How the President is playing class politics all wrong

 

When he ran for office, President William Ruto made clear that his administration would champion a bottom-up model of economic planning.

In other words, his administration’s policies would be targeted at increasing incomes, productivity and jobs at the very wide bottom of the economic pyramid.

Reasonable people can debate the merits of such an approach, but it is fair to say it was a brilliant exercise in policy messaging. It was simple, it was catchy, and it captured a wider swathe of the electorate relative to Ruto’s competitors.

Once he entered office, the President found himself in a bind. First, it seems to have finally dawned on him that he has neither the fiscal space nor the policy levers to rapidly impact the economic lives of the so-called hustlers.

Instead, he must first deal with the legibly productive class in society – the group of Kenyans that pays the largest share of direct income taxes and whose behaviour can best be influenced via government policy.

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The hustlers may have had the votes, but they contribute precious little in direct income taxes. They are also largely unreachable via existing policy levers. This means that catering to their policy preferences must be redistributive. And there is the rub. Redistribution is not possible without having to listen to the legibly productive classes.

Second, it is likely that the President also realised that our intra-elite patronage politics is not necessarily amenable to real bottom-up economic policymaking.

Doing so would mean a radically agrarian reorientation of the entire economy.

Given the small margins in agriculture, I doubt there are enough people in the President’s coalition that would be willing to forego the easy money of non-agricultural project-based developmentalism for the sake of hustlers.

Both the President’s Budget Policy Statement and the Finance Bill betray a chasm between policy and the hustler rhetoric. Higher taxes and new funds (including the housing fund) are not necessarily redistributive in the direction of hustlers.

Higher VAT across the board amounts to a flat tax that will hit poorer Kenyans hardest.

The housing plan’s real beneficiaries (if it becomes reality) will be salaried workers and well-connected developers, not the under/unemployed hustlers.

For all intents and purposes, the President’s economic agenda is only peripherally interested in restructuring the economy in the direction of hustlers.

Finally, the hustlers should not let the President forget them.   BY THE STANDARD MEDIA