Elections around the world are fought and won based on key emotions – hope or fear. Narc’s 2002 campaign “yote yawezekana” produced the most hopeful nation in the world, according to a 2003 Gallup poll. Our favorite song from the campaign was “unbogable” Gidi Gidi Maji Maji Duo because it made us feel like we were unstoppable. We were so euphoric that citizens arrested stray traffic cops and not the other way around!
In contrast, the 2012 TNA / URP campaign sold the fear – of kimundu and the ICC. The canoe campaigns of the 90s used to create fear by not only threatening us with bodily harm, but actually attacking us through tribal conflict and other forms of political violence! The PNU’s emotionally neutral “kazi iendele” campaign from 2007 struggled to gain momentum, which almost cost Kibaki a second term.
Obama’s 2008 “Yes We Can” sparked a deep emotional response based on hopes for a better future for all, regardless of background or circumstance. All over the world people wept as he triumphed.
Trump’s “Make American Great Again”, meanwhile, was based on fear of job loss, stagnation in living standards and loss of status as a global economic power. It generated very angry white voters. They applauded him when he was aggressive against women, blacks and immigrants.
What does all of this have to do with the economy and the urgent need for a nationalist coalition by 2022? As it turns out, a lot. The economy runs on trust. When optimism is high, the economy grows faster. When doom and darkness prevail, the economy is sluggish, or worse, we get a recession. Let us briefly consider the reasons.
If citizens look to the future with great hope, i.e. are optimistic, this has a positive effect on their consumer behavior. They’re more likely to build or buy a house, take out a mortgage, go on vacation, buy a car, and so on. Personal creditworthiness grows. Conversely, when we are anxious or pessimistic about the future, we adopt a wait-and-see attitude. Even our favorite investment – buying land in Nanyuki, Rumuruti, Mlolongo, or Kajiado – is being put on hold.
When companies look to the future with confidence, they tend to increase inventory and inventory because they anticipate sales. They are also more likely to make long-term investments in property, plant and equipment. Conversely, if they are pessimistic, they will reduce inventories, withhold investment and adopt a wait-and-see attitude. It is for this reason that economists talk about consumer and business confidence.
So what happened in the years that we were unbwogable? Real wages quadrupled. The stock market went through the roof. Equity, Co-op Bank, Safaricom and other companies listed on the stock exchange. And wherever Kibaki built a road, we quickly followed, bought land, built many buildings, and started small businesses. And banks literally pitch tents on sidewalks to look for customers.
But what happened when we felt anxious? Uhuru built many more roads than Kibaki. But we responded with a complaint. He has redoubled his efforts, but consumer and business confidence has remained low. Annual private sector lending growth remained below 5% and we continued to complain.
Then how can we overcome fear and anger and create hope in their place to ensure personal income growth? A nationalist coalition. Far from being just words, campaign messages and attitudes unleash deep emotions that determine our feelings for years after the election and increase the confidence of consumers and companies in one way or another, with significant economic consequences.
What creates fear and what are we angry about?
First anger. One explanation from economists is that real wages have been stagnating for over a decade. As a result, workers and small business owners feel disenfranchised. To paraphrase, jeshi ti ngenu. Real wages rose rapidly 4.8 times between 2002 and 2008 to 33,000 per person per month. After that, wages fell to 26,000 by 2012, before slowly rising to the current 31,000.
Many middle class people say they haven’t made any significant investments in the past decade. Still, they can see other people who appear to be in a different economy thrive. As a result, they feel disenfranchised and wonder who is to blame.
This has resulted in politicians looking for the guilty party. Dynasties, one group has already chosen. In previous election cycles, parishes in Mt. Kenya were the target. In America, Trump offered immigrants, African Americans and women as targets of guilt to explain why people felt their lives were stagnant.
Taking advantage of such disillusionment is fodder for populist politicians around the world. And it creates fear! Which only makes the situation worse because the economy cannot thrive when consumer and business confidence is low. And fearful people have little self-confidence. Populism seeks to use political solutions to heal profound economic problems like stagnation in productivity. It can win elections, but it always makes economic problems worse.
As we saw at the end of Trump’s tenure, the angry white voters were still angry. They stormed and desecrated Congress, in part because four years of its rule did not reverse job losses or stagnation in living standards.
Then what is to be done? What is driving real wages up? Productivity gains. We need to find ways to increase productivity at the corporate and household levels. These increases in productivity will make our companies globally competitive and lead to increases in real wages and thus to an improvement in the standard of living.
That means we have to solve the underlying problems, including high energy and capital costs and technology. Our competitors in the Far East pay less than six shillings, we pay three times more per kilowatt hour. We have to solve that. To get rid of expensive thermal energy, entrenched powerful business interests must be overcome.
Although economists have yet to figure out whether there is a direct link between real wages and real interest rates, it can be casually observed that real interest rates were the lowest in the years prior to 2008, averaging 1.2 percent over a six-year period. It is the same period in which real wages have risen the fastest. So we have to lower the cost of capital.
Third, we need to stop punishing domestic technology. Some of our policies favor imported technology. To be fair, these are difficult political questions. Effective politics require broad legitimacy. Hence the need for a broad nationalist coalition! When we are together, we are less afraid of each other. But how are we supposed to be together? So far, two models have been tested. One failed. Another worked.
The competing idea is a nationalist coalition. Embrace different parties, then form a coalition. It will make everyone feel more secure and will make it easier to gain broad political legitimacy for the difficult political decisions ahead.
In 1963, 2003 and 2008 we had broad-based coalition governments. We have developed well. Let’s do it again in 2022!
Ndiritu Muriithi is the governor of Laikipia County