Policy lessons and implication for the Kenyan economy
Primarily, the Kenyan government can create policies that advance development even with low levels of government spending. According to Hope (2017), the spending patterns in Kenya presently are more than twice on average than what advanced economies like East Asian could spend decades back. For instance, around 1964, the country’s spending on unemployment, pensions, housing, and health contributed to less than 4 percent of the GDP (Hope 2017). Even with low government spending, the economic expansion was slow. Countries like South East Asia were equally struggling to expand their economy. It had increased cases of unemployment, poverty, and fewer resources. However, in 2019 the country thrived from being among the poorest global regions to global economic power (Hope 2017). The country focused on emphasizing education to its population that influenced most of them to pursue industrialization and technological advancements. Thereby, while the country’s priority is to strengthen its domestic taxation and raise more revenues to finance public goods, the priority needs should focus on improving the business environment. This way, they will attract investments into industrialization and technological activities, which essentially revolutionize the economic framework.
Kenya’s economic policies should also focus on developing fiscal and market institutions prior to increasing its spending needs. Ideally, the economic system of East Asia changed after 1970 after the region focused on utilizing its human capital (Hope, 2017). It reevaluated the government’s role amidst the economic changes to strengthen the economy. Thus, this shift demanded a different perspective on human capital skills to lead to a significant expansion of social insurance, which eventually reduces spending. Thereby, the Kenyan economy should incorporate its vast human capital into economic processes that protect spending.
Characteristics of the Kenyan economy
According to Akena (2016), the Kenyan economy increased at an annual GDP rate of 6.6 percent. This growth was significantly boosted by its agricultural activities, which are essentially the popular economic practice in the region. During then, the majority of the country’s population was unemployed, experienced high poverty levels and poor education patterns. Also, Akena (2016) informs that most Kenyans focused on promoting the Africanization of the Kenya economy during this period. This way, the country focused on public investments and industrial activities that were still not prominent in the region. Also, most leaders were against the capitalist economy that was supported by the western leaders and the communist ideologies that were supported by the Eastern region. Thus, the economy was restructured to accommodate African socialism and equally protecting Kenya’s fortunes from being linked with other countries.
The economic conditions in this period were characterized by the capital shortage (Akena, 2016). This condition was brought in after the country attained its independence. Thereby, Britain was no longer directly benefitting or supporting its economic activities. Kenya also had a poor technology base that undermined its communication and development activities. Finally, the country had underexploited its private sector. Initially, it hesitated to develop its private sector, especially since it had fewer resources. Despite that, the country has not yet experienced an economic take-off. The country is still considered as an emerging nation.
However, the country can experience a take-off by considering development strategies. For instance, Akena (2016) informs that Kenya accumulates a significant amount of foreign aids yearly. While this practice is necessary for the country’s growth plan, it should maximize several areas in its economy. This way, the company should consider importing raw materials, foreign technology, and goods, then reproducing them to influence economic growth. This aspect relies on effective technology development, a skilled workforce, financial support, and promotion of its exports.
Relevance of industries
Ideally, agricultural revolutions were the root cause of industrial revolutions. This allowed most industrial operations to shift from the tiresome manual work to simpler mechanical operations. Over the years, the increased prominence of technology in nearly all the industrial operations has made these processes even more convenient (Mariara & Kiriti, 2020). Thereby, industrial revolutions are dynamic mechanical changes integrated into modern economic practices to achieve massive productivity.
In this case, the Kenyan economic system should integrate technological practices into its industrial activities. This practice creates room for innovative practices to create competitive products that serve the needs of its population and the foreign market (Mariara & Kiriti, 2020). Ultimately, this allows the country to create more income that should be reinvested into the economy. Also, technology allows the country to sustain most of its economic activities using artificial intelligence. This way, the country will be able to create its original data and structure it to sustain the economic functions. Unfortunately, the technological environment experiences dynamic changes due to surging economic needs. This requires the country to study the various pattern and adapt to those that serve its needs. Frequent technological innovations in industrial operations are relevant practices that enable the country to stay relevant economically.
Finally, technology can be integrated into economic aspects. For instance, education is a vital economic element that allows citizens to foster skilled habits that are relevant to developing the economic structure. This way, the country should invest in creating educational systems that are integrated with technology and information. This allows citizens to experience an appropriate education system that matches its economic needs and goals. According to Mariara & Kiriti (2020), the Kenyan education system is averagely relevant in promoting an economic take-off. Based on this, the government should accommodate more technological reforms that support productive economic systems. Therefore, the use of technology in the economic elements allows the country to expand its economy by focusing on innovation.
Business Negotiations
According to Olivia & Dedzo (2017), negotiations are vital in the business and management field, especially in the dynamic world. This skill enables members to develop effective relationships among potential business partners, competitors, and other business collaborators. The country can achieve this by focusing on reaching agreements and promoting equity in decision making with other individuals it interacts with.
Successful negotiations are based on understanding other people’s cultures. Olivia & Dedzo (2017) informs that negotiation may fail due to problems stemming from cultural differences. For instance, non-verbal behaviors may receive wrong interpretations from other societies, which may damage the transaction process. In this case, Kenyan society is prone to be receptive to business activities, very inquisitive, and less aggressive. Such attributes express their behaviors that are relevant to creating effective business negotiations. Also, the Kenyan attitudes are shaped towards supporting and participating in Africanized processes and operations. Thereby, this group may be less receptive to nations that are supporting communist and capitalist ideologies. Such social, cultural conflicts are prone to hindering effective business relationships among the members. Therefore, individuals should study various cultural behaviors put across by the members they are working with in order to create relevant business negotiations.
Most often, the objective of business negotiations is to achieve a good outcome. A country can integrate business negotiations with its business operations in order to achieve the most appropriate outcome (Olivia & Dedzo, 2017). Thereby, it should avoid fighting their potential partners regardless of differences in opinions or values. On the contrary, it should seek mutual respect by creating a fair winning platform to benefit all the parties from business relations. Therefore, business negotiations are critical skills that enable parties to achieve proper business relations and significant outcomes.
In conclusion, the Kenyan economic system is prone to expansion by focusing on proper policy implementation. Ideally, relevant policies enable the organization to initiate and sustain economic practices that foster the country’s economic goals. Thereby, Kenya can achieve this by significantly reducing its spending patterns and improving its fiscal and market institutions. Ideally, since Kenya gained its independence in 1963, the country has been increasing its GDP. However, instead of expanding its economic power, it has maintained a stagnant economic situation due to increased government spending. Regardless, Kenya can experience an economic take-off by utilizing its vast human capital in industrial and agricultural activities. While these activities are crucial in boosting its economic power, the company should integrate them to promote a productive economic system. Also, technology is a vital element that allows industries to innovate and develop relevant economic activities. Thus, the Kenyan government should invest in a modern technological framework to improve and develop its practices. Finally, business negotiations are vital skills that are used to promote proper relations among the parties involved in transactions. As a country, Kenya should foster positive business negotiation skills with its members in order to achieve an effective outcome. Therefore, the country’s economic system is prone to experiencing growth by looking at other success factors in other countries and implementing relevant economic practices to outlive the country’s economic weaknesses.
References
Akena, A. A. (2016). The relationship between exports and economic growth in Kenya.
Hope, K. R. (2017). Economic performance and public finance in Kenya, 1960‒2010. Africanus, 47(2), 1-19.
Mariara, J. K., & Kiriti, T. W. (2020). Structural adjustment, poverty, and economic growth: An analysis for Kenya (Doctoral dissertation, AERC).
Olivia, A. T., & Dedzo, B. Q. (2017). Cross-cultural competence and functional diversity in business negotiations: a developing country’s perspective. In Advances in Cross-Cultural Decision Making (pp. 85-98). Springer, Cham.