2.6 Public action as steering development
The role of ‘development’ here is primarily to ameliorate the disordered faults of [capitalist] progress, and it is development agencies or ‘trustees of development’ – state, NGOs, international organisations – that act as agents of development. Thus, the desirable ‘developed’ state is one where a modern industrial society and liberal democracy can thrive along with some attention being given to basic social and environmental goals.
Public action that steers development thus includes deliberate action to cushion the effects of a market ‘fallout’ and attempts to make amends towards those who have been caught up in this. In steering development, there is then an attempt to intervene in all kinds of social, environmental and other crises that have accompanied varied degrees of ‘development of capitalism’ through targeting of particular projects and programmes.
In an extreme or pure form of capitalism, there would be only a minimal role for states or any form of collective or public action. In practice, in contemporary or ‘advanced’ capitalism, states have an important role to play.
(Allen and Thomas, 2000, p. 190)
Allen and Thomas argue that even if the state can sometimes act as a structural obstacle to development it does, nevertheless, have the capacity to enable development if it should so will. The state can thus be regarded as an important, if not the major ‘trustee’ and the primary agent for development. Take for example, the story of tea in Kenya (told here very briefly in Box 1) which illustrates well the point that the state can play a major role in protecting those who may be crushed by giants in the market, and at the same time, steer long-term industrial development (although recently this role has been undermined).
Box 1: Case study – Kenyan tea
Indian tea was introduced to Kenya and other parts of Africa in the 1910s. By 1920, BrookeBond had established control over the internal marketing of tea in Kenya, and was rapidly seeking control over production and a good quality supply for exports. By 1939, BrookeBond controlled all the key (and most lucrative) stages of production, marketing and distribution, and its trade orientation was mainly geared towards exports (Dinham and Hines, 1983, p. 100). Kenyan tea was thus developed primarily as a colonial export crop. However, during the Second World War foreign consumption fell significantly whilst domestic consumption, in contrast, rose dramatically to 67%. Nevertheless, by the 1950s, BrookeBond continued to expand as a dramatic increase in the world price of tea generated even larger profits to the company.
Following the Second World War, Kenyan demands for independence, redistribution of land and access to cash crop production began to worry the British colonial government. This prompted the colonial government into considering some form of ‘inclusive’ participation in the production of the main export crops of tea, coffee, pineapples and others. The enquiry into how this could be done resulted in the Swynnerton Plan (1954) which recommended that African Kenyan farmers were ‘incorporated’ into cash crop production through small holder (shamba) schemes (Swainson, 1980, pp. 250–64). Private companies were expected to participate in these schemes in assisting with the production, processing and marketing of the crop.
After initial reluctance, BrookeBond (which was also only too aware of the coming independence) appeared to relent in assisting small holders. It offered facilities and training. For example, whilst tea needs to be processed immediately after plucking, small holders did not have any processing plants to do so. BrookeBond seconded many of its senior officers to advise small holders, engineered the construction of the first small holder processing factory and provided various training and technical assistance. However, it should be noted that in doing so, BrookeBond was in fact weighing up and managing any possible competition from the small holders. For instance, it insisted on setting the quality standard for the tea leaf, often deeming small holder tea to be only fit for local consumption whilst it sent its own tea for the more profitable export market (Swainson, 1980, pp. 250–64).
In 1963, Kenya gained independence, but not before a concentrated (and often bloody) struggle. One of the major features of this struggle was the black African demand to retrieve land from white-owned Highland estates growing tea and coffee. Land redistribution did take place to an extent, allowing African farmers to purchase Highland estates through loans from the Commonwealth Development Corporation and the World Bank. The amount of land that could be purchased in this way was not, however, significant enough to equalise distribution, a feature that marks Kenya's economy to this day.
The first President, Jomo Kenyatta, has been accused of prioritising urban development and economic growth over rural concerns, especially issues of landlessness. Nevertheless, the new Government policy did aim to expand the small holders and prevent further purchase of land by foreign investors. For tea, its major cash crop, the Government sought to steer development by supporting small tea growers through various stages of production, processing and marketing (as it also did with coffee).
A major institutional change was the establishment of The Kenya Tea Development Authority (KTDA) in 1964, which aimed to protect small holders. The KTDA quickly began to build state-owned tea factories which bought green tea leaf from the farmers and controlled the processing and marketing of this. In this way, the KTDA began to steer development towards establishing a niche for small holders in international tea markets that operate through auctions held in Mombassa and London. Since its founding days, the KTDA has also developed its own technological and research base to assist the small holders to increase production.
Under the shelter of KTDA, tea small holding schemes in Kenya have been incredibly successful in terms of production and integration into international markets. Tea production since independence has risen from 18,000 metric tons to 220,000 metric tons out of which production within the small holder sub-sector rose from a mere 1.7% to 59% (Nyangito and Kimura, 1999, p. 1). A recent management study attempting to emulate the Kenyan smallholder scheme Sivaram cited in The Daily News, Sri Lanka (2001) suggests that, ‘After just 30 years of commercial production, Kenya's tea industry has stolen a clear march over the conventional tea producers …’. Even the World Bank once described Kenya's attempts as the best exemplar for developing the small holder tea industry (NewsAfrica, 2001).
Since the 1990s however, there have been several important changes. A persistent nudge from the World Bank's Structural Adjustment Programmes has pushed the government towards privatisation. Despite its attempts to continue protecting ‘strategic parastatals’, privatisation and restructuring of KTDA began in 1994. However, there was a strong feeling that the process excluded small holders and thus, privatisation was temporarily halted for six months in January 2000 until various consultations on how to involve small holders took place (The Financial Gazette, 2000).
It is argued that privatisation will lead to efficiency and finer management of tea production and marketing of green leaf (Nyangito and Kimura, 1999). Yet, it is too early to say what implications privatisation will have on the small tea holders of Kenya. However, there is growing concern for those who already live vulnerable lives. One of the major changes is that once again major shareholders rather than the KTDA or the smallholders can set the agenda. This includes the powerful multi-national Unilever which took over BrookeBond in 1984 and has acquired further vast tea plantations in Kenya (http://www.unilever.com). The land for these plantations has been obtained from the small holders, many of whom now have to work as labourers on tea estates that they previously owned. Small holder cooperatives are also experiencing difficulties in the face of multi-national competition, a factor contributing to further impoverishment of small tea farmers. Nevertheless, privatisation of the KTDA and minimising of the state's role currently remains inevitable.
The Kenya tea case study shows that the state can play an instrumental role in steering development. The state, however, needs to filter its ‘steering role’ through its many agencies which function at various levels, and this usually takes some time. Take, for example, the case study of Brazil's pursuit of better public services in Box 2 below. This is taken from the World Development Report (2003, p. 136) which draws its information from Tendler (1997).
Box 2: Steering public services development in Brazil
The state of Ceara in Brazil's poorest region, the northeast, was legendary for clientelism, patronage and poor public administration. In 1987 a newly elected reformist government, led by Tasso Jereissati, took the reins. Only a few years after the new government launched a public health programme, vaccination coverage for measles and polio had tripled to 90% of the child population and infant deaths had fallen from 102 per 1,000 infants to 65 per 1,000. How could a long tradition of clientelism and political opposition be overcome so rapidly? How did reputedly mediocre agencies deliver and sustain better performance spanning several years in administration? The governor of the state administration had to compel reluctant mayors to join the programme. Pressure on the mayors came from neighbouring municipos that had joined the program, and from an unusual and unending flurry of publicity through radio and other means. By creating an informed and demanding community, the state had initiated a dynamic in which mayors saw political rewards for supporting the programme. In doing so the government contributed to replacing the old patronage dynamic with a more service-oriented one, exploiting an opportunity as a strong third party to improve municipal accountability.
Box 2 illustrates that the steering of various aspects of development may be initiated by the state but it is often necessary to filter it through various levels of society. If, however, the state's role is undermined for whatever reason (for example, privatisation of Kenyan tea), what happens? As Allen and Thomas (2000) point out, ‘The apparent erosion of state capacities has highlighted the issue of what other kinds of actors might try to respond to aspirations of social well-being’ (p. 199). These include NGOs and other organisations who can also act as ‘trustees’ of development, acting to pick up the pieces of both state and/or market failures.