[Excerpt] It is often argued that the cost of social equity is less economic growth, highlighting the supposed trade-off between these two goals. The global financial and economic crisis that erupted in 2008 – which was preceded by rising social inequalities – has shown that this is simply not the case. In fact, if properly designed, equity-enhancing policies can also promote prosperity and reduce the risk of future crises.
The purpose of this report on Kenya, published under the series Studies on Growth with Equity, is to show how such policy complementarities can be achieved. Given the complementarities between macroeconomic policy on the one hand and employment and social policy on the other, the International Institute for Labour Studies (IILS) has joined forces with the United Nations Department of Economic and Social Affairs (UN DESA). The report is an outcome of a joint project of the French Ministry of Labour, Employment, Vocational Training and Social Dialogue and the IILS of the ILO.
In particular, the report examines how employment and social policies can contribute to a more stable and equitable growth pattern. Indeed, growth in Kenya has been characterized by considerable volatility due in part to a narrow growth base and weak investment patterns. This has adversely affected formal job creation and hampered improvements in living standards, particularly among Kenyan youth, despite considerable efforts by the government to support the labour market.
Moving forward, Kenya needs, first, additional efforts to support a job-centred macroeconomic framework. A stable, employment-oriented macroeconomic strategy that addresses the current vulnerabilities will be essential in order for Kenya to attain a level of growth that will allow for sufficient employment creation. Second, Kenya needs to encourage the formalization of formal-sector enterprises and improve the working conditions of workers in informal-sector employment. Finally, it is of upmost importance to develop a national employment strategy with a particular focus on encouraging job creation among youth. To that end, this report highlights a number of policy areas and recommendations intended to help guide the government and social partners, namely the Central Organization of Trade Unions (COTU) and Federation of Kenya Employers (FKE), in achieving growth with equity.