Creating an inclusive economy for all

By Phyllis Wakiaga

The ability for industry to create an inclusive society is often obscured by narratives that center profits and markets or languages of GDP growth and trade statistics. Yet, the single most important function of a well-established manufacturing base for any country is to create social equity, reduce inequality and alleviate poverty.

The focus when it comes to this very function rests on the capacity of industry to create productive jobs and whilst that is indeed a crucial pillar, a holistic perspective connects the intricacies of human development and industrialization in a more profound way. Meaning, it is not just about creating the means of income generation for citizens, it is also about providing them the basic capabilities to function in a society. These range from being able to participate in civic activities to gaining a strong sense of belonging to community and society at large.

The Inclusive Development Index published in 2017 by the World Economic Forum ranked Kenya’s performance at 66 (out of 109) specifically on the Inclusion indicator. The index recorded a -14.47% decline on inclusion for the past 5 years. The country also registered a -2.68% decline on the intergenerational equity indicator for the past five years and was ranked at 62.

Meanwhile Denmark, which is a highly industrialized economy, was one of the top ranked on both indicators, number 7 on inclusion with 1.58% growth rate for five years, and number 8 on intergenerational equity with 0.66% growth rate.

Industrialization is synonymous with building human capabilities in this manner; on a broader level, a well industrialized country is able to catalyze the development of technology and equipment that will advance crucial sectors such as agriculture, health and housing. Raising the level of agricultural production (including quality of inputs, machinery for farming, techniques in harvesting) is only possible through industrialization; and seeing as Agriculture remains the number one sector in our country – determining food security and water provision for citizens – then it is critical for our country to invest heavily in industrializing.

Secondly, the ability of a country to enhance its capacity to provide affordable healthcare also rests on industrialization. A country that is able to supply critical medical equipment such as MRI Machines, Dialysis machines and so forth, as well as strengthen and boost its pharmaceutical sector, enables access to affordable medication, reduces the rate of infant mortality and generally results in a healthy population, whose vitality enables individuals to actively take part in shaping the future of the nation.

Thirdly, a thriving industry is able to produce quality material for the construction of quality and affordable housing. Shelter provision guarantees security and privacy of individuals, which affirms their right to exist, participate and belong.

Food security, water, housing and health are at the heart of building an equal society. They boost individual morale and vitality to engage in the political, economic and social life of society. None of these basics can exist without a strong manufacturing base which produces, innovates and sustains the infrastructure and systems that make them accessible, affordable and good quality.

Subsequently, individuals demonstrate increased productivity and drive to take part in economic activities which lead to greater economic growth for the country. A booming economy avails quality education, health, transportation as well as productive and sustainable employment to all citizens.

However, a continued decline of living standards for majority of citizens, coupled with an increase in inequality are great contributors to the political polarization we witness in our country, which manifests as violence/tension every five years. It also results in the erosion of social cohesion, especially since poverty strips away individual’s humanity, and their lack of access to basics is a violation of their human rights. The unity of a country is only possible if one can access and provide basic amenities for their family, and participate fully in social, civic and economic activities.

The current situation on accessibility to basic infrastructure is bleak. For instance, only 30.1% of the overall population, both rural and urban, have access to improved sanitation facilities. When it comes to access to basic medical facilities, there are, for example, 1.4 hospital beds per every 1,000 people. All the while the population continues to grow at an average of 1.69% per year according to the CIA World Fact Book.

Having a thriving industry will power the equipment and infrastructure necessary for good sanitation systems to function, and will also elevate overall living conditions of all citizens.

The writer is the CEO of Kenya Association of Manufacturers and the UN Global Compact Network Representative for Kenya. She can be reached at ceo@kam.co.ke.