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"id": 496601,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/496601/?format=api",
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"type": "speech",
"speaker_name": "Hon. Bunyasi",
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"speaker": {
"id": 2511,
"legal_name": "John Sakwa Bunyasi",
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"content": "Thirdly, the emergence of a common market is going to consolidate Kenya’s position. As we would like to say, we are ahead and that is a good thing. Those who have looked at the European Union know that German has to shoulder specific responsibilities as the larger economy that was ahead at the inception of the union. Be that as it may, good things come with responsibility. Kenya is already the largest economy; it has many facilities that the other countries are also working hard to acquire, but we are still ahead. That will offer us an opportunity; it will also impose responsibility on our country, particularly as we shall see later when we reach the ultimate stage of the common currency and what that goes with. If things are that good, why is it that sometimes you have to go back to referenda in various countries to get this kind of process to go forward? In saying that, I want to begin to hint at the kinds of challenges that lie along the way. We can see the land of milk and honey at the end, but there are hurdles along the way. These hurdles, from what has been studied elsewhere, do not constitute permanent obstacles; they can be overcome at some cost, and benefits are higher than the cost. Take for example, the need to harmonize inflation. Why do you need to harmonize inflation? Hon. Wakhungu talked about how he feels, I thought he would say he feels like a king when he gets to Uganda and changes the Kenyan currency. Do not go to the dollar, just carry Kenya Shillings, go to Uganda, change it and you will feel like a king when you count it, shilling by shilling. However, you know that you should not compare shilling to shilling; you should look at the price of a coke and say how many cokes you will get with what you have changed today. Ask yourself how many dinners you will buy with what you have got today. There are other reasons as hon. (Ms.) Nyamunga has explained why people would go to Uganda and buy goods that came in through Mombasa and passed through here on their way to Uganda, and are still cheaper than ours. Harmonizing inflation has a number of implications. When we talk about sensitizing people about the protocol, let us not waste time talking about the technicalities of the documents, the implications of harmonization; that is what our people, the ordinary person here; the farmer, the man or woman on the street, the Wanjikus and so on need to understand. To harmonize inflation in a setting where the productivity levels are different is a very tall order. If, for example - which will necessarily be the case as we go down the road - there should be no farm production support and no price subsidies, the survivors in such a situation will be those whose productivity levels are competitive, and are high, so that for every unit input of cost, the output is able to more than pay for it. If you have farmers who have survived as a result of excessive subsidy and support, hidden or explicit, harmonizing it would kill that particular sector of activity in that area. Take fiscal deficits; you agree on the level of fiscal deficit to GDP. Harmonizing fiscal deficits is a very tall order. One, you must tame the appetite for expenditure. We are in a Republic in which, for example, in our case, the appetite for expenditure is pretty high. Reining in that appetite, so that the expenditure levels are sustainable is a tall order. It is a painful order. One way of reining in deficits is to increase taxes, so that the difference between your expenditure and your revenue is narrowed or eliminated. Elimination is a tall order. How do you do that when you raise taxes? You are going to hit a brick wall. These are the sort of challenges along the road to the land of milk and honey that are painful, but which we need to do if we are going to The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}