Sunday, October 26, 2008

More News From Kenya

Sources:
Remittances
Obama Tourism

As a recent post described, the global credit crisis could lead to fewer remittances for Kenya (there was also a recent Center post on Mexican remittances that you can access here). According to the Financial Times, Kenya has in fact been hit with a decline in remittances. A remittance is money from family members living outside of Kenya (or any home country) sent back to support their family. Remittances accounted for a flow of $574 million back to Kenya last year and money from the US accounted for about 50% of this number.

As the credit crisis in countries such as the US and UK is affecting the spending power of its own citizens, Kenyans living abroad are finding it increasingly more difficult to set aside money to send back to their families. The amount of remittances in August was down 38% from the level recorded in August a year ago. The decline of remittances affects Kenyans’ ability to invest in property, the Kenyan stock market and pay for necessities such as schooling. The remittances are also a large source of foreign currency for Kenya, as some experts say it is the second largest source after tourism. The Kenyan government is forming an emergency committee to respond to the trend of declining remittances, but it is unclear what action, if any, it could take.

On a brighter note, Kenya is busy preparing for what they see will be a boom in “Obama tourism” should the Democratic nominee win the presidency. Barrack Obama’s father was born (and buried) in the region surrounding the city of Kisumu. This area is far from the typical tourist areas in Kenya, yet with less than two weeks until the election, hotels in Kisumu are booked solid. Kenyans are proud of Obama, who they view as a native son, and hope they can build a successful tourism industry around the presidential candidate. One Kisumu citizen said that the government was going to have to invest more money in Kenya’s airports, because, “when [Obama] returns to Kenya as the American president, [he] will have to land in style.”

Questions:
1) As stated above, the emergency committee is trying to buck the trend of declining remittances. What steps could the committee take to encourage continued remittances?
2) Obama’s father was a member of the ethnic Luo tribe which has long been marginalized in Kenya. Do you think his being elected president in the US will affect the Luo’s position in Kenya? Will this especially be the case if “Obama tourism” really does take off?

1 comment:

Naomiestar said...

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