1. Global Trends and what they mean for Kenya in 2010 Mind Speak, Rich Management Dr. Wolfgang Fengler, Lead Economist World Bank, Nairobi 30. January 2010

2. 2 Born in Germany in January 1971 Graduated from German Universities in 1996 (Masters) and 2000 (PhD) Founded a number of companies, including “Africa Consulting” in the 1990ies Left Germany and joined the World Bank in January 2000 Became Senior Economist for the World Bank in Indonesia in 2004 Moved to Kenya as World Bank Lead Economist in August 2009 Married to Petra Fengler; 3 children aged 5-8 About myself

3. Main messages Our generation is experiencing the most profound demographic transition ever: in 1970, the world had less than 4 billion people; by 2050 it will have more than 9 billion. We are also experiencing a geographic transition from rural to urban. But “growth will always be unbalanced but development can still be inclusive” (WDR 2009). Development is possible but it is not inevitable. Asia is rising – Africa continues to stagnate. Paradox Kenya. Strong private sector but poor growth.

4. 4 Demographic shifts

5. The World will soon exceed 7 billion; working age population will continue to rise

6. Global population growth is driven by Asia and Africa …

7. … while Europe and North America’s share in global population is declining 7

8. Total Population Working Ages 15-64 Youth 0-14 Older 65+ 19502000 Population in thousands 20251975 2050 Kenya is growing by more than 1 million a year; by 2050, the country will exceed 85 million people

9. 9 Geographic shifts

10. D ensity: Tokyo—the biggest city in the world  35 million out of 120 million Japanese, packed into 4 percent of Japan’s land area D istance: USA—the most mobile country  More than 35 million out of 300 million changed residence in 2006; 8 million people changed states D ivision: West Europe—the most integrated continent  About 35 percent of its GDP is traded, almost two thirds within the region The 3Ds: Density, Distance, Division

11. Concentration, a fact of life, Half of the world’s production…..

12. WDR Conference in Central Asia, February 26- 27 2009 at the global spatial scale ….can fit onto 1.5% of its land, less than the size of Algeria

13. Economic map of the World – Africa is still absent but Asia has been reappearing 13

14. 14 Kenya’s cities are growing rapidly

15. 15 Development is possible but not inevitable

16. Globally, extreme poverty has declined significantly… Share of Population below US$ 1 a day; Source: Chen/Ravallion 2004

17. … but there is great regional variation

18. In Kenya, per-capita income recovered since 2002 - after more than a decade of decline 18

19. 19 KENYA’s economy in 2010

20. Kenya’s economy is dominated by services – and has always been New SNA methodology Source: Kenya National Accounts / WB Staff estimates; Please note that Kenya adopted SNA1993 and revised the GDP series. Starting 1999-03 the series reflects the structural break in the methodology and not changes in the trend.

21. Services have a much bigger role in the economy compared to Tanzania and Uganda 21

22. Kenya has experienced a decade of strong, but uneven, growth

23. Even though Kenya never received debt relief, debt levels declined from 60% to 40%

24. Kenya is not aid dependent: Only 5% of the budget is financed by partners

25. Kenya is experiencing an IT revolution Since 2008, IT and phone connections increased rapidly

26. Outlook 2010: A continuation of Kenya’s (slow) recovery with 3.5% growth

27. Kenya’s growth will be similar to the SSA average

28. … but remains below its neighbors

29. Danke Asante Sana Thank you