July 1, 2024
Finance

Kenya’s Ruto Concedes to Protesters’ Demands to Scrap Finance Bill


Welcome back to World Brief, where we’re looking at the political impact of Kenya’s mass protests, new leadership for NATO and the European Union, and a coup attempt in Bolivia.

Welcome back to World Brief, where we’re looking at the political impact of Kenya’s mass protests, new leadership for NATO and the European Union, and a coup attempt in Bolivia.


‘The People Have Spoken’

Kenyan President William Ruto yielded to protesters’ demands on Wednesday by agreeing not to sign Nairobi’s contentious finance bill. “I run a government, but I also lead people, and the people have spoken,” Ruto said. The concession comes in stark contrast to Ruto’s comments the day before, when he lambasted the widespread protests as “treasonous events.”

Nairobi’s proposed finance bill aims to raise $2.7 billion in taxes to alleviate Kenya’s extensive debt crisis. Reforms include taxes on key imports and social health services, among others. Last week, public pressure forced lawmakers to scrap some of the increases, such as a 16 percent levy on bread and other taxes on vehicles, vegetable oil, and mobile money transfers. But many Kenyans believed the concessions were not enough to curb the country’s rising costs of living.

Demonstrators, primarily young people, mobilized in the capital on Tuesday to condemn the legislation, having nicknamed the president “Zakayo” after the biblical tax collector Zacchaeus. Protesters stormed and set fire to part of Kenya’s parliamentary building. Ruto, in turn, deployed the military to assist police in quelling the violence. At least five people were killed, around 200 others injured, and more than 50 protesters arrested.

“Ruto must go,” senior opposition leader Eugene Wamalwa said on Tuesday. “Ruto must resign. He must do the honorable thing.” Kenya’s High Court announced on Wednesday that it will hear a challenge to Ruto’s military deployment order on Thursday.

Kenya has the fastest-growing economy in Africa but faces imminent debt default. In total, Kenya owes $80 billion in domestic and foreign public debt, accounting for almost 75 percent of the nation’s entire economic output. Last week, Kenya used part of a World Bank loan to pay off a $500 million Eurobond, but interest rates continue to consume 27 percent of all revenue collected.

A series of local and global crises have devastated Kenya’s economy. COVID-19 hit the country hard, and Nairobi struggled to quickly amass medical supplies and vaccines. The Russia-Ukraine war and subsequent Western sanctions have forced global food and energy prices to skyrocket. And last month, widespread flooding and landslides killed at least 260 people and impacted more than 380,000 others.

Kenya is not alone with its fiscal struggles. Elsewhere on the continent, Zambia, Ghana, and Ethiopia have inked or are working to secure debt restructuring deals. “Building a resilient economy that can withstand geopolitical shocks cannot happen in a vacuum,” East Africa expert Caroline Gray argued in Foreign Policy, suggesting that Kenya and other emerging economies focus on strategic trade deals with major powers such as the United States and China.

Yet that may be difficult if Washington and its partners are disconnected from Kenya’s reality on the ground, FP’s Robbie Gramer reports, with critics accusing the Biden administration of “prioritizing short-term arrangements that advance U.S. policy while sidelining real concerns over democracy.”


Today’s Most Read


What We’re Following

Big promotions. NATO formally appointed outgoing Dutch Prime Minister Mark Rutte on Wednesday to be the alliance’s next secretary-general. Rutte’s campaign was largely uncontested, with Romanian President Klaus Iohannis, his only rival, withdrawing from the race last week. Rutte will replace Jens Stoltenberg, who has helmed NATO for the past 10 years, on Oct. 1. During his tenure, Rutte is expected to bolster Western support for Ukraine’s defense against Russia as well as address NATO members that are not meeting the group’s 2 percent defense spending quota.

Also on Wednesday, three centrist European Parliament parties proposed reelecting Ursula von der Leyen for a second term as European Commission president. Under this agreement, former Portuguese Prime Minister António Costa would become president of the European Council, replacing Charles Michel, and Estonian Prime Minister Kaja Kallas would succeed Josep Borrell as the European Union’s top diplomat. The lineup signals the EU’s continued support for Ukraine despite major far-right gains in parliamentary elections last month.

Coup attempt. Bolivian armed forces seized control of the city center in La Paz on Wednesday in an apparent coup attempt. Locals reported soldiers storming the entrance of the presidential palace after an armored vehicle was rammed into it. President Luis Arce denounced the “irregular mobilization.”

The attack appears to be led by Gen. Juan José Zuñiga, Bolivia’s top military official. Arce fired Zuñiga on Tuesday over comments criticizing former President Evo Morales, who was forced to resign in 2019 after the military demanded that he step down following voting irregularity allegations—allegations that he called a “coup.” Morales served for almost 14 years and is set to run for reelection in 2025, though Zuñiga has demanded that he be barred from running again.

Debate season. British Prime Minister Rishi Sunak and Labour Party leader Keir Starmer went head-to-head on Wednesday for their first televised debate ahead of snap elections on July 4. The two clashed on tax policy, ethics scandals in Sunak’s Conservative Party, nationwide doctors’ strikes, and London’s asylum deportation policy to Rwanda. YouGov polling suggests that the opposition Labour Party will win around 425 seats, with the Conservatives securing only 108.

On Tuesday, French politicians also took the stage to debate policy ahead of next Sunday’s snap elections. French Prime Minister Gabriel Attal accused his far-left and far-right opponents of “promising the moon.” Right-wing National Rally representative Jordan Bardella criticized Attal and French President Emmanuel Macron of creating a public deficit. And Manuel Bompard, a candidate with the left-wing New Popular Front coalition, accused Bardella of promoting costly populist measures.

If that’s not enough political debate for you, CNN will host former U.S. President Donald Trump and current U.S. President Joe Biden on Thursday for their first presidential debate ahead of a neck-and-neck election in November. Efforts have been taken to limit animosity and crosstalk, which dominated debates during the last election cycle. But viewers can still expect heated discussion on the economy, immigration concerns at the U.S. southern border, the Supreme Court’s conservative tilt, and Trump’s recent felony conviction.

Gershkovich stands trial. U.S. journalist Evan Gershkovich appeared before a Russian court on Wednesday to begin his months-delayed closed-door trial. The Wall Street Journal reporter is accused of gathering classified information for the CIA on a company that manufactures Russian tanks for Moscow’s war on Ukraine. No evidence of this has been made public, and both the Wall Street Journal and the Biden administration deny Russia’s allegations. If convicted, Gershkovich will likely be sentenced to up to 20 years in prison, though Russian President Vladimir Putin has suggested that he is open to a prisoner exchange involving the reporter.

“His case is not about evidence, procedural norms, or the rule of law. It is about the Kremlin using American citizens to achieve its political objectives,” the U.S. Embassy in Russia said. This is the first time since the Cold War that a U.S. journalist has been tried for espionage in Russia. The next court session is scheduled for Aug. 13, indicating that the trial will last months.


Odds and Ends

Dogs are facing steep competition for which animal most hates postal workers. The United Kingdom’s Royal Mail issued a formal apology to residents of Cornwall last Thursday for delayed deliveries—blaming dive-bombing seagulls for the inconvenience. Residents can either nominate another address for future deliveries or wait for the gulls to become less aggressive. We wish World Brief’s editor, who is currently waiting on a Royal Mail package, the best of luck.



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