Why economy is a national security issue

Some people think of national security in terms of specific violent attacks by terrorists, bandits or external aggression. But without a doubt one of the biggest threats to integrity of the Kenyan State has been underperformance of the economy relative to citizens expectations.

Violent cost of living protests rocked the country in 2023. Last year, Gen Z revolt saw widespread demos in 140 towns across the republic. Citizens matched into and burnt parts of Parliament and the Supreme Court. It led to a reconstitution of government and rearranged the political landscape.

Underperforming economies leading to cost of living crisis and widespread protests is a global trend. Stagnation in real incomes for a generation has eroded living standards, frustrating populations pushing them to the streets.

For three decades, it was assumed that more democracy would yield automatic prosperity. But the world economy did not follow that trajectory. Instead, while many countries hold regular elections, citizens have met with economic ruin.

The global financial crisis in 2008 made things worse. The financial sector recovered and has posted record profits since then. However, factories and farms have continued to struggle. Then the covid pandemic shut down the global economy in 2020. After a sharp 24 percent decline, Kenyan real wages have recovered ever so slowly to their 2008 peak.

Consider this. In 2022, people took to the streets in 12,500 events, in 4,630 unique locations in 148 countries, protesting the rising cost of living as well as shortages of fuel, gas, and electricity. These demos took place in all world regions, in all types of political regimes, and in countries at all income levels. In some countries, they escalated into larger political crises, with significant violence, hundreds of fatalities, and demands for political change.

The protests were triggered not by the generalised price rises or shortages, but by perceived government failure to act to protect citizens against their effects. The majority of the protests followed steep price increases, the result of cuts to fuel, energy and other subsidies,

Everyone, from organised labor and opposition political parties to farmers, truck and taxi drivers, construction workers, teachers and health workers, protested. Several major episodes, such as Kenya’s Gen Z revolt relied on technology and lacked visible organisation or leadership, taking the form of spontaneous mass uprisings.

Though triggered by the cost of living crisis, most protests also articulated political grievances, including complaints against unaccountable or corrupt governments, that are in collusion with economic elites.

It is clear that people are holding their governments accountable for ensuring access to affordable basic goods and services needed for a decent life. Governments that fail to take action on or seem indifferent to price spikes are protested against for violating what people feel are their basic social economic rights.

Political leaders who failed to ease the cost of living burden were blamed for being unaccountable or corrupt, lost legitimacy and support with the protesting public. In Sri Lanka, protestors took matters the full length, their popular uprising deposing the president and prime minister over failure to manage the country’s economic crisis.

Disillusioned populations are fertile ground for both leftwing and rightwing populist politicians, who are capitalising on these trends in the Americas, and Europe. Blaming power elites and immigrants, populists have become increasingly electable, attracting new supporters to their extreme positions on immigration and protectionist policies such as higher tariffs.

However, rather than a consistent ideological or policy critique, populists are simply denouncing their country’s rising costs of living as the route to winning elections. Without solid policy alternatives, their economic plans are not resolving the crisis, which has roots in stagnated productivity.

Understanding an underperforming economy as a threat to national security suggests fresh thinking. Rather than investing in more weapons , governments around the world might do better by using the resources to stimulate productivity.

The writer is an economist and partner at Ecocapp Capital.  He is also the chairman of KRA and former governor of Laikipia County. Email: [email protected]