Assignment 2: Lending Institutions, Health Care, and Human Capital

The World Bank and the International Monetary Fund (IMF), have really helped in boosting development in developing countries, through providing financial support. Most developing countries depend on funds from these bodies, as they are responsible for working with young and developing nations, to make sure they provide the support they can, hence changing the lives of the people in developing countries (Hope, 2012). Kenya, a developing country in the East Africa region, has been able to benefit fully, from the IMF and World Bank, and this is evident through the developments which the country has seen over the years. In a bid to understand the effects of IMF and World Bank, this paper will critically analyse the social, economic and political situation of Kenya (World Bank, 2010).   

Impact of Lending Institutions to Kenya

Kenya adopted a new constitution in August 2010, which required the national government to devolve some of its functions to county governments (Carrin, 2011). This was a move which was aimed at improving the economic growth of the country, however, it came with a lot of economic challenges. This included a rise in the country’s wage bill, a move which required the country to seek international funding. The IMF, offered the country $630 million, to aid in devolution and preventing the country from any forms of shock (Norris et al, 2016). This allowed the country to devolve different functions to the counties, thus leading to economic growth.

Kenya’s economy has grown from 5.9% in the year 2016, to 6% in the year 2017, due to the development record which the country has seen (Carrin, 2011). This has consequently made the country to become one of the fastest growing sub-Saharan nations. This is a move which has been attributed to increased agricultural supply, low inflation, growth in the construction sector, and improved transport and communication systems. The World Bank has been on the forefront in supporting Kenya through its development records. For instance, World Bank offered the country $420 million, to aid in the supply and installation of electricity in homes (World Bank, 2010). Due to the electrification of most homes in the country, Kenya has turned into a 24 hour economy, whereby standards of living have been raised, a move which has led to a drop in inflation, thus leading to the growth of the economy (Hope, 2012).

Kenya as a country has reached some Millennium Development Goals (MDGs) objectives, and this includes reduced infant mortality rates, increased primary school enrolment, high spending on education and health, which results in the payment of dividends (Carrin, 2011). Even though the healthcare systems have faced a lot of challenges, devolution will help in improving maternal health care in different health institutions. This will consequently lead to a healthier nations, thus leading to developments and the growth of the economy (World Bank, 2010).

Impact of a Healthy Population to the Growth of Kenya’s Economy

A healthy population lives longer and is more productive than an unhealthy population. The growth of the economy depends on the efforts of its citizens. A country is able to fund its activities through the collection of taxes, from individuals living in the country (Norris et al, 2016). The economy of Kenya fully depends on agricultural produce, without healthy citizens, the country cannot be able to produce coffee for export. In addition, investors cannot invest in an unhealthy nation, because the levels of work output will be less, a move which will translate to low productivity (Carrin, 2011).

A healthy population saves more, and it is development oriented. Health comes first in a nation, since a country cannot operate when the levels of deaths attributed to diseases are high (Hope, 2012). Healthy people save more, due to less spending on medication, thus leading to high living standards. For instance, Kenya has benefitted heavily from improving the health standards, since this has led to the creation of job opportunities for medical doctors, thus saving the country the costs of shipping patients to other countries for medical purposes (Norris et al, 2016). Secondly, a healthy population is development oriented, and this implies being focused on providing the best services to the country. When people are healthy, they focus on improving their living standards, and providing the best services to their customers in their specific areas of specialization. This results to the growth of the economy, since most people are able to work hard, save more, and improve their living standards (Carrin, 2011).

Foreign Aid usage on Health Care Systems in Kenya

The leadership of Kenya through its president, President Uhuru Kenyatta has spent 60% of foreign aid on health care systems in the country (Carrin, 2011). The funds have been allocated to maternity wards in different public hospitals in the 47 counties in the country. In addition, the country has also invested in dialysis machines, which have been installed in the 47 public hospitals in the counties (Hope, 2012). This has consequently seen the health levels in Kenya growing drastically, since patients can easily access medical care from their counties, rather than travelling to the national hospital in the capital city of Kenya Nairobi. The government has also offered free maternity delivery in all public hospitals, a move which has helped in reducing infant mortality rates (Norris et al, 2016).    

Reference

World Bank. (2010). World development indicators 2010. Washington, D.C: World Bank.Retrieved from: https://books.google.co.ke/books?id=MW_ntT8hLqEC&pg=PA441&dq=Impact+of+IMF+and+World+Bank+funding+to+the+economy+of+Kenya&hl=en&sa=X&redir_esc=y#v=onepage&q=Impact%20of%20IMF%20and%20World%20Bank%20funding%20to%20the%20economy%20of%20Kenya&f=false

Norris, S. M. P., Forstag, E. H., Altevogt, B. M., Institute of Medicine (U.S.)., Providing Sustainable Mental Health Care in Kenya (Workshop), & Providing Sustainable Mental Health Care in Ghana (Workshop). (2016). Providing sustainable mental and neurological health care in Ghana and Kenya: Workshop summary. Retrieved from: https://books.google.co.ke/books?id=orKpCwAAQBAJ&pg=PA23&dq=Health+care+systems+funding+in+Kenya&hl=en&sa=X&redir_esc=y#v=onepage&q=Health%20care%20systems%20funding%20in%20Kenya&f=false

Carrin, G. (2011). Health financing in the developing world: Supporting countries' search for viable systems. Brussel: University Press Antwerp. Retrieved from: https://books.google.co.ke/books?id=j--AU-HS2ZEC&pg=PA395&dq=Health+care+systems+funding+in+Kenya&hl=en&sa=X&redir_esc=y#v=onepage&q=Health%20care%20systems%20funding%20in%20Kenya&f=false

The report: Kenya 2016. (2016). Retrieved from: https://books.google.co.ke/books?id=BZ4oDwAAQBAJ&pg=PA100&dq=World+Bank+electricity+supply+in+Kenya+and+its+costs&hl=en&sa=X&redir_esc=y#v=onepage&q=World%20Bank%20electricity%20supply%20in%20Kenya%20and%20its%20costs&f=false

Hope, K. R. (2012). The political economy of development in Kenya. New York: Continuum International Pub. Group. Retrieved from: https://books.google.co.ke/books?id=BhejMw4zb0wC&pg=PA3&dq=Impact+of+IMF+and+World+Bank+funding+to+the+economy+of+Kenya&hl=en&sa=X&redir_esc=y#v=onepage&q=Impact%20of%20IMF%20and%20World%20Bank%20funding%20to%20the%20economy%20of%20Kenya&f=false