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In the following chapter, I use the concept of economic evolution to evaluate Kenya’s developing by formulating the concept as the co-evolution between physical technologies, social technologies, and business plans. The analysis interprets and expands the understanding of the coherence between the events outlined in the timeline.

In its transition towards a middle income country, Kenya has sought to implement an encompassing, inclusive strategy as the country had successfully carried out the PRSP and ERS. Vision 2030 materialized on the promising experiences of these strategies that stabilized macro- economic performance. Moreover, all relevant stakeholders were consulted twice during its finalization. The imposition of a democratic policy has brought a number of institutional changes to capture the positive trend. These innovations have, in turn, created space for embracing new technologies.

In 2007, the Roads Act introduced a road enhancement, expansion, and maintenance programme (GoK 2007: 24-24, 27-29, 31-33). This has created a profitable environment for infrastructure as a differentiating factor in Kenya’s economic evolution. It provides the “legal and institutional framework for the management of roads” (Soft Kenya Group 2011). 


Table 3 Second MTP (sectoral) growth targets and actual growth targets (%), 2012-2017. Source: Kenyan National Bureau of Statistics (KNBS) 2017 (KIPPRA 2017: 15).

Second MTP (sectoral) growth targets and actual growth rates (%), 2012-2017

2012 2013 2014 2015 2016 2017

Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual

Total GDP 4.6 4.6 6.1 5.7 7.2 5.3 8.7 5.6 9.1 5.9 10.1 n.a.

Agriculture 3.8 2.9 5.1 5.4 6.5 3.5 6.8 5.6 7.1 4.8 6.7 n.a.

Industry 4.5 4.2 6.0 5.3 7.6 6.5 8.6 6.9 10.1 7.3 10.2 n.a.

In 2008, the EARM and the Mombasa-Nairobi SGR were approved by the EAC countries and the GoK respectively. This event can be seen as critical juncture: (transnational) railway development has become locked in into Kenya’s developing path. In 2009, two Memorandums of Understanding (MoU) have been signed between the GoK and CRBC; and between the GoK, the government of Uganda (GoU), and CRBC. The first MoU was concluded on August 12th_{, for a feasibility study and} preliminary design of the Mombasa-Nairobi SGR. The second MoU was signed on October 1st_{, for} the construction of the Mombasa-Nairobi SGR connection to Kampala. This has incorporated a regional dimension of infrastructure improvement. Thus, formal institutions have reinforced the initial decision to realize transnational railway development.

In 2010, the Roads Act was revised in accordance with the new Kenyan constitution. It is expected that this will bring Kenya’s infrastructure policy to level that integrates transport infrastructure with operations, and responds to the “market needs of transport” (Soft Kenya Group 2011). On 28 August 2013, a tripartite agreement between Kenya, Uganda, and Rwanda to speed up railway track development to their capital cities was reached. It is likely that this effort elaborated upon the 2009 MoU between the GoK and GoU. Also in 2013, the PPP Act enabled private sector participation in financing infrastructure and development projects initiated by the GoK. As such, external funding of the Mombasa-Nairobi SGR by China became possible. The PPP Act capitalized on the earlier institutional and technological novelties. However, this legislation could not have materialized without prior changes in the other dimensions of economic evolution. Hence, it demonstrates path dependency. The introduction of the RDL in 2014 supports this course further by imposing a duty on import commodities to complement the Mombasa-Nairobi SGR funding, thereby minimizing Kenya’s infrastructure financing gap. On 11 May 2014, KRC and CRBC signed two contracts that finalized the agreement on the Mombasa-Nairobi SGR funding by China’s EXIM Bank: a Civil Works EPC Turnkey commercial contract, and a Supply and Installation of Facilities, Locomotives, and Rolling Stock contract. These contracts have further reproduced the contingent event of approving the EARM and the Mombasa-Nairobi SGR.

On 16 June 2014, a SGR symposium was organized to integrate local communities’ voices into the project’s realization. At this social event, the issues environmental degradation, livelihood, and land tenure security were difficult discussion topics. It reflects the increasing value of land (use). In the case, (wildlife) livelihood has arguably become ‘monetized’ in the form of land compensation for the sake of development (AFP 2014). Additionally, the switch from communal living to the privatization of land has led to local displacement across construction sites. Reportedly,

ten schools have to be rebuild because the Mombasa-Nairobi SGR would occupy their locations (Ngugi 2016).

The beginning of construction works of the Mombasa-Nairobi SGR on 12 December 2014 marks another critical juncture. It is the very realization of the PT in the context of Kenya’s developing. Not only does it represent the physical expression of the first critical juncture. Placing it into the framework of the GR-conditions, the building process also reflects the PT’s economic value. Irreversibility, entropy, and fitness come together during this stage. On 12 June 2015, the Kenya Roads Bill devolved the maintenance of several road categories to county governments. One month later, the first of four training centers for maintaining the Mombasa-Nairobi SGR opened at Voi. Both of these implementations reveal the scarce capacities at national and local authority levels, reflecting inconsistencies between institutions that set and coordinate the rules for road management (Njoroge 2015).

During the 2015 FOCAC, a new contract ensured the continuity of the Mombasa-Nairobi SGR through the realization of Phase II. This event is again based upon the accumulated knowledge of the prior decisions and events. The contract represents another institution of Chinese-African cooperation, indicating ST replication. Approving Phase II suggests that the PT of Chinese railway technology was replicated.

Mid-2016, societal unrest emerged in response to the terms and conditions of the agreed contracts. Attacks on Chinese workers and protests against CRBC reveal the incoherence between Chinese and Kenyan working codes. In the case, local norms have been tuned towards Chinese labor culture. Technology, resources, and expertise have been imported from China, indicating that the pace and quality is firmly controlled on China’s behalf. Moreover, construction according to ‘Beijing way’ is still informed by the Tan-Zam experiment of the 1970s as discussed in chapter 5. The Operations and Maintenance contract between the GoK and CRBC, signed on 30 May 2017, avoids the mismanagement of the past by transferring Chinese knowledge to Kenya over a period of five years. One day later, the Mombasa-Nairobi SGR was inaugurated by President Kenyatta.

This day can arguably be regarded as a third critical juncture for at least two reasons. First, the railway can now actively contribute to Kenya’s developing because it is ready to be operated. How this will be evaluated by the market remains to be seen. Cargo flows are expected to increase only slowly, because this new system needs to start rolling. Second, the PT has been instrumental in Kenyatta’s re-election campaign since he preluded the Mombasa-Nairobi SGR on 28 November 2013. This is called “exaptation,” i.e. embracing technology for a different reason than it was initially adopted for (Beinhocker 2006: 312). On 11 August this year, Kenyatta claimed the electoral

victory. The historical judicial verdict of 2 September shows that corruption is being addressed. As such, the process of Kenya’s developing has the potential to strengthen Kenya’s political, legal, and social environment.

Hence, the unique sequence of legislative and technological changes that emerged out of Vision 2030 shows the interdependence of technological, institutional, and strategic forces. Their dynamic interactions have generated increased complexity of the Kenyan economy. Moreover, it has brought important socio-political issues to the surface. But all in all, it shows developing.

CONCLUSION

In this research, I have employed a model of economic evolution to assess to what extent a complexity approach to the economy can explain Kenyan (and African) developing in the contemporary context of China’s NSR. Combining several data sets, the analysis shows through content analysis, discourse analysis, and process tracing how and why economic evolution can be traced back to interactions between technical, institutional, and strategic dimensions of the economy.

Essentially, economic evolution emerges as the result of co-evolution at different levels of action. By considering each dimension as an evolutionary structure, the economy as a complex adaptive system emerges through their joint evolution. The PT of Chinese railway technology was imported by Kenya through the NSR as a ‘best practice’ of contemporary development. The Mombasa-Nairobi SGR is the physical manifestation of this technology. Although important concerns about the environment, communities’ displacement, and the import of Chinese labor have emerged, the PT is already being replicated in the form of Phase II, and the larger EARM generally. At the institutional level, the ST of Sino-African cooperation generated change in Kenya’s social organization. The implementation of legislative and regulative reforms, the signing of contracts, and social events were seen as results because of implementing Vision 2030 and embracing Chinese railway technology as a key driver of the economy. However during the railway construction, conflict occurred between foreign codes that were introduced by importing Chinese knowledge and domestic norms (informally) instituted by Kenyan cultural traditions. Here, we may be looking at friction between a Western colonial legacy focusing on structurally organized society and a new Chinese system based on mutually beneficial relations (Lian and Lejano 2014: 9).

In the strategic dimension, we are clearly seeing the accumulation of knowledge in creating Kenya’s latest development strategy Vision 2030. Early rewards from the market environment indicate that Vision 2030 is successful. GDP and GDP annual growth rates have increased.

Additionally, Kenya’s potential to become an economic hub in East Africa demonstrates a stronger regional economic position. Nevertheless, massive unemployment remains a serious challenge. Moreover, the failure to meet growth targets in the second MTP. Capturing the benefits of the youth is crucial for continued positive trends. It appears as if Vision 2030 is an evolutionary strategy. The diversified options, proclaimed national ownership, and MTPs that allow for flexible resource allocations all point towards the internalization of evolution in Vision 2030. The timeline of events connects the dots. Three critical junctures are found upon which several other important events are based. In this way, path dependency and increased complexity show the working of economic evolution.

The approach of complexity economics has significant implications for contemporary development. At theoretical and methodological levels, an evolutionary approach to the political economy demonstrates that contemporary development is a multidimensional, dynamic, and constructive process. Developing is multinational in two ways. First, it is not only about economic growth, but also about the evolution of other aspects of society. Second, the economy itself has multiple dimensions. Developing is also dynamic, visible in the interdependence of different dimensions of the economy, and in the self-adaptive character of the economy after feedback from the environment. Finally, developing is a constructive process. The economy as a complex adaptive system consists of different actors that actively communicate with each other, thereby constructing a collective entity that represents all agents involved.

On a pragmatic level, the model of economic evolution has strong explanatory power because it addresses and answers how and why change has occurred. It also addresses the resilience of institutions in terms of their modification when the environment changes. Furthermore, it shows that development is just a means to prosperity, and not the end goal. A shift in focus enables to becoming aware of the dynamic directions of development. In turn, this awareness determines the future path of development.

This work underscores the value of a complexity lens to understanding and explaining contemporary development in terms of developing. Beinhocker’s model of economic evolution provides an analytical framework that illuminates the interactions between these factors. They are separate but interdependent variables that influence how the economy emerges and evolves. Such a view will give us more answers to why and how development takes place. It also incorporates the effects in other aspects of development such as culture, politics, and identity. The concept of economic evolution should in future research be refined, but not defined. Evolution is an open- ended process. The journey itself is the destination that defines developing.


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