Comment Experiment on 'welfarism' won't workOne of the many surprises of working amongst Americans is that, despite a well-developed capitalist work ethic, there are people who do not have any qualms about working for six months and collecting unemployment benefits for the rest of the year. In fact for some, even working for six months is considered too much. As a foreign student, this attempt to beat the system always surprised me because I assumed you only got that type of conniving in a Third World country. What I found to be even more tragic was the fact that, in what is really a land of opportunity, young people could chose idleness when they could be anything they wanted to be. What I later learnt was that the negative attitude towards work and the resulting dependency mentality are some of the many negative consequences of government-funded social programmes. While Kenya does not have a comprehensive welfare system, the total effect of the intended, comprehensive free education, shelter, housing, health and even retirement programmes could, ironically, undermine the exhortation to build a working nation. In its paper, "Economic Recovery Strategy For Wealth and Employment Creation", the Government states its broad objectives in the social sector as reducing poverty and narrowing inequalities through, among other things, introduction of affordable and quality social services. In what has to be the most definitive ideological statement by a high-ranking Government official, Planning Minister Anyang' Nyong'o summarised the Government's intentions as aiming to achieve rapid economic development in order to provide appropriate social welfare systems. So far, the most visible translation of this vision has been provision of free primary education, and work is underway to create a comprehensive national health insurance scheme as well as a national housing programme. In his speech during the annual Tom Mboya speech, for instance, the minister pointed out that, by creating an elaborate welfare safety net for Kenyans, the Government aims to achieve two objectives. First, it hopes to free the energy spent on survival issues so that it can be used towards more creative matters. Secondly, it hopes to narrow the difference in the quality of life amongst Kenyans. Considering the experience elsewhere, this optimism seems quite out of place. From an economic perspective, Government-funded social programmes have always been controversial because they are not only an extra burden to the Exchequer, they also require taxpayers to underwrite the Government�s generosity. The additional cost to the Exchequer means that the Government has to increase taxes, Treasury borrowing, or donor funding, in ways that pose a number of fiscal problems. Increased borrowing in the domestic market puts pressure on interest rates and therefore ends up crowding out the private sector. Increased taxes reduce consumer demand for goods and services and therefore investment. Borrowing from international institutions increases dependency, compromises sovereignty, and mortgages the life of future generations. Already, the burden of such social programmes has resulted in creating an unprecedented deficit in this year's budget, the adverse effects of such deficits can be quite disastrous. For as US economic history illustrates, the stagnation and high inflation rates of the 1960s and 1970s resulted, to a large extent, from the deficits that arose from both President Roosevelt's New Deal welfare policies, and President Lyndon Johnson's Better Society programmes. If the economic arguments are controversial, the political and ideological arguments are equally problematic. In general, Narc's plan for elaborate social programmes seems to emanate from a belief that it is important to narrow income disparity, that the Government is the appropriate agent to bring about this equity, and that such a system is consistent with African culture. During the Tom Mboya speech, Prof Nyong'o revealed that the Government's plan is to pick up from the policies outlined in Sessional Paper Number 10 of 1965 on African Socialism. While every African country had a unique interpretation of this ideology, the different experiments shared the idea that an appropriate African economic system has to meet the African tradition of sharing and distributing wealth equitably. Forty years down the line, no African country does it. If the cultural justification for a welfare system stands on shaky ground, the assumption that equity is achieved when the Government dispenses social benefits is equally debatable. In the first place, it is difficult to define equity considering we are born with God-given differences and grow up in different cultural environments. For instance, the nomad whose whole life is spent looking after cattle has a very different concept of wealth from the urbanised professional who spends his life behind a desk. In such circumstances, should the Government seek to narrow the income differences by asking the businessman to underwrite some social programmes for the herdsman? Similarly, a Catholic priest who subscribes to vows of poverty can be considered poor when his wealth is compared to the businessman whose mission in life is to maximise profit. Should the Government seek to rescue the priest from his self- imposed poverty by offering him public-funded welfare benefits? Ultimately, there are many economic and philosophical questions that need to be thrashed out before putting public-funded social programmes in place. Comments\Views about this article |
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