The Comparative Advantages Approach to Development

The Taita have an apt saying, ‘kila mtoto huzaliwa na riziki yake’ which when they translate means that when a baby is born, their fists are clenched, and what they are clutching in their fingers is their fortune. Similarly, every county has its fortune – be it the sea, arable land, mineral resources, cultural heritage and human capital among others, and Baringo has its share.

Traditional development theory sees the economy as “factor-driven.” A county’s comparative advantage in regional trade is expected to be determined by such factor endowments as land, natural resources, labor, and the size of the local population. Under comparative advantage theory, the basis for export development is factor intensity: the county should export products that use its abundant factors intensively.

This is a very sensible approach – it starts with identifying what resources are available and seeks how to develop on top of that. Baringo, for example, would be expected to take an inventory of its ‘riziki’ and figure out how to make the most from it. Some of the areas where Baringo holds comparative advantages include:

1. Human Resource – a better educated population that the surrounding communities
2. Livestock – 700,000 cattle, 1.4 million goats
3. Infrastructure – good roads, various airstrips in comparison to Turkana or Samburu.
4. Natural Resources - lakes, rivers, large forests, quarry stone, sand
5. Strategic position as a gateway to Turkana, Samburu and South Sudan. There also is a possibility for alternative linkage with Central Kenya through Laikipia. In addition, Baringo abuts very populous counties such as Keiyo, Uasin Gishu and Nakuru.
6. Fruit production and Horticulture – under irrigation, Marigat, Barwesa
7. Sisal Production
8. Land

However, the comparative advantage has a few weaknesses:

1. It invites exploitation – if oil was found in Baringo today, many strong countries and politicians would rush there and the local population would not benefit. All one needs to do is to identify the money and the vultures rush in.
2. It discourages divesture into more profitable areas for which the endowments may not be apparent. It is common in areas where gold has been discovered for people to stop investing in education – “why go to school if we can become rich digging dirt” seems to be prevailing mentality in such places.
3. It can entrench poverty: Suppose we were designated as the food basket of the nation. The country would put in place policies to ensure that we sell cheap food in the economy – at a great opportunity cost – because we could have used the same land to produce fruits that bring in a higher income.
4. It may not develop strategic capacity – Japan is one of the world’s largest steel producers, yet it has no iron mines. They import everything and do the value addition in Japan. One of the most potentially lucrative sectors in the regional economy is oil refining and petrochemicals. Baringo has no oil or ports – it would not make sense for them to be investing in such a sector – hence no investments are made in that sector; not really. In fact we should.