We live in a truly global village. What happens in some remote part of the world will impact on a whole swathe of land on the other side. It is the so-called butterfly effect.
It is said when a butterfly flaps its wings somewhere in a remote pacific island, the effect might mutate into a tsunami on some other shores on the west coast of America. Or put in another way, when America – or more recently China – sneezes, the world catches pneumonia.
I look at what’s happening at the global stage and there is ample proof we are living these cliches every day. The tariff wars for instance, initiated by President Donald Trump, have had severe global repercussions and will continue doing so. Though Trump appears not bothered by effect of his tariffs – he recently said, casually, that instead of an average American kid getting 30 dolls for Christmas, now they will only get two – the actual effect of the tariffs might lead to a global meltdown. Economies are driven by consumer spending.
If you scratch the surface Trump’s thinking, you will see this is 28 dolls less that would have been sold by an American company and therefore less tax dollars in the national Treasury kitty. This is Trumponomics at its best. Being the interconnected world that we are, we cannot escape the repercussions of such actions by the global economy movers and shakers. Take climate change and the adverse effect it has on the entire world; we all know that the most severe impact is on less developed countries yet the real culprits are the industrialised west.
Even disruption of the supply routes through the Suez Canal that has happened in recent past has affected global supply chains in unprecedented ways. Ships must now take the longer route around the Cape of Good Hope adding to the cost of shipping. Wars taking place in far off places such as that between Russia and Ukraine have had a negative effect on commodity prices globally. Tea for instance is a leading export for Kenya and it’s been impacted by these externalities in addition to other local factors such as high production costs and reduced production due to adverse climatic conditions. The commodity is buffeted by internal factors that sometimes make the price oscillate over time depending on factors sometimes beyond the control of those managing the sector.
Farmers, of course, expect high payments of the so-called bonus as well as the final payment, but the price of tea and other commodities, as noted above, is buffeted from all fronts by an ill wind that bears nobody any good. In any case, global commodity prices have a five-year boom and burst cycle that has in recent past been accelerated by myriad externalities. Our tea farmers, and other farmers for that matter, should therefore take the good with the bad. Away from farmers, the brinkmanship the world has been taken through during the Trump presidency calls for a rethinking of the world order. We crave for a new world order but not the one currently taking shape; what we are seeing is a new world disorder that has left economists shaking their heads and craving for a re-education of leaders on basic Keynesian economics.
I wonder why nobody has the guts to tell the king that what he is doing will leave not only the world worse off but his countrymen more so. That his actions might have short term effect on the rest of the world but the isolationist policy will have a long term negative effect on US?
Trump has confused his economic theory so thoroughly that he doesn’t know his taxes from his tariffs. The king is naked but all around him around are commending him on his resplendent regal attire. Someone must tell the king the truth.
– Communications consultant
By Mutahi Mureithi