Patrick
Do you always have to turn a conversation into a personal affront/attack?
My limited understanding of State Capture? I will not deign to respond to
personal attacks because in my responding I will be making an assumption
that you are an expert in the subject of State Capture.
Let me instead respond to your question below:-
*”Perhaps Ali, you can shed more light as to why the name of a particular
company – and not any other(s) – came into your mind after reading my
general comments about ruthless anti-competitive, anti-poor practices by
monopolistic entities. Is there something you have observed or heard about
their activities and/or practices?”*
Simple Patrick. The title of this email thread specifically mentions
Safaricom and so the assumption is understandable that you are singling
them out. Perhaps you care to respond to that instead of deflecting? I
asked a specific question on this. Focus on that, perhaps?
*Ali Hussein*
*Principal*
*AHK & Associates*
Tel: +254 713 601113
Twitter: @AliHKassim
Skype: abu-jomo
LinkedIn: ke.linkedin.com/in/alihkassim
<ke.linkedin.com/in/alihkassim>
13th Floor , Delta Towers, Oracle Wing,
Chiromo Road, Westlands,
Nairobi, Kenya.
Any information of a personal nature expressed in this email are purely
mine and do not necessarily reflect the official positions of the
organizations that I work with.
On Mon, Jun 24, 2019 at 9:36 PM Patrick A. M. Maina <[email protected]>
wrote:
> Greetings Ali, and many thanks for your thoughts.
>
> One key attribute of high value debates is the presence of two (or more)
> opposing perspectives because diversity of thought often leads to a
> multi-dimensional understanding of complex issues, which (if leveraged with
> good intentions) can lead to high quality inputs for policies, strategies,
> regulations and/or decisions. So I truly welcome and appreciate your
> counter-perspective and rebuttal efforts. 🙂
>
> Let me start with an African saying made famous by Chinua Achebe:
> * “An elderly person is always uneasy when dry bones are mentioned in a
> proverb.” *
>
> Perhaps Ali, you can shed more light as to why the name of a particular
> company – and not any other(s) – came into your mind after reading my
> general comments about ruthless anti-competitive, anti-poor practices by
> monopolistic entities. Is there something you have observed or heard about
> their activities and/or practices?
>
> Why would public-interest regulation be interpreted as targeting specific
> companies – unless it is some kind of admission or assertion that those
> companies could indeed be acting (or causing negative externalities)
> against public interest?
>
> Retrogressive externalities could be an unforeseen and/or unintentional
> by-product of a sub-optimized network-effects success model and poor
> economic master-planning (see links #1-7). Furthermore corporations, in
> different parts of the world, have also been known for purposeful
> malevolent activities when they fear of competition/disruption especially
> when operating within a weak / outdated institutional / antitrust
> framework. Specifics would need to be studied on a case by case basis.
>
> Have you considered the timing of the bill (in context of recent industry
> developments)? The proposed rules could actually *benefit* the very local
> corporate entities that would supposedly be motivated to resist them. In
> the global scale, our “tech giants” are like MSMEs and they get to be on
> the receiving end of mega-scale cross-border corporate tyranny.
>
> There is an interesting story of certain well known CEO’s visit to
> Africa. A lot of people thought he was coming to look for investment
> opportunities and they cheerfully welcomed him (full VVIP+ treatment), took
> him on tours, demoed innovations, snapped selfies and eagerly answered his
> questions – hoping to dazzle, awe and impress him. Kumbe he was on a
> mission to gather *economic intelligence* – and he openly stated so
> (meaning you can’t claim illegality) – leaving people to form their own
> self-deluded conclusions as to *why* he was doing it. Several years
> later, his company launches a product that will directly compete with ours
> at an unprecedented game-changing scale! There are so many stories like
> this in Africa, the script remains the same, only the actors, props and
> victims keep changing.
>
> It is quite embarrassing just how easy we make it for others to
> *repeatedly* plunder our ideas/insights or compete with us unfairly – to
> our own collective detriment – yet we always speak of a “knowledge economy”
> without taking time to understand what that *really* means.
>
> *”Fool me once, shame on you; fool me twice, shame on me.” *- old proverb.
>
> Africa’s centuries-old commitment to gullibility and ignorance is
> unparalleled and quite disturbing (see links #8-15). We are among the
> very few (if not the only) modern-day societies that never seem to learn
> from history. We welcome plunderers / economic spies with pomp, ceremony
> and color, and we happily give them everything they need to subjugate and
> impoverish us. Like little children, we accept sweet words as proof of
> benevolent intent and our shallow vanity makes us take pride that everyone
> is interested in learning from us (surely that means we are very important
> and smart – if others want to study us and everything we know, right?), yet
> we don’t take as much – or more – interest in learning from them or asking
> ourselves uncomfortable questions, such as: “why is the student always
> teaching the teacher?”… and most worryingly, we see voices of reason,
> desperately scrambling to wake us up – as party-pooping troublemakers. Quite
> depressing, but I digress..
>
> Ali, your argument on state capture suggests a limited understanding on
> how state capture comes about or what really it is (see links #8-15).
> Essentially you are contradicting yourself because it is good (uncorrupted)
> public-interest regulations, strong government institutions (not beholden
> to a few private interests) and a socio-political commitment to fair and
> sensible rules – motivated by public-interest – that minimize the risk of
> state capture.
>
> State capture is enabled by corruption, unchecked corporate power and
> corporate lobbying against public interest, which leads to regulatory (and
> market) failure e.g. due to bad laws that have loopholes purposefully
> designed in to them – or good laws getting blocked from enactment.
>
> I urge you to read more on the topic if you are interested in it (there
> are some good links below that you can start with) to gain a better
> understanding so you can offer more robust arguments/rebuttals without
> unwittingly demolishing or contradicting your main argument.
>
> Have a great evening.
>
> Brgd,
> Patrick
>
> Patrick A. M. Maina
> [Cross-domain Innovator | Independent Public Policy Analyst – Indigenous
> Innovations]
>
>
> *Links / References:*
>
> 1. Understanding Network Effects
>
> saylordotorg.github.io/text_information-systems-a-managers-guide-to-harnessing-technology-v2.0/s10-understanding-network-effects.html
>
> 2. The Dangers of Platform Monopolies
>
> knowledge.insead.edu/blog/insead-blog/the-dangers-of-platform-monopolies-6031
>
> 3. UNCTAD: Why competition and consumer protection matter
>
> unctad.org/en/Pages/DITC/CompetitionLaw/why-competition-matters.aspx
>
> 4. Apr. 2016: MIT News: How network effects hurt economies
> news.mit.edu/2016/network-effects-hurt-economies-0406
>
> 5. Regulating Anticompetitive Behavior – Principles of Economics
>
> opentextbc.ca/principlesofeconomics/chapter/11-2-regulating-anticompetitive-behavior/
>
> 6. Monopolies are Destroying our Economy (US centric – but contains
> valuable insights)
>
> intpolicydigest.org/2018/05/23/monopolies-are-destroying-our-economy/
>
> 7. Apr. 2019: IMF warns that tech giants stifle innovation and threaten
> stability
>
> www.theguardian.com/business/2019/apr/03/imf-warns-that-tech-giants-stifle-innovation-and-threaten-stability
>
> 8. 2017: UN Speakers Stress Need to Address Exploitation of Africa’s
> Resources, Urging Paradigm Shift, as Economic and Social Council Concludes
> Segment | Meetings Coverage and Press Releases
> www.un.org/press/en/2017/ecosoc6831.doc.htm
>
> 9. Why the richest continent is the poorest
>
> edition.cnn.com/2016/04/18/africa/looting-machine-tom-burgis-africa/index.html
>
> 10. Culture and social environment in the pre-colonial era
>
> www.scielo.org.za/scielo.php?script=sci_arttext&pid=S0041-476X2009000100014
>
> 11. Why no African country is truly free or independent – THE AFRICAN
> COURIER. Reporting Africa and its Diaspora!
>
> www.theafricancourier.de/opinion-analysis/neo-colonialism-in-africa-the-illusion-of-freedom/
>
> 12. Exploiting gullible people is a modern form of mining
>
> www.theguardian.com/lifeandstyle/2015/aug/07/exploiting-gullible-people-modern-mining
>
> 13. Universities and the “democracy of the gullible”
> en.unesco.org/courier/2018-1/universities-and-democracy-gullible
>
> 14. The Age of Gullibility
>
> www.psychologytoday.com/us/blog/one-among-many/201806/the-age-gullibility
>
> 15. The Science Of Gullibility: Why We Get Duped
> www.npr.org/templates/transcript/transcript.php?storyId=99160094
>
> 16. Corporations and Regulators: The Game of Influence in Regulatory
> Capture
>
> www.researchgate.net/publication/257246830_Corporations_and_Regulators_The_Game_of_Influence_in_Regulatory_Capture
>
> 17. Corruption, Lobbying and State Capture
>
> www.researchgate.net/publication/304479012_Corruption_Lobbying_and_State_Capture
>
> 18. Rent-Seeking and Regulatory Capture
> www.e-education.psu.edu/ebf200/book/export/html/160
>
>
>
>
> On Monday, June 24, 2019, 7:57:38 AM GMT+3, Ali Hussein <[email protected]>
> wrote:
>
>
> Patrick
>
> From the context of this headline, I’m curious to see how Safaricom
> contributes to your quote below:-
>
> *”…OK to drive mama mbogas (small vegetable sellers), youth-founded
> startups, indigenous innovators and other MSMEs out of business, by
> leveraging legal/regulatory loopholes that allow them to distort market
> forces using their mass-scale market power. “*
>
> Whilst I generally agree with your thesis below I think it’s fair that
> when we make such accusations in relation to a specific company we quote
> specific examples. I’m all for ensuring a level playing field across the
> board and contend that this is a collective effort of Good Citizenry by
> corporates (which by the way is good for business long term) and robust but
> fair policies and regulation by government.
>
> The world is full of examples where breaking up companies has never
> achieved the desired effect of creating a level playing field (Standard Oil
> is probably the best example. Years later these baby Standard Oils are
> mostly back together in the form of Exxon Mobil.
> <www.visualcapitalist.com/chart-evolution-standard-oil/> And by
> the way, the breakup may have made the Rockefellers even more fabulously
> wealthy). Rather than breaking up companies, the world should address the
> elephant in the room.
>
> State Capture. <en.wikipedia.org/wiki/State_capture> Boeing is
> probably the most current example of how government regulation was
> completely corrupted
> <www.economist.com/business/2019/03/23/regulatory-capture-may-be-responsible-for-boeings-recent-problems>
> by a company, resulting in a colossal loss of life.
>
> One of my best examples of how governments can reign in bad players is how
> the fear of breaking up Microsoft and other tech giants in the 90s
> <www.theverge.com/2018/9/6/17827042/antitrust-1990s-microsoft-google-aol-monopoly-lawsuits-history> contributed
> to the rise of the current #BigTech companies. Maybe the cycle needs to be
> repeated?
>
> Let me reiterate. I’m in general agreement with your post, I’m just
> concerned we don’t specifically target an organization without specific
> evidence to back it up.
>
> Regards
>
> *Ali Hussein*
>
> *Principal*
>
> *AHK & Associates*
>
>
>
> Tel: +254 713 601113
>
> Twitter: @AliHKassim
>
> Skype: abu-jomo
>
> LinkedIn: ke.linkedin.com/in/alihkassim
> <ke.linkedin.com/in/alihkassim>
>
>
> 13th Floor , Delta Towers, Oracle Wing,
>
> Chiromo Road, Westlands,
>
> Nairobi, Kenya.
>
> Any information of a personal nature expressed in this email are purely
> mine and do not necessarily reflect the official positions of the
> organizations that I work with.
>
>
> On Sun, Jun 23, 2019 at 1:14 AM Patrick A. M. Maina via kictanet <
> [email protected]> wrote:
>
> Fair competition laws are long overdue and should be very welcome because,
> if properly formulated and implemented, such laws will rapidly stimulate *economic
> growth* and create *millions of new jobs*.
>
> An objective observer will agree that there is something *fundamentally
> wrong* about billion-dollar-revenue companies operating in poverty-ridden
> low-income countries that find it OK to drive mama mbogas (small vegetable
> sellers), youth-founded startups, indigenous innovators and other MSMEs out
> of business, by leveraging legal/regulatory loopholes that allow them to
> distort market forces using their mass-scale market power.
>
> Instead of celebrating a few concentrated pockets of super-profits – we
> should be concerned as to why such “stellar” performance does not match the
> overall sector’s competitive landscape (especially if everyone else in the
> sector is making losses) – as well as, the general state of the rest of the
> economy.
>
> Hopefully the relevant parties in legislature will do the right thing for
> opportunities-starved wananchi and for the struggling economy by passing
> fair competition laws (I am also hoping that wananchi, politicians, public
> interest NGOs and activists will add weight to such beneficial initiatives
> as/when necessary).
>
> There is still room for more to be done, however, especially in the six
> areas below (which if addressed, will create an environment that is even
> more conducive for prosperity and growth):
>
> *1. Contextualized Intellectual Property Protection*: This area needs
> urgent attention to address rampant theft of IP due to obsolete,
> non-contextualized laws that favor corporate tyranny and plunder.
>
> Compelling data-based evidence (see link #1-2) shows that a *laissez
> faire* attitude to IP is a top contributor to poverty and low quality FDI
> in low income countries. Wealthy nations zealously defend their indigenous
> IP as a critical economic resource that is part of their national security (equivalent
> importance to oil, mining and financial sectors).
>
> Did you know that the *top 10 most valuable companies in the world are
> IP-based* (see link #3) and none of them is in oil / gas /precious stones
> or minerals? Extraction is no longer the secret to prosperity (in fact it
> only attracts chaos instead nowadays)!
>
> Did you know that *Apple*, the world’s most valuable company overall, *does
> not own a single factory *(see link #4)? Apple is an *IP and distribution* *company
> *(not a manufacturer) – it is in the business of selling ideas! This
> should be very interesting for Africa, the fact that high value ICT
> corporations can be based on ideas, IP and distribution networks alone.
> Wake up brothers and sisters. We don’t have to build physical factories to
> plug into the global ecosystem. We just need a good framework for
> monetizing great ideas!
>
> Even if we are to choose the harder 19th/20th Century path of traditional
> own-factory manufacturing (instead of the easier and more profitable
> logistics-driven 21st Century alternative) path, a conducive IP
> protection framework still remains an essential must-have prerequisite.
> Global clients will need strong credible guarantees that there wont be
> leakage of their designs / prototypes / proprietary tooling etc.
>
> *2. Preventing Deceptive PR and Marketing Practices*: Weak
> regulation/enforcement encourages corporations to engage in deceptive PR
> campaigns (e.g. fake partnership offers or deceptive innovation
> “competitions” / “boot-camps” / “demo-day” events whose purpose is to
> facilitate the theft/plunder of IP. We also have anti-poor / anti-social
> companies which brazenly deceive the public by masquerading as pro-poor /
> pro-social via dishonest marketing and CSR.).
>
> *3. Fast-tracked MSME friendly dispute resolution:* Judiciary should
> consider a dedicated court to handle and fast-track commercial disputes
> that involve MSMEs v/s large corporations with affirmative action in favor
> of MSMEs (e.g. state provides litigation assistance and cushions the MSME
> from legal fees).
>
> Currently corporations use their resource-power to bully and steal from
> MSMEs because the current legal framework has loopholes which allows
> corporations to subvert justice (e.g. companies steal BILLIONS by delaying
> MSME invoices to accumulate debt then they declare bankruptcy. This is
> theft – plain and simple – but the law does not treat it as such.
>
> Other corporations use legal technicalities to unjustly drag court
> proceeding for years – hoping that litigants will run out of resources or
> give up even if they have a strong case. These kind of dispute resolution
> loopholes cause great harm to MSMEs.
>
> *4. Anti-Price Gouging regulations:* Companies that provide essential
> services to the public (e.g communication / data / e-money) should not
> price them exorbitantly in order *to exploit the must-have nature of the
> product*. This should especially apply when there is limited /
> ineffective competition or indicators of cartel-like collusion within an
> industry.
>
> Dominant / monopolistic entities that offer essential services to the
> public should be compelled to publish their audited pricing methodologies
> every month in a way that shows the profit margin percentage for each
> product line (after factoring in scale and piggybacking advantages).
>
> *5. Anti-predation, anti-usury laws:* I believe there are ongoing efforts
> in this area. The public should not be enticed into odious debt or
> induced to take on debt that they cannot manage; and the CRB should not be
> used as a financial weapon for oppressing the poor or entrenching poverty. Maintaining
> a record for 5 years after someone has cleared a loan is disproportionately
> punitive and shows a lack empathy with the ordinary mwananchi’s economic
> struggles.
>
> CRB rules are anti-poor and punish people for lack of opportunity and a
> poor education – i.e. things that are not wholly of their own making, in
> favor of predatory corporations. The financial sector needs *more empathy*
> and less greed. By punitively and unreasonably denying people access to
> opportunities, they unwittingly limit their own growth potential.
>
> *6. Regulating **non-profit foundations associated with for-profit
> companies:* to limit conflicts of interest. Many (if not all) of these
> companies are covert vehicles for corruption, lobbying and influence
> peddling. They subvert agendas in sectors like education, finance,
> agriculture and health with the goal of creating new markets for affiliated
> corporations, winning government tenders or creating rent seeking avenues
> contrary to public interest. Ultimately the country loses because the net
> effect is wealth extraction. The left hand gives with a big show, and
> pompous ceremony where everyone is invited, but then, once the lights and
> cameras go off, the right hand quietly takes it all back, and then takes a
> lot more (leading to a net-loss).
>
> Economic analysts should start conducting *net-effect analysis* of
> charitable/donor activities to confirm the growing sense of awareness
> across Africa that something is not right with the charity/donor model. How
> can we receive so much “assistance” and yet we never seem to take off? How
> can countries that literally know everything important that happens within
> our territory (even before it happens) be completely inept and clueless
> when it comes to preventing proceeds of corruption from being laundered in
> their countries? Their economies benefit greatly from our fatuous
> practices.. could it be that some of them actually want us to stay corrupt?
> Food for thought.
>
> Modern day monopolies do not have to overtly abuse their dominance in
> order to damage the economy. Any mass-scale business model that is based on
> network effects is *inherently anti-competitive because it locks-in
> millions of customers* to one brand and its associated platforms or
> products – thereby severely limiting choice, stifling competition and
> blocking startups with better solutions from gaining market traction due to
> *gatekeeper-effect* (which prevents the rise of new ICT-related
> industries).
>
> This has a cascading effect of blocking TRILLIONS in *high quality FDI *
> that would have eventually come in via Venture Capital; it also limits the
> ability of the economy to create an export market – to beef up foreign
> reserves; limits the number of high-value formal jobs; reduces
> opportunities to lower government’s reliance on debt for budget support;
> and suppresses the growth of a healthy middle class that is essential for
> economic and political stability.
>
> Anti-competitive practices also contribute to *increased economic
> hardships* for citizens (by limiting opportunities to a few connected
> individuals) and prevent governments from fulfilling their campaign
> promises to the people (thereby stirring dissent and political volatility
> risks).
>
> Products from dominant companies are *priced using anti-poor (zero
> empathy) methodologies* which makes them disproportionately expensive to
> the poor who comprise the majority (and who often have to make food v/s
> airtime decisions on a daily basis). The same companies offer *exponentially
> better value for money to the rich* (less than 1% of the population) to
> whom the discount has minimal life impact and who can afford to pay a
> premium anyway! Yet these companies brand themselves as pro-poor and
> pro-wananchi (which *is evidence of a loophole in advertising regulations
> that allows for deceptive PR practices*).
>
> Having *concentrated points of failure *in critical applications, like
> Mobile Money, puts our increasingly digital economy at significant risk.
> There needs to be innovations that *decentralize mobile money* and
> disrupt the current rent-seeking / price gouging model which offers
> ridiculous and unjust margins to companies that are already wealthy anyway. *Money
> is not a product* – even in digital form. Exchange of digital cash should
> be 100% free, with no rent-seeking intermediaries taking an undeserved
> “private tax” cut off every transaction; money should serve its proper
> purpose as an economic store of value and trade enabler. With the right
> framework, such socially beneficial innovations will have room to emerge.
>
> Economies grow when innovative MSMEs are given room to bloom, grow and
> thrive without being crushed by anti-competitive dinosaurs *who
> themselves had benefited from state protection and preferential regulation
> when they were startups* e.g. telecomms operators initially benefited
> legal limits on the number of competing mobile operator licenses – which
> gave them breathing room to reach scale and discover a working business
> model.
>
> Dominant corporations have highly competent teams that (ought to)
> understand the cyclical nature of markets and innovation. They are
> therefore not sincere when they play “victim” to block public-interest
> regulation that would be exceedingly beneficial to the overall economy.
>
> A big THANK YOU to all government stakeholders who are committed to doing
> the right (and smart) things for the economy and for wananchi in general.
> You are the true heroes that our country needs and your efforts are truly
> appreciated!
>
> Brgds,
> Patrick.
>
> Patrick A. M. Maina
> [Cross-domain Innovator | Independent Public Policy Analyst – Indigenous
> Innovations]
>
> *References / Links:*
>
> 1. Nunnenkamp P, Spatz J; 2004: Intellectual Property Rights and Foreign
> Direct Investment: A Disaggregated Analysis
> www.jstor.org/stable/40283951?seq=1#metadata_info_tab_contents
>
> 2. Contribution of IP in growth of FDI’s in India
>
> www.lexology.com/library/detail.aspx?g=fa4da9e0-029d-4f0a-9f61-bf4213ef3d6c
>
> 3. The World’s Most Valuable Brands
> www.forbes.com/powerful-brands/list/
>
> 4. Apple’s Supply Chain From the Factory Floor to Retail Stores
>
> s354933259.onlinehome.us/mhi-blog/apples-supply-chain-factory-floor-retail-stores/
>
>
>
> On Saturday, June 22, 2019, 5:08:51 PM GMT+3, Mwendwa Kivuva via kictanet <
> [email protected]> wrote:
>
>
> The Kenya Information and Communications (Amendment) Bill 2019, which is
> sponsored by Gem MP Elisha Odhiambo, is seeking to compel mobile phone
> companies to form separate arms to manage any other business they engage in
> outside telecommunications services.
>
> They will also be required to “legally split or separate the
> telecommunciations business from such other business.
>
> Besides separating the revenue streams, telcos will also be required to
> compensate consumers for dropped calls at the rate of Sh10 for every call
> dropped for up to three dropped calls a day.
>
>
> www.businessdailyafrica.com/news/MPesa-Airtel-Money-set-for-split/539546-5165930-bbwvsfz/index.html
>
>
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people’s times and bandwidth,
> share knowledge, don’t flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
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