Understanding DP Ruto's Bottom-Up economy approach - GILITICS MEDIA

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Understanding DP Ruto’s Bottom-Up economy approach

By Allan Kai

Recent chatter in the political spheres as we head towards the 2022 elections has revolved around the issue of economic reforms.

The presidential aspirants have centered their election priority towards shifting from the decades long trickle-down economy approach.

Various other approaches have been suggested to solve economic problems mostly centered around unemployment and job security in the country.

Popular among the proposed policy shifts is the Bottom-Up economy approach which has garnered a lot of reaction from both proponents and those opposing the strategy.

Current economic model; trickle-down approach

This economic model is based on the assumption that by incentivising or giving breaks and other benefits to the large corporations and the wealthy members in the country, they would use the surplus to expand their businesses and operations, giving them the ability to share the proceeds with the lower income earners in the economy.

Photo: Courtesy – A model of the trickle-down economy which some view as unfair and unreasonable.

Basically, the government offers tax breaks, reduces regulations, and gives other benefits to the wealthy, hoping that it will add to the growing income inequality among the lower class in the country.

Referred to as supply-side economics, this model implies that, the government assumes there is high demand for products in the economy, but there is not enough spending power by the people. To solve this issue, government offers the said benefits to the large corporations to produce more, and invest more in the economy. This creates job opportunities and higher wages to the lower class. Thus, increasing their spending power.

This model has been used in Kenya since independence, and according to some – lead by the deputy president William Ruto – this model has not been working, and it is time for a new approach. Thus the Bottom-Up economic model.

What is the Bottom-Up economic model?

In an interview with local media recently, Ruto explained the Bottom-Up economic model, touting it to be people centered, and meant to bring wealth and prosperity at the grassroots level.

 

Photo: DP Press – DP Ruto has been a major proponent of the bottom-up economic approach, heavily criticizing the current trickle down approach.

This economic model operates on the premise that, massive government spending on infrastructure, education, health among other aspects that directly affect the lower income earners, leads to the creation of a more productive middle class.

The spending is made possible through imposing relatively higher tax rates for the wealthy, and re-investing the revenue collected to cater for the needs of the general public.

The Deputy President broke down the model by explaining three specific areas that the bottom-up economic model would assist in bridging the gap.

First, job creation for the over 4 million unemployed Kenyans. Second, creating a conducive environment for small businesses to have access to funds and growth mechanisms, and finally, enabling farmers to be in a position to produce enough to sustain themselves, and infuse the surplus in the market, thereby effectively reducing food importation costs.

As the country struggles to make its way out of the Covid-19 pandemic, perhaps it is time to consider an economic approach that is centered towards the overall well being of the public rather than catering for the interests of the few wealthy people. Or maybe a  mixed approach would make more sense. One thing for sure, the economic debate will definitely shape the 2022 general elections debates.

 

2022 Elections, bottom-up economy, Economic reforms, hustler, Mombasa county, ruto, William Ruto

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