Commentary
Much has been said of the changes Brussels is trying to make to the EU enlargement process. Here’s why gradual integration might—or might not—be the answer.
Dimitar Bechev
{
"authors": [],
"type": "pressRelease",
"centerAffiliationAll": "",
"centers": [
"Carnegie Endowment for International Peace"
],
"collections": [],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "",
"programs": [],
"projects": [],
"regions": [
"Southern, Eastern, and Western Africa"
],
"topics": [
"Economy",
"Trade"
]
}
REQUIRED IMAGE
Press Release
Trade is critical for Kenya’s economic growth, but it’s not enough
The implementation of a likely agreement of the Doha Round would improve Kenya’s competitive position in processed food and agriculture, but would harm manufacturing and mining. Depending on the content of negotiations, the liberalization of trade in goods would boost the country’s GDP by 0.2 percent annually, placing Kenya on the winning side of Doha. However, the benefits would be small.
Published on Nov 4, 2009
WASHINGTON, Nov 4—Kenya’s economy has yet to recover from the global financial crisis and the political upheaval and social violence that followed the disputed elections at the end of 2007. A new report finds that the implementation of a likely agreement of the ongoing Doha Round of trade negotiations would improve Kenya’s competitive position in processed food and agriculture, but would harm manufacturing and mining. Depending on the content of negotiations, the liberalization of trade in goods would boost the country’s GDP by 0.2 percent annually, placing Kenya on the winning side of Doha. However, the benefits would be small, according to the report from the Carnegie Endowment, United Nations Economic Commission for Africa, United Nations Development Programme, and Kenya Institute for Policy Research and Analysis.
Key Conclusions
- Eliminating export subsidies for agriculture in Europe and the United States would help Kenya more than partial reductions of domestic support to agriculture in these countries and cuts to tariffs around the world.
- Kenya would enjoy gains in agriculture, processed food, and the service sector, but experience losses in manufacturing and mining.
- Losses in manufacturing and mining follow the weakening of domestic protection in Kenya.
- Changes in the Kenyan economy would decrease poverty, and income distribution in rural regions would fall slightly, but the gap between wages in urban versus rural areas would expand.
- The Doha Round is likely to diminish the importance of Kenya’s regional partners in total trade as its exports of manufactured goods would fall—these goods are often destined for African countries.
- Countries in sub-Saharan Africa should not expect major net gains stemming from the current round of trade negotiations. This underscores the need for human development policies that will accompany trade liberalization.
“The impact of the Doha Round can lead the Kenyan economy to further specialize in agriculture and processed food. And specialization in these activities can help Kenya make good use of its unskilled labor, its most abundant factor,” write the authors. “But Kenya’s long-term development cannot rest on only these two activities. Kenya must aim to build dynamic comparative advantages in activities with higher value added that can support higher standards of living. Trade can help, but trade by itself will not do the job.”
###
NOTES
- Eduardo Zepeda joined the Carnegie Endowment in 2007 as a senior associate in the Trade, Equity, and Development Program. He also serves as a policy adviser to the Bureau for Development Policy’s Poverty Group at the United Nations Development Programme, a position he has held since 2003. Zepeda’s research focuses on employment, poverty, and development policy.
- The Carnegie Trade, Equity, and Development Program undertakes analysis and promotes policies and strategies to make global economic integration work for more countries and more people.
- Press Contact: David Kampf, 202/939-2233, dkampf@ceip.org
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Endowment for International Peace
- How the EU’s Single Market Could Unlock Enlargement
- Sri Lanka’s Economic and Geopolitical Balancing ActArticle
Economic recovery has brought Sri Lanka a modicum of stability, but domestic strains and great-power rivalry could test how long it lasts.
Avinash Paliwal
- Governance Compared: Autocracy and Democracy in AfricaPaper
Today’s global democratic recession is partly rooted in a common perception that democracies have a delivery problem, with many citizens in both autocracies and democracies alike now believing that strongmen can achieve better governance outcomes. But a study of four countries in Africa reveals that democratic-leaning governments have demonstrated better governance performance than autocratic governments.
Sarah Yerkes, Natalie Triche, Amr Hamzawy
- The Debt Toll Booth: A Modular Solution to Addressing Sovereign Debt CrisesPaper
Policy proposals on sovereign debt must both match the scale of the challenge and be implementable within existing political constraints.
David McNair
- Who Is Funding Russia’s War in the 2027 Budget?Commentary
For every ruble allocated to social policy, health, and education in 2027, double that amount is earmarked for the army, the police, and the security services.
Alexandra Prokopenko
