THE BUDGET

Hi
Today I presented my first Budget called Stability and opportunity: building a strong, sustainable future.
Economic stability will always be Labour's first priority. The core purpose of this Budget is stability - now and in the future. Its core values are fairness and opportunity, founded on stability and strength.
The investment the Labour Government has made has supported many people in realising their potential. By maintaining a strong and stable economy we have been able to invest in our public services after years of underinvestment.
Today the global slowdown means we face uncertain economic times. The turbulence in the American mortgage market has touched economies all over the world - including ours. But here in Britain we are better placed than other countries and better placed than we ever were in the past to deal with this.
The Budget reports that the economy is resilient, and continuing to grow. The Government is meeting its strict fiscal rules for the public finances. This is a responsible Budget to secure Britain's stability in the face of global uncertainty.
In particular, the Budget focuses on tackling two of the big issues of today - child poverty and climate change -alongside continuing investment in education and providing extra help for pensioners. I am proud to announce key measures to:
• help lift 250,000 children out of poverty on our path to eradicating all child poverty;
• build a low carbon Britain by giving incentives for people to make green choices;
• an extra £200 million invested over the next three years to bring forward Labour's ambition for no school to have fewer than 30 per cent of its pupils achieving five A*-C grades at GCSE;
•give an extra boost of £50 to over 60's households and £100 for over 80's households on top of the Winter Fuel Payment, benefiting nine million pensioner households.
Labour's choice: Fairness and opportunity for everyone in Britain to secure a strong, sustainable future.
Best wishes
Rt Hon Alistair Darling MP

The day i met H.M QUEEN ELIZABETH II at buckigham Palce

With the duke of Edinburgh,Prince Phillips

1.0. Part (I), Post World War II Political and Economic
System of the Developing Countries.

The end of the Second World War and its aftermath was the beginning of many changes emerged with an opposing socio-economic and political strategies. Also, many countries, particularly in Africa gained their independence during this period. The developmental processes and political strategies in which the LDCs adopted in this period have inevitably shaped and transformed the contemporary developing nations in many aspects relative to the industrialized countries of the capitalist as well as the communist countries notably of the Soviet Union. Before we embark on the main issue of our essay we try to present a brief spectrum of the two systems of capitalism and socialism. I have attempted the following model that might help us to understand in detail the civil society of the developing nations, their relation to power, production and the market.

Figure 1.0; Civil Society's relation to production & Market.

MARKET
RELATION
MARKET
RELATION
Goods &
Services
CONTROL
Capital
Managers
Public
MEANS OF PRODUCTION
Socialism
Goods &
Services
CONTROL
Capital
Owners
OWNERSHIP
MEANS OF PRODUCTION
Private

Capitalism
STATE
Democratic
Non-Democratic



C
I
V
I
L

S
O
C
I
E
T
Y
OWNERSHIPIf we look at this model we notice that there are two opposing political systems which paved the way the social and economic development of all nations and particularly the LDCs in which we are concern. To analyse the arguments associated with the two systems, we discuss separately both systems while we summon together the arguments of how well the basic needs of the Civil Society was met and allocated in both ideologies. States in the Third World countries can be grouped, as shown in our model "figure 1.0", into capitalist and socialist whether they are democratic or undemocratic. In democratic state the civil society elects and can change easily the government through election whereas the non-democratic state is not. Two good examples of these states can be one from Somalia between 1960-69 "democratic state" and the other is from Kenya "non-democratic" until recently.

1.2. Civil Society and the Market in a Socialist State.

In socialism, the model shows the means of production is owned publicly and controlled by managers employed by the state. These managers are members of the civil servants of the government which produce goods and services for public and private consumption. They make no profit of what they produce and no competition between the growing economic sectors; but there might be a moral encouragement or promotion of their position according to their performance. In this case it is assumable that there are no incentives for capital accumulation and further investments or re-investment. Thus, the state is the ultimate power that has the financial capacity and the authority to allocate resource rather than the free-market mechanisms. The state intervention of the economy is seen as a sound environment that the market would satisfy the needs of the civil society without any distortion. Therefore, as it seems, it is a very efficient way to redistribute income and resources among the civil society and provide goods and services for the normally segmented population that represented from different social interests and values.

1.3. Civil Society and the Market in a Capitalist State.

Capitalism system, the means of production is owned by private people "capital owners" who control the production. Profit is the main determinant of production and distribution. To maximize the profit, investment is leaned towards the sectors that have the highest returns. Thus, the goods and services produced were intended only to one section of the society; the well-off people "that are mainly from the urban dwellers" and the rest of the society were left at the verge of deprivation or so. The state has no role to intervene the market system. The free market policies some times called market-friendly polices would allocate domestic resource and decide what goods and services should be produced, for whom and are produced for domestic consumption or for export. This system has dominated the developing nations than ever since the collapse of Soviet Union precipitated by reversal of the China's socio-economic development in the late 1970s.

The theoretical arguments of both systems sounded fair and logic; but the reality is different. Nearly the five decades after the World War II, in which both systems were in practice, have shown no respect on human life and deprived the civil society of both capitalist and socialist countries. Both systems appeared to be a tool of foreign domination that service only the local powers and their foreign patron. The civil societies of the both systems have no control of the means of production and the market. The managers of the capital in the publicly organized production and the capitalist capital owners are the dominant of both societies. Them and their families have the best education, best medical services and the best living condition than others have.

Therefore, to understand deeply how well the states "capitalist and socialist" worked to create a functioning-market in order to meet the needs of the civil society, we try demonstrate in the following two case studies in which the first case study is Kenya that was one of the outstanding capitalist countries in the Sub-Saharan region of Africa. And the second one will be over-viewed about Somalia as an example of socialist state in the period between 1969-1991;


2.0. Part (II), State market policies and Civil Society.

In this part we try to discuss and examine the socio-economic development process of the two nations of Kenya and Somalia. We also, demonstrate the impact of bad government policies on the economy, mainly on the agricultural sector, that has subsequently transformed the social development of the two nations in general and particularly the disadvantaged sections of the civil society.

2.1. Case Study (I). Kenya.

Our case study in Kenya will be focused on the agricultural sector and multinational corporations that involved this industry. We also Centre the impact of the MNCs on the economy and the consequence of the rural/urban underdevelopment. This will help us to analyse the developmental programmes of the state on the agricultural sector and how this had benefited to all sections of the civil society particularly those living in Nairobi. It is not only Kenya, but all developing countries have in common the capital city is the predominant economic and political city which attracts poor people to migrate in search for better life when governments fail to balance the rural/urban societies in terms of living standard and income.

Nevertheless, it was the dream of all civil societies in every developing nation that their governments will eradicate poverty and social inequities. One of the forefront policies taken by the new-states of Africa was to redistribute land. Immediately after the Kenyan people gain their independence, the government started land-transfer programme. Foreign ownership in agriculture was reduced. But this has not helped change the economic situation and the social development of the Kenyan people. In contrast, all the expansion which occurred was foreign-owned and controlled which means 50 per cent increase of output between 1964 and 1970, and 100 per cent increase in the annual level of investment (Colin leys; P. 118; 1975). Because, the land reform programme was not accompanied the necessary financial package and government support. On the other hand, one major factor that hampered the social investment and public services development was that many of the MPs of the new government were involved as owners of some subsidiaries and not interested the local firms or develop the rural agricultural sector. This has given power Multinational Corporations to dictate all government policies related to policymaking and decisions. For instance, the Kikuyu politicians -the ruling class of Kenya after the independence- were the directors of the largest shoe subsidiary in Kenya. The three largest of these subsidiaries reported they had informal channels of access to government and friendly relations with the state (Steven W. Langdon; P. 90; 1981). In that sense, the Kenyan civil society was not benefiting any policies taken by their government. As a result of bad government policies and inappropriate technologies, many rural population deserted their areas and poured into the big cities when they could not keep pace with the growing urban economy, dominated by foreign firms, and increasing rural unemployment.

Moreover, according to UNICEF report of Children and Women in Kenya "a situation analysis 1992; P.19" the agriculture, manufacturing and services sectors of the Kenyan economy have all declined. The manufacturing sector dropped from its rate of 6% in 1986-89 to 3.5% in 1991. This had affected Kenya's economic growth particularly the sector's contribution to the export earnings. But the most dramatic is the decline in agriculture which recorded a negative growth of 1.1% in 1991. The situation is very alarming since the Kenyan poor people depend directly and indirectly on this sector for their livelihood and contribute 29% of the GDP and 65% of exports (Todaro, P.124; 1997). It also quoted from Todaro, Kenya's per capita income dropped from $410 in 1980 to $260 in 1990 which mean they lost almost half of their income while the urban unemployment rate had also rose to 30% at the same time. In addition to that, the economic policies designed to promote industrial growth led to a bitter neglect of agriculture. As a result, farm prices, production and farmer income have all declined in a very dramatic way which in turn exacerbated the already poor conditions of peasant farmers. Due to these circumstances, many farmers migrated to nearby cities mainly to Nairobi pushing up the rate of unemployment and population.


Table 1. Population in Nairobi (1990).

Total population Planned areas slams

1.3million 40% 60%
Source: UNICEF; Children and women in Kenya "A situation analysis"
pp.19; 1992.
The above table shows in 1990 sixty per cent of Nairobi's
population were living in slams with no social and economic infrastructure at all. Another study quoted from the Geography Program of the BBC2 learning zone indicated that Nairobi's population at the moment is about more than two million people, nearly four times of the 1969, in which half of them are living in twenty per cent of the capital city "Nairobi" where as the other half live in eighty per cent of the total area of Nairobi. This is very clear that the social stratification and the gap between the rich and poor is widening, particularly if we look at the worsening situation of the poor people in Nairobi. Most of them live in overcrowded areas with a very poor houses and do not have access to public services such as health and education. No sanitation and clean water. This had deteriorated the already appalling conditions of the civil society particularly this section of the population. For example, according to the Kenya's National AIDS Control Programme the number of AIDS cases has increased and doubled every six to nine months. Estimates show more than one million Kenyans are now infected by the HIV virus. One of the reasons that can be attributed to this change could be the declining income of the poor society that had turned them to practice another activities of means of an income such as prostitution and drug uses. Furthermore, the public health service is declining year after year and most of these people have no access to hospital and health centres. Today, apart from the private health centres and hospitals, about 40% of the health services in Kenya are provided by some 32 different NGOs and most of them charge fees (Children and women in Kenya "A situation analysis, 1992). This is because the public service in general and the health services in particular are disintegrating and not functioning for the civil society. The government elite and their families and those who can afford the private health services have benefited from the system and not by the needed and most vulnerable people of the society. Therefore, the state policies on the economic development and the markets that have prevailed are not functioning for the civil society of Kenya that has in turn decayed the social and political relationship of the state and the civil society.

2.2. Case Study (II), "Somalia".

Somalia's economy is mainly based on livestock and agriculture. Thus, in trying to overview the main domestic problems that deprived the civil society, contributed to the collapse of the state of Somalia and undermined the prospect of future national reconciliation, it is very helpful to begin with a quick review of the colonial economic policies that have cleared the way to be continued by the succeeded governments since the independence. Unlike Kenya, Somalia was colonized by three different European countries Italy, Great Britain and France. This means Somalia was divided into three; Italian Somali Land, British Somali Land and French Somalia Land. Somalia today constitute the two former British and Italian Somali Lands whereas the French Somali Land is an independent country known as Djibouti.
However, after thirty years of independent country the state of Somalia has collapsed and fragmented into small communities just as they were before the colonial invasion. Thus, the focal point of our case study will be concentrated on the market that the socialist government created and how this has contributed to the destruction of the country and the civil society. This is because after the collapse of Somali state in 27 January 1991, to me, it become clear the important role of the state in the economic and the social development. Thus, our area of review and analysis include; land use and land allocation; education; rural development; [to be continued...]

Course:- MSc\ Development Studies.

State Civil Society And Development.

Unit Co-ordinator: Robinson Rojas.

Essay topic:-
"How well, in your opinion, has the state in developing societies fulfilled its role of keeping civil society and markets functioning to meet the needs of the former? Include in your answer at least one case study.

By:- Mohamed Ali-Nur Hagi.