ECS3705
Assignment 2 Semester 2 2024
Unique #:
Due Date: September 2024
Detailed solutions, explanations, workings
and references.
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, QUESTION 1
Mercantilist Principles in Kenya’s Approach to the Fourth Industrial
Revolution
Introduction
Kenya's efforts to position itself in the fourth industrial revolution reflect a range of
economic principles that are closely aligned with traditional mercantilist thought.
Mercantilism, an economic theory that dominated European thought from the 16th
to the 18th century, emphasizes the role of the state in managing the economy to
increase national wealth and power. This approach often involves state intervention
in industries, protectionist policies, and the strategic development of key sectors.
In the context of the fourth industrial revolution, which is characterized by the
integration of modern technologies such as automation, artificial intelligence, and
digitalization into industrial processes, Kenya’s strategy demonstrates several
mercantilist principles. This essay identifies and explains five mercantilist principles
implied in Kenya's strategy as described in the extract from the article.
1. State Intervention and Industrial Development
One of the core principles of mercantilism is the active role of the state in directing
economic activity, particularly in strategic industries. The extract highlights Kenya’s
focus on the development of the iron and steel industry through the establishment
of an integrated steel mill, which is a direct form of state intervention aimed at
fostering industrial growth. This approach reflects a traditional mercantilist belief
that the government should play a central role in the economic development of
critical industries to ensure national self-sufficiency and reduce dependency on
foreign imports.
The establishment of an integrated steel mill is a strategic decision that aligns with
the broader mercantilist goal of creating a self-sufficient economy that can produce
its own goods rather than relying on international trade. By investing in the steel
industry, the government aims to build a strong industrial base that will support
other sectors such as construction, manufacturing, and infrastructure development.
This state-led industrialization strategy mirrors mercantilist principles where
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