There are no elephants in Kenya, or just about extinct

(Or how great it is to be an elephant in Zimbabwe….) 

This according to a writer for the Telegraph newspaper in the UK:

Kenya banned the killing of elephants in 1979, effectively nationalising its herd. At around the same time, Rhodesia (as it still was) made elephants the property of those whose land they were on. The result? Thirty years on, Kenyan elephants have been all but wiped out, while Zimbabwe’s are as numerous as ever. (Read full article)

(bolding is all mine, though mind you, the rest of the article doesn’t make any sense either).

Reminded me of that cartoon movie from the 80s about mice who emigrate from Europe to America in the belief that there are “no cats in america”.

Technology Adoption

The problem with a lot of the technology adoption success stories coming out of Africa and in other developing markets is that they are anecdotal at best. In some cases one reads about a “success” in a single news story and the example is never ever heard of again. Did it really succeed? Who did it really benefit? How do we measure failure or success?

An attempt to answer these questions and analyze the speed of technological diffusion is the Cross-Country Historical Adoption of Technology (CHAT) database developed as part of a Cross-country technology adoption study : Making the theories face the facts.

Some of the conclusions of this study :

Our panel data analysis indicates that the most important determinants of the speed at which a country adopts technologies are the country’s human capital endowment,type of government, degree of openness to trade, and adoption of predecessor technologies.

What it tries to do is find reasons for :

• Why does some technology get adopted quickly in a developing country, while another technology doesn’t ?
• Why is running a call-center in a country like India cheaper than say, running it in Kenya?

The Economist has an excellent article about the study.

Old technologies – electricity generation, land-lines, railways are still relevant:

Broadly, two sets of obstacles stand in the way of technological progress in emerging economies. The first is their technological inheritance. Most advances are based on the labours of previous generations: you need electricity to run computers and reliable communications for modern health care, for instance. So countries that failed to adopt old technologies are at a disadvantage when it comes to new ones. Mobile phones, which require no wires, are a prominent exception.

Mentioned in the context of technology adoption is the case of Kenyan call centres v/s the competition.

This partly explains the patchiness in countries’ technological achievements overall. Call centres in Kenya, for example, pay more than ten times as much per unit of bandwidth as do rivals in India, because India’s fibre-optic cable system is far better and cheaper. So sometimes you cannot leapfrog. It depends in part on how governments organise basic infrastructure like transport and communications. The other set of problems has to do with the intangible things that affect a country’s capacity to absorb technology: education; R&D; financial systems; the quality of government.

(Which means its probably more sensible to compete in a market where you are cheaper, better equipped, and have better positional advantage than the competition)

The Economist also makes an example of usage of conventional technologies by the Kenyan horticulture sector (and how these were affected during the recent violence).

Govt. snatching milk from young entrepeneurs

The government wants to turn Kenya into an ICT hub. IT outsourcing being the new buzzword.

It would even seem that there is potential, given a few success stories, and the interest shown by companies like Google in the Kenyan market.

It would also seem logical that the government would then lower the cost of adopting ICT, and encourage local initiatives, isn’t it?

Well, no. The government wants to license the pants off various kinds of local ICT initiatives. Ksh 100,000 ( $1,400) as license fees may not seem like much, but its a lot of money in Kenya (about ten times the cost of a hiring an assassin).

Note #1: Where are these content providers they want to license anyway? I am having a hard time finding a reasonably efficient internet connection.

Note #2: I think the ICT outsourcing potential of Kenya is highly over-rated. I lived in Pakistan for 6 months. Its a country with significantly lower living and operational costs than Kenya. The outsourcing business there had rapid growth, but they still struggled in face of competition, and mostly took on a lower rung of outsourcing work as compared to their bigger neighbor, India. Reason for this being that few countries were willing to trust any confidential data processing in Pakistan (Islamic country, absence of a proper system of legal redress). Point being its a bit late joining the starting line-up when the race is already over.

Note #3: I think there is more money to be made in the regional ICT market. There is a fairly large market size, few dominant players, and lots of potential for online and offline information based services. Just as long as governments don’t tax and legislate the market to death.

Coastal under-class

Met random fishermen in random villages along the coast. Average incomes are around 9,000 shillings a month (about $125) – for a family size of 2 adults and 3 children (second, third wive and their kids not included). About 50% of that income is spent on food purchases : rice, vegetables, meat. The biggest fishes are sold to middlemen and wholesalers, the fishermen consume the leftovers. Every member of the family works towards generating an income. Boats are rented from a few boat-lords.

I found a large, white, but now red and sun-burnt volunteer in one of these villages. “I love this place”, he said without enthusiasm [and without an exclamation mark in his tone ]. His blackberry phone had discharged, week long power outage. What was he doing here ? Some obscure plan to build latrines. When I asked the villagers about a toilet, I was directed towards a clump of bushes, which seemed pleasant enough. The half-constructed latrine was some distance away – the brittle concrete radiating heat , hordes of flies and the smell of fish-bait. What problem was this cement horror solving?

One of the most lucrative businesses here is that of a liquor store. Most are run by enterprising groups of women. In another village, named after grains of mineral-salt, I met an old woman, an important person, one of the eminent palm wine brewers of the area. Lots of drunken men lay in the shade of baobab, most in an incoherent state. The other profitable enterprise is also run by women – a kind of thread, woven out of the tail bones of a shark, used for making fish nets.

What do they all think of the elections ?
We didn’t vote, we don’t have ID cards.

Few have ID cards here (which explains the low numbers on voter rolls, despite high population). Getting one requires lining up in some foreign government office, scratching the right palms, and answering difficult questions : “Are you really a Kenyan…?”, “Are you a muslim?”. Its just easier not getting an ID card – what would you use it here for anyway ?

Everybody knows, everyone else. Moreover, they see little reason to vote.
(One wonders, does an ID card serve any real purpose, apart from being a way of identifying someone negatively ? Clearly the history of this ID-card is rooted in colonial controls)

Borrowing and lending is via a local money-lender / pawn-broker who mortgages cash at atrocious interest rates, but users of his services are rare – for there isn’t much worth mortgaging. He showed me some of the abject pawned items: an ancient radio set, a silver bangle, a clock (one of those winding varieties, what use is a clock here anyway?).

It feels far away and remote, not for its distance, but because of the way the people ask with wonder about a remote and mythical place called Nairobi.

My name is bond, zero coupon bond

The Central Bank of Kenya (the equivalent of the Federal Reserve) issued “zero coupon” and fixed-rate treasury bonds with one-year and ten-year validities. This is the second time since the new year that the government has aggressively tried to market treasury bonds. What does this mean ?

The government wants to raise money by borrowing internally (the other ways of course, are to simply print more money, but we know what happens when you do that – and also borrow externally – few are willing to do that at the moment).
So the government issues IOUs (treasury bills) which citizens and financial institutions can purchase – thus lending the government money. Zero coupon bonds are interesting because they are sold at a discounted price, and yield the actual price on maturity – and are usually long term bonds. A 1 year zero coupon bond – means the Central Bank has no idea about inflation and economic projections beyond the next 12 months (Zero coupon bonds tend to factor in the inflation index).

Understandable as revenue collection is down, inflation is up, foreign investment is down, and government spending is up. In a nutshell the government is running out of money. Its a great time to own a bank – you lend money to the government on your terms, their balls are in your hands.

Funny, this didn’t make much news.