global trends and what they mean for kenya in 2010 mind speak, rich management dr. wolfgang fengler,...
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Global Trendsand what they mean for Kenya in 2010
Mind Speak, Rich Management
Dr. Wolfgang Fengler, Lead Economist
World Bank, Nairobi30. January 2010
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2
Born in Germany in January 1971 Graduated from German Universities in 1996 (Masters) and 2000 (PhD) Founded a number of companies, including “Africa Consulting” in the
1990ies Left Germany and joined the World Bank in January 2000 Became Senior Economist for the World Bank in Indonesia in 2004 Moved to Kenya as World Bank Lead Economist in August 2009 Married to Petra Fengler; 3 children aged 5-8
About myself
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Main messages
Our generation is experiencing the most profound demographic transition ever: in 1970, the world had less than 4 billion people; by 2050 it will have more than 9 billion.
We are also experiencing a geographic transition from rural to urban. But “growth will always be unbalanced but development can still be inclusive” (WDR 2009).
Development is possible but it is not inevitable. Asia is rising – Africa continues to stagnate.
Paradox Kenya. Strong private sector but poor growth.
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Demographic shifts
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The World will soon exceed 7 billion; working age population will continue to rise
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Global population growth is driven by Asia and Africa …
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… while Europe and North America’s share in global population is declining
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0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Total Population
Working Ages 15-64
Youth 0-14
Older 65+
1950 2000
Population in thousands
20251975 2050
Kenya is growing by more than 1 million a year; by 2050, the country will exceed 85 million people
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Geographic shifts
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Density: Tokyo—the biggest city in the world 35 million out of 120 million Japanese, packed into 4
percent of Japan’s land area
Distance: USA—the most mobile country More than 35 million out of 300 million changed
residence in 2006; 8 million people changed states
Division: West Europe—the most integrated continent About 35 percent of its GDP is traded, almost two
thirds within the region
The 3Ds: Density, Distance, Division
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Concentration, a fact of life,
Half of the world’s production…..
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WDR Conference in Central Asia, February 26-27 2009
at the global spatial scale
….can fit onto 1.5% of its land, less than the size of Algeria
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Economic map of the World – Africa is still absent but Asia has been reappearing
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Kenya’s cities are growing rapidly
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Po
pu
lati
on
('0
00
s)
Nairobi 862 1,090 1,380 1,755 2,233 2,818 3,443 4,016
Mombasa 350 407 476 572 686 828 988 1,148
Kisumu 156 175 201 261 337 433 537 635
Nakuru 97 129 168 194 225 264 311 361
Eldoret 54 80 116 141 173 212 256 301
1980 1985 1990 1995 2000 2005 2010 2015
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Development is possible but not inevitable
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Globally, extreme poverty has declined significantly…
Share of Population below US$ 1 a day; Source: Chen/Ravallion 2004
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… but there is great regional variation
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In Kenya, per-capita income recovered since 2002 - after more than a decade of decline
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KENYA’s economy in 2010
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Kenya’s economy is dominated by services – and has always been
New SNA methodology
Source: Kenya National Accounts / WB Staff estimates; Please note that Kenya adopted SNA1993 and revised the GDP series. Starting 1999-03 the series reflects the structural break in the methodology and not changes in the trend.
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Services have a much bigger role in the economy compared to Tanzania and Uganda
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Kenya has experienced a decade of strong, but uneven, growth
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Even though Kenya never received debt relief, debt levels declined from 60% to 40%
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Kenya is not aid dependent: Only 5% of the budget is financed by partners
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Kenya is experiencing an IT revolution
Since 2008, IT and phone connections increased rapidly
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Outlook 2010: A continuation of Kenya’s (slow) recovery with 3.5% growth
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Kenya’s growth will be similar to the SSA average
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… but remains below its neighbors
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DankeAsante SanaThank you