[kictanet] Malaysia/Policy Clarifications

[Bill Kagai]

Daktari,
This response is a clear sign of top notch leadership.
Thx for clarifying for those of us who were in the dark.


On Thu, Oct 9, 2008 at 8:07 PM, <bitange at jambo.co.ke> wrote:

> Dear All,
> I am in Malaysia.  This country's development is awesome.  Their
> e-applications are indeed something we all aught to learn from.  You can
> see the positive energy to move their country out of poverty in their
> eyes.  We must find ways to emulate these people and move away from self
> interest that is tearing our country apart.
>
> Prior to my travel here, I made some statements regarding local ownership
> of ICT investments with the aim of reviewing our policy.  This is what I
> am employed to do and I am still consulting with stakeholders to see how
> to advance the policy change.   Specifically, I argued as follows:
> •       The drop in Foreign Direct Investment (FDI) in our sector is as a
> result
> of rigid policy on ownership of investments;
> •       We must work toward attracting FDI if we have to sort out
> unemployment
> of our youth which has reached crisis levels;
> •       Large ICT multinationals have requested exemptions to this policy
> and
> would rather have the local ownership through the stock market;
> •       That those who have in the past purported to have the capacity to
> raise
> sufficient local capital have failed and cannot raise new capital thus
> compromising the competitiveness of these firms;
> •       Protectionism leads to poor service and uncompetitive environment;
> •       The problem of local equity participation can be summarized by the
> experience we went through during the search for the SNO – promises of
> non-existent funds and extortionism;
> •       The absence of local equity participation in some foreign banks did
> not
> stop Equity Bank from growing phenomenally;
> •       There is no threat to domination from foreigners since local firms
> have
> made great strides to eventually partner with multinationals from points
> of strength (read KDN/Altech; Safaricom/Onecom partnerships) and it is
> encouraging to see other local firms such as Access, Jamii, Wananchi etc
> coming up strongly that we don't need to require multinationals to seek
> for partners up front at the expense of our unemployed youths; and
> •       My liberalist economic approach is what in my view would make our
> country considering that some decisions we made along the same lines have
> greatly impacted all our lives.
> Take for example the liberalization of International Gateways.  There were
> threats to our lives that we could not survive to see the benefits.  These
> were threats made by those who benefited from illegal terminations of
> calls through Telkom Network leading to losses in excess of one billion
> shillings per year.  I am surprised that this move pains some people to
> date when we are enjoying lower tariffs with a more efficient Telkom.  I
> have no regrets on Telkom reforms at all and I am sure you all know that I
> never run from any responsibility.
>
> The Libyan matter has never been an issue before considering the fact that
> this are standard MOUs that we sign regularly whenever we market Kenya out
> there as an investment destination.  Yes I signed the MOU and the two ICT
> items in the MOU, that is, Telkom Kenya and Teams never went to Libyans
> since they lost in the bid process and rejected by local investors
> respectively.  In the same MOU were Energy items and of course Grand
> Regency but MOUs are not sale agreements.  We sign lots of these MOUs and
> even today here in Malaysia I have had to sign two.  These are public
> documents accessible to any Kenyan and there is nothing to hide in the
> course of serving our country.
>
> I have never in my life met Moi and as far as I am concerned I have never
> crossed his path either in his business or himself as a person.  The
> decision to extricate the Government from the Econet saga in my view saved
> the tax payers a great deal of money.  I was not there when this matter
> started and I still do not understand the whole transaction but it makes
> great sense to remove the Government from any liability.  If such a
> decision did not favour anybody, then the courts can settle and in any
> case, this matter is still sub judice.
>
> Back to policy.  If you have noted, we are launching an average of two ICT
> firms per a week.  Large BPO multinationals have told me to my face that
> until we sort out the local ownership issue, they are going elsewhere.
> These are firms that employ in excess of 30,000 BPO agents.  Investment in
> the sector runs into billions of shillings which people like myself cannot
> even dream of raising even 1% (and this is true for many of us in Kenya).
> Do we let such opportunities slip by because we want to be nationalists?
>
> Regards
>
>
> Ndemo.
>
>
>
>
>
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