Wednesday, February 27, 2008

Kenya News Bulletin: ODM Calls Off Thursday's Mass Protests; Leaders Urged to Find Quick Solution; Economy Cannot Survive Turmoil Any Longer

ODM calls off Thursday's mass protests

Kenya Daily Nation
Publication Date: 2/27/2008

The Orange Democratic Movement has called off rallies slated for Thursday which aimed at pressurising the government for a speedy resolution of the political impasse.

The ODM postponed the countrywide rallies, which called for the re-opening of Parliament, so that it can pass laws in support of the resolutions of the Kofi Annan led mediation talks.

ODM leader Raila Odinga announced the rescheduling of the rallies following a request by former United Nations secretary general Kofi Annan so that not to jeopardise the talks.

"I would like to announce now on behalf of the movement the postponement until further notice any kind of action intended for tomorrow," Mr Odinga said at Pentagon House in Nairobi.

Speaking after a meeting with Mr Annan and former Tanzanian President Benjamin Mkapa, Mr Odinga who was flanked by Pentagon members Musalia Mudavadi, Najib Balala and Charity Ngilu said ODM was committed to the negotiations and will ensure it succeeds.

Mr Annan appealed to Mr Odinga and ODM not to proceed with the mass action.

The chief mediator said the National Dialogue and Reconciliation was at a critical stage of negotiations and that solutions to the crisis must be reached at the negotiation table.

The rallies had raised fears countrywide that they could result in fresh violence and lead to deaths and destruction of property.

The party which enjoys a majority in Parliament and whose pollsters have rated as most popular in the country had given President Kibaki seven days from last Wednesday to convene Parliament to discuss and pass laws to back recommendations of the Annan talks for smooth implementation.

The rallies were also meant to protest what party secretary general Anyang Nyong’o termed as slow pace of the month old talks and the party added it had notified police as required that it will be holding them.

The party has accused rival PNU of undermining the talks, often changing goal posts, lack of seriousness and buying time as it consolidated its leadership.

PNU which has since denied being a stumbling block in the negotiations condemned the planned demonstrations.

Previous mass protests by ODM supporters over the disputed last year’s presidential election results were outlawed by police, who lobbed tear-gas canisters at the defiant demonstrators, shot at, injured and killed some of them.

Mr Mkapa called for patience as PNU and ODM negotiators looked for a solution to the crisis that has left more than 1000 people killed and 300, 000 displaced.

Mr Annan had set a deadline of 15 days since January 29 for ODM and PNU negotiators to agree on short term solutions to crisis.

Disagreements between the negotiators and hardline positions have however hampered the talks success as at a time when the teams were discussing how to resolve the disputed last year’s presidential election results.

The teams are divided on the creation of a Prime Minister position, the holder’s functions and powers.

Leaders urged to find a quick solution to crisis

Kenya Daily Nation
Publication Date: 2/27/2008

President Kibaki and ODM leader Raila Odinga have been urged to speedily agree on a solution to the current political crisis in the country.

Chief mediator Kofi Annan made the call as Mr Odinga announced that power-sharing to facilitate constitutional changes was the only solution to the crisis.

Addressing journalists at Pentagon House in Nairobi after a meeting with Mr Odinga, Mr Annan said the talks between PNU and ODM that he chaired required the parties’ leaders support and political will to succeed.

Mr Annan explained that he had also separately met Tanzanian President Jakaya Mrisho Kikwete and President Kibaki in the morning and discussed the talks and how to move the negotiations forward.

Mr Annan suspended the National Dialogue and Reconciliation talks on Tuesday after PNU and ODM negotiators failed to agree and talks seemed to be going round in circles. The Ghanaian said he was to meet the principals-President Kibaki and Mr Odinga to break the stalemate.

Mr Annan said he was pleased with his discussions with Mr Odinga and that they were to have further discussions on some issues raised from their meeting with him and other leaders. The mediator did not however specify the issues and did not field questions from journalists after the press conference.

He said Kenyans were suffering; living in fear, traumatised, displaced, lost jobs and that a quick solution was needed for their return to normal lives.

"I appeal to those concerned to think of the people and seek speedy solution," Mr Annan who was accompanied by former Tanzanian President Benjamin Mkapa, said.

Mr Mkapa said during their Team of Eminent African Personalities meeting with President Kibaki, they sought his assistance for finding a quick solution to the crisis.

The former President said the issues that sparked disagreements at the talks could still be addressed and that reaching a lasting solution or agreement was possible.

Meanwhile, President Kibaki said he was ready and willing to share "responsibilities of government" with the ODM and to push for a speedy resolution of the issues under discussion.

The president also said that he would do all within his powers to see that the process of national dialogue and reconciliation succeeded and reflected the will of the Kenyan people.

In a statement sent from the Presidential Press Service, the president said the office of the Prime Minister and two deputies would be created under the current constitution, before a comprehensive constitutional review to be done within a year.

On Tuesday, PNU and ODM negotiators sharply differed over the creation of a prime minister post, the holder’s powers and functions. They also differed on appointments to the Cabinet and constitutional changes to accommodate the talks recommendations among other things.

A PNU representative is said to have used harsh words on mediation team before storming out of the meeting at Serena Hotel as the talks hit a dead end.

Mr Odinga said he had been briefed by Mr Annan and Mr Mkapa on progress made and difficulties encountered at the negotiations.

"We as ODM are committed and will ensure the talks do succeed. We will do anything in our power to facilitate progress," he said.

He pushed for a power-sharing arrangement that would enable the country carry out necessary reforms to avoid a repeat of violence witnessed since the disputed presidential elections results were announced.

Any agreement entered between ODM and PNU, he said, must be for continuation of reforms Kenyans have been yearning for.

He said ODM did not just want to enter government for sake of it, but to provide lasting solution to problems facing the country and conduct constitutional changes.


This economy cannot survive political turmoil any longer

Kenya Daily Nation
Publication Date: 2/27/2008

THIS ECONOMY BADLY Requires a new dose of optimism. Right now, the biggest barrier to a return to economic stability is the atmosphere of uncertainty hanging over the mediation process presided over by former UN secretary-general Kofi Annan.

Already, the effect of the climate of uncertainty that has engulfed the country can be seen on the sluggish stock market, a volatile exchange rate, and inflation that stubbornly remains at double-digit levels.

If Dr Annan fails, this country could plunge into a round of macro-economic instability, the magnitude of which was only witnessed in the early 1990s.

Optimism, although intangible, is a very powerful economic factor. No investor can risk putting his money into a new project in an environment of high political risk, and where he is unable to predict the future movement of prices and interests rates.

This economy will not regain the growth momentum it has been enjoying in the last three years if the climate of uncertainty lingers too long.

If you look at the Economic Survey, you will realise that the main sources of economic recovery in the last four years have been the following:

Top of the list is the agriculture sector, dominated by horticulture and cereals, the transport and communications sector, and the wholesale and retail sectors. Tourism and the Manufacturing sectors have also consistently recorded impressive growth rates.

In terms of expenditures, much of the growth is attributed to domestic consumption. Investment on roads, free primary education, and the revival of trouble-ridden parastatals also increased.

Trade, reflected in the volumes of exports of goods and services, has also performed well, growing at an average 15 per cent.

Still, the intangible factor behind all this growth has been optimism within the private sector. The business community believed that the growth pick-up was real and sustainable.

This is why firms were ploughing back profits rather than depositing the money in bank accounts abroad, while businesses were positioning themselves to produce for an integrated East Africa and for expanded markets with the Comesa trading bloc.

Instead of optimism, what we have now is an atmosphere of doom and gloom. Tourism is in the doldrums, while regional trade, the transport sector and agriculture have been adversely affected by the post-election violence.

Sooner or later, we will have a glimpse of the toll these negative conditions in the economy have had on the Government’s finances — revenues, external assistance and borrowing — when the Finance minister presents the supplementary budget in Parliament next month.

WE ARE LIKELY TO SEE MAJOR deviations between the original budget and the supplementary one. The predictions right now are that the recurrent budget will overshoot the printed estimates significantly, reflecting expenditures which were not budgeted for in the June budget — including the “free’’ secondary school education programme, and additional expenditure in providing security to quell the post-election violence.

And if Dr Annan leaves town without a deal and “donors” — especially the influential ones like the European Union — follow by freezing grants and loans, Mr Amos Kimunya will have even more problems trying to juggle with the allocations in the development budget.

Compared to Tanzania and Uganda, Kenya does not absorb that much budget support, namely quick-disbursing cash not tied to any project. But in terms of project loans and grants, we still depend a great deal on donors.

In the current circumstances, a freeze will badly affect the infrastructure investment programme, especially the roads, health and energy sectors where the European Union and a number of “bilaterals” have committed billions of shillings in the current financial year.

Opinion is unanimous today that physical infrastructure (especially roads) is the biggest impediment to private investment and expansion.

Indeed, poorly maintained roads, and expensive and unreliable electricity supply have combined to hamper productivity and stifle the competitiveness of our exports within the Comesa region.

A recent study found that while it costs Sh5,400 to ferry cargo from Shanghai to Mombasa — a distance of 5,000 kilometres — transporting the same cargo between Mombasa and Nairobi, 500 kilometres distant, would cost Sh3,000.

Can we, really, afford any delays in the infrastructure investment programme? Yet this will be the inevitable consequence of donors freezing aid.

The donor factor aside, this year’s budget is also set to experience pressure from shortfalls from privatisation proceeds.

The budget which Mr Kimunya presented to Parliament in June had assumed that the Government would, within the financial year, receive Sh36 billion in the second quarter of the financial year, especially from the planned initial public offer of Safaricom shares.

Although the Government realised the same amount from the sale of Telkom Kenya alone, it still calculated on receiving proceeds from Safaricom before the end of last year. It hasn’t happened yet.

Dr Annan must save this country.

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