Investing in knowledge will cure many of our ills
By Ng’ang’a Mbugua
Kenya is paying a steep price for
failing to invest in the knowledge economy. The Economic Survey 2016, which was released early May, shows that real
estate continues to experience the most robust growth. An earlier study on the
property market indicated that in some parts of the capital, land costs as much
as Sh1 billion an acre. That means an individual with 143 acres could have
afforded to fund Kenya’s education budget for the current financial year.
This is very well for the
creation of individual wealth. It means that the people who had the foresight
to buy land when the cost was lower will reap handsome dividends. The only
problem, from a public good point of view, is that these type of transactions
do not create jobs and the wealth generated remains concentrated in a few hands
with no real value created in the economy.
The danger with this trend is
that for the rest of the economy – including the upwardly mobile middle class
and for entrepreneurs – the cost of owning land as a factor of production
becomes prohibitive. It also pushes up the cost of owning homes, even when such
a home is a flat bought on mortgage in a leafy suburb.
The second danger in failing to
invest in the knowledge economy became evident with the collapse of the
storeyed building in Huruma, Nairobi. The building, which housed more than 300
families, was built very close to a river. With the flooding of the city, the
huge volumes of water began to eat away at the river banks. When a chunk of
soil was washed away from near the ill-fated building, it tilted and eventually
caved in. By the time of writing this, close to 100 people were yet to be
accounted for and 28 had been confirmed dead.
Such tragedies are unlikely to
occur in a knowledge economy, first, because the advice of professionals would
be sought before such an investment is made and during the construction. As
such, professionals would have ensured that the building had a firm foundation
and they would have taken measures to mitigate against any undesirable
eventuality, such as flooding, considering that the building was constructed
right next to a water way.
Because these investments in
knowledge were not made, many families have lost their loved ones and their
property. Similarly, the two brothers who invested their money in the building
have not only lost their investment but are now in court facing manslaughter
charges.
Let us turn from property to
health. In the last one year, more than 200 people have died of cholera in
various parts of the country, including northern Kenya, the Coast and Nairobi.
Did these people need to die?
In his book, The Great Escape: Health, Wealth, and the Origins of Inequality, Deaton
Angus says that in the 21st century many people in poor countries
are dying from diseases that used to ravage Europe during the industrial
revolution in the 18th century.
“We need to ask why people are
still dying of things we know how to prevent,” says the scholar who won the
Nobel Prize for Economics last year.
According to him, it is not right
that thousands of children in poor countries die before their fifth birthdays
because they contract diseases like pneumonia and malaria, yet these diseases have
been wiped out in richer countries for over one hundred years.
The answer lies in the fact that
these countries invested in knowledge. They studied the causes of the diseases
and how to prevent and treat them. For cases such as cholera, their leaders took
the actions needed to stop further deaths – like separating drinking water from
sewage - and for cases like bacterial infections, their scientists developed
antibiotics, which with government intervention, became readily available to
the public. No wonder such countries continue to enjoy better quality of life
for their citizens who are living longer and have more wealth relative to their
counterparts in poor countries.
This, in my view, is one of the
reasons why people from poor countries are always seeking refuge in Europe and
other well-off countries as Paul Collier has ably demonstrated in Exodus: How Migration is Changing the World, his book on the causes and
effects of immigration. Those poor souls who perish off the coasts of Libya and
Italy trying to make the perilous journey to Europe are doing so in the hope of
living a better life, if not for themselves, at least for their children.
Often, when people from poor
countries travel to richer ones, they always come back with tales of how they were
impressed by systems that work. Hardly, however, do they make the connection
between such systems and the knowledge economy, yet these are but two sides of
the same coin.
In Europe, for instance, the
obsession with land that is so prevalent in Kenya is virtually non-existent. As
such, if a European country was to build a railway line in the same year and to
cover the same distance as the Standard Gauge Railway in Kenya, it would cost
them much less because there will be no “entrepreneurs”, civil servants and
politicians buying land cheaply from peasants and inflating the price when reselling
to the government. In a knowledge economy, the cost of public goods and
services is moderated to benefit the highest number at the lowest price. In an
economy like ours, a few benefit sometimes by abusing the privilege to leverage
information that is otherwise not in the public domain. Such private gain, of
course, comes at a cost to the public.
Similarly, in a knowledge
economy, those in position of power do not sub-divided land in water towers to
their political allies as so often happened in the past because they would
recognize that water towers are a public good meant to be shared by all; the
rich and the poor, the urban worker and the rural farmer, man and beast alike.
Too often, however, when we say
that knowledge is power, we fail to grasp the full import of this otherwise
self-evident truth. Leveraging knowledge gives societies the power for social
and economic transformation, setting them on a path of progress and increasing
what is now called the gross national happiness. Of course, for knowledge to
benefit societies, it must be coupled by the political will to make systems
work, such as ensuring that citizens have access to the drugs and
infrastructure that prevent 18th century diseases from afflicting
them in the 21st and conserving the environment for present and
future generations.
Mr Mbugua is a newspaper editor
and an award-winning novelist.
mbugua@bigbooks.co.ke
This article was first published in The Edge magazine
