Attaining a sustainable economic growth in developing countries remains the major challenge to the development, African countries have been struggling to improve their economic performance but due political challenges this has continued to be a challenge. High rates of unemployment and extreme poverty as a result of political instability and poor leadership have now become an emerging problem that have attracted the attention of many developing countries. As it is always known, powerful political administration is essential for economic progress. Leadership is an ancient challenge in the political viewpoint as well as in the current technology strategy. In the developing countries, leadership may result to poor or better economic development. A nations’ economy is directly dependent on the politics (Easterly & Pennings 2016). Leadership is all about integrity, ethics, and character, and the function of leadership is management, authority, and inspiration (Beng-Huat & Kuo 2014, p.35). Leaders are usually perceived as the unique people designed to make the world a better place, though, some leaders use the power they have to manipulate citizens and end up affecting the general economy of the country (Moore & Donaldson, 2016, p8). On the other hand, corruption a product of poor leadership is unwelcoming to development; it disseminates inequality, increases wealth and assets gaps between rich and the poor on national and regional scale, that’s why in developing countries where leaders are corrupt some regions are more developed than others because they had been neglected by the previous governments that had control of the nation. Corruption also reduces the rewards for merit and reinforces the belief that the only road to success are through corruption and not through education and good leadership thus returns to education and management are perceived to be low resulting in lower enrollment rates than would be observed in absence of corruption and poor governance. Corruption inhibits economic growth because it destroys inducements and markets signals, resulting to mismanagement of resources
In this essay, am going to discuss about Kenya as a developing country and Singapore as the developed nation. Good leaders enhance development in their countries while bad leaders only mind their pockets resulting to economic crisis (Shatkin, 2014, P. 120). Most leaders from developed countries are aware of their countries’ main challenges like the unemployment, poverty crisis, gender disparity, and will work towards eliminating or reducing the challenges, because they are conscious of the fact that challenges facing a nation’s development must be worked on thoroughly (Anyanwu, 2014, p.473).
Impact of leadership in Economic growth: Kenya vs Singapore
Singapore is a nation with an excellent economic performance. With over two 2million people, as early as 1990 the country was ranked top twenty in production, exportation good and commercial services. In Singapore during the 20th C, the late Lee Kuan was one of the development leaders with a vision. Lee was the prime minister for over 30years and was acknowledged as Singapore’s architect in the achievements he established in the country. Lee was considered as a universal leader in international logistics, pharmaceuticals, environmental science, and petrochemicals (Beng-Huat & Kuo, 2014, p.35). Lee established a team of the best individuals he could ever have and made an honorable civil service to implement the country’s vision he had. Currently due to the Kuan leadership, Singapore is among the world financial hub, with around 500 corporations. The GDP per capita in Singapore is $85,253 which is among the highest universally.
Kenya is nation that has experienced a lot of political instability which have greatly slow down pace of economic development. The coup in 1982 and the assassination of various leaders created political pressure in the country. Investors who would want to invest in the country lose confidence because of lack of security for their investments and their lives too. The recent political instability experienced during the 2007 post-election violence led to some investors withdrawing their investments because the political situation does warrant them to carry out their businesses. This in turn leads to reduction in the nation income and employment opportunities that were provided by that particular investor. Tourism sector of the economy, which generates a lot of revenue for the economy, is also greatly affected by political instability because the levels of tourists who come to visit the country drop so rapidly and by the time we recover from the political instability a lot of revenue would be lost which could have steered the economy to greater heights.
Political instability greatly affects distribution of services and goods. It may bring an economy to stagnate or to deteriorate farther. Therefore, political stability is a major recipe to development. Possibly, a crucial factor that is affecting the Kenyan shilling and overall the economy of Kenya is politics. For instance, the economy of the country grew very rapidly during the year 2003-2006 when the country was regaining from extreme political tense and corruption problems. However, during the year 2007 the political crisis arose again due to the elections that was followed by violence. Many local businesses were affected by the situation overall affecting the economy of the country. The Kenyan political leadership can be viewed in two levels; the national and political party level. After Kenya attained independence in 1963, with Jomo Kenyatta as the president, it experienced political alliances instability as the initial government, KANU, was unwilling to work with the regional administration, termed as Majimbo. The KANU administration opted for powerful central governance in 1964 that dominated till 2002. The unipartism seemed to have affected the country as it leads to leaders being more self-centered in terms of power where each community is struggling to attain power for their own benefits (Easterly & Pennings, 2016).
Figure 1: The trend of Economic performance in Kenya
In the 3rd world country Kenya, leadership has been influenced by corruption. Corruption is common in the country beginning from the civil servant bribes for favor of attaining a political sit and bureaucrats by using the power for their own selfish interest. Due to corruption, justice morality gets destroyed and so is the society at large (Muna et al 2014). Corruption in Kenya has deteriorating influence since it distorts the productive capacity of the local talent and entrepreneurial skills. The opportunities for corrupt practice lead to practice lead to resources especially human resources, being channeled into rent seeking rather than productive activities. Corruption is strongly negatively associated with investment rate regardless of the amount of red tape. It reduces both the volume and efficiency of investment and thus economic growth. The GDP Product Per capita was recorded in 2016 in Kenya at US$2925.60 after being adjusted by the purchasing power parity, making it to be equal to 16% of the world’s total average. The GDP was approximated to 2348.12 dollars from 1990 to2016 attaining the highest record of 2925.60 dollars in 2016 and a low record of 2106.60dollars in 2002 (Fourie 2014, p. 550).
Figure 2: Kenya GDP per Capita
On the other hand, in Singapore, the last record of GDP PPP was 81443.40 dollars in 2016 after the adjustment of PPP, attaining 458% of the world’s total. From 1990 to 2016, Singapore was averaged 57811.61dollars achieving the highest score of 81443.40dollars in 2016 and 34339.70 dollar in 1990 as the lowest record. The difference between the two countries has been contributed by the kind of leaders the countries have. The Singapore economy comprise of extreme transparency and financialization, making it dependent of intercontinental trade (Moore & Donaldson 2016, p8).
Figure 3: Singapore GDP per capita
Singapore is known worldwide to be a zero-tolerant nation on corruption. It was ranked 7th position in 2016 with least corruption in the world by the Transparency International Corruption Perceptions Index and it has upheld the first position on corruption survey by the PERC. Kenya on the other hand, it was positioned number three worldwide after France and South Africa as a corrupt country, conferring to Price Waterhouse Coopers (PwC) survey audit. The audit results came days after the president Uhuru Kenyatta confessed that Kenyan people are professionals in stealing, tribalism, and whining, as he addressed Kenyans in Israel (Ngare et al 2014, p.36).
It has been reported by audit firms that Kenya is on top position worldwide in economic crimes like bribery, embezzlement, and procurement fraud which has led to confidence decline in the capacity of legislatures to deal with. The report was published during the National Youth Service (NYS) scandal of 791million Kenyan shillings. Before the issue of NYS that resulted in job termination of some government officials, the panel is not aware of how the government spent 250 billion Kenyan shillings of the Eurobond (Ngare et al 2014, p.36). When one compares Singapore and Kenya in terms of presidential elections, there is a great difference on how the two countries operate. In Singapore, the former Prime Minister Lee Kuan set presidential criteria by help of the constitutional commission that later was approved by the parliament. In September 2017, it was certified that only Ms. Halimah qualified for the sit with no opponent that means there was no election to be conducted. Halimah was later declared the president as her rivals were not eligible (Sidhu, Yeoh & Chang 2017.p 96). In Kenya, the electoral officials were alleged to have been involved in bribery by UK officials printing firm to support a specific candidate win in the 2013 elections. The same thing happened in 2017 august elections that led to a rerun of the presidential elections. Kenya has proven to be very corrupt in the election sector that made the opposition leader Raila Odinga quit the elections, making Kenya politically unstable and leading to economic crisis (Mkandawire, 2015, p 570).
During the political instability period in Kenya, analysts claim that over 300 billion Kenyan shillings was lost in a period of 3 months due to the battle for leadership of the two core principles of the Jubilee Party and National Super Alliance (NASA). There shilling dropped value against the dollar (Rodan, 2016). It was later noted that economy is not affected if elections are held and concluded immediately after comparison of the economy in 2013 election verses the 2017. In the 2017 economy, the GDP increased only by 4.7% according to the Kenya National Bureau of Statistics. The CPI that measures the inflation changes and living costs rose from 6.3% to 8% from August 2016 to august 2017 (Buigut & Amendah, 2016, p 933).
Figure 4: GDP growth in Singapore for the last 4 years
Figure 4: GDP growth in Kenya for the last 4 years
Despite the fact that Singapore and Kenya have a similar history, of attaining independence in 1963 by the British colonial rule, there is a huge gap between the two countries (Minca & Ong, 2015 P.174). Singapore being faced with uneducated, poor, and rapidly growing population living in slums, the country has struggled with scarce land and water, till 1965 when it became independent form Malaysia (Tang & Abosedra, 2014 p.460). Currently Singapore is an industrialized community with trade being major economic income. Its port is among the busiest port in transportation of goods. The tourism sector in Singapore is developing with over 10 million visitors coming annually (Sidhu, Yeoh & Chan, 2015.p 96). Due to better governance in the country, it has nature reserve, zoo, and a night safari and recently it has established the most expensive integrated casino resorts in the world, in Sentosa and Marina Bay Sands. The nation’s culinary and medical tourism companies are now marketable due to the improved medical technology and cultural heritage mosaic (Bernhard et al., 2015, p).
On the hand, in Kenya, due to poor governance and greed by those in power, the administration is not in position to offer sufficient support to the tourism industry particularly in the allocation of funds (Gil-Alana, Mudida & de Gracia, F.P., 2014). The government have also not motivated the stakeholders to invest more in the sector despite tourism being one of the Kenya’s sources of income (Daniel 2014). Poor infrastructure in Kenya makes the visit hell as the tourist find it hard to access the wildlife areas affecting the country’s industry to develop. The political instability that brought chaos in Kenya affected the rate at which tourist visit Kenya. For instance, the 2007 election that resulted to violence scared the international tourist from (Bernhard et al., 2015, p). Poor economic policies in financial and also agricultural sector have really undermined the economic growth in Kenya. In agricultural sector the government reliance on rain fed agriculture and depending on only two cash crops rather than encouraging workers to diversify in different sectors has led to the slow economic growth because agricultural sector is the back bone of the Kenyan economy. In the sector for housing also, government failure to initiate economic policies to act with high population has resulted to the increase of slums due to inadequate infrastructure for housing in major towns of Kenya. Also in economic policies the government failure to control weakling of the shilling has resulted to increase in inflation rate in the nation. Failure of the governments to come up with solutions and mechanisms to deal with disasters like floods, drought and famine and health epidemics which affects the productivity of the economy in turn affecting the level of development, has been the norms of the governments in Kenya. For instance, in 1998 the bomb blast on co-operative house and British embassy in Kenya showed how really unprepared we are for disasters. Other countries had to come and help to control the disaster that had occurred.
Finally, when one compares the political status of the two countries, it is evident that businesses are usually affected by the political status of any country hence affect the economic growth rate (Cheeseman, 2015;650). Foreign investors fear investing in a country that is notorious in political instability as it normally results to destruction of business by protestors (Tignor, 2015). A corrupt nation will always lag behind in development as most of the foreign stakeholders find themselves trapped in bribery and the funds fail to reach the targeted place due to greed of the people involved (Daniel, 2014). Kenyan leaders, being one of the developing countries needs to style up and emulate other countries in the first world to create a better living environment for their citizens since political leadership is a key factor in the economic growth of a nation (Lim et al 2014, p.14). However, in spite of the great significance of the decisions made by the government in every stage of economic life. The economists have not managed to combine the government with decisions that may maintain an equilibrium between the leadership and the economic performance of the country like Kenya for example which is a developing country. Several economists have generated principles that may guide the development of a government but government action has remained to be is variable that determines the political status of a country. Issues like corruption which is the misuse of public power for private gain and is difficult to measure directly because of secretive dishonest nature according to th (World Bank). Corruption is inimical to development; it perpetuates inequality, increases wealth and assets gaps between rich and the poor on national and regional scale. Studies have demonstrated how the leadership of country can affect the economy either in a positive or negative manner.