Economic Development Term Paper

Open, View, and/or
Download this Document

Total Length: 2868 words ( 10 double-spaced pages)

Total Sources: 1+

Page 1 of 10

Kenyan reform policy Successful?

The need for reform in Kenya has been clearly demonstrated. But the question remains, has this reform been successful? The slogan of "Harambe" fueled the passions of the Kenyan people and drove them to strive as one nation to lift themselves up from poverty and oppression. It has been ten years since the last reform and it is now time to look back and see what has been accomplished.

To measure the success of the reforms we will consider several economic indicators both before the reform and after to see how they have changed. Then these factors will be considered as a whole to develop a better outlook on the entire picture. We will consider education, the performance of the industrial sector, the trade and tourism sector, the finance sector, rate of inflation, employment and wages, the agricultural sector, construction, social services and some comments on general conditions of the average person in Kenya today.

Education

It is conventional wisdom to stress the importance of education, a measure of human capital accumulation, in determining growth. After independence, Kenya experienced a major educational expansion but experienced economic slow down in the 1960s followed by stagnation in the 1970s and decline post-1980 (Appleton, 1999). Like the subcontinent as a whole it has experienced educational expansion but poor economic performance. At present, Kenya's educational achievements are above the average for the subcontinent with an illiteracy rate of 22% in 1995 compared to 44% in the subcontinent as a whole.

Its income is below average, in 1997 its GNP per capita in was $1,110 compared to $1,470 in the subcontinent. (World Bank, 1998). One common critique of conventional rate of return to education estimates is that they are based on urban wage employees. This may be appropriate for males in industrialized countries, but is questionable in developing countries where most of the population depends on self-employment. For the years for which we have data, we find rates of return to education within self-employment are comparable to those for wage employment. Education does have strong effects on the probability of employment and self-employment, an effect missed by conventional analysis of returns within employment (or self-employment) alone. However, earnings differences between the two kinds of activity are not sufficiently large to make this a major consideration for men. For women, low rates of labor market participation implies that education may have a much stronger effect on earned income than implied by conventional estimates (Appleton, 1999).

With higher literacy rates than the rest of the African continent, it would seem that their GDP per capita should be higher as well. But this is not the case and it seems as if education is not the only factor in determining economic growth.

Industrial Sector

Kenya's industrial sector has grown substantially over the years with its contribution to Gross Domestic Product (GDP) rose from about 8 per cent in 1990 to 14 per cent in 1994. There are more than 700 medium and large-scale enterprises of which 200 are foreign multinationals, mostly from the United Kingdom, the United States of America, Germany and the Far East. The major industrial exports include refined petroleum products and cement (Kenyaweb.com, 2001). This sector points to economic growth since the reform as this sector is a major source of employment, growth in this sector would b expected to have positive influences in other sectors as well.

Trade and Tourism

Another sector that has gained increased importance in the Kenyan economy since 1963 is trade, restaurants and hotels, including tourism. At the time of independence, the contribution of this sector to the national economy was minimal. Today the sector is the third most important, accounting for nearly 12 per cent of the total annual national output. By 1996, the country had earnings from tourism rising from 1,250 (Million Kenya Pounds) in 1995 to 1,280 million (Kenya Pounds) (Kenyaweb.com, 2001).

Finance Sector

With the general growth of the economy, other services such as banking, insurance and business have also expanded. Real estate services have also grown substantially over the period, reflecting largely the rapid expansion that the country has experienced in its urban population. Altogether, the contribution of these services to the gross domestic product, which was 16 per cent, had almost quadrupled by the end of 1990 (Kenyaweb.

Stuck Writing Your "Economic Development" Term Paper?

View All Our Example Economic Development Term Paper

Have A Custom Example Essay Written

com, 2001).

Inflation

In 2000, the Kenyan economic growth rate was at its lowest since independence in 1992 by registering a 0.4% increase. Inflation rose to 27.5%. Political reforms that led to the reintroduction of multi-party political system led to economic uncertainty towards the general election. This coupled with ethnic clashes in some parts of the country led to economic disruption and a fall in the output levels of the affected areas. During the same year, bad weather led to less production. Consequently, the gross domestic product declined. During the year 1992, a survey conducted by the National Household Welfare Monitoring and Evaluation showed that most households' expenditure was spent on food. The same survey showed that about 74% of households used mud or wood in the construction of walls, 67% used the same materials in floor construction. 36% used grass-thatched roofs (Kenyaweb.com, 2001)

By 1994, the Kenyan economy had improved considerably compared to the past four years, 1990-1993. This was largely due to the implementation of appropriate economic reforms like tight monetary control, favorable weather also helped to improve the economy, liberalization of foreign exchange and also a return to political stability. Real Gross Domestic Product expanded by 3.0% compared to 0.2% in the previous year. Inflation rate, which had risen to 46% in 1993, declined to 28%. During the year, the agriculture sector registered a growth of 2.8% while the manufacturing sector was hit by competition from imported goods hence registered a growth of only 1.9% (Kenyaweb.com, 2001)

Employment and Wages

By the year 1992, an estimated 2.1 million people were employed outside rural small-scale agriculture. A total of 91,000 jobs were created. Growth in employed persons declined in the years 1990 to 1992. Total employed persons by 1992 were 1,462,600. Due to the government's effort to reduce wages and achieved budgetary savings, a decline in the number of persons employed in the public sector was realized by 1%. On the other hand, the informal sector created 68,800 additional jobs representing 27.2% of total persons employed in 1992. (Kenyaweb.com, 2001)

The overall nominal wage rose from K£ 2,649 in 1991 to K£ 3,013 million in 1992 representing a 13.7% increase. Average earnings per person increased from K£ 1,837.4 per annum in 1991 to K£2,059.7 per annum. Due to inflation rate increase in this period from 19.6% in 1991 to 27.5% in 1992, consumer prices rose rapidly. (Kenyaweb.com, 2001)

By 1994, total employment outside rural small-scale agriculture activities grew to an estimate of 3.4 million persons. Employment in the informal sector had overtaken the public sector and represented 53.4% of the total employed persons with a total number of 1,792,400 persons. Overall, nominal wage increased by a huge 20.5% from K£3,496.6 million in 1993, to K£4,213.8 million in 1994. Inflation declined by 17.2% from 46% in 1993 to 28% in 1994. (Kenyaweb.com, 2001)

The year 1996 saw the total employment outside rural activities stand at 4.3 million persons. The number of persons employed in the informal sector was 2,643,800 and accounted for 61% of total persons employed. Those employed in the modern sector were a total of 1,670,000 persons. The overall wage increased from K£ 5,303.7 million in 1995 to K£ 6,669.8 million in 1996. The rate of inflation was contained within a single digit but rose from 1.6% in 1995 to 9% in 1996. (Kenyaweb.com, 2001)

The Kenyan economy generated 384,800 additional jobs in 1997 to bring total employment outside rural small-scale agriculture activities to 5.1 million persons by 1998. The overall nominal wage increased by 23.3% rising from K$8,247.7 million in 1997 to K$10,170.3 million in 1998. Average earnings per person expanded by 25.% from K$5,004.6 per annum in 1997 to 6258.3 per annum in 1998. Overall inflation as estimated by Nairobi consumer price indices, declined by 4.6% points from 11.2% in 1997 to 6.6 in 1998. (Kenyaweb.com, 2001)

Agriculture

Agriculture, accounts for 24.5 per cent of the Gross Domestic Product (GDP), and has expanded by 0.7 per cent within the year to July 2000 relative to 1.2 per cent in 1999. The agricultural sector has recorded a continued decline in performance, which is attributed mainly to the prolonged drought, tribal clashes that affected.....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


Related Essays

Democracy or Not for Economic Development

of the country to lay the groundwork for developing its economy. The evidence shows that there is a pathway to economic development, even for the least-developed country, and this paper will elaborate on what those steps might be. South Sudan is a landlocked country of 12.5 million people that split off from the Sudan in 2011. South Sudan is a multiethnic society, with different tribal groups living in the basin of the White Nile, which flows from Lake Victoria until it meets with the Blue Nile. The split of Sudan came after years of civil war. The north of Sudan was Muslim, the south Christian, and that is largely the… Continue Reading...

Steps of Economic Growth in USA China and Germany

relative benefit in manufacturing (Wolak, 2011). This paper offers an evaluation of economic development methods and both, relative and absolute, benefit in global trade as it pertains to the USA, China as well as Germany. USA By having a great quantity of low-priced work crews compared to the United States, it is no wonder that China as well as other developing nations, around the world, focus on the creation of labor-intensive items. For equivalent motives, the US may focus on the creation of products which are not only human but also physical-capital intensive due to the comparative wealth of a highly-knowledgeable work… Continue Reading...

Greece Economic Problems Analysis

has also received several bailouts in recent years, and struggles with tax collection, and overall economic development. Tax evasion ranges between 6-9% of total GDP in Greece, which makes it a significant economic problem (Georgakopoulos, 2016). Recent Macroeconomic Data In recent years, Greece\'s economy has flatlined. The country has received several infusions of capital from other EU countries, but there is a lack of confidence in Greece that is hampered investment at present. The GDP grew 0.4% in 2014, slipped 0.2% in 2015, and was flat in 2016. The country ranks 191st in real GDP growth rate, and 71st in GDP per capita (CIA World… Continue Reading...

Gender Status Impact Access to Social Political and Economic Resources

as well as economic development (Fitriani, 1). Additionally, a large number of initiatives for improving financial service access have been extensively implemented for providing better opportunities to the poverty-ridden class of society. Though mixed outcomes are noted with regard to initiative success, analyses of gendered micro-financial service targeting reveal male beneficiaries do not contribute as much as their female counterparts to familial food security and overall wellness. Though microcredit programs display potential when it comes to increasing females’ self-confidence levels and small-scale earnings generation, they may play a role in increasing their susceptibility… Continue Reading...

Public Land Development Projects

a public hearing, headed by Councilmember Kenyan R. McDuffie and the Committee on Business and Economic Development on March 5, 2018. The substantive content of the meeting comprised four separate urban development issues including the redevelopment of waterfront station, parcel easement, the redevelopment of center leg freeway, and a Spring Road disposition approval. Each of these issues are legislative bills being proposed and were discussed in order including PR22-0629, B220609, B22-0632, and PR22-0717, starting with the waterfront station disposition approval resolution. Although they are different resolutions, each of these revolved around development, use, or appropriation of publically held property. The meeting shows in a general… Continue Reading...

Literacy Rates Among Females in Developing Countries

a particularly dramatic impact upon a nation’s social and economic development, given the link between female literacy and lower birth rates, lower poverty rates (as a result of smaller family sizes), and improved health outcomes.[footnoteRef:2] This paper will compare the literacy rates of Cuba, the Central African Republic, Iran, and Myanmar (Burma) in general terms and in female-specific terms and show whether these general principles regarding development and female literacy are supported. [2: Robinson-Pant A. “Women, Literacy, and Development: An Overview.” Literacies and Language Education. Encyclopedia of Language and Education (3rd ed.), edited by Mary B. Street.Springer International Publishing,… Continue Reading...

The Tourism Industry in Mexico

provides a window into understanding U.S.-Mexico relations. By promoting tourism as a path to economic development, Mexico shows that it is still dependent on the U.S. This is the same U.S. that fought a war with Mexico, took land from Mexico (the southwest region of America), and still continues to treat Mexico with condescension (threats of building a wall, calling all immigrants rapists and murders, and knocking down the culture of Mexicans). Yet, Mexicans should think that relying on Americans for tourism is a good thing? Instead of relying on the tourism industry for economic development, Mexico should be developing its industries. After all,… Continue Reading...

Globalization and International Political Economy

issues should be identified and nabbed. (Mingst and Arreguin 2011. 169) 2- Reasoning with clear ideas and examples, provide at least two main justifications for International Economic Development as a legitimate component of Globalization, and two of its main criticisms? Have a working definition of International Development even if highly elastic and normative. How is this distinguished… Continue Reading...

UAE and Japan Relations

industries, and these initiatives are expected to further enhance ongoing economic development efforts. Against this backdrop, both the UAE and Japan have recognized the importance of establishing and strengthening bilateral relations, and these efforts expanded significantly over the past half century. Some salient demographic and economic statistics for the UAE and Japan are set forth in Table 1 below to provide an overview of their current status. Table 1 Salient demographic and economic statistics for the UAE and Japan Statistic UAE Japan Population 9,701,315 126,168,156 Religions Muslim (official) 76%, Christian 9%, other (primarily Hindu and Buddhist, less than 5% of… Continue Reading...

Africa From Colonialism to Neocolonialism

that markedly affected the economic development of the African continent during the last five centuries” (221). In essence, slavery was largely focused on the exploitation of human capital – whereby captured natives were expatriated to provide labor in diverse settings. For instance, European economies during the slave trade era were in need of sufficient labor to exploit vast and fertile lands they had seized in the Americas. According to Mukhtar, Kura, Abba, and Ahmed (2013), agricultural exploits in the Mediterranean, particularly sugar plantations, were largely powered by the trans-Saharan slave trade. At the same… Continue Reading...

The U.S Economy and Health Care

vary across populations and economic sectors. Analysts, for instance, observe that healthcare expenditure hinders economic development in general but has the potential to promote economic prosperity and development in particular economic segments as well (Sood, Ghosh & Escarse, 2007). Comprehending these impacts of healthcare expenditure necessitates evaluation of these elements. The CBO notes that federal health care program spending is increasingly rapidly, and with that comes the need to fund that spending. It notes that the Affordable Care Act has served to reduce the cost burden of health care on the economy, in particular on consumers, but only by means of slowing the growth… Continue Reading...

Globalization and Major Programmes

up a progressively more significant role in the public administration of emerging and developing nations. From an economic development perspective, projects add to the assimilation of markets by connecting productive activities, facilitate the organization and technology for the transformation of raw materials into socially and economically beneficial goods and services, and institute the physical infrastructure that is essential to increase interchange amongst organization and geographical expanses. Projects make available the channels for public and private investment, re-station unutilized or underemployed resources into productive uses, and provide increased prospects for entrepreneurship (Rondinelli, 1976). In a wide-ranging setting, projects have grown to become, in numerous developing nations, instruments for… Continue Reading...

Globalization Essay

on economic development, and prosperity, and on human physical well-being in societies around the world (2018). Globalization has been around for thousands of years because people have been buying and selling to one another all over the world regardless of how much distance was between them.  For hundreds upon hundreds of years, people and companies have made strategic investments in the work of other countries, with many of the current traits of globalization that dominate today comparable to those that were the norm before World War One (SUNY Levin). However, with… Continue Reading...

Emirates Airlines PESTLE AND SWOT Analysis

The recommendation given is that this presents a great opportunity for Emirates Airlines because of the healthy economic setting. Therefore, the company should capitalize on the health economic setting to advance its business operation. 2. Economic development It is imperative to note that the economy of the United Arab Emirates has been largely supported by the oil industry. However, in recent times, the government together with the private sector has made significant investments into other industries and sectors in the UAE economy, for instance the trade and commerce sectors. This is an endeavor to facilitate the UAE to be an attractive and appealing business destination to world. As a result, this has directly impacted Emirates Airlines in a positive manner in the sense that increased… Continue Reading...

Seattle Homelessness Action Plan

background checks. The creation of the Office of Economic Development (OED) was key towards the enhancement of workforce development. In essence, this provided Mayor Norman Rice with the appropriate foundation to power through his social equity objectives. Together with the Seattle Jobs Initiative (SJI), many of those who lacked adequate incomes were able to access living-wage placements and postings. It is, however, important to note that the social equity agenda of Seattle was challenged by larger regional trends whereby the resulting economic growth ended up edging the living costs higher. Housing costs were also driven up. Currently, with… Continue Reading...

Economy and U.S. Health Care

declines and a growth in inflation. Greater national expenditure adversely impacts economic development, to a considerable extent. Rise in workforce health insurance premiums has deterred investors from investing in the US and led them to turn their attention to Canada and other such economies having appreciably lower employer premium burdens. In sectors like the automotive sector, employee insurance at the time of manufacturing an automobile stands at 1,300 dollars, which is costlier as compared to the steel that forms the automobile’s body. This sort of huge premium decreases companies’ earnings following taxes and the overall income earned for each household. This… Continue Reading...

Ending Terrorism in Africa

counter terror attacks - which happen to be modern day's most worrying aspect of insecurity and economic developments on the global scene (Bamfo, 2013). Terrorism stands on the way of many development agenda. It is as much a hindrance to the national economic agenda as much as it inhibits efforts to attain the Millennium Development Goals. A lot of resources are focused on reconstructing installations that have been destroyed. Sometimes, there is heavy ransom that is paid to these groups for abductions. There is need for cooperation among African nations if peace and tranquility is to be achieved. Literature Review Findings African countries have made commendable… Continue Reading...

Light Rail Transport System Project

of light rail system is associated with some community benefits like lessening traffic congestion, reducing pollution, enhancing economic development, and job creation. Therefore, this regional transportation district would significantly benefit from increased development of light rail transportation system. To help enhance the development of a light rail transportation system in this district, voters have just approved a mil levy (property tax) increase to fund the system that connects the current system to a commercial airport located nearly 20 miles from the urban core of the city. Funding for this system is critical toward enhancing its development given that the creation of a light rail system would help… Continue Reading...

Problems Unsolved and a Nation Divided

economy. Businesses must pay greater attention to training and development opportunities, compensation, public education, economic development, as well as community building. State and local governments must encourage cross-sector collaborations, develop workforce skills, revitalize local education, promote entrepreneurship, improve infrastructure, and craft regional economic strategic plans. At the federal level, there must be reforms in corporate taxation, immigration, international trade, communications and energy infrastructure, health care, and public education. Addressing these areas can significantly improve the business environment and the standards of the average citizen, thereby reversing the deteriorating competitiveness of the U.S. economy. Tax Reform Taxation is one of the major factors, according to… Continue Reading...

sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Economic Development" (2002, April 24) Retrieved April 19, 2024, from
https://www.aceyourpaper.com/essays/economic-development-130657

Latest MLA Format (8th edition)

Copy Reference
"Economic Development" 24 April 2002. Web.19 April. 2024. <
https://www.aceyourpaper.com/essays/economic-development-130657>

Latest Chicago Format (16th edition)

Copy Reference
"Economic Development", 24 April 2002, Accessed.19 April. 2024,
https://www.aceyourpaper.com/essays/economic-development-130657
   

Open, View, and/or
Download this Document
order custom essay example