A Mother Diagnosed With Cancer Psychology Essay

A Mother Diagnosed With Cancer Psychology Essay At that time, cancer for me and probably for anyone else was an unknown monster who spared no life when it hits you. There were endless nights full of hope for her recovery. At night before I would doze off to sleep I would look at her closely. She still had that same pretty face, beautiful eyes, lovely shaped lips and brilliant mind. But deep inside, it was too painful to see my ever energetic mother lying in bed with all the tubes in her body. Too hurtful to think that all we had shared, our plans might come to an endà ¢Ã¢â€š ¬Ã‚ ¦ This is an adolescent daughters account of her journey with having a mother diagnosed with cancer. Dealing with maternal cancer can cause distress and anxiety because this illness is usually associated with poor prognosis, agonizing pain, negative effects of the treatment, and low survival rates. Cancer is considered by many as a silent killer, which unsuspectingly ravages the body from within. It can be a stressful experience, not only for the patients themselves, but also for the entire family. Every member of the family, especially the children, has to adjust to the emotional burden, physical demands, and lifestyle changes which cancer brings about. The occurrence of cancer has alarmingly increased throughout the years, affecting and claiming many lives around the world. It has been estimated that around 12.2 million people are diagnosed with cancer worldwide (American Cancer Society, 2007). It is also projected that the number of cancer cases and deaths will continue to escalate in the future. New cancer cases are estimated to increase from 11.3 million in 2007 to 15.5 million in 2030 (WHO, 2008). Based on the worldwide proliferation of cancer cases, this disease is now considered to be a major health problem. In the local scene, it is estimated that one in every 1,800 Filipinos will suffer from cancer every year (Philippines Breast Cancer, 2008). Based on the 2005 Cancer Facts and Estimates (cited in A Look at Cancer, 2007), approximately 39,929 men and 32,917 women were diagnosed with cancer that year. Consistent with the worldwide trend, the number of cancer patients in the Philippines is also expected to increase in the coming years. The most common cancer sites for both men and women are as follows: lung, breast, liver, cervix, and colon (A Look at Cancer, 2007). Young and middle-aged women are at great risk of developing cancer. According to Hamouy (2007), statistics show that females have one in three chances of getting cancer in their lifetime. This risk is also due to the drastic increase in the number of breast and cervical cancer cases, which are commonly and specifically associated with women. The breast is the most common cancer site among Filipinas. As of 2008, the Philippines had the highest reported cases of breast cancer in Asia, even surpassing other European countries (Philippines Breast Cancer, 2008). Cervical cancer ranks as the second most frequent type of cancer among Filipino women (World Health Organization, 2007). According to the Department of Health (cited in DOH Launches, 2008), approximately 10 Filipinas die from cervical cancer each day. Women diagnosed with cancer belong to various age groups. However, findings consistently show that cancer risk is positively correlated with age (Baum Andersen, 2001; A Look at Cancer, 2007). This puts older women at greater risk for developing this dreaded disease. In the past years, majority of cancer cases were diagnosed at 50 years old or at a postmenopausal age (Bobadilla, 2006). Unfortunately, there has been an increase in the occurrence of cancer among women in their midlife (Bobadilla, 2006) as well. Recently, the battle against cancer has started to affect younger women. A significant number of women who belong to this population are mothers. It is estimated that 30% of women diagnosed with breast cancer has one or more dependent offspring still under her care (Faulkner Davey, 2002). The growing incidence of cancer among younger mothers means that more families are being challenged to cope with this disease. Mothers diagnosed with cancer are faced with various issues in the different facets of their lives. On a personal level, their concerns include experiencing the physical rigors of the disease and treatment, emotional issues, and preoccupation with existential matters. Aside from these, they also have additional sources of stress such as meeting the demands of being wives, mothers, and professionals in their respective fields. Being diagnosed with cancer at this stage in ones life can be stressful and in some cases, traumatic. This can be attributed to the pressure of having to fulfill different roles despite the physical and emotional demands of the disease. Mothers with cancer are forced to shift their role from taking care of their family to the one being cared for. In effect, although a maternal cancer diagnosis is experienced as a personal crisis, it also makes a great impact on the whole family system. These families are put in a predicament wherein they have to adapt with the changes and stresses brought about by maternal cancer. As the patients roles as a mother and spouse are disrupted, dealing with the illness becomes a shared crisis within the family. The husband and children are forced to adapt with the situation by handling the responsibilities which the mother could not perform, while dealing with their own emotional distress. The stressful nature of the situation puts other family members at risk for psychological distress, especially the children. In families dealing with maternal cancer, the adolescent daughters are expected to assume the responsibilities of the mother. In the Filipino culture, daughters are reared to help out in domestic chores and assist the mother with her duties (Liwag, Dela Cruz, Macapagal, 1998). Thus, when the mother is not well enough to carry out her responsibilities, adolescent daughters take over in caring for the family. This additional burden makes adolescent daughters the most vulnerable to experience psychological distress. Such circumstances subject the daughters to witness drastic physical and emotional changes in their mothers, disruption in their daily routines and changes in family roles. Aside from sharing the burden with their family, the daughters are also faced with the challenge of dealing with the developmental demands of being an adolescent. They may experience a variety of emotional responses, the most common of which are depression and anxiety, as a way to cope with their stress. Parents may fail to recognize the distress their daughters are experiencing due to preoccupation with the treatment and their own distress. In effect, the emotional issues harbored by the daughters may not be addressed appropriately. In the field of psychological research, a large body of studies had already been devoted to investigating the effects of cancer on the different aspects of a patients life. It has only been recently that researchers also recognized the need to shift their attention to the children of cancer patients. It is in this vein that the focus of this research will be centered on adolescent daughters whose mothers have cancer. This research will look into the psychological impact of maternal cancer on adolescent daughters, specifically in terms of emotional, behavioral, and social functioning. The mothers perceptions regarding how their daughters are dealing with situation will also be explored. It is also of interest to know how maternal cancer affects the relationship between the mother and adolescent daughter. Review of Literature Impact of Parental Cancer on the Family Cancer was found to be associated with psychological distress. Much of past research on cancer has focused mainly on the psychological impact of cancer on the patients themselves (Veach, 1998). Researchers have acknowledged that it is also necessary to look into the effect of cancer within the context of the family. Family Systems Theory The family is defined by Buckley (as cited in Papadopolous, 1995) as a system made up of sets of different parts which are interdependent and interconnected. A change in one part causes a change in the entire system. It is comprised of several subsystems which characterize the existing relationships within the family such as parental, marital, and sibling relationships (Faulkner Davey, 2002). According to the family systems theory, the condition of one family member influences the condition of other family members. It proposes that all the subsystems within the family interact and affect each other (Faulkner Davey, 2002; Papadopolous, 1995). The members of the family operate in a way that it maintains a balanced level of functioning, also known as equilibrium. The well-being of the family members and the familys functioning depend greatly on the interaction of the subsystems (Faulkner Davey, 2002). Due to the dynamic and interdependent nature of the family system, the roles and psychological functioning of individual members can affect the whole system. A role change initiated by one member will alter how the rest of the members play their roles. In this case, the whole system has to make corresponding changes in their behavior in order to compensate for the disruption in the roles among the members. This adjustment has to be made in order to regain the familys equilibrium (Jolley Mitchell, 1996). In the same way, a members psychological functioning is strongly influenced by ones interaction with the other members (Oster Caro, 1990). In families which are under a great deal of stress, the child is vulnerable to everything that is going on between the parents. The tension or conflict within a family can also induce distress within the child, whether the child is directly exposed to the stressor or not (Sokolova, n.d.). The Filipino Family The Philippine society is familial in nature (Jocano, 1995). Filipinos recognize that the family is the most basic institution in the society and is at the center of the affairs of the community. The high regard given to the family can be seen in the strong and pervasive influence this institution exerts towards individuals. According to Jocano (1995), the Filipino family is superordinate over the members. The life of each member is strongly influenced by the dynamics within the family. An individual must involve the family in decision-making and resolution of important issues. This is because the entire family is affected if something happens to its member, regardless of whether this occurrence is positive or negative. Thus, the Filipino family tends to be protective of its members, as a way to preserve not only the individual but the entire system as well. In order to uphold the traditional Filipino family system, cultural ideals which guide ones behavior are instilled in the individual. These ideals are learned through rearing practices and adherence to the societys norms. The following standards are honored and imbibed by traditional Filipino families: kapwa, damdamin, anddangal (Jocano, 1995, p.7). Kapwa refers to establishing interpersonal relationships which are based on equality and empathy. Damdamin on the other hand, deals with valuing others peoples emotions and striving in order not to hurts the feelings of others. Lastly, dangal, pertains to honoring and respecting others. Despite the changes in the society, in light of modernization, Jocano (1995) found that many Filipino parents continue to inculcate the following cultural ideals to their children: paggalang, which is giving respect to people and venerated customs; pagbabalikatan, which is empathizing and sharing the burden of others; pagbabayanihan, which is cooperating w ith one another; and pagmamalasakit, which is being considerate and concerned with other peoples welfare (Jocano, 1995, pp.7-8). The Filipino family is also described to be bilateral (Jocano, 1995). This refers to the establishment of close relationships with relatives from both the sides of the mother and father. An individuals level of affinity towards the maternal and paternal relatives are said to be equal. This bilateral characteristic of the family makes the relationships within the family system wider and more intertwined. In effect, the typical Filipinos concept of family is not only limited to the nuclear family structure, which is comprised of the parents and their children, but also includes the extended family which includes the relatives from both sides. By going beyond the immediate family, the individual can draw support and security from both the immediate and extended family. Jocano (1995) considers this close kinship among Filipinos as a significant source of strength. This provides an individual with an assurance that there will always be someone to count on when problems arise. The close ties among relatives and the ideals which families uphold influence the structure of Filipino households (Torres, 1995). It is typical for a nuclear family to share a roof with a few relatives and a nonrelative, which is usually the househelp. This is true, most especially for middle class urban families. In some cases, nuclear families who belong to the same clan reside in separate dwellings which are close in proximity. By maintaining geographical nearness, the extended family and its members are able to strengthen the support that they derive from each other. Carandang (1987) applied the family systems approach within the context of Filipino families. In line with Western theories on family systems, she suggested that any stress experienced by one member can be vicariously felt by the other members. Each of the family members responds to this stress by acting out in their own unique way. It has to be taken into consideration that the Filipino family is usually comprised of immediate family members, as well as extended relatives. There is also greater emphasis on maintaining close emotional bond among the family members. This nature of Filipino families makes it a more dynamic and complicated system. In effect, the children are challenged to gain recognition so as not to be lost within the larger system. This makes the children the most vulnerable members of the family because they can be easily affected by the stresses experienced by the family (Carandang, 1987). When the family is in the middle of a crisis, there is a tendency for the children not to directly articulate their feelings, especially if these are negative and are felt towards the adults in the family. In some cases, these stresses are manifested through the childrens behavior. Carandang (1987) found out that regardless of the socioeconomic status of the family, the children play the role of the familys protector. Being the protectors, the children absorb the familys stress and respond through their behaviors. In the Philippine setting, the familys tagasalo (Carandang, 1987, p. 47) or the one who takes care of the family is considered to be at risk for developing distress. Older siblings, most especially the daughters, are commonly expected to fulfill the role of being the familys tagasalo. Daughters are groomed at an early age to assist in tasks which are domestic and nurturant in nature, such as household chores and caretaking duties. By the time Filipino daughters reach adolescence, they are expected to become mother substitutes (Liwag, Dela Cruz, Macapagal, 1998, p.155). With this new role, adolescent daughters assume a considerable number of their mothers household responsibilities. The study of Go Tian (2003) supports Carandangs premise that daughters are more likely than sons to assume the role of the tagasalo. Based on her research among Filipino college students, females exhibited higher tagasalo traits than males. In contrast, Udarbes (2001) research proposed that the familys tagasalo is not necessarily related to the childs gender or birth order. Her findings suggest that the tagasalo generally possesses the following characteristics: strong sense of responsibility, good listener, nurturant, peacemaker and a strong need for control. Traditionally, women are considered to be central to the functioning of the family. This is due to gender role socialization, which dictates that women are expected and trained to take care of household matters (Liwag, Dela Cruz, Macapagal, 1998). As the major female figure in the family, the mothers main role is to handle domestic responsibilities at home. Thus, when a mother is diagnosed with cancer, the family adapts to the situation by assuming the responsibilities which the mother could not handle. This burden is often passed on to the adolescent daughter, who had been trained since childhood to carry out domestic chores. The impact of cancer within the Filipino family was evident in a local study done by Gorospe (2002). A cancer diagnosis affects the different aspects of a patients life, as well as the rest of the family members. The debilitating effect of cancer on the patient can cause a disruption in routine, changes in lifestyle, and limitations in performing ones responsibilities. Thus, the patient and his family are confronted with overwhelming changes which they have to adjust to. As a reaction to these changes, the entire family undergoes a process of emotional distress characterized by disbelief, denial, and initial resistance to the diagnosis. The roles within the family also have to be re-assigned in order to compensate for the changes related to the patients inability to fulfill ones role. Family Changes Brought About by Parental Cancer A mothers diagnosis of cancer is not an individual struggle. The entire family is subjected to the repercussions of dealing with maternal cancer. According to Robinson, Caroll, and Watson (2005), cancer within the family can be considered as an emotional crucible. This is the shared experience in which the family goes through a series of emotional adjustments. Such experience has been described as both draining and empowering, not only for the cancer patient but for all the family members. The profound stress brought about by the illness affects the relationships and interactions within the family. As a response, the family members reactions are manifested through their behavior and emotions (Sargent, 2003). Parents diagnosed with cancer reported that due to the illness, they were unable to spend time with and address the needs of their children (Walsh, Manuel, Avis, 2005). This was supported by the study of Faulkner and Davey (2002) which revealed that parental cancer can lead to impaired parenting. The demands of the illness made both the healthy and ill parents less available to their children, emotionally and physically. There were also cases of less communication, decrease in supervision, and lack of consistency in discipline and nurturance. Such disruption in the family system undeniably exposes the children to many psychological stressors such as: threat of permanent loss of parent to death, temporary loss of parent due to the treatment demands, and changes in family roles and routines (Davey, Askew, Godette, 2003). This may result in adjustment difficulties and psychological consequences, thus, making the children vulnerable to the impact of having a parent with cancer. Cancer blurs the roles in the family. The study of Walsh, Manuel, and Avis (2005), which investigated the impact of maternal breast cancer on the family, revealed that because the mothers were not well enough to perform their usual responsibilities at home, they had to transfer some of their family duties to their spouses and children. Generally, adolescents in the family had to take on more responsibilities at home, such as household chores and caregiving tasks for their younger siblings and the ill parent (Davey, Askew, Godette, 2003; Davey, Gulish, Askew, Godette, Childs, 2005; Grabiak, Bender, Puskar, 2007; Visser, Huizinga, Van der Graaf, Hoekstra, Hoekstra-Weebers, 2003). Aside from dealing with worry over the ill parents condition, the adolescent children in the family felt that their lives were complicated due to the additional responsibilities they had to carry out in order to augment the deficiencies caused by maternal cancer (Davey, Gulish, Askew, Godette, Childs, 2005). Psychological Adjustment Among Adolescents of Cancer Patients The psychological effects of maternal cancer on children are widely investigated. The qualitative study of Forrest, Plumb, Ziebland, and Stein (2006) reported that children already suspected that something was wrong even before they were told about their mothers diagnosis. They based this suspicion on the mood and behavior changes in their mother. Upon knowing about the maternal cancer diagnosis, the adolescents experienced emotional distress. The initial emotional responses were shock and disbelief, followed by devastation and intense feelings of sadness (Davey, Askew, Godette, 2003; Davey, Gulish, Askew, Godette, Childs, 2005). Compas, Worsham, Ey, and Howell (1996) assessed the emotional distress experienced by children of cancer patients by looking into their depression and anxiety. Their distress arose from their considerable worry about their mothers health and fear of losing their mother from cancer (Davey, Askew, et al., 2003; Davey, Gulish, et al., 2005; Grabiak, Bender, Puskar, 2007; Kristjanson, Chalmers, Woodgate, 2004; Walsh et al., 2005). In some studies, adolescents were also concerned with the possibility of potentially inheriting the cancer (Davey, Askew, et al., 2003; Walsh et al., 2005). The adolescents emotional difficulties partly stemmed from feeling powerless over their parents illness. The adolescents felt that they did not have control over the outcome of the diagnosis and treatment, which in turn also affected the moods and accessibility of both parents (Davey, Askew, et al., 2003). Another cause of the adolescents distress was witnessing their parents pain. Some of the adolescents reported that they were bothered by the side effects of chemotherapy (Forrest et al., 2006). They had to adapt to seeing their usually healthy parent slowly become weak and ill (Davey, Askew, et al., 2003). The positive effect this had on the children was that they became more empathic towards their ill parent. They were also more tolerant and understanding of both their parents, who exhibited increased irritability and moodiness (Davey, Askew, et al., 2003). This was consistent with the findings of Kristjanson et al. (2004) which revealed that the adolescents were sensitive to the suffering of their ill mother. The teenagers expressed that they felt guilty because their own lives were normal, whereas their mother was enduring the painful physical and psychological consequences of cancer. They were able to empathize with their mothers suffering but they expressed guilt about their own situation. A local research done by Tantoco (1992) examined the issues confronted by terminally ill mothers and their eldest offspring. Results revealed that the eldest children exhibited considerable anxiety during the process of dealing with their mothers illness. Many of the participants described their journey as an emotional roller coaster ride (Tantoco, 1992, p.73). This experience compelled them to prioritize their mothers condition. This forced them to put other aspects of their lives, such as studies, work, and heterosexual relationships aside. Given that the eldest children focused much of their attention on their ill mother, they became sensitive to their mothers physical, emotional, and mental anguish. The children shared that they had difficulties in dealing with their ill mothers emotional outbursts. Despite this, the eldest in the family also felt the need to give emotional support, security, and assurance to their ill mother. Another source of the eldest childrens stress was the ir informal role of being next to their parents in terms of responsibility and authority. Being the eldest, they had to take on additional household responsibilities, including caring of their ill mother and younger siblings. These extra tasks required them to make personal sacrifices such as not being able to engage in their usual adolescent activities. Aside from emotional problems, behavioral changes were also observed among children of cancer patients. Increased crying, clinging, difficulty in sleeping, and changes in the intensity of talking were some of the behaviors which children engaged in after their parent was diagnosed with cancer (Visser et al., 2003). There are inconsistent findings in terms of the childrens school performance. Some adolescents showed a decline in their academics and attendance (Visser et al., 2003; Grabiak, Bender, Puskar, 2007. This was due to their inability to concentrate during school hours because of their preoccupation with their parents illness and the disruptions in their routine (Visser et al., 2003; Forrest et al., 2006). However, some adolescents actually performed better in school even though they were dealing with parental cancer (Visser et al., 2003). Positive behavioral changes also surfaced as the adolescents were dealing with their mothers cancer. The adolescents expressed that they appreciated their mother more even when the diagnosis and treatment were over. They showed this newfound appreciation by constantly checking on how the ill mother is doing, wanting to be physically close, paying more than usual attention to mothers needs, and wanting to offer support (Visser et al., 2003; Davey, Gulish et al., 2005). Some adolescents also reported that they took over their mothers role even if it meant an increase in their responsibilities. This contributed to their perception that they were older than their years, after having gone through that experience (Davey, Gulish et al., 2005). Daughters whose mothers have cancer also became more involved with the medical aspects of the treatment. Even though they were less convinced that things will work out, they took more initiative in handling the medical concerns of their mother (Gilbar Borovik, 1998). According to Grabiak, Bender, and Puskar (2007), the behavioral adjustment of adolescents rely heavily on the emotional condition of both parents and on the family functioning. When both parents display symptoms of depression, adolescents tended to show increased behavioral problems. Between the two parents, maternal depression exerts a stronger influence on the childs behavioral functioning. It was also found that adolescents who experienced difficulty with behavioral adjustment perceived their families as having poor quality of communication, responsiveness, and involvement. In the aspect of social functioning, the study of Osborn (2007) found no evidence to suggest that social competence is negatively affected among children of cancer patients. In a few studies, adolescents of cancer patients even reported handling their social lives more effectively than those from the norm groups (Osborn, 2007). This favorable social functioning may be attributed to the strong social support which the adolescents actively seek and maintain. Common sources of social support were family, friends, school counselors, teachers, and support groups (Davey, Askew, Godette, 2003; Grabiak, Bender, Puskar, 2007; Huizinga, Van der Graaf et al., 2005). Adolescents felt that their peers were positive sources of support with whom they could talk openly about their feelings and fears. However, some teenagers expressed that their friends had difficulty empathizing with their situation. They felt that their friends could not really understand what it is like to have a mother diagnosed with cancer. This feeling further highlights the sense of isolation which the adolescents sometimes feel. They felt more consoled when they talked to peers who were also experiencing the same adversity (Huizinga, Van der Graaf et al., 2005). Similarly, Filipina adolescents place importance on having strong social ties. Being more emotionally involved in relationships and having higher levels of interpersonal needs, warmth, and sensitivity are important factors which contribute to the finding that female adolescents are less lonely than their male counterparts. Their need for interaction actually reduces the feelings of loneliness because Filipina adolescents have a richer source of social and emotional support (Jimenez, 2009). Adolescents of Cancer Patients in Comparison With Control Groups Several studies compared the psychological functioning of adolescents whose parents have cancer vis-a-vis a control group. Inconsistent findings were found. A number of studies reveal that adolescents of cancer patients and the control group did not significantly differ in terms of emotional, behavioral, and social functioning (Brown et al., 2006; Harris Zakowski, 2003; Hoke, 2001; Huzinga, Van der Graaf, Visser, Djikstra, Hoekstra-Weebers, 2005; Osborn, 2007; Visser, et al., 2007). The similarity in the levels of psychological distress between adolescents of cancer patients and the control group can be attributed to the childrens efforts to mask their true feelings. They were aware that their parents were already under a great deal of stress. The adolescents showed that they were not affected by the situation so that their parents would not worry about them. This was their way of protecting their parents from additional stress (Visser et al., 2007). Although no significant differences were found in terms of psychological distress, a percentage of the adolescents of cancer patients exhibited scores within the clinical range. In the study of Houck, Rodrigue, and Lobato (2006), one-third of the adolescents whose parents have cancer reported clinical levels of posttraumatic stress in response to their parents illness. In addition, approximately 25% to 30% of the adolescents in both the studies of Visser et al. (2007) and Huizinga, Van der Graaf et al. (2005) reported clinically elevated scores in internalizing and externalizing problems. Internalizing problems refer to turning ones emotions inward. This is manifested through withdrawal, somatic symptoms, anxiety, and depression. On the other hand, externalizing problems are more noticeable ways of dealing with stress because they are reflected through ones behavior. This can be in the form of socially unacceptable, delinquent, and aggressive behavior (Visser et al., 2005). Consisten t with the abovementioned, Osborn (2007) proposed that adolescents of cancer patients generally did not experience higher levels of psychological distress compared to reference groups. However, they were slightly at increased risk for internalizing problems. Some studies found that adolescents of cancer patients are more emotionally distressed than those from the control sample. The research of Grabiak et al. (2007) revealed that adolescents whose parents have cancer displayed a significantly higher level of anxiety compared to the age-normed sample. Visser et al. (2003) supported this claim as their study found that when compared to a control group, adolescents dealing with parental cancer exhibited significantly higher stress-response symptoms, which included avoidance and intrusive thoughts. In another study, adolescents of cancer patients also displayed significantly higher levels of perceived risk for developing cancer than adolescents who have healthy parents (Harris Zakowski, 2003). Despite this, it is interesting to note that these two groups did not differ in depression and anxiety. Hoke (2001) found that adolescents coping with maternal cancer did better in their social and academic endeavors when their mother was more distres sed. This is in comparison with adolescents in the control group who did less well when their mother was more distressed. The results also varied depending on the t

Finance Manager

Fiscal Policy in Kenya: Looking Toward the Medium-to Long-Term By Kamau Thugge, Peter S Heller, and Jane Kiringai[1] Executive Summary Kenya’s authorities, in articulating their vision for the next two decades of Kenya’s development, understood clearly that fiscal policy would need to play a critical role in influencing the pace at which the economy will grow and its capacity to deal with the key challenges that will arise over the next several decades.Domestic policy challenges include a high population growth, rapid urbanization, significant weaknesses in infrastructural capacity, inadequate levels of investments, and pressures for decentralization. External challenges include security risks as well as an uncertain global economic growth environment. Fiscal policy will not only affect macroeconomic stability, but also whether Kenya can transition to a higher economic growth path, reduce its high poverty rate, and address its substantial income, asset, and regional ine qualities.The paper by Thugge, Heller and Kiringai examines whether Kenya’s medium-term fiscal policy strategy is responsive to addressing the potential scale of the challenges confronting Kenya, particularly given the inevitable uncertainties assicuated with the global economic environment. It also takes stock of the impact of recent developments on the viability of the original strategy. Kenya is likely to face in the next two decades and the scope of its policy goals for this period.Section II will briefly identify both the domestic policy challenges that Kenya’s fiscal policy-makers must address in coming years as well as the different potential external policy environments within which these policies must be formulated. Section III reviews the Government of Kenya’s (GOK) fiscal policy strategy, as broadly embodied in its recently issued long-run perspective–Vision 2030, but more concretely in the Medium Term Plan for 2008/09-2012/13 and the Medium-Te rm Budget Strategy Paper (MTBSP) for 2009/10-11/12.In particular, it will examine the economic and institutional assumptions underlying this strategy; the policy choices made in terms of the balance between the roles of the public and private sectors; the choice among alternative public spending priorities; the way in which possible downside risks are addressed; the approach to financing fiscal initiatives; and the sustainability of the fiscal and debt strategy. Section IV will then assess whether the GOK’s chosen policy strategies appear both responsive to the long-term policy challenges identified in Section II and robust to the downside risks in the external economic environment.II. Medium to long-run challenges In Vision 2030, Kenya aspires to achieve middle-income status by 2030 through the realization of a 10 percent per annum real growth rate for the period 2012-2030. This is a highly ambitious objective although not an unreasonable aspiration, given the importance of Kenya to the regional economy of East Africa and the many assets that Kenya possesses in terms of its human capital and its industrial, service, and tourism potential.But achieving this goal will require that Kenya successfully pursue disciplined and ambitious policies that will confront the many domestic and external policy challenges it now faces. It will also require a bit of luck and a bit of skill by Kenyan policy-makers in adapting to the uncertain global economic policy environment that will undoubtedly emerge in the next two decades. Fiscal policy will need to be finely balanced if Kenya is to achieve the Vision 2030 objectives.It must facilitate rapid growth—both through the provision of needed infrastructure and human capital—while still being responsive both to the demands of the population for basic public services and the potential downside risks that may emerge. Yet fiscal policy must also be sustainable. Fiscal space will be precious if the various expen diture objectives are to be met without compromising macroeconomic stability or raising doubts about Kenya’s solvency. If growth proves less than anticipated—as occurred in 2008 and as expected in 2009—the needed fiscal space may prove inadequate to finance the required government outlays.Under these circumstances, unrestrained recourse to additional borrowing could jeopardize Kenya’s solvency and crowd-out its private sector. a. Domestic policy challenges to which fiscal policy should respond There are several important obstacles that could impede Kenya’s progress toward achieving the high growth rate targeted through 2030. First, after years of neglect, Kenya has only recently begun to address the inadequacy of its infrastructure for the realization of a modern, 21st century economy.Deficiencies exist in terms of Kenya’s port facilities, its trunk and secondary roads, its railroad system, its energy plant, and in the availability of clean water and sanitation facilities. While telecommunications has been the bright light of the last several years, there is still much to be done to make the system fully accessible and the proposed undersea fiber-optic cable, The East Africa Marine System, should help in this regard. Vision 2030’s emphasis on rebuilding and creating a productive infrastructure is rightly supported by international observers (e. . , in the IMF’s 2009 staff report) and appears responsive to this challenge. [2] But creating this infrastructure will be costly and could easily outstrip the domestic financial capacity of the government if it were to go it alone, justifying the government’s interest in seeking public-private partnerships as well as external financial support. Second, while Kenya is blessed with relatively a high quality and deep base of human capital, it has yet to find ways to deploy it more efficiently.Among African countries, Kenya has always been known for the high as pirations of its population for education and the drive of its citizens for self-betterment. But the productivity of Kenya’s educational system has long been a source of concern, and the continuing weaknesses in the health system have meant that infant and mortality rates are still too high, that malaria still poses a heavy health burden, and that the AIDS epidemic has cost Kenya significant losses among its most productive citizens. 3] The success of many Asian countries in realizing high growth rates when they were at Kenya’s stage in the demographic transition derived from their ability to productively employ the rising share of the working-age population. Strengthening the quality and exploiting the productive use of Kenya’s human capital, particularly looking forward, must thus be a high policy priority. Third, governance concerns remain an obstacle to Kenya fully exploiting its growth potential through foreign investment inflows.While the World Bankâ€℠¢s â€Å"Doing Business Indicators† suggest some improvements in creating the conditions for a receptive foreign investment climate (with Kenya ranking among the world’s top ten reformers in 2006/07), Kenya still ranks only 82nd on this index out of 181 countries, and ranks 147 out of 180 countries in terms of Transparency International’s index of perceptions of corruption for 2008. [4] Prioritizing and effectively carrying out the necessary institutional reforms, while not requiring substantial fiscal resources, may still prove costly and difficult in political economy terms.More important, it may play a critical role in determining whether Kenya can meet its ambitious investment goals in infrastructure, given that they are to be primarily financed from private sources through public-private partnerships. Fourth, to achieve its target growth, Kenya will not only need to raise significantly its pace of investment (from an average of 19% of GDP in 2005/06 to 2007 /08 to over 30% by 2012/13), but also to maintain the relatively low incremental capital-output ratio (ICOR) of about 3 that it has experienced over the last few years.The latter may prove difficult. Among low and low-middle income countries, an ICOR of about 4 seems the norm (see World Bank, 2009). For the few non-oil-based countries in the world that have experienced growth rates as high as 10% for a sustained period, investment rates have been in the range of 40% of GDP plus (e. g. , China), reflecting a loss of efficiency in capital investment (and thus a higher ICOR). For Kenya to realize more efficiency from its investments, it must demonstrate a concomitant capacity to mobilize human capital resources effectively (e. . , rectifying both the under- and overstaffing of different public service activities), efficiency in the utilization of capital inputs, adequate attention to routine and periodic maintenance of existing infrastructure and a focus on investments that are of part icularly high return (the latter influencing the appropriate structure of Kenya’s public and private investment programme). Linked to these issues is the low absorptive and implementation capacity in the key infrastructure line ministries, particularly for foreign-financed projects.A key challenge that will determine whether the desired change in the composition of expenditure materializes will be the actual implementation rate of the development budget. In the past, actual expenditures have fallen well short of budget estimates, and in particular, absorption of donor development assistance has been very low—usually below 50 percent of budgeted amounts. Increasing the implementation capacity of the infrastructure ministries, and especially that of the Ministry of Roads and Public Works, will, therefore be critical.Fifth, generating the required financing for a higher level of investment will be a further challenge. A sound fiscal policy will constrain how much can dire ctly be provided from the budget, leading to the acknowledged need to rely on the private sector, domestic and external, for the remaining financing. The modalities by which Kenya provides incentives and deals with the risks associated with public-private partnerships, and improves governance, will determine the extent of foreign capital participation in Kenya’s investment programme.Six, despite the progress made in reducing poverty incidence from 57% in 2002 to 46% in 2006 (MTBSP, paragraph. 14), Kenya still faces high income and asset inequality as well as significant regional inequality in incomes and assets. While rapid growth over the next two decades would do much to reduce absolute poverty levels, the number of absolute poor will still remain substantial. Together with continued high inequality, this would constitute a significant drag, in political economy terms, on Kenya’s ability to obtain popular support for an ambitious resource mobilization and savings eff ort.Certainly, unless addressed, income inequality will constrain growth in the country, dampen the scope for poverty reduction and create an environment for social and political unrest. Seventh, and linked to the latter point, current fiscal decentralization efforts to address regional inequality through the use of a devolved funds mechanism are subject to potential vulnerabilities. In principle, through community-based projects, such an approach can have a positive impact on grass roots[5] support.However, slippages in governance and accountability, efficiency, or effectiveness in the use of devolved funds could undermine their potential impact, with political pressures engendering spending programs that would not normally meet benefit-cost criteria or address the existing regional maldistribution of resources. In the medium term, three potential threats to the effectiveness of a devolved funds approach require attention.First, is the poverty-weighted allocation criteria, which ef fectively incentivises constituencies to be ranked poor in order to qualify for a higher share of the devolved resources. Second, the provision of such ‘free’ budgetary resources may dampen revenue generation efforts at the local level. Third, the disconnect between community-based projects and the provision for operations and maintenance within the central budget can limit efficiency and effectiveness in the use of these funds[6].All of the above factors might be considered as relevant in formulating current budgetary policies. But Kenya also confronts other future developments that can easily undermine the long-term capacity of the economy to sustain rapid growth. These include: †¢ The rapid rate of urbanization: By 2025, Nairobi and Mombasa will have to invest in urban infrastructure (e. g. , housing, water, sewage, transport, schools and health facilities) to accommodate a virtual doubling of their populations. 7] The size of other urban centers will more than double by 2025 (from 3. 8 million to 9. 3 million). [8] Overall, the urban population is projected to triple to 21-22 million. Such urban infrastructure investments are likely to be of a lower overall productivity (thus implying a higher ICOR), further constraining the prospects for achieving the high efficiency level required to realize a 10% annual growth rate. †¢ The continued high overall population growth rate: Kenya’s fertility rate of 5 is high.The population aged 5-14—the prospective primary and secondary school-age groups—is anticipated to rise during 2005-2030 by at least 60 percent (more than 5. 2 million children). This highlights both the prospective increase that will be needed in spending on Kenya’s primary and secondary school system and the substantial expansion that is likely to be needed for tertiary education facilities. The latter will be particularly costly, and will put enormous pressure on the education budget (with one tertia ry student costing the equivalent of 40 primary students).Without policies that will encourage a reduced fertility rate, Kenya’s capacity to create fiscal space by shifting the composition of government expenditure towards growth-enhancing investments will be severely limited. †¢ The pressures for job creation arising from population growth: In the next 6 years, Kenya’s education system will produce at least 14 million new school leavers seeking jobs. While the public sector cannot be responsible for their employment, government expenditure policies will need to be sensitive to the job creation possibilities associated with the realization of the government’s expenditure program.This burgeoning employment challenge also highlights the importance associated with a successful transition to a high growth policy framework, since this will be the key to meeting the continuing pressure for job creation over the medium- to long-term. †¢ Cost pressures in the public sector: as with most middle-income and industrial economies, rapid productive growth in the economy typically will outpace productivity growth in the government sector.As wages in the public sector respond to market wage developments in the private sector, this will create cost-push pressures on public service delivery (particularly in the social sectors) (the so-called â€Å"Baumol effect†), pushing up the recurrent cost budget and generating further need for a higher revenue share. †¢ The looming costs of climate change: Recent World Bank reports suggest that Kenya is among the countries most at risk from an increased frequency and intensity of drought conditions.Addressing the potential deleterious effects on agricultural productivity will require a combination of intensified investment in water-control systems that promote enhanced efficiency in the use of water resources; a further shift in the role of nonagricultural outputs (and thus a capacity to become co mpetitive in earning the foreign exchange required for a higher level of food imports); and new R&D efforts at promoting agricultural techniques robust to drought and uncertain precipitation conditions.Given the importance of Mombasa as Kenya’s principal port, the probability of a sea level rise raises the question of when it will become necessary for Kenya to undertake the investments required to cope with the potential longer-term damages to Mombasa and what alternative approaches might be needed to ensure a continued viable port capacity. Less of a challenge and more of an opportunity is the possibility that Kenya might be able to exploit its comparative advantage with respect to solar and geo-thermal energy generation, and earn additional export and fiscal revenues from selling carbon credits to other high-emission countries. The budgetary risks associated with recognized contingent liabilities: the most obvious include those associated with the pay-as-you-go budgetary fu nding of civil service pensions; the potential for the National Social Security Fund (NSSF) to be relatively unfunded; and the possibility of losses associated with the parastatal sector. The anticipated effort by the Government to seek public-private partnerships in a number of infrastructure projects carries with it the potential for additional contingent liabilities. b. External policy challengesKenya’s ability to achieve its Vision 2030 objectives is not wholly subject to its own making. The global financial crisis which commenced in 2008 has adversely impacted Kenya, and highlighted the importance of external factors in influencing the growth of an economy. Kenya is vitally integrated within the global economy, being dependent on external commodity markets for its exports and critical energy imports, sensitive to the state of global tourism markets, significantly reliant on remittances, a recipient of aid flows, and ambitious in its pursuit of both direct foreign investm ent flows and possible external credits.In geopolitical terms, it has already experienced terrorist incidents and is a vital transport hub for many important countries in Central Africa. But of course the future is uncertain, particularly if one is considering policy options looking out more than 20 years. There is, thus, an important argument for seeking a policy program that is robust to potential downside risks and the possibility of very different external environments. One approach to exploring the robustness of the Vision 2030 fiscal strategy is to examine its viability in the context of alternative scenarios of the future.In 2005, the World Bank undertook just such an exercise to consider alternative scenarios for how the global economy might evolve through 2020. Each of the three scenarios elaborated were meant to constitute â€Å"relevant, compelling, plausible, and logically consistent†, but, importantly, divergent stories of what the global economy might look like in 2020. As emphasized by the Bank, â€Å"no single scenario will ever come true in its entirety, but if it is to be a valuable stone against which to sharpen one’s strategy, one must believe it just might! Box 3 provides a brief summary of these three different worlds, and section IV will examine more concretely the robustness of Vision 2030 in the context of these scenarios. At this point, what is important to emphasize are the key external policy factors to which the success of Vision 2030 might prove sensitive, and the way in which these scenarios highlight potential issues to which Kenyan policy makers might need to be responsive. Among the key factors that could affect Kenya’s prospects, the following appear most relevant: Robustness of global growth: Kenya’s capacity for mobilizing the fiscal resources required to implement its public investment program (and equally the prospect for the private sector to also achieve the targeted growth in its investment share) will be strongly influenced by the pace and structure of global growth. Given its dependence on external commodity and tourism services, a slower global growth scenario (such as in the GU scenario) would probably be reflected in slower Kenyan growth, lower fiscal revenues, and the need for a smaller budgetary envelope.How would the budget be prioritized in such circumstances? Would the same infrastructure and human capital investment priorities be relevant under a lower global growth scenario? Certainly, with the pace of population and urban growth (not to mention climate change) not affected by external factors, the pressure would be to cutback on precisely those investments most likely to generate additional growth and employment!Moreover, if global growth were to be dominated by a higher share derived from emerging markets, would this adversely affect Kenya (perhaps through reduced tourism from industrial countries)? Would reduced dynamism in the US and European economies imply a lower level of concessional financing, or would Kenya be able to obtain such assistance from alternative sources (e. g. , China and India)? With changes in the pace or sources of global growth, would Kenya still be able to realize the currently anticipated level of direct foreign investment flows?Would these derive from different sources and if so, would they be directed to the same sectors? |Box 1: Alternative Scenarios for the World of 2020 | | | |The following provides a brief summary of how these different worlds will appear, with our focus principally on the character of | |the alternative potential external economic environments facing Kenya. | | |Affluence, Ltd. (AL) | |Years of rapid, US-centered, economic growth will nearly double world GDP, an annual increase of more than 4 percent. States have | |shifted their focus from guaranteeing outcomes to providing opportunities.Rapid innovation and new technologies enable continuous | |improvements in productivity, whic h global corporations spread around the world as they expand. But economic success is not | |universal. Forty less competitive countries have been left behind due to geographic isolation, poor governance, small market size, | |or lack of strategic relevance. For most major economies, however, the United States has guaranteed political stability and open | |trade-conditions that have encouraged the creation of massive amounts of wealth. |Globalization Unwinding (GU) | |Through 2020, economic growth has been slow worldwide, averaging less than 2 percent for more than a decade. Weaker states have | |collapsed, as economic pressure translates into domestic unrest, while other states have resorted to authoritarianism or populism | |in order to stay in power. Costs of military interventions, energy price volatility, and years of deficits brought a sharp | |contraction in the US economy, and the consequent dollar crisis triggered a global economic downturn.Europe and Japan lacked the | |dy namism to lead the world out of recession, while the growth engines of China, India, Korea, and other â€Å"emerging economies† all | |sputtered-as did those of Russia and Latin America. Most developing countries have proven unable to mitigate the worst effects of | |the downturn. A deep-seated cynicism about the value of free markets prevails in the world, and economic decisions are generally | |focused on short-term returns. Protectionism grew rapidly following the downturn, and the path to recovery looks difficult. | | |Competing Horizons (CH) | | | |Large emerging markets of China, India, Brazil, Indonesia and much of Southeast Asia have sustained rapid long-term | |growth—particularly in comparison to older industrialized economies—and a second wave of developing countries has joined their | |ranks. The developing world accounted for almost two-thirds of global GDP growth between 2005 and 2020.Regional economic powers | |have started to contest US primacy in their regions, and in global forums. Poles of cutting-edge R&D have emerged, with growing | |numbers of firms from these high-growth countries rivaling the multinational companies from the United States, Europe, and Japan. | |Many other developing countries have grown rapidly following improved policies and governance and benefiting from rising volumes of| |global trade. However, rising tensions between Old World and New World powers seem inevitable in the medium term.Despite strong | |networks of trade and continued rising demand for raw materials and basic commodities, growth in parts of the developing | |world—particularly in parts of Africa—remains low. In addition, the environmental costs of broad-based growth are significant: | |accelerating environmental degradation and severe resource constraints for water, strategic minerals, and energy are the order of | |the day. | | | |* Source: World Bank, Rehearsing for the Future: the World and Development in 2020 (Wa shington DC, 2006) (www. worldbank. rg/2020) | †¢ Scale of security threats: the alternative scenarios highlight the potential for different degrees of ethnic, terrorist and regional security tensions. Kenya may thus need to be prepared for the possibility of a higher level of security-related military outlays than presently envisaged under Vision 2030. Depending on the extent of external financial support to deal with terrorism and regional security threats, this may prevent the realization of the current strategy to shift funding away from such â€Å"other sectors† for the purpose of creating fiscal space for social or growth-oriented outlays. Nature of the trade environment: the extent to which further global trade barriers are reduced, or rather shifted towards bilateral or regional trading arrangements, may potentially influence the pace of growth and potentially the sources of Kenya’s principal comparative advantage, again influencing both the prospects for revenue mobilization and the focus of the investment programme. †¢ Importance of governance concerns: Were there to be a shift in the global economic center more towards emerging market countries, there might be a reduced incentive for Kenya to focus as much on governance issues.However, given the possibility of the AL scenario also arising, and given the merits on political economy grounds for strengthening Kenya’s governance and regulatory system (particularly given the increased role envisaged for PPPs), current strategies would appear robust to the alternative possible scenarios. †¢ Pace of technological change: Alternative scenarios also suggest differences in the future pace of technological change. This could be important, particularly with respect to certain kinds of infrastructure (e. g. , in the energy and possibly the ICT sectors).Would the nature of infrastructure investment decisions be influenced by the possibility that newer and more advanced technolo gies might make existing infrastructure or technologies inappropriate? All of these uncertainties raise the question of whether fiscal policy, to be robust under alternative scenarios, should be more conservatively managed, particularly with respect to the level of nonconcessional borrowing that would be appropriate in financing the investment program (or more pointedly, in the level of any fiscal debt anchor that might be considered in managing fiscal policy).They also raise questions as to the core investment programme which would appear appropriate, given the uncertainty as to which scenario might eventuate. III. Kenya’s fiscal strategy underpinning the Vision 2030 A. Background and macroeconomic assumptions Under the Economic Recovery Strategy (ERS) covering the period 2003-07, Kenya made significant progress in macroeconomic management and in implementing key structural and governance reforms. As a result, the economy staged a remarkable broad-based recovery as growth of real GDP accelerated from 0. 5 percent in 2002 to 7. percent in 2007. In the aftermath of the post-election-violence (PEV) in early 2008 and the global economic slowdown, growth fell sharply in 2008 to 1. 7 percent. In 2009, the economy is projected to rebound only slightly to 2. 5 percent . Underpinning the good economic performance of recent years was the implementation of sound macroeconomic policies, and in particular, through 2007, the pursuit of a prudent fiscal stance in which the overall budget deficit (on a commitment basis, including grants) was contained to an average of about 2 per cent of GDP compared with a target of 3. percent in the ERS. As a result, there was a net domestic repayment of 0. 7 percent of GDP in 2007/08, relative to a net borrowing of 3. 6 percent of GDP in 2002/03, thereby contributing to a decline in the ratio of net domestic debt to GDP from 23 per cent in 2002/03 to roughly 17 per cent in June 2008. This facilitated a reduction in interest rates a nd an expansion of credit to the private sector in support of productive activities.With the conclusion of the ERS at end-2007, the Kenyan Government elaborated a medium-term development plan, the National Vision 2030, aimed at achieving rapid economic growth and poverty reduction. The vision had three pillars: †¢ an economic pillar whose goal was to achieve and then sustain annual real GDP growth of 10 percent by 2012 with a view to making Kenya a middle-income country by the year 2030; †¢ a social pillar aimed at creating a cohesive society enjoying equitable social development.This pillar would address inequality and poverty challenges faced by many Kenyans and move Kenya towards achieving some of the Millennium Development Goals; and †¢ a political pillar calling for an issues-based, accountable and democratic political system. Achieving the Vision 2030 growth target would require Kenya to increase its investment share in GDP from about 22 percent in 2007/08 to 33 percent by 2012/13. Over the same period, domestic savings would need to increase from about 16 percent of GDP to 28 percent. Details of the key indicators underpinning the macroeconomic framework are provided in Table 1. Table 1: Key Macroeconomic Indicators Underpinning Vision-2030 and the Medium-Term Plan | | |2007/08 |2008/09 |2009/10 |2010/11 |2011/12 |2012/13 | | | |Medium-term projections | |(Annual percentage change) | |National accounts and prices | |6. 2 |8. 3 |9. |9. 7 |10. 0 | |Real GDP |5. 7 |7. 5 |5. 0 |5. 0 |5. 0 |5. 0 | |CPI (end of period) |28. 5 | | | | | | |(In percent of GDP) | |Investment and savings | | | | | | | |Investment |21. |21. 9 |23. 3 |27. 3 |29. 9 |32. 6 | |o/w Central Government |8. 2 |8. 6 |8. 4 |8. 6 |9. 0 |9. 5 | |Gross domestic savings |15. 9 |15. 1 |17. 4 |21. 8 |24. 6 |27. 5 | |o/w Central Government |0. 4 |1. 6 |2. 7 |2. 9 |3. 2 |3. | |Central government budget | | | | | | | |Total revenue |21. 3 |21. 6 |21. 8 |21. 8 |21. 9 |22. 0 | |Total e xpenditure and net lending | | | | | | | |Overall balance (incl. grants) |29. 4 |28. 6 |27. 6 |27. 6 |27. 8 |28. | |Domestic debt, net (eop) | | | | | | | |Total Public Sector Debt |-6. 2 |-5. 6 |-4. 2 |-4. 0 |-4. 0 |-4. 0 | | |17. 8 |16. 8 |16. 5 |15. 7 |15. 0 |14. 3 | | |41. 6 |43. 0 |40. 2 |41. 3 |38. 0 |38. | |External sector | | | | | | | |Current account (incl. official transfers) | | | | | | | |Reserves (months of import cover) |-6. 0 |-6. 8 |-5. 9 |-5. 5 |-5. 3 |-5. 1 | | | | | | | | | | |3. |3. 5 |3. 7 |3. 9 |4. 2 |4. 5 | Source: Ministry of Finance; Medium-Term Budget Strategy Paper, 2008/09-2010/11. The fiscal framework underpinning the Vision 2030 scenario called for increased spending on the critical â€Å"flagship† projects, while at the same time ensuring that the overall fiscal deficit (after grants) would progressively narrow from 6. 2 percent of GDP in 2007/08 to a sustainable level of around 4 percent of GDP over the medium term. This would allow net domest ic debt to decline substantially from 17. 8 percent of GDP to 14. 3 percent by 2012/13.The strengthened fiscal position would be supported by the implementation of revenue administration measures by the Kenya Revenue Authority (KRA), which would sustain the revenue-to-GDP ratio at around 22 percent throughout the medium-term. Under Vision 2030, public expenditure was to be restructured in favor of development spending and other priority social interventions. Improved management of public sector finances was expected to lead to a positive shift in investor and creditor confidence as well as to boost growth by providing the fiscal resources to raise public development spending from 8. percent of GDP in 2007/08 to 9 ? percent of GDP by 2012/13. B. The Medium-Term Plan, 2008-2012 (MTP)[9] To understand how the Kenya government envisaged the role of fiscal policy in its broad vision for development in the coming two decades, it is useful to begin with the first five-year development stra tegy, the Medium-Term Plan (MTP), issued in 2008 and intended to be the instrument for implementing the Vision 2030 development strategy. Two important elements underpin the MTP. First, the MTP clarified how overall resources in the economy would be allocated among the three pillars and the enabling sectors (i. . the Foundations for National Transformation) during the course of the first five-years of the Vision 2030 (see Annex Figure 1 and Annex Table 1). In particular, it highlighted the overwhelming importance that would be played by investments in infrastructure projects, particularly beginning in 2010/11. [10] While in 2008/09 and 2009/10, 21 percent of the resources was to be on infrastructure,[11] this share was to rise in the three subsequent years to about 60 percent with a heavy emphasis on roads (reflecting the inadequate maintenance and limited construction on new roads during the 1990s and earlier).The MTP also indicated that (with the exception of a short burst in 2009 /10), the social sector would absorb about 20 percent of available resources. Spending on the economic sector pillar was to drop sharply after 2008/09 (being replaced by infrastructure spending), but would then be held roughly constant for the remaining four years of the MTP period (see Annex Table 1). [12] Second, given the limited resources available to Government, the MTP emphasized that the financing of infrastructure should rely heavily on the private sector through the use of public-private-partnership (PPP) financing initiatives.For the five-year period, at least 80 percent of infrastructure spending should expect to be financed through PPPs, particularly starting in 2010/11. Thus, the success of infrastructure financing would be predicated on two important fundamentals: first, that domestic savings could be increased from about 16 percent of GDP in 2007/08 to reach 28 percent of GDP in 2012/13 and second, that a legal and regulatory framework for public-private-partnerships could quickly be put in place so investors would feel comfortable about investing in this strategy.Regarding the latter, we note that a PPP framework has been developed but has yet to be made operational. C. Medium-Term Budget Strategy Paper, 2009/10-2011//12 (MTBSP) Each year, the MTBSP provides much more detail on the government’s fiscal framework over the next three budget years, not only in terms of the allocation and financing of the budget for the different government ministries, but more importantly with regard to the key policy objectives. The most recent MTBSP was issued in June 2009 at the time of the BudgetSpeech for fiscal year 2009/10. Unlike the MTP, the MTBSP is guided by the need to be prudent on growth prospects to mitigate the risk of being overly optimistic, and in the event that higher than expected growth rates are achieved, the medium-term macroeconomic framework can be modified accordingly, with the higher revenues allocated to priority expenditures. Ta ble 2 below summarizes the main macroeconomic indicators underpinning the more cautious fiscal framework in the 2009 MTBSP.The table reveals the striking contrast between what had been assumed in the Medium-Term Plan for the next few years and the new assumptions dictated by recent domestic and external developments. Reflecting the domestic and external shocks of 2008 and 2009—the violence following the December 2007 election and the global economic slowdown—real GDP growth over the next three years is now projected to average under 5 percent, much lower than the 6. 8 percent projected in the 2008 MTBSP and half the 10 percent targeted under Vision 2030. | |Table 2: Key Macroeconomic Indicators Underpinning the MTBSP, | | |2007/08 |2008/09 |2009/10 |2010/11 |2011/12 | | | |Prel. Est. | | | | | | |Medium term projections | |(Annual percentage change) | |National accounts and prices | | | | | | |Real GDP |4. 0 |2. 5 |3. 1 |5. 2 |6. 4 | |CPI (end of period) |29. |18. 0 |10. 1 |5. 9 |5. 0 | |(In percent of GDP) | |Investment and savings |19. 1 |18. 1 |19. 2 | | | |Investment |8. 2 |7. 6 |10. 2 |22. 1 |23. 3 | |o/w Central Government |13. 5 |11. 9 |14. 1 |8. 9 |9. 1 | |Gross national savings |1. |1. 7 |2. 3 |17. 3 |19. 0 | |o/w Central Government | | | |3. 1 |3. 5 | |Central government budget | | | | | | |Total revenue |22. 0 |22. 6 |22. 3 |22. 5 |22. 6 | |Total expenditure and net lending |27. 2 |28. 5 |30. 3 |28. |28. 3 | |Overall balance (incl. grants) |-3. 5 |-4. 9 |-6. 6 |-4. 5 |-4. 2 | |Domestic debt, net (eop) |16. 9 |18. 5 |20. 6 |21. 1 |21. 1 | |Total Public Sector Debt |39. 3 |42. 6 |44. 5 |44. 3 |43. 8 | |External sector | | | | | | |Current account incl. off. ransfers |-5. 6 |-6. 2 |-5. 1 |-4. 8 |-4. 3 | |Reserves (months of import cover) |3. 4 |2. 8 |2. 9 |3. 1 |3. 5 | Source: Ministry of Finance; and the MTBSP, 2009/10-2011/12 With respect to the saving-investment balance, there is also a significant divergence between the MTP? s mediu m-term targets and the revised targets in the 2009 MTBSP. For example, the saving-to-GDP ratio is projected to reach 19 percent compared with 24. 6 percent in the MTP in 2011/12—a shortfall of 5. percentage points of GDP. Similarly, the investment-to-GDP ratio is now projected to reach only 23. 3 percent in 2011/12 compared with 29. 9 percent in the MTP—a shortfall of 6. 6 percentage points of GDP. Virtually all the projected shortfall in both saving and investment are associated with the private sector as public sector saving and capital spending are broadly as envisaged in the MTP. The large projected shortfalls in private sector saving and investment suggests that the Vision 2030 growth objectives are unlikely to be met within the timeframe originally envisaged of 2012/13.Moreover, unless the level of productivity rises sharply (or the ICOR is reduced markedly compared with the target in the MTP) in the next few years, achieving the growth objectives of the Vision 2 030 with lower investment is unlikely to be realized. Therefore, to avoid a prolonged divergence between actual outcomes and the Vision 2030 objectives, it is critical for Kenya to fast track the implementation of key reforms aimed at rapidly improving the investment climate, while putting in place the institutional framework to facilitate private sector participation in infrastructure projects through the PPPs.Without these reforms, the timeline for achieving the Vision 2030 growth objectives will not only be delayed substantially but could be seriously compromised. As in the previous year, the 2009 MTBSP also aims at maintaining revenue collection at around 22 percent of GDP over the medium term. This is quite reasonable by historical Kenyan standards and high by Sub-Saharan African standards, and reflects an assumption that revenue collection will keep up with growth in nominal GDP.No major tax rate increases are envisaged in line with Kenya’s intention to maintain a compe titive climate for foreign and domestic investors by reducing the cost of doing business. Avoiding higher taxes seems, at this time, to be a reasonable policy position, though the issue of a further increase in the overall tax share will become more important to consider as one moves further into the next decade (as discussed below). The MTBSP rightly takes a cautious view on the availability of grants and concessional loans, which are projected at roughly 3. 5 percent of GDP annually through 2011/12.However, even for this amount of financing to become available, the MTBSP recognizes that improving public expenditure and financial management will be critical in order to give comfort to development partners that their resources are being efficiently used to support economic growth and poverty reduction. The decision to exclude budget support in formulating the medium-term framework is informed by the recent success of having more predictability in budget execution by ensuring that re sources allocated to line ministries are not disrupted by the ups-and-downs of donor relations and conditionalities.This practice has been highlighted positively by Standard and Poor’s and Fitch Ratings. However, as the 2008 MTBSP emphasized, the exclusion of budgetary support should not suggest a slowdown in implementing reforms in public expenditure management, in the financial sector, and in the restructuring and/or privatizing of public enterprises. Indeed, the assumed lower donor inflows should be accompanied by an intensification of the pace of structural reforms, especially in the modernization of tax and customs administration, to ensure Kenya’s recent financial independence is sustained in line with KRA’s motto of â€Å"Tulipe Ushuru–Tujitegemee. †On the expenditure side, the 2009 MTBSP proposes an increase in overall spending from 28. 5 percent of GDP in 2008/09 to 30. 3 percent followed by a gradual reduction thereafter to about 28 perce nt by 2011/12, while simultaneously effecting a slight shift in the composition of expenditure towards development projects. As a result, the share of recurrent outlays in total outlays will have declined from a high of 90 percent in 2002/03 to 80 percent in 2006/07 and to 67 percent by 2010/11. This is consistent with Vision 2030’s objective of increased funding for the flagship infrastructure projects while still maintaining macroeconomic stability.Reflecting the importance of the other pillars of Vision 2030, and in particular, the social pillar, the proposed expenditure profile in the 2009 MTBSP provides for spending on education and health to remain broadly unchanged at around 30 percent of total spending over the medium-term (Table 3). [13] This follows significant increases in resource allocation to both sectors in recent years. Nevertheless, it may still be necessary to provide more resources to both sectors (see below) and this will require careful prioritization of spending to create the fiscal space for the shift in budget priorities.In particular, spending on other parts of the budget (including public administration, defense, internal security, etc), which is currently projected to remain broadly stable at around 46 percent of total spending, may need to be rationalized in order to release resources for the social sectors. . |Table 3: Spending on the Social and Economic Sectors (in percent of total expenditure) 1/ | | |   |2007/08 |2008/09 |2009/10 |2010/11 |2011/12 | |Social Sectors |28. % |29. 3% |30. 4% |30. 6% |29. 6% | | Health | 6. 1% |5. 7% | 6. 8% |6. 0% |6. 0% | | Education |22. 0% |23. 6% |23. 6% |24. 7% |23. 7% | |Economic Sectors |†¦ |24. 8% | 22. 9% |23. 6% |24. 8% | | Productive, incl.Agriculture |†¦ |4. 3% |3. 5% |4. 3% |4. 4% | | Physical Infrastructure |†¦ |20. 5% |19. 5% |19. 3% |20. 4% | |Other |†¦ |45. 9% |46. 7% |46. 3% |45. 6% | |Total |†¦ |100. 0 |100. 0 |100. 0 |100. 0 | / Source: The Medi um-Term Budget Strategy Paper, 2009/10-2011/12 Based on the projected revenue and expenditure, the overall budget deficit (after grants) is estimated to initially rise from 4. 9 percent in 2008/09 to about 6 percent of GDP in 2009/10—reflecting the impact of the fiscal stimulus package—and then decline to 4. 2 percent by 2011/12. (see Table 2). It is anticipated that concessional financing, mainly from multilateral institutions, non-concessional borrowing through the issuance of sovereign bonds, and domestic borrowing will cover the deficits.The projected domestic borrowing (including issuance of domestic infrastructure bonds) would result in a gradual increase in the stock of outstanding net domestic debt from 17 percent of GDP in 2007/08 to about 21 percent in 2011/12. This increase, while necessary in the context of the economic slowdown and government policy response, carries with it the risk of potentially crowding out of the private sector. This could pose diffic ulties in allowing the private sector to play its role in financing economic activities consistent with achieving the higher growth path. D. Overall fiscal and debt sustainabilityThe projected medium-term fiscal deficits are broadly consistent with fiscal and debt sustainability. Throughout the period covered by the MTBSP, the ratio of public sector debt-to-GDP fluctuates within a narrow range of 40-44 percent of GDP, implying that the net present value of debt-to–GDP ratio is well below 35 percent. [14] It should be noted that the issuance of sovereign bonds to fund high-return infrastructure projects does carry some debt sustainability risks arising from the exchange rate, making it important that the projects be subjected to rigorous cost-effectiveness analysis.Also, some caution may be needed with regard to the timing of issuance of these bonds, given the increased borrowing spreads currently facing many developing countries, as well as the recent and potential further de preciation of the Kenya Shilling against the Euro and the US dollar. Regarding contingent liabilities, a significant amount has already been taken into account in the context of the financial restructuring of the National Bank of Kenya (over Ksh. 21 billion) and during the course of privatizing Kenya Telecom.However, owing to lack of data, not all potential contingent liabilities from the parastatal sector and from the pension scheme have been included in the debt sustainability analysis. Including such contingent liabilities would increase the official public debt and the risk of the overall public debt becoming unsustainable. Another potential source of contingent liabilities is the Government’s planned heavy reliance on public-private-partnerships to finance many of the infrastructure projects for Vision 2030. It will be critical to ensure that increased use of the PPP framework is well managed and minimizes potential contingent liabilities.Reliance on PPPs in some instanc es involves some assumption of the government ultimately, in the future, financing the purchase of the privately-built assets. Moreover, depending on the terms of an individual PPP, the government could bear a number of potential risks associated with each project (demand risk, financing risk, political risk, supply risk, legal risk, etc). The Government appears to be cognizant of this danger, and intends to establish a PPP unit in the Ministry of Finance to vet all new PPP funded projects.In the meantime, the Government should avoid any new PPP projects before the finalization of the PPP legal and regulatory framework. E. The Potential Role of PPPs Can and should Kenya realistically rely on PPP mechanisms? First, there are some areas of public infrastructural spending where potentially the private sector may be willing to invest and provide services without the need for a PPP (e. g. , as has already been demonstrated in the telecommunications sector). In other sectors, the challeng e is for the government to ensure that the same public policy factors that originally motivated public sector investment and provision, e. . , equity factors, natural monopoly conditions, or externalities, are taken into account in the way in which the private sector produces and delivers services. Here the government’s task is to ensure that a clear and well-designed regulatory structure is in place, particularly with regard to pricing policy. Second, private financing in the form of a PPP entails both opportunities and risks to a government, and management of these risks is essential if there is to be a genuine sharing of both the gains and the associated risks between the public and private sectors.What makes a PPP attractive to a government is the ability to harness the potential of the private sector to construct and operate a facility with greater efficiency than would be the case for the public sector, with such efficiency gains offsetting the presumably higher borrowi ng or equity costs associated with private as opposed to government borrowing. Such efficiency gains are particularly relevant when the private sector can bundle the construction and operating phases of a project, thus allowing for internalization of cost-reducing incentives (Scandizzo and Sanguinetti, 2009).At the same time, by substituting the private sector for public provision, the government can also save scarce public funds and relieve strained budgets. But PPPs can also be used, inappropriately, to bypass spending controls and move public investments off budget and debt off the government’s balance sheet. This could leave governments bearing most of the risks involved and face large fiscal costs over the medium to long term.Experience in other countries suggests that to work effectively and for a PPP to be an appropriate approach, several key prerequisites should be satisfied: the quality of services should be contractible; there should be competition or incentive-base d regulation; as noted, there should be an appropriate distribution of risks; the institutional framework should be characterized by political commitment, good governance, clear supporting legislation (including with regard to pricing); and a transparent procedure for award of performance incentives and enforcement of sanctions throughout the concession period.Finally, a government needs to have a capacity, both in the finance and sector ministries, to effectively appraise and prioritize public infrastructure projects; design PPPs; evaluate affordability, value for money and risk transfer; correctly select those projects that are appropriate to undertake as PPPs; draft and scrutinize contracts, monitor, manage and regulate ongoing projects, and undertake periodic performance evaluations (see Sutherland et al, 2009; Scandizzo and Sanguinetti, 2009; IMF, 2004; and Tchakarov, 2007).This underscores the importance of Kenya moving at a deliberate pace to put in place a strengthened manag ement capacity in the Ministry of Finance and given, past governance failures, caution to ensure that the government sector is not burdened with excessive risks that ought legitimately to be borne by the private sector. In terms of negotiating the distribution of risk, the experience of Latin American countries with PPPs suggests that some are appropriately borne by the private partner—those associated with the construction or the operation of the project in particular.Others, such as political and regulatory risk, clearly should be borne by the government. Others—such as market demand risk, some supply side risks (the cost of foreign exchange, some factor cost risks), may be influenced by government but not fully under its control. How such risks are shared is an obviously important and sensitive aspect in the negotiation of a PPP with a private partner, since it will bear on how large are the contingent risks to which a government is exposed. Experience also has taug ht that governments entering into PPPs need to be aware, that there is a strong tendency for contracts to be renegotiated.Tchakarov (2007) notes that in Latin America and the Caribbean, over 30 percent of PPPs were renegotiated (particularly in transportation and water projects), often within the first two to three years of the award of a PPP. Key factors forcing renegotiation have included the fixed term nature of concession contracts, the challenges posed by demand risk, poor decisions at the design stage, government acceptance of aggressive bidding, or changes in the rules of the game by the government after the contract award.Tchakarov also notes that an â€Å"improper regulatory framework and poor regulatory oversight [can] increase the chances of conflict, rent capture by operators, or opportunistic behavior by government. † In sum, private sector financing offers important opportunities for Kenya to augment its fiscal space for infrastructure, but successful exploitati on of this source requires important capacity building within the government in order to ensure both fiscal savings and efficiency gains relative to public provision.F. Risks The MTBSP recognizes that the underlying medium-term assumptions are not without risks, and that the projected rate of economic growth may not be achieved. Under such circumstances, the MTBSP indicates that the government would take appropriate measures to mitigate the risks to macro-economic stability, such as by delaying or scaling back on expenditures on non-priority programs. However, the MTBSP does not identify which programs would be curtailed should revenues fall short of projection. IV.Assessing the Vision and the Medium-Term Budget Strategy ADoes Vision 2030 and the MTBSP Address the Key Challenges facing Kenya? In assessing Kenya’s fiscal policy going forward, it is probably best to work from the plans indicated in the recent MTBSP, primarily because Vision 2030 and the MTP provide less detail on the macroeconomic and fiscal policy framework. Vision 2030 is also of course more ambitious in its objectives for growth, so that any doubts raised about the MTBSP would only be more the case concerning Vision 2030.At the outset, it is worth pointing out that the fiscal framework in the MTBSP appears to be based on fairly conservative assumptions and has introduced some degree of flexibility that can accommodate several alternative scenarios. In particular, the assumed lower growth in the MTBSP compared with the Vision 2030 is, regrettably, realistic in light of recent global developments. However, the projected constant ratio of revenue-to-GDP ratio also comes at a time when KRA is undertaking significant reforms in the customs and tax administration.This means that there is likely to be a revenue windfall. The projected disbursement of concessional loans in line with GDP assumes no improvement in absorption capacity in the key line ministries from the low levels of between 40-5 0 percent and the authorities have underscored this as an objective to pursue in coming years. With the recent enhanced monitoring of project implementation, the absorption of donor funds should increase. The exclusion of donor budget support from the framework at a time when PFM/PEM reforms are on-going also suggests a potential upside in donor support.Finally even with the increase in government spending associated with the fiscal stimulus, the level of public sector debt to GDP ratio still provides some scope for additional domestic borrowing to fund key infrastructure projects, if warranted, without jeopardizing Kenya’s debt sustainability status. All in all, with the exception of the growth scenario, most of the other assumptions appear fairly cautious and leave room for some over performance. Thugge et al make several key observations on these issues.While acknowledging that the authorities have articulated a sensible and ambitious policy strategy, recent domestic polit ical events and the global economic downturn highlight the setbacks to its realization almost from the outset. Revenue shortfalls, limited efforts at rationalizing spending in noncritical sectors, and the slow pace of civil service rationalization will limit the potential for meeting policy objectives in the health and education sectors, both in terms of levels of spending and efforts at increased sectoral efficiency.The need for increased infrastructural spending is recognized, but financing efforts remain impeded by the lack of progress on setting out the policy framework for enhanced private sector participation and an improved investment climate. Enhanced revenue efforts will also be needed, particularly from personal and corporate income taxes and from an increase in the effective VAT rate. Fifth, the MTP calls for a sharp increase in overall investment in order to achieve the planned 10 percent real GDP growth.However, in light of the sharply lower medium-term levels of saving and investment now projected in the MTBSP, the government needs to move with deliberate speed to implement structural reforms and improve the investment climate in order to raise productivity rapidly. Without a significant increase in total factor productivity, achieving the Vision 2030 growth objectives could be seriously impaired.One implication of the limited amount of resources available to G

Diglossia

Hindi as a Diglossic Language Standard (Suddha) Hindi vs Hindustani:- Hindustani,  commonly known as  Hindi-Urdu  and historically as  Hindavi,  Urdu, and, is the lingua franca of north india and Pakistan. It is an  indo Aryan language and it is deriving primarily from the  khariboli of Delhi, and borrows a large amount of vocabulary from  Persian, Arabic, Sanskrit and Turkic. The colloquial languages are all but indistinguishable, and even though the official standards are nearly identical in grammar. They differ in literary conventions and in academic and technical vocabulary.With Urdu retaining stronger Persian, Central Asian and Arabic influences, and Hindi relying more heavily on Sanskrit. Before the  partisan of India, the terms  Hindustani, Urdu,  and Hindi  were synonymous; all covered what would be called Urdu and Hindi today. The term  Hindustani  is still used for the colloquial language and lingua franca of North India and Pakistan, for example for the language of   bollywood  films, as well as for several quite different   varieties of Hindi  spoken outside the Subcontinent, such as  Fiji Hindi  and the  Caribbean Hindustani  of   Suriname and  Trinidad.Standard Hindi, the official language of India, is based on the  khariboli dialect of the Delhi region and differs from Urdu in that it is usually written in the indigenous  devnagari  script of India and exhibits less Persian influence than Urdu. Many scholars today employ a Sanskritized form of Hindi developed primarily varansi, the  Hindu  holy city, which is based on the Eastern Hindi dialect of that region and thus a separate language from official Standard Hindi.It has a literature of 500 years, with prose, poetry, religion & philosophy, under the Bahmani Kings and later on Khutab Shahi Adil Shahi etc. It is a living language, still prevalent all over the Deccan Plato. Note that the term â€Å"Hindustani† has generally fallen out of common usage in modern India, except to refer to a style of Indian  Hindustani Classic Music. The term used to refer to the language is â€Å"Hindi†, regardless of the mix of Persian or Sanskrit words used by the speaker.One could conceive of a wide spectrum of dialects, with the highly Persianized Urdu at one end of the spectrum and a heavily Sanskrit-based dialect, spoken in the region around Varansi, at the other end of the spectrum. In common usage in India, the term â€Å"Hindi† includes all these dialects except those at the Urdu end of the spectrum. Thus, the different meanings of the word â€Å"Hindi† include, among others: 1. standardized Hindi as taught in schools throughout India, 2. Formal or official Hindi advocated by Puushottam Das Tandon who was freedom fighter from Uttar Pradesh. e is widely remembered for his effort in achieving the official language of India status for Hindi  and as instituted by the post-independence Indian government , heavily influenced by Sanskrit, 3. the vernacular dialects of Hindustani as spoken throughout India, 4. the neutralized form of the language used in popular television and films, or 5. The more formal neutralized form of the language used in broadcast and print news reports. Hindi has two forms: the H form called   Shuddha Hind and Hindustani Language.Both are based on the same dialect that is Khariboli. The L variety, Hindustani (often simply called Hindi) contains many loanwords from Persian and Arabic (brought by the Arabic and Persian invaders in medieval times), along with a massive vocabulary of English loanwords which increase day by day. The L variety is identical with spoken Urdu—except for the fact that the latter is written in  Perso Arabic script. The H variety was standardized in the 1960s during the movement to adopt  Hindi  as national language of Indian Union.Shuddh  means pure Hindi primarily uses words from Sanskrit to replace not only English lo anwords, but also loanwords from  Persian language  and Arabic which had been nativized for centuries. These words are called  Tatsama  words, and they even replaced many  tadbhav  words, i. e. words with Sanskrit origin but having undergone profound  phonological  change. The L variety is used in common speech, TV serials and Bollywood movies and songs. The H variety is used in official and government writings, scholarly books and magazines, signboards, public announcements and public speaking.

Right For Hunt Vs. Animal Rights - 955 Words

Right to Hunt vs. Animal Rights On the topic of Animal Rights, subjects such as hunting can be addressed clearly as an unnecessary sport by many animal rights groups, however Jim Amrhein of The Daily Reckoning has brought to light many valuable points on the right to hunt. According to the Daily Reckoning website, the publication is a daily stock market observation stressing the economy, world politics, and travel. Mr. Amrhein reveals various statistics not only for the right to hunt, but also facts of the negligence of some well-known animal rights groups. In Right to Hunt vs. Animal Rights, Jim Amrhein speaks to the fact that hunting is not as detrimental as many animal rights groups portray it as. 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