for knowledge on the African continent”.

The bank’s focus has shifted since the New Partnership for Africa’s Development (Nepad) – the home-grown economic initiative – was launched in 2001, and now part of the revamped African Union assigned to the AfDB the lead role in promoting regional infrastructure programmes. One of the specific recommendations of the British-appointed Commission for Africa, in its report in March last year, was “to make the AfDB the pre-eminent financing institution in Africa within 10 years”.

The Centre for Global Development, an independent Washington-based think tank, recently called for the AfDB to concentrate its lending exclusively on infrastructure. “The bank has tried to be all things to all shareholders and is spread too thinly,” it said.

One option put forward by the Commission for Africa, calling for an extra $10bn of donor money a year for infrastructure, would have been a single infrastructure fund, housed at the AfDB. But its report also said that continuing to spread funding between the AfDB, the World Bank, the European Investment Bank, as well as bilateral and other sources – “within a framework of enhanced co-ordination” – would probably allow for a faster aid build-up.

Instead of a single fund, the UK has funded the setting-up of a networking body, the Infrastructure Consortium for Africa, based at the AfDB.

This is not a funding agency, but is described by Alex Rugamba, its co-ordinator, as a platform for brokering more donor finance. It has a small secretariat with four experts, including one seconded from Britain and another from Japan, traditionally a strong backer of infrastructure projects in Africa.

Grouping G8 nations, multinational and African institutions and regional organisations, it aims also to reach out to emerging donors such as China and India. Mr Rugamba says that, while it has no enforcing powers, it will monitor commitments.

As an overall vehicle of development assistance to Africa, the AfDB, with total loans and grants of about $3.4bn in 2005, stands behind the World Bank, with lending of $4.8bn to sub-Saharan countries in the last fiscal year to June.

The European Union has meanwhile set up an EU-Africa Partnership on Infrastructure, backed by an EIB trust fund, which is open to contributions from member states’ bilateral aid programmes.

The US is ploughing a separate furrow through its Millennium Challenge Account programme for approved recipient countries, much of which goes into infrastructure such as revamping Cotonou port in Benin.

Another British-inspired initiative, the Emerging Africa Infrastructure Fund, was set up in 2002 as a new approach to combine public and private funding.

Standing at $305m, with equity from UK, Swiss, Swedish and Dutch agencies and debt provided by Dutch, South African and German financing institutions agencies alongside Standard Bank of South Africa and Barclays, it was designed to mobilise commercial lending.

But with $134m committed so far and decisions awaited on further projects worth $100m, it has been slower to take off than expected. Nick Rouse, managing director of Emerging Africa Advisers, which manages the fund, admits: “Getting projects off the ground in Africa has been very difficult.”

THE CHINA FACTOR: A spectacular resurgence

Published: November 20 2006 15:40 | Last updated: November 20 2006 15:40

By David White

China’s presence in Africa reaches to the very doorstep of the African Union. Next to the pan-African organisation’s headquarters in Addis Ababa, Chinese experts have started surveying land for a planned conference facility, built and paid for by Beijing, according to officials.

In the Ethiopian capital, Chinese technicians and businessmen have become a familiar sight. Around the country, Chinese contractors have been building roads, telecommunications infrastructure and, at the headwaters of the Blue Nile in the north, a dam to produce much-needed power.

Across Africa, the past few years have seen a spectacular resurgence of Chinese involvement, highlighted earlier this month at a high-profile China-Africa Forum summit in Beijing and drawing increasing attention – and concern – from Africa’s long-standing western partners.

The new drive comes mainly on the back of China’s quest for oil and other natural resources. In fragile, war-damaged countries such as Sudan and Angola, the Chinese have seized opportunities where western lenders or investors have been holding back. But the Chinese advance has other dimensions: markets as well as materials, platforms for export, and, in key regional countries such as Ethiopia, political influence.

It is as builders and financiers that the Chinese have made the biggest impact, mostly through state-owned or partially state-owned companies, in big projects for which they have the advantage of access to low-cost, long-term funding. On a much broader front than ever before, China has established itself as a leading force in African infrastructure, building roads, railways, power stations and bridges at costs reckoned by experts to be 25-30 per cent below those of western counterparts. Because of the high cost of obtaining materials locally and shortages of qualified personnel, many contracts involve bringing supplies and staff from China.

Speaking before the recent Beijing summit, a World Bank official estimated that announcements made this year alone – dubbed China’s “Year of Africa” – amounted to commitments of $10bn in African infrastructure. That would, he pointed out, outstrip the flow of traditional international aid or private sector investment in infrastructure projects.

The scale of this involvement has brought increasing calls for greater consultation and exchange of information between China, western donors and African organisations. Just as some African countries have benefited by playing off China against Taiwan, the temptation now is to play off western interests against China.

Chinese lending and investment is widely seen as bypassing the rules that western governments and institutions have sought to agree with African partners in exchange for their support. African Union officials recognise the need for dialogue similar to that with the European Union, and for partnership agreements at a regional level, not only with China but also with India and Brazil.

The Infrastructure Consortium for Africa, set up in the wake of last year’s landmark G8 pledges on aid, has invited both China and India to take part as observers at a meeting in Germany in January.

According to a recent World Bank report, 27 per cent of Africa’s exports now go to Asia, almost twice the proportion at the start of the decade and almost on a par with the EU and the US.

Chinese-African trade, totalling almost $40bn last year, according to official Chinese figures, has quadrupled since 2000 and is expected to reach $100bn in the next five to 10 years. In Sudan, China has become the dominant export customer and has invested in pipeline, refining and port facilities. In Nigeria, oil rights secured earlier this year are linked to plans to channel $4bn into refineries, power and other infrastructure. A deal was recently reached with a Chinese contractor for an $8.3bn project to rebuild the dilapidated colonial-era railway between Lagos and the northern Nigerian city of Kano, in the first stage of an ambitious 20-year rail modernisation plan.

Experts say a small part of China’s activity in infrastructure is outright aid, but the dividing line between government co-operation and investment is often unclear. An $2bn oil-linked low-interest credit line was agreed with Angola in 2004 – extended since then to $5bn or more, and released on a project-to-project basis – under which Chinese companies are eligible to bid for 70 per cent of the work rebuilding infrastructure damaged in the country’s 27 years of intermittent civil war. Among other transport contracts, Chinese companies are rehabilitating the legendary Benguela railway from the coast to the borders of Zambia and the Democratic Republic of Congo, originally completed as a British contract in the 1920s.

The Chinese have, of course, been in Africa before. In more ideologically-driven mode in the 1960s and 1970s, China backed guerrilla movements, sent out doctors and agricultural engineers, bestowed hospitals and football stadiums and built the 1,800km Tanzania-Zambia railway – now, 30 years later, expected to be concessioned to a private Chinese company.

“The difference is that the Chinese this time come back smarter,” says an international official in impoverished Guinea-Bissau. It is unclear to what extent co-operation projects are linked to China’s significant fisheries interests or possible oil exploration. “They are not gifts,” the official comments.

In-kind aid of this sort is a regular feature of Chinese co-operation. It is also used to cement political ties among African countries that have dallied with recognition of Taiwan. All but five African countries now have relations with Beijing.

China’s role is much wider, more sophisticated and businesslike than it was 30 years ago, and on a different dimension.

The World Bank report puts total financing by China Exim Bank, the export credit agency, at $12.6bn in mid-2006, including power, telecoms, transport, water and sewage. These commitments, it says, now appear to be “significantly overtaking” traditional forms of assistance for infrastructure from OECD countries.

Thursday, 26 July 2007

Kenya 2007:CORRUPTION: ‘Ever bigger, thicker tentacles’

CORRUPTION: ‘Ever bigger, thicker tentacles’
By Matthew Green

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

In the weeks after President Mwai Kibaki was elected, tales began to surface of outraged passengers hurling abuse at policemen attempting their usual trick of forcing bus drivers to pay bribes. A few years later, allegations of scams involving hundreds of millions of dollars linked to senior members of government shredded popular faith in Mr Kibaki’s promises to tackle graft.

While Kenya’s government can point to cleaner service delivery in some areas, passports for example, Mr Kibaki has made only limited progress in dismantling a patronage system greased by state funds and perfected under his predecessor, Daniel arap Moi.

“There are areas where things are better. What you don’t have is systematic change,” says Maina Kiai, head of the state-funded Kenyan National Commission on Human Rights. ”The small fish simply take their cue from the top; the key to stopping corruption is going for the bigwigs, the brains.”

Although Kenyan business sentiment has proved remarkably resilient to the infighting and splits characterising Mr Kibaki’s government, perceptions of high corruption worry investors, and prompted the World Bank to delay lending. While obtaining permits for business is now easier in many cases, and bribe-taking by low level officials initially declined under Mr Kibaki, the kind of grand scale corruption that stunted economic growth under Mr Moi has continued on a comparable scale.

The short history of the Kibaki government’s anti-graft measures have unfolded like a spy novel, taking in locations from the spires of Oxford to the panelled inner sanctums of Nairobi’s State House.

At first, the new administration’s reforms were taken seriously by Kenyans and donors. Among a raft of measures, the government investigated the infamous Goldenberg scandal, a bogus gold and diamond export scheme which cost the taxpayer $1bn under Mr Moi.

The Kenya Anti-Corruption Commission (KACC) was established, while Mr Kibaki appointed John Githongo, the former head of Transparency International in Kenya, as its chief anti-corruption tsar. Within a few years, Mr Githongo had quit in frustration, moving into self-imposed exile at St Anthony’s College Oxford where he leaked documents implicating ministers in the new administration’s answer to Goldenberg: a saga known as “Anglo Leasing”.

Huge amounts of money were handed to phantom companies through dubious purchases of everything from police helicopters to forensic labs. The various fraudulent contracts were worth more than $700m. Such rackets may not only affect Kenya. Donors are increasingly concerned that international criminal networks involved in corrupt deals will expose the country to further infiltration by drug traffickers, money launderers and perhaps terrorists.

“The mega-corruption today is a different animal: it’s still big, but it’s changed in nature – corruption has become internationalised,” says Robert Shaw of Transparency International. “It has bigger, thicker tentacles, it’s almost beyond a government’s control.”

The problem, activists say, is that Mr Kibaki has chosen to maintain members of government he needs to back his expected re-election bid this year, however tainted their reputations. “They are siphoning millions and millions off the treasury because they think they can get away with it,” says a Western diplomat, referring to members of Mr Kibaki’s cabinet. “It’s quite obvious that the president, for political reasons, is not going to do anything.”

There was a moment in early 2006, when the climate seemed to be changing. Kenyan ministers started doing something new – quitting when their names came up in connection with scandals. But by the end of 2006, Mr Kibaki had reinstated two of the ministers, a move that upset donors, anti-corruption campaigners and many Kenyans.

Speaking a week after the pair returned to the cabinet, US ambassador Michael Ranneberger said the government should bring those guilty of corruption to book, no matter what their position. “Corruption creates a negative perception of Kenya both at home and abroad that will linger and persist until decisive action is taken to bring the guilty to justice – no matter what their position or degree of influence may be,” Mr Ranneberger said in a speech to the American Chamber of Commerce in Kenya.

All the ministers whose names have surfaced in investigations have denied any wrongdoing. While convictions of high-level officials, long conspicuous by their absence, would go a long way to establishing the government’s anti-graft credentials, there are some more modest but still encouraging signs that corruption is being tackled..

An increasingly aggressive press has eroded the culture of impunity among lower-level officials, while the KACC has conducted useful investigations at the town council or state-owned company level, according to Transparency International. Voters, who turfed out a sitting government for the first time since independence in December, 2002, are also less likely to be impressed by candidates handing out cash in return for ballots this time around.

But for Mr Githongo, the man identified most clearly in the public mind with the fight against the plundering of public money, little has changed. “Tragically, the impunity that many Kenyans – including myself – believed to be a thing of the past after the last election is still alive and with us five years later,” he said in a statement issued in January. “What serious actions have been taken to solve this crime against the Kenyan people?” Mr Kibaki still has until voting day to answer.

Kenya 2007:Stranger than fact: the new Kenyan writing

GUEST COLUMN: Stranger than fact: the new Kenyan writing
By Parselelo Kantai

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

Early in his short story, Discovering Home, Binyavanga Wainaina takes on Nairobi:

This is Nairobi! This is what you do to get ahead: make yourself boneless, and treat your strait-jacket as if it is a game, a challenge. The city is now all on the streets, sweet-talk and hustle. Our worst recession ever has just produced brighter, more creative Matatus.

That novella, a semi-autobiographical account of a young Kenyan’s return home after years away, published in the web magazine G21, won the Caine Prize for African Writing in 2002, the most prestigious literary award for writers from the continent. In the five years since, Wainaina has founded Kwani?, Kenya’s first literary journal in a generation.

A new group of young Kenyan writers is redefining the country’s cultural landscape. On evenings in Nairobi’s bars and restaurants, writers and budding poets now regularly take to the stage, read and extemporise on all manner of issues in front of packed audiences.

Kenyan literature had been in a state of chaotic stagnation. The country’s leading writers were all in exile. Publishers, accusing the public of not reading, had turned away from fiction and were making a killing from the sale of primary school textbooks (they still are). Occasionally, a novel would trickle off the printing presses. But its appalling cover design seemed to suggest a bizarre lack of faith, as if publishers had decided to launch marketing kamikazes on their own products.

The year 2002 was a watershed for Kenya. Then President Daniel arap Moi was leaving office after 24 years in power. We replaced Kosovo at the top of Gallup International’s “most optimistic people on earth” chart. One of the consequences of the politics of one-man rule – the 39 years divvied up between the Kenyatta and Moi governments – had been an ever-growing silence.

Like so many other aspects of national life, thought was a State-run activity. Dissidence was punished. Writers such as Ngugi wa Thiong’o were detained without trial and would later escape into exile. As literature and journalism were excavated of their brightest talents, a deep mediocrity seemed to settle in. Reading and writing went underground. Poets, thespians, writers – the ones who stayed on – went into retirement at the National Theatre Bar in downtown Nairobi, getting drunk on warm Tuskers in the afternoon and squabbling overmoney fromnon-governmental agencies.

On Sundays, Ali Zaidi maintained an open-door policy at his Loresho home, deep in Nairobi’s leafy suburbs. Over the years, Zaidi, perhaps Nairobi’s only Marxist editor working for a corporate business weekly, had attracted many of Nairobi’s literary odd types. His garden had become a meeting point for freelance journalists, photographers still attached to defunct magazines, accountants writing thrillers at night – people struggling to hold on to a conscience and a decent living in a city of more than 3m people, 199 slums and an excess of Mercedes Benzes, gossip and churches. It was a place to meet and drink and talk about books and writers.

It was also where the idea of Kwani?, was first hatched. Change was in the air and Wainaina’s Caine Prize victory opened up a whole new set of possibilities.

“There was a lot of excitement after Binyavanga won, but also a sense of unreality,” says Muthoni Garland, who began to write at 40. She had previously worked in Nairobi’s advertising industry. “But there was no money in [writing]. It was almost a vanity project.” She had met Wainaina on the online magazine Zoetrope. Until his victory, she had been rather sceptical of his enthusiasm for a literary revival in Nairobi. “Prizes changed something. They made the idea real.”

There was a need for Kwani?, for a literary showcase of Kenyan writing – primarily because the lack of new fiction had made the country strange to itself. Like so much on the African continent, it had become a place externally described and therefore misunderstood.

It is a sign of the changed times that little of the subject matter in the short stories published in Kwani? is directly political. Unlike the writing of the Ngugi post-independence generation of writers who wrestled with neo-colonialism and the post-independence politics of betrayal, most of the stories are street-level examinations of Kenyan life. Also, where many of the first-generation writers, were suspicious of the city, this present generation is steeped in it. Yvonne Owuor’s Caine Prize winning story, Weight of Whispers, tracks the declining fortunes of Rwandan refugees post-1994, in Nairobi. This retreat from a prescriptive, ideological stance is perhaps reflective of a generation of writers grown cynical of the redemptive possibilities of politics.

The expected change turned out to be a hoax. The new government quickly set about privatising the state for its own consumption. Tribalism, cronyism and corruption resumed almost unbidden. There were, however, attempts at grand public gestures. A year after coming to power, the Kibaki administration announced its intention to re-inter the remains of the liberation struggle hero, Dedan Kimathi. In A Likely Story published in the inaugural edition of Kwani? in 2003, Andia Kisia seemed to anticipate such an event. In almost farcically identical circumstances to the Dedan Kimathi debacle, nobody can remember exactly where he had been buried. There was one big difference, however: where the politicians have ended, the writers are just beginning.

Parselelo Kantai is a Kenyan author and journalist.

Kenya 2007:CASE STUDY; Grand plaudits for a poster-child of the future

CASE STUDY; Grand plaudits for a poster-child of the future
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

One of the country’s most prestigious public awards, the Order of the Grand Warrior of Kenya, oozes symbolism. It evokes images of steel-tipped fearlessness under the savannah sun – and definitely not the sterile interior of a well-organised call centre.

But it was for marshalling ranks of phone operators, and thus “rendering meritorious service to the nation,” that Nicholas Nesbitt was honoured last year with a glistening medal.

The 44-year-old is chief executive and co-founder of KenCall, the country’s first and biggest call centre, which has won fame and acclaim for gaining a small foothold in a global market more commonly associated with India. Its success has made Mr Nesbitt, who is half-Kenyan and half-English, the darling of progressive thinkers in the government who are trying to promote precisely the form of business development and economic diversification that he and his group personify.

From a standing start in 2003, KenCall colonised an abandoned avocado processing plant in a Nairobi industrial park, converting it into a technology hub that is today filled with rows of young people shuffling computer mice and speaking English into headsets. Its revenues this year are expected to hit $3.5m with a profit margin that Mr Nesbitt says is “barely double figures”. Former customers include the Carphone Warehouse, a UK telecoms group, and BG, the former British Gas. Mr Nesbitt is more coy about current clients, but says KenCall is selling bandwidth for a leading US internet provider, doing publicity work for a French magazine publisher, and processing data for a Wall Street credit ratings agency.

KenCall’s payroll has grown to 390 people – including 120 in training – who work in shifts that mean the lights in the building are never turned off. Watching over them is a supervisor who doubles up as a disc jockey, filling the cavernous space with music to alleviate the monotony of the work. Normally, dance tracks are streamed in from London radio stations, says Mr Nesbitt, but when the Financial Times takes a tour, Celine Dion is in full swing. (Callers are shielded from the sound by noise-cancelling microphones)

Earnings for an average KenCall employee are $350 a month and the highest-paid get between $600 and $700, which compares with about $100 at their previous jobs, according to the boss. “Imagine your salary going up 600 per cent. That’ll change your life,” Mr Nesbitt says. “You can tell who the newest people are here because they’re still not dressed great. But, after a while, the women get fancy hair-dos and shoes and the guys are wearing designer clothes.”

To create the millions of new jobs it needs to raise incomes, Kenya has to diversify its formal economy beyond its traditional staples: food, flowers and safaris. That is why forward-thinking ministers have seized enthusiastically on KenCall as a poster-child of the future. It is also why Mr Nesbitt, in addition to his gong, has been made a non-executive member of the Central Bank of Kenya board.

Staking out his hopes, Amos Kimunya, the finance minister, says Kenya is benchmarking itself to the best in the world in business process outsourcing (BPO). “We are now saying all these highly-educated graduates don’t need to go and work in America or India, they can service the best corporations in the world from Kenya,” he says.

India’s advantages, Mr Nesbitt says, are scale, branding and back office capabilities. But Kenya, he argues, has “the ease of getting people with high-quality accents, a close affinity to Britain and open-mindedness”.

English is one of Kenya’s two official languages, alongside Kiswahili, and KenCall prefers to reject applicants whose accents are not up to scratch rather than offer them coaching. “We don’t want these guys to become false. We don’t want pretenders or posers,” he says. “When you start exaggerating vowels you screw up.”

Another reason for KenCall’s popularity in government circles is that it came into being as a direct result of president Mwai Kibaki’s election victory in December 2002. At the time, Mr Nesbitt was working in distribution in Denver, Colorado, and had previously toyed with – but rejected – the idea of opening a business in Kenya. But, he says, the president’s inauguration speech, in which he pledged to rebuild a country “ravaged by years of misrule and ineptitude”, inspired him to take a chance.

Teaming up with his brother Eric and brother-in-law Stephen Liggins, he returned to Kenya and found the avocado plant in a tax-free export processing zone. EPZ officials acted as “go-to guys” on hand to sort out teething troubles and Mr Nesbitt says KenCall was spared any enticements to corruption: “We didn’t have to buy anyone anything. No lunch. No coffee. Not a whisper.”The government stood back and even granted unprecedented permission for the group to bypass the shaky phone lines of the state telecoms monopoly and set up its own (expensive) satellite link-up.

But that was more than four years ago and the flipside of KenCall’s stand-out success is the fact that Kenya – a country of 36m people – has not produced a single other company with such a compelling tale.

Peres Were, managing director of Cascade Global, a consultancy, reckons there are five other BPO businesses in Kenya with annual revenues of about $200,000, plus 10 that average $50,000 a year, as well as 15 or so start-ups that were established last year and are still looking for clients. Mr Nesbitt says one problem they all face is that potential clients do not associate Kenya with call centres. “They wake up thinking safari, beaches, corruption, Aids, malaria,” he laments. The window of opportunity for Kenya will not remain open forever. Elsewhere on the continent Egypt and South Africa have already won pieces of the English-language BPO market, and Ghana and Botswana are seeking to follow in their footsteps. A lone Grand Warrior is a captivating emblem for the sector and Kenya’s embryonic new economy. But the country needs many more from where Mr Nesbitt came from.

MOMBASA PORT: A frantic game of catch-up with rivals

MOMBASA PORT: A frantic game of catch-up with rivals
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

Lined up forlornly in one corner of Mombasa’s sprawling port are four French-built cranes: 25 years old, their blue paint faded, they are exiles from another era.

Today the limbs of Kenya’s pivotal seaport are Chinese. Grabbers attached to four cranes from Shanghai Zhenhua Port Machinery pluck containers from ships docked in a channel that leads to the Indian Ocean.

Two more of the 60 metre devices are on their way, each one a $7m statement of Mombasa’s intent to haul itself back into the premier league of international ports.

Yet its users, beleaguered by persistent delays and congestion, will testify that hardware alone is not enough.

Known to tourists as the gateway to Kenya’s most popular beach resorts, Mombasa has been a trading centre since at least the 12th century. Today it remains Kenya’s lifeline to the world for everything from exported tea and coffee to imported steel, sugar and paper.

In the early 1990s, however, the government-owned port lost its way. True to the economic turpitude of Daniel arap Moi’s regime, its costs rose, productivity tumbled and Mombasa – in spirit, structure and status – began to crumble. Cutting-edge hub ports such as Jeddah in Saudi Arabia started to race ahead in terms of management sophistication, use of technology, and efficiency.

At the same time, Mombasa’s ambitious smaller rivals to the south – Dar es Salaam in Tanzania and Maputo in Mozambique – began to breathe down its neck. Stirred from its torpor in the late 1990s, Mombasa embarked on a series of investments – in cranes, forklifts, terminal tractors, a control tower, and process automation – and so began a frantic game of catch-up that continues today.

Activity on the docks, where stacks of containers make workers look like ants in Legoland, is a useful indicator of economic activity in the port’s hinterland. As Kenyan economic growth has accelerated from a near-standing start five years ago to 6.1 per cent in 2006, so through put at the port has risen. Since 2002, when Mombasa processed the equivalent of 305,427 twenty foot containers (the standard unit of measurement), throughput rose by 57 per cent to 479,355 in 2006, notwithstanding the absence of growth the previous year.

More than just a barometer, the port is a crucial component of the economic system in its own right. If things go wrong, or it is unable to cope with demand, the port itself can act as an economic depressant.

Nicholas Komen, a public relations official from the government-run Kenya Ports Authority, acknowledges its make-or-break role. “If we increase capacity in the time required, the port won’t limit growth, it will encourage it,” he says.

It will not just be Kenya. Mombasa is vital to a number of neighbours, most notably land-locked Uganda, which accounted for 72 per cent of all transit traffic last year.

Transit cargo makes up just 27 per cent of the total, but that proportion is likely to rise if the port keeps pace with the regional economic growth, which has taken off as politics stabilises in Kenya’s more strife-prone neighbours.

Plans for an extra berth, and eventually a whole new terminal, are on the drawing board, and the KPA is looking forward to draining a main channel to attract even bigger ships.

Cargo logjams continue – depriving east African industry of raw materials and delaying its exports – but the authority’s officials have chosen to place the blame elsewhere.

Mr Mwaruwa complained in a staff newsletter in March that importers were using the port as a storage area. The transport links from Mombasa to Nairobi and beyond are a long-running source of despair: the road is dilapidated and too dangerous to drive at night, while the train moves at a crawl and is running short of wagons. Others, however, say the port authorities can do more to address problems on its own patch, starting with corruption. KPA buildings in Mombasa are plastered with posters urging employees to resist graft. One cartoon shows a man in a T-shirt labelled with “food” and “roads” being dragged under water by a mean-looking fish called corruption.

But it is still rampant. Frederick Wahutu of the Kenya Ships Agents Association, says: “I’m glad they’re creating awareness. But the rot has been there for a long time and it takes a long time to remove.”

If, for example, a container is stuck at the bottom of a stack of five, he says a “facilitating payment” to a box-shifter is often the only way to get it out quickly. “So I know it’s wrong,” Capt Wahutu says, “but if I don’t do that I wait and wait and wait.”

Another irritant is paper work and bureaucracy. It stems partly from the fact that there are multiple organisations on the quayside – the KPA (affiliated to the transport ministry), the Kenya Revenue Authority (affiliated to the finance ministry), the Kenya Bureau of Standards, and Kenya Plant Health Inspectorate Services – but there is no top dog.

“There are so many stoppages that by the time a shipment can move it’s been 10 days.

“It’s ridiculous,” says Capt Wahutu. “Why can’t the KPA take control and say: ‘You guys, you are lowering performance’?

To some, the biggest barrier to progress at all east African ports, Mombasa included, has been politics: both in-fighting among ministries and jostling between competing industry groups.

Richard Bridges, a transport consultant at Portman Associates who advised Mombasa on container shipping in the 1980s, says: “When you look around the world, where you see port concessions have come in, there has been a significant improvement in performance.”

Yet Mombasa remains firmly in state hands. “For some reason they’re not convinced,” says Mr Bridges. Cranes from overseas, it seems, are one thing. Managers are a different matter.


FOREIGN RELATIONS: Increasingly difficult to remain neutral over Somalia
By Matthew Green

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

The palm-fringed beaches and lounging lions gracing Kenya’s tourist brochures could hardly present a greater contrast to scenes of gunmen careering around in pick-up trucks, fleeing families and blasted buildings familiar from neighbouring Somalia.

But Kenya has shouldered the burden of living next door to the world’s most failed state for years, struggling to cope with thousands of refugees, a proliferation of guns and terrorist attacks blamed on al-Qaeda suspects exploiting the chaos across the border.

Fears that Somalia’s troubles will weigh even more heavily on Kenya have increased since Ethiopia invaded late last year to oust a coalition of Islamists, leading to the heaviest fighting in Mogadishu, the Somali capital, in 15 years. About 34,000 Somali refugees trekked into Kenya last year, the biggest number since 1991 when the fall of dictator Mohammed Siad Barre triggered an influx of more than 400,000. Kenya sealed the border in January, stranding thousands and irking aid workers.

But perhaps more significantly for Kenya, the latest round of conflict has pushed the government into an increasingly visible role in the US “war on terror,” inflaming sentiment among the country’s Muslim minority ahead of elections due later this year. By helping to secretly “render” suspected Somali militants to Ethiopian prisons for interrogation by US agents, Kenya may also have jeopardised its status as a neutral mediator won during years of patient diplomacy among Somalia’s warring clans.

“It is arguable that Nairobi, among all the players, has suffered the greatest losses to its position,” Somalia expert Michael A Weinstein wrote in the April edition of the Power and Interest News Report. “Its decision to co-operate with Washington and Addis Ababa has destroyed its credibility as an honest broker.”

Somalia has been a troublesome neighbour since at least the 1960s when Kenyan security forces fought the “Shifta War” against secessionists from Kenya’s ethnic Somali minority, a conflict that further entrenched a deep-seated prejudice among many in Nairobi.

“There’s this blanket intolerance of Somalis,” says Emmanuel Nyabera, spokesman for the United Nations refugee agency in the capital. “Whenever there is insecurity, refugees are blamed.”

Guns trickling in from Somalia, as well as from conflicts in neighbouring Sudan, Ethiopia and Uganda, have fuelled Nairobi’s high rates of carjacking and robbery. Jemdayi Frazer, US assistant secretary of state for African affairs, said in March that Somalia continues to harbour terrorists, including three suspected senior members of al-Qaeda.

Washington accuses the network of organising truck bomb attacks on the US embassies in Kenya and Tanzania that killed more than 200 people in 1998. The group has also been blamed for a suicide bombing of an Israeli-owned hotel on the Kenyan coast in 2002 within minutes of a botched attempt to shoot down an Israeli airliner taking off from Mombasa. Kenyan and US investigators have linked the attacks to Fazul Abdullah Mohammed, a suspected member of al-Qaeda from the Comoros islands who is believed to have used Somalia as a base for training operatives and shipping weapons into Kenya.

Both the 1998 and 2002 attacks punished Kenya’s tourist industry, a big source of foreign exchange, while fears of more bombings have prompted the US and Britain to issue repeated warnings over travel to Kenya, a constant source of chagrin to hoteliers. Seeking to mitigate Somalia’s impact on its security and economy, Kenya has hosted successive attempts to help rival clans form a unified administration.

Somali elders eventually created an interim government, which Ethiopia and the US see as a bulwark against Islamist influence. Many hoped the new leaders would preside over a wider reconciliation process after Ethiopian troops pushed the Islamists from Mogadishu at Christmas. Instead, bodies piled up in the streets as Ethiopian troops fought street battles with the interim government’s opponents, bombarding residential areas and killing hundreds of civilians.

Kenya has found it increasingly difficult to remain neutral. The government sent troops to help round up defeated Islamists along its border after the Ethiopian invasion, while US air strikes on sites near the frontier only reinforced a perception among Kenyan Muslims that their government was working chiefly at Washington’s behest.

A report issued by Human Rights Watch accusing Kenya of helping the US spirit dozens of Somalis into arbitrary detention in Ethiopia further enflamed sentiment among Kenya’s Muslims, who account for perhaps 7 to 15 per cent of the population. Analysts say events in Somalia are likely to amplify a long-standing feeling of marginalisation among this community. “You see this international conflict in Somalia having an impact on national politics in this country,” says Mohamed Ali, a researcher with the Institute for Security Studies in Nairobi.

“The Muslim communities are becoming more vocal and it will continue that way.”

Kenya 2007:POLITICS; Battle lines are drawn

POLITICS: Battle lines are drawn
By Matthew Green

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

President Mwai Kibaki may have failed to meet dizzy expectations generated at the last election, when voters kicked out a government for the first time since independence, but some policy successes, a better economy and a divided opposition could yet hand him victory.

Euphoric crowds invested Mr Kibaki with a status akin to saviour when he won a huge victory at the election in December 2002, promising to stamp out the graft and tribalism that had blighted one of Africa’s most promising economies.

Within a few years, the coalition that brought him to power had splintered, a British diplomat had accused “gluttonous” ministers of gorging on aid money, and the government looked increasingly like an ethnic clique as intent on helping itself as the country.

“It was such a dysfunctional administration that just normalising it scores points,” says Kwamchetsi Makokha, a columnist with the Daily Nation. “The more significant grouse is that there isn’t significant representation in government. There’s a feeling that a lot of people are being locked out of the centre.”

While the septuagenarian president has yet to formally declare himself a candidate, he is widely expected to vie for a second five-year term in December. Lingering concerns about his health aside, he will have to overcome a legacy of broken promises after a victory that made Kenyan history.

Crippled for years by ethnic divisions, the country’s main opposition parties buried their differences at the last elections to field the first single opposition candidate since multi-party politics was reintroduced a decade earlier.

Mr Kibaki won by a landslide, humbling the chosen successor of former president Daniel arap Moi whose 24-year rule was characterised by graft, ethnic discrimination and economic decline. The win also overturned 39 years of rule by the former ruling party, Kanu, providing Africa with one of its most striking examples of a peaceful handover of power and setting a standard for struggling opposition movements in neighbouring Uganda and Tanzania.

The first year began well: the government investigated the notorious Goldenberg corruption scandal from the Moi era in which $1bn of public funds was stolen in a bogus import-export scheme, passed legislation to fight graft, devolved spending power and purged crooked judges.

Marketing reforms helped raise the incomes of some of the farmers forming the bulk of the 36m population, while bribe-taking by low-level officials appeared to fall. Free primary school education lessened the financial burden on many families.

A raid by masked policemen on a newspaper’s offices in 2006 reminded Kenyans of the bad old days under Mr Moi, but the press has generally been much freer to criticise the president. On the streets of Nairobi, people are more confident about speaking out on the state of the country.

“The atmosphere’s opened up a lot, and of a lot of good things have happened, but they’ve whetted an appetite,” says James Mwangi, a 30-year-old management consultant. “If India can move from where it was 10 years ago to where it is today, why not us?”

Within three years, the veneer of unity among leaders who had rallied behind Mr Kibaki at the election had peeled away. Accusations that the president had reneged on a deal to devolve the over-arching powers of the presidency by creating a prime minister’s post to reward the veteran firebrand Raila Odinga, one of his main backers, tore his coalition apart.

Mr Kibaki’s tenure reached its lowest point in November 2005 when the electorate rejected a proposed constitution at Kenya’s first referendum, widely seen as a protest vote against corruption and a perception he was favouring a “Mount Kenya mafia” from his home region.

The referendum drew the battle lines for the coming contest. A selection of powerful politicians commanding large ethnic constituencies who had thrown their weight behind Mr Kibaki during the election, campaigned against the charter. Mr Kibaki sacked his entire cabinet after the defeat, marking the final break-up of the coalition that had brought him to power.

As the alliance shattered, the initial impetus for reforms waned. Various ministers were linked to a scandal dubbed “Anglo Leasing” involving corrupt procurements from naval boats to forensic laboratories. Mr Kibaki later reinstated most of the ministers who were forced to resign over the Goldenberg affair after being cleared by the courts. Despite the disillusionment, analysts say the outcome of the election is still too close to call.

In Kenya, voters have traditionally cast their ballots on ethnic lines. The presidency goes to the leader who can rally a selection of tribes representing the biggest proportion of the electorate.

Mr Kibaki can probably count on the support of most of his Kikuyu community, Kenya’s biggest and wealthiest, centred on Nairobi, where the business community has an optimism not seen in years. But pundits say he will need to reach out to others to guarantee victory and the break-up of the original coalition has left a legacy of bitterness that may be hard to overcome.

The president faces a credible challenge in the form of the Orange Democratic Movement-Kenya, which groups former coalition partners who can rally some of the biggest ethnic groups behind them. Their biggest problem will be repeating the unprecedented feat Kenya’s opposition performed at the last election – agreeing on a single candidate. The party includes Mr Odinga, who has the support of the large Luo tribe, Kalonzo Musyoka, a former foreign minister, Musalia Mudavadai, an ex-finance minister and Uhuru Kenyatta, Mr Moi’s one-time preferred heir, all significant figures who could switch allegiance.

A split in ODM-Kenya would dramatically improve Mr Kibaki’s chances, although, with his party fighting divisions of its own, there is a high chance of more realignments before the polls. Fears of pre-election violence linger, particularly in the most closely-contested constituencies. Land-related clashes this year, in which scores of people have been killed, have served as a reminder of the strife that marred the 1992 and 1997 polls, though the last elections were peaceful. With both the opposition and Mr Kibaki’s NARC-Kenya dominated by faces familiar throughout decades of Kenyan politics, many voters question whether the outcome of the election will have much impact on the way the country is run.

Election authorities are hoping to add a further 2m young voters to the electoral roll, which already stands at a record 13m, and some Kenyans hope national interest will begin to trump ethnicity.

“We’re still in the politics of tribalism and individuals rather than ideology,” says Edwin Macharia, a 28-year-old who studied in the US, and is now seeking to run as a member of parliament on Kibaki’s party ticket. “Part of what this election will tell us is whether people can vote for people because of their ideas, not because of where they are from.”

Kenya 2007:Less dependent on foreign aid?

By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

Fifty years ago, starting in Ghana, a string of African countries began to win independence. But in spite of political autonomy, many needed donor aid – and still do. Kenya would like to think it is different. Just 5 per cent of its budget is funded by donors, compared with 50 per cent for some neighbours.

Martha Karua, justice minister, told members of the Kenyan diaspora in London in March: “When I hear a foreign diplomat or a development person trying to talk down to us, I always ask them: ‘Excuse me, don’t you think your voice is disproportionate to your money? If you have an issue, we welcome you as a friend to discuss it. But don’t talk like you’re the colonials.”

Government spending in 2006-07 is expected to be KSh566bn, the bulk funded by tax revenues, which are rising thanks to economic growth and more efficient collection. Borrowing, which contributes the rest, is also on the up. The budget, however, does not tell the whole story as it does not include funds from non-governmental organisations, nor does it show aid flows triggered by specific events. When drought struck parts of the country last year the government was compelled to call for assistance even though there were surplus crops in some regions. It is also questionable whether the government could have pursued its policy of universal primary education without significant contributions from donors.

Still, the Kenyan government is less dependent on foreign aid than many and can, ironically, attribute that to its failure to become a free-market democracy under president Daniel arap Moi in the 1990s. Donors led by the World Bank and International Monetary Fund cut off lending several times during the decade in protest at human rights abuses and corruption. By the end of the 1990s this had precipitated a grave financial crisis. Kenya had to weather it alone but by doing so learned how to live with less foreign assistance. .

Kenya 2007:ECONOMY; Better conditions for growth

ECONOMY: Better conditions for growth
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

Armed with a PowerPoint presentation, a battery of statistics, and an upbeat story, Amos Kimunya is the consummate travelling salesman. In March he took a roadshow to Toronto, Atlanta, Washington and Brooklyn Park, Minnesota. The sole item on his sales list: the Kenyan economy.

Mr Kimunya is the country’s finance minister and cheerleader-in-chief for an economic bounceback that began in 2003. He was on the road to persuade members of the Kenyan diaspora to dig deep and invest money in the country that they, or their forebears, had left behind. In the minds of many, Kenya is still characterised by the wretched economic performance that marked the final years of Daniel arap Moi’s rule: in 2002 the economy grew by a mere 0.5 per cent and gross domestic product per head shrank.

But Mr Kimunya told his audiences that this was a thing of the past. Since the watershed election that brought his government to power, the economy has expanded at an ever-increasing rate that last year hit 6.1 per cent.

Whether this is in spite of, or because, of president Mwai Kibaki is open to debate – and an increasingly fractious one as the political temperature rises ahead of this year’s election. But there are equally important questions about whether the growth is good enough, whether it is sustainable and whether it is doing anything to reduce chronic poverty.

Beyond doubt, however, is that parts of the economy are buoyant. The manufacturing sector – which accounts for 10 per cent of GDP and is dominated by canned vegetables, oils, drinks and tobacco – expanded by 7 per cent. That performance reflected not only activity in Kenya, but also rising regional demand. Agriculture, which represents a quarter of the economy, put in a below par performance due to the effects of a drought that hit many parts of the country in early 2006: the sector expanded by 5.4 per cent compared with 7 per cent the previous year. But tourism positively boomed. The country received 1.6m international visitors last year, up 8 per cent on 2005, and made roughly $800m from them – putting the sector ahead of horticulture and tea as the country’s best hard currency earner.

Underlying the sector stories are deeper changes that have helped create the conditions for growth. One is a gradual process of economic liberalisation that began under Mr Moi and has begun to bear fruit (though it originated more from international donor pressure than the former president’s own policy instincts).

The Kibaki administration has not launched any sweeping economic reforms of its own, but it has resisted the urge to interfere in business. It has slimmed down cumbersome licensing regimes, and pushed ahead with a privatisation programme. On corruption, a dead weight on the Moi economy, the government wins fewer plaudits. Bribery has become less acceptable, but only moderately less common, and continues to eat up public funds, private profits and consumer earnings.

In his presentation, Mr Kimunya chose to focus on the country’s new-found macroeconomic stability, which has arguably given business people more confidence to plan and invest for the future. The government, for its part, is keen to claim the credit.

Independent economists, however, caution against getting over-excited by growth of 6 per cent. Compared with what has gone before in Kenya, it is an improvement. But compared with the rest of Africa, it is not remarkable: the continent as a whole grew by 5.5 per cent last year, according to the Organisation for Economic Co-operation and Development and the African Development Bank.

Robert Shaw, a Nairobi-based businessman and economist, says that as long as the government does not do anything clumsy it is “easy” for Kenya to achieve 5 to 6 per cent growth. “It’s dynamic here. You see the entrepreneurship. Anything you want can be done. The big question is going beyond 6 per cent.” It is a point the government recognised in its Vision 2030 development plan, launched last month, which aims to lift annual GDP growth to 10 per cent from 2013.

If that is to happen, Kenya’s economic base has to be broadened. Given the vulnerability of agriculture to commodity prices and the weather, and of tourism to crime, terrorism and travel fashions, growth driven by those two sectors alone is not sustainable.

In the search for alternative engines, much hope has been invested in agro-processing, call centres, IT and the banking and insurance sectors. But so far the optimism has not been matched by finance. True, overseas Kenyans are sending money home to build houses in their villages. But while the likes of Unilever have been around for years, the country has failed to attract the kind of multi-million dollar investments that can kick-start whole sectors.

According to the United Nations Conference on Trade and Development, Kenya attracted only $21m of FDI in 2005. Tanzania, with an economy two-thirds the size, sucked in $473m.

Why the poor record? Because Kenya is perceived as a difficult and dangerous place to live and work – a notion reinforced this year by a spate of brutal carjackings in Nairobi.

To achieve transformative growth – with or without foreign direct investment (FDI) – economists say the government must prioritise spending on water supplies, power, roads, railways and ports. For all the talk of supercharging growth, however, an unwavering focus on GDP as a measure of success carries pitfalls. Last year, the United Nations Development Programme noted critically the government prioritised economic growth over alleviating poverty and unemployment.

“For me the most worrying thing about Kenya is the disequilibrium,” says Mr Shaw.

“The problem is the wealth is so skewed. This growth has affected the privileged class and certain farmers. But the people on the other side of the fence are increasing percentage-wise and population-wise.”


THE STOCK MARKET: Investing craze takes hold in a disorderly environment
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

Snatches of conversation float over the hum of a fan and across the dim auditorium. “The restructuring … What I’m saying is there is major staff discontent,” one man says into his mobile phone. And then another, impatiently: “If you’ve found someone to sell to at 90, then say so … Just tell me at what price you want to sell.”

Fifty or so others sit motionless, straining to concentrate on the numbers on a giant cinema-scale spreadsheet projected in front of them. But no one pleads for silence. On the contrary, ears are pricked in the hope of gleaning surreptitious tips from the gabblers. The flashing screen shows the latest trades on the Nairobi Stock Exchange (NSE) and audience members are watching – and listening – for ideas on what to trade next.

On the third row of benches sits Basit Vayani, who is gently kneading his own phone between his hands. “You get a feeling for the market here, and information,” he says, rolling his eyes toward the restructuring tipster. “People talk around.” He is a regular visitor to the NSE and so are most of the smartly-dressed young men in the room. Ordinary Kenyans are engaged in a love affair with the stock market and the daily spreadsheet show is the embodiment of it.

In a run that began after the 2002 election, the main NSE index soared 432 per cent in local currency terms to a peak of more than 6,000 in early January. The total capitalisation of the 48 companies listed in Nairobi climbed to about $12bn – tiny compared with the $16,000bn value of the 3,100 companies on the New York Stock Exchange – but the market was injected with a bull market fizz familiar everywhere.

Newspapers began devoting large spreads to the machinations of the market. Banks started offering “share loans” to novice punters. There were even reports of farmers selling cattle to raise a few thousand shillings to become involved. But the investing craze hit a rough patch: starting in mid-January the market nose-dived for 10 weeks and wiped 30 per cent off share prices. “We were expecting it, but not that soon and not that far,” says Bijal Gudka, an independent financial adviser.

The same cannot be said of novice investors for whom the tumble provided a painful lesson: contrary to what some had presumed, or been led to believe, share prices go down as well as up. The question now is whether Kenya’s share affair has survived the losses and can develop into something more serious.

It all began with the peaceful end of Daniel arap Moi’s 24-year regime. Post-election euphoria combined with a government- orchestrated cut in interest rates gave equities a new allure. That was enhanced in the months that followed when it became clear that economic growth and corporate earnings were picking up.

But the stock market only really opened up to the masses in April 2006 when KenGen, a state-controlled electricity generator, sold 30 per cent of its stock in an initial public offering. Until then, the NSE had been something of a private members’ club. But KenGen shares became available to everyone and the company’s familiar name helped to remove the trepidations of first-time investors.

The result: the $100m offering was more than three times oversubscribed and the share price multiplied almost three-fold on its first day of trading. A few months later, the flotations of Eveready East Africa, a battery maker, and Scangroup, a marketing services company, generated equal fervour.

The NSE estimates that 700,000 Kenyans now own shares. Jimnah Mbaru, the exchange’s chairman, says: “We have a new generation of young people. In the old days people used to invest in land. Now young people understand and want financial assets. It’s a paradigm shift.” One of those people is Robert Gichuru, a young bank worker, who puts about KSh5,000 into equities each month via an investment club run with seven friends. The market, he says, is not driven by rigorous analysis. “If you ask a person why he’s buying shares, it’s often because his neighbour is buying,” he says. “A number of people are entering the market on a gut feeling.”

Mr Mbaru is inclined to agree. “There are lots of people who are reasonably ignorant about the workings of the market so they invest on the basis of incomplete information.” As an example, he says the most popular shares are often those in the smallest denominations because people confuse low prices with good value. So it is not surprising that share prices became detached from the fundamentals during the rally: the constituents of an S&P/IFC Kenya stock index were averaging a flighty price-to-earnings ratio of 30 by last November.

For domestic institutional investors, which still control almost 60 per cent of the market, that presented an attractive opportunity to liquidate investments. Their profit-taking played a big part in recent falls, but retail investor confidence was also dented by the suspension of a small retail broker. By mid-April the market was back to a more level-headed price-to-earnings ratio of 22, compared with about 18 for the US S&P 500 index and 13 for the UK’s FTSE 100.

Nairobi investors must also reckon with the reputed weakness of market regulation and a desperate lack of transparency. “There’s a lot of manipulation and insider trading by the big boys,” says Ms Gudka. “The market’s not clean.”

Mr Mbaru disagrees and says the introduction of an automated trading system last September has cut out a lot of abuse. But suspicions of shady dealing go some way to explaining why many retail investors are trying to snatch quick profits, rather than make long-term investments.

Some are not even betting their disposable income, but money they need to cover living costs, say others. Prices dipped briefly last December, it is reckoned, because parents were selling to raise the cash for the next year’s secondary school fees. So the NSE is some way from being an orderly market where hard analysis tends to set the tone. But the hordes that thronged the offices of Nairobi brokers in late April to subscribe to the float of Access Kenya – which became the country’s first listed internet services provider earlier this month – indicated the passion of the masses had not dimmed.

Kenya 2007:Uneven spoils of economic revival

Kenya 2007
Uneven spoils of economic revival
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

From the unconventional platform of a wheelchair, where he sat with one leg in plaster, President Mwai Kibaki roused Kenyans four-and-a-half years ago with a pledge to rebuild a country ravaged by mismanagement and corruption.

He had won a crushing election victory over the protégé of his predecessor, Daniel arap Moi, a few weeks after being injured in a car crash.

“You have asked me to lead this nation out of the present wilderness and malaise to the promised land.” Mr Kibaki told hundreds of thousands of people squeezed into Nairobi’s Uhuru park. “And I shall.”

The end of Mr Moi’s venal regime, which had sapped the country’s spirit, released a wave of euphoria. Expectations were sky-high. This year comes the reckoning. Before the end of 2007, and most probably in December, Kenyans will vote in another presidential election in which the 75-year old incumbent is expected to stand once more. If the fractious opposition unites behind a single candidate, he is likely to face a tight race.

The record of the Kibaki administration is mixed – and judged wildly differently depending on where you are in the social strata and whether you live in the country’s parched semi-desert north, its lush central highlands or the muggy coast. To its critics it has failed to deliver on key issues such as corruption and crime.The ruling coalition has often appeared paralysed by division, while Mr Kibaki’s grip on the tiller has been a matter for debate amid persistent worries about his health.

For the private sector, however, the Kibaki era has helped to advance one significant change: a gradual delinking of business from the melodrama and intrigue of politics. In the lean years of the 1990s many Kenyan businesses had to restructure and spread beyond national boundaries to survive. With a more laissez-faire administration in power, some are now beginning to thrive.

Titus Naikuni, chief executive of Kenya Airways, the country’s flagship carrier, says: “I think we’ve sort of separated the politicians, who are making noise, from those of us who want to make money. Because the politicians realise that without this money we won’t have development.” Of the election, he says: “It’s time people realised Kenya has become very mature, in the sense that the business community couldn’t care less about what happens. I don’t put our business plans in place based on whether we’re going to elect Kibaki or someone else.”

Such attitudes go some way to explaining why Kenya’s economy, dominated by agriculture, light manufacturing and tourism, is looking sprightly compared with its wretched performance in the 1990s. From a paltry 0.6 per cent in the final year of Mr Moi’s rule, annual gross domestic product growth has risen steadily and last year hit 6.1 per cent.

Kenya’s young stock market has also been buoyed. The Nairobi stock exchange’s main index soared 432 per cent in a four-year period that kicked off just after the 2002 election and, following an abrupt correction this year, has stabilised.

While industry battens down the hatches in many African countries ahead of polls, business confidence in Kenya appears to be growing. Yet it is a moot point whether economic growth, promoted by the president as the best in 30 years, has come in spite of, or because, of the government. The Kibaki administration has not launched any sweeping reforms. But the peaceful transition to a different regime inspired a fresh optimism in the country.

Three things, broadly, have created a better environment for business. The first is a decline in political interference in company affairs. Second, the government has begun to tackle a mass of rules and regulations that are stifling productivity and innovation, most notably a thicket of 1,325 business licences required for all manner of things. Dozens have been cut or simplified already and Amos Kimunya, the finance minister, says he wants no more than 400 to remain.

Nicholas Nesbitt, chief executive of KenCall, a call centre group, says: “The government has said: ‘We have to create an environment for business and get out of the way.’ But it does take a while to get out the way because some politicians think differently.”

Third is macroeconomic stability. Though the government is probably claiming credit for the results of some measures put in place during the Moi era, underlying inflation, interest rates and the value of the shilling have steadied. The risk of nasty economic shocks has thus fallen, giving industrialists more confidence to plan and invest for the future.

Some of the more basic foundations for growth, however, are part of the country’s fabric. Beyond its sunshine-and-safari image, Kenya has long had a more developed industrial base than its neighbours.

It has a stronger banking sector, a reasonably deep well of management and labour skills, and multinationals such as Barclays, Unilever and Diageo have had big operations in the country for years. It is east Africa’s biggest economy and a pivotal trade hub. It has been largely free of the big ethnic conflicts that have beset most of its neighbours, and it is not endowed with the mineral wealth that has been a curse as much as a blessing to others.

Nevertheless Kenya is no business paradise. Far from it. For a start, corruption remains endemic, sapping profits, preventing reform, and perverting the circulation of capital. Mr Kibaki was elected on an anti-graft ticket as much as an anti-Moi ticket, but has failed to rein in both petty and grand corruption.

A stigma that was not previously attached to bribes and kick-backs has developed. But no top officials have been prosecuted and thegovernment has become embroiled in a scandal of its own, the Anglo-Leasing saga.

Kim Howells, a UK foreign office minister, said last November: “People can be bought, right from the person who works at the docks in Mombasa up to the government.” Yet while corruption remains a near-obsession for international donors, many Kenyans view it with a weary sense of resignation.

It is something else – Kenya’s abysmal infrastructure – that inspires the angry passion of business people. Roads are crumbling, the railway is a relic of the colonial era, the port is bunged up, and the electricity supply keeps cutting out. Crime and insecurity are also enervating sources of fear, stoked this year by a spate of deadly carjackings in the capital and a series of beheadings by a criminal sect known as Mungiki.

For any business seeking to compete globally, the conditions are not auspicious. Yet while ministers say they want Kenya to join the same economic league as Asian countries that were its peers 35 years ago – Malaysia, Indonesia and Thailand – little has been done to upgrade its run-down infrastructure.

If the neglect continues, the chances of Kenya’s economy expanding by more than 6 per cent a year are slim. Equally important, a dark side of the revival will persist. For all the hyperbole, growth is not reaching a large number of Kenyans whose lives are entirely isolated from the goings-on of the business world. The country is one of the most unequal in Africa and the divisions between rich and poor are not narrowing. There is even talk about the risk of “two countries” developing within one.

According to a government survey released last month, 46 per cent of the population – or 16.5m people – are below the officially-defined poverty line, which equates to living on roughly $1 a day.

The figure was down from 52 per cent 10 years ago, but regional disparities were striking. In Nairobi, 30 per cent of people – primarily the residents of the sprawling slums Kibera and Mathare – are living below the poverty line. In the arid north-western Turkana province, where nomadic pastoralists roam a desolate wasteland, the figure is 95 per cent.

Many say more than economic forces are at work. Ethnicity is rarely far from the surface in Kenyan politics and the Kibaki administration has been accused of favouring one ethnic group over the 40-plus others.

The president is a Kikuyu – the biggest ethnic group, the richest, and the one that predominates in Central province and Nairobi. The spoils of growth, critics say, have accrued to its members.

“When you hear about economic growth, look at the ownership,” says Kwamchetsi Makokha, a columnist with the Daily Nation newspaper. “The companies are either foreign-owned or owned by people from the president’s areas,” he says. “There’s a feeling a lot of people are being locked out of the centre. Kibaki has unleashed anti-Kikuyu resentment, which is exactly what he shouldn’t have done.”

True, the government has introduced some policies delivering widespread, if not universal, benefits. Primary school education is now free (though there are too few teachers and textbooks); the number of testing centres for HIV/Aids has been expanded and the stigma associated with the illness reduced; and a Constituency Development Fund has been set up to seed community-based development projects (though it has also been abused). The press has grown more rumbustious and democratic space has opened up across society, encouraging more openness, debate and candour in the streets.

But the uneven spoils of the economic revival point to another set of dashed hopes for many Kenyan voters. They had looked forward, on inauguration day, to a new mode of politics in which the iron triangle of patronage, ethnicity and corruption would be replaced by consensus, inclusiveness and fairness. It has not arrived.

Mr Makokha predicts that the nascent election campaign will boil down to two things: “The government says ‘growth’ and the opposition says ‘Kikuyu clique’.” Barring accidents, the president will be championing his message on two feet, his broken leg long since fixed. But in four-and-a-half years he has nothealed Kenya.

Somalia wins bonuses on China oil fields

By Barney Jopson in Nairobi

Published: July 18 2007 22:56 | Last updated: July 18 2007 22:56

The Somali government will receive big production bonuses from CNOOC if it makes significant discoveries of oil in the country, even though the Chinese state-owned company has secured the right to nearly half of any profits from oil production.

A production-sharing contract signed in May 2006 says the transitional federal government (TFG) will receive $50m (€36m, £25m) bonuses for any wells that yield more than 200,000 barrels a day for 75 consecutive days, the Financial Times has learnt from one person who has seen the document.

The deal gives CNOOC and its smaller partner, China International Oil and Gas, the right to 49 per cent of the profits from any oil they find and promises the rest to the interim government.

Somalia remains a speculative region for oil exploration. Several western oil companies held exploration concessions in the country in the 1980s, but it has no proven oil reserves and only 200bn cubic feet of proven natural gas reserves, according to the US Energy Information Administration. Others, however, say the country’s geology is promising.

CNOOC is braving insecurity and political uncertainty as an insurgency against the interim government continues in Mogadishu, the capital. Somalia’s prime minister this week raised questions about the validity of the deal. But thanks to China’s thirst for oil, the group has developed a reputation for launching high-risk ventures.

The deal gives CNOOC and CIOG the right to search for oil in part of semi-autonomous Puntland province and exploration work is due to begin this year.

If oil is discovered, the final breakdown of profits will depend on other factors such as income tax and the payment of exploration costs. It is not clear whether the two Chinese groups paid an upfront sum to seal the deal when it was signed.

According to the person who has seen the contract, its signatories were Chen Zhuobiao, managing director of CNOOC Africa; Judah Jay, managing director of CIOG; and two junior Somali ministers who had been granted power of attorney by President Abdullahi Yusuf Ahmed.

The contract was endorsed when Mr Yusuf, who is from Puntland, met Fu Chengyu, CNOOC chairman, at the Chinese group’s headquarters in November, weeks before an invasion of Somalia by Ethiopia forced the Islamic militia that had been running Mogadishu to flee the capital. At the time of the meeting, the TFG had little authority outside its home base in Baidoa.

Revelations about the deal in the FT have illuminated splits within the fragile interim government.

Ali Mohamed Gedi, the prime minister, said this week he was not aware of the deal and no valid oil deals could be struck until the country’s parliament had endorsed a new oil law due in the next two months.

But a document signed last month in Nairobi by the Somali energy minister and the two Chinese groups says: “The TFG has and will continue to authorise CNOOC and CIOG to exercise their contract without any interruption during and after the effectiveness of the new national oil law.”

Copyright The Financial Times Limited 2007

Sarkozy and Brown unite for Darfur Oil

By John Thornhill in Paris

Published: July 20 2007 17:46 | Last updated: July 20 2007 17:46

France and Britain are to send their foreign ministers to New York in a concerted bid to press the United Nations Security Council into urgent action to address the humanitarian disaster in Darfur.

Nicolas Sarkozy, France’s president, and Gordon Brown, the British prime minister, said the UN must quickly adopt a draft resolution authorising the despatch of up to 26,000 troops and police to quell the violence in the Sudanese region, where about 200,000 people have been killed.

Meeting for the first time since assuming the top jobs in their respective countries, Mr Sarkozy and Mr Brown expressed their outrage about the human tragedy in Darfur that had also displaced 2m people and left 4m on the edge of starvation.

“This is one of the great humanitarian disasters of our generation. It is incumbent on the whole world to act,” Mr Brown said.

The two leaders said they would be prepared to provide substantial economic assistance to Darfur as soon as the peace process was launched and promised to intervene personally to monitor progress. “Once the UN resolution is passed we are prepared to go together to Darfur to make sure the peace process is moving forward,” Mr Brown said.

Mr Sarkozy said China, which has been a key ally to Sudan, had a particular responsibility to help resolve the crisis in Darfur. “We cannot guarantee success. But what Gordon and I guarantee is that we are determined to shake up the system,” the French president said.

Since entering office, both leaders have put a high priority on tackling Darfur. Bernard Kouchner, France’s foreign minister, visited Sudan last month and hosted a conference in Paris to call for international action on Darfur. Douglas Alexander, the UK international development secretary, is visiting the region.

Ban Ki-moon, the UN secretary general, said on Monday he hoped the UN resolution could be adopted as early as this week.

Copyright The Financial Times Limited 2007

Wednesday, 25 July 2007

An Open Letter To America

Our blind hatred to everything that?s not American caused the deaths of more than two million Iraqis during the First Gulf War and during the genocidal blockade and no-fly zones that we imposed on Iraq. Most of the dead were children and our representative at the United Nations; Ms Madeleine Albright tolerated the killing of the Iraqi children and said, "The price is worth it". Then she was rewarded the portfolio of Secretary Of State. And do you expect us to be revered and loved by the people of the world? Are we responsible for the acts of our government? Yes we are responsible because we allow such people to hold office; we have elected them and now we are paying the price. People around the world hate us. Our young men and women are being killed, and we are creating more enemies. We do not have enough jobs; our senior citizens cannot afford to buy medicine; we pay high prices for gasoline; and we pay heavy taxes to supply the costs of wars committed by our government and by our Zionist allies. We became the butchers of the world instead of the advocates of peace. - Irahim Ebeid


By Ibrahim Ebeid
04 August, 2006

Dear Fellow Americans,

Are we really aware of why people around the world don?t harbor love and respect for us? Have we ever thought why people around the world "hate" us?

Most of us do not know why because we are being fed with false propaganda, which has become ingrained, in our minds, and we have been forced to believe that people around the world envy our way of life and hate our democracy.

To know the reality we have to pause for a while and take a profound look at the policies and actions of our governments. When we do so then we might discover the facts and reasons why people dislike us. Though facts sometimes are painful, we have to accept them in order to eradicate the evil causes and purge ourselves.

I would like to be very frank with my fellow citizens and tell them some of the reasons why people hate us. I was born in Palestine. I suffered under unfair and unjust US policies. The price my family and I paid was very heavy and high. We lost everything that my father worked for when the Zionist state was created in 1948. Hundreds of thousands of Palestinians were expelled from their land and became refugees. They were forced to spend the bitter cold of winter under the trees, the lucky ones were sheltered in tents made of canvass that were donated by the United Nations Relief and Work Agency. Those places, later on, were converted into temporary camps until such a time feasible for the refugees to return to their homes; the refugees and their descendents are still waiting.

Mr. Harry Truman ignored that human tragedy and he was very quick to recognize "Israel" 11 minutes after its announcement. Since then, the United States, was and still is siphoning billions of dollars and sending the most sophisticated arms from the US arsenal to help the Zionists fulfill their dreams: to kill more Arabs and to grab more lands for the Zionist settlers. Palestinians are considered subhuman, or like roaches, and must be crushed according to Zionist leaders. "The Palestinians would be crushed like grasshoppers ... heads smashed against the boulders and walls," ?Israeli? Prime Minister Yitzhak Shamir in a speech to Jewish settlers reported the New York Times on April 1, 1988. " [The Palestinians are] beasts walking on two legs." Menachim Begin stated in a speech to the Israeli Knesset, quoted in Amnon Kapeliouk, "Begin and the Beasts:? New Statesman, 25 June 1982.

And yet, we Americans, who claim to be the freest people in the world who believe in freedom and democray, are supporting such a racist entity that is built on usurped land, its leaders are full of hate and they are commiting genocide against the Palestinian and Lebanese peoples.

We Americans are being robbed by Republican and Democratic administrations alike. They are utilizing the taxpayers? money to help ?Israel? to launch continuous wars to kill thousands of people and destroy entire nations with ?our? unconditional support. Palestine was completely usurped and its people are uprooted, Lebanon is being attacked and destruction and death are spreading all over the land. Do we expect people to have faith in us?

Our president, Mr. George W. Bush, became the most vocal voice of Zionism in the world. He is not concerned about peace in the world. He is encouraging the "Israelis" to commit more crimes and massacres against the Palestinians and he is sending more destructive weapons to the Zionists to kill more Palestinians and Lebanese. Both countries are being destroyed and ruined. Both countries are being besieged and blockaded and Arab children are being killed with no remorse. And yet we call America a broker for Peace and Justice?

On April 18, 1996, the Zionists attacked Qana, in Lebanon, and killed 110 women and children who were taking refuge in the United Nations compound. The horrible crime was repeated again on July 30, 2006 when the same Zionist criminals attacked a building in Qana and killed more than 60 innocent civilians who were taking shelter to avoid the savagery of their enemy. Among the dead were about 40 children, if not more. They were killed with American-made bombs that President Bush donated to the perpetrators. Killing innocent people and especially children make people around the world hate and despise Americans.

We are launching a savage war against the people of the Cradle of Civilization since 1991 with no cessation .Our laser-guided ?smart bombs" destroyed Al Ameriyah shelter on February 13, 1991 and more than 400 Iraqi civilians were killed, mostly women and children.

More and more people are being killed by the US occupiers and by the sectarian militias of the sectarian government that we created in Iraq. People are being buried in mass graves that we are creating and blaming on the Iraqi Resistance.

The United States has killed more than 200,000 Iraqis during the illegal invasion of March 2003 and thousands more after. Now, the average is about 100 killed a day.

Our blind hatred to everything that?s not American caused the deaths of more than two million Iraqis during the First Gulf War and during the genocidal blockade and no-fly zones that we imposed on Iraq. Most of the dead were children and our representative at the United Nations; Ms Madeleine Albright tolerated the killing of the Iraqi children and said, "The price is worth it". Then she was rewarded the portfolio of Secretary Of State. And do you expect us to be revered and loved by the people of the world?

We are sending thousands of our troops to foreign lands, to Afghanistan and Iraq, to kill innocent people and to force them to accept our export of ?democracy.? This type of democracy is causing misery to many families in Iraq and to the families of our servicemen who die in vain to satisfy the egos of President George W. Bush, Dick Cheney, Donald Rumsfeld, Condoleezza Rice and the Zionist ?allies? of Washington.

Mr. Bush sent Condoleezza twice to "Israel" to give his support and assurances to the Zionists to commit atrocities and destruction in Lebanon and the result was very vast and devastating, Children are being slaughtered with our bombs and you expect the Arabs and the rest of the Muslim World to love us and favor our democracy, which in reality, means their destruction?

The attack on Qana and the killing of Lebanese children and their moms took place while Condoleezza Rice, our Secretary of State, was meeting with Ehud Olmert, the "Israeli" Prime Minister. Of course this meant that the attack took place under the eyes and the blessing of the United States. The Zionist leader, Ehud Olmert requested the approval of the United Sates, and more time to continue the war against Lebanon and its people. What is taking place in Lebanon and in Palestine, in Qana and in Gaza is indeed a massacre, a crime against humanity, a hate crime, and a racist crime against people for being Arabs or Muslims. The United States is responsible for such crimes because our President and his administration are putting all our power and resources behind such a "state", behind "Israel". Our tax money is going towards committing war crimes instead of spending it for peace or at home, on education, medicine, research, building homes for the homeless and poor, creating new jobs, etc.,
We send our young people to kill, to rape, to commit atrocities and to die for wars in the interests of the rich, corporate America and above all on behalf of ?Israel? that is holding us hostage.

Are we responsible for the acts of our government?

Yes we are responsible because we allow such people to hold office; we have elected them and now we are paying the price. People around the world hate us. Our young men and women are being killed, and we are creating more enemies. We do not have enough jobs; our senior citizens cannot afford to buy medicine; we pay high prices for gasoline; and we pay heavy taxes to supply the costs of wars committed by our government and by our Zionist allies. We became the butchers of the world instead of the advocates of peace.

We should stop supplying "Israel" with weapons of destruction.

We should stop wasting our billions on the "Israeli" war machine.

We should stop all the wars that we are launching around the world, especially in Afghanistan and Iraq.

We should build bridges of love and friendship among nations.

We should treat all nations with equal respect.

We should always stand with justice.

We should withdraw our troops from around the world and bring them home alive.

Is our foreign policy stemming from our interests in building peace and democracy around the world?

The answer to this question is a flat no. Our foreign policy has been a hostage to the interests of the few: to corporate America, to the rich who want to be richer even by launching wars to rob other nations. And who pays the price to these greedy ambitions? The answer is the poor, young Americans. They are the ones who are forced to go to wars to shed their blood and the blood of others for oil and ?Israel.? Mr. Martin Indyk, the then US Ambassador to Tel Aviv, once said about the first Gulf War it was for "oil and Israel." Indeed it was and now most of the Americans know it.

American foreign policy was always and still is not fair, especially when it comes to the Arabs and Muslims. The United States never allows the United Nations Security Council pass any resolution condemning the state of ?Israel? for war crimes and atrocities that it commits, because, "Israel" according to our successive administrations, is our staunchest ally.

These are some of the reasons why people hate us. It is about time to put America on the right track. It is about time to join the human race and be part of a peaceful and civilized World.

Yours truly,

Ibrahim Ebeid
US citizen and a veteran of the Vietnam era