II.3.7: Generally the absolute poor are those who cannot earn enough income to sustain an adequate standard of living. Absolute poverty arises because of one of the following three reasons:

II.3.8: The poor can be divided into two groups: the rural poor and the urban poor.

II.3.9: This paper focuses on the urban poor in Kenya. It posits that structural adjustment programmes (SAPs) in Kenya have led to increasing household poverty both in relative and absolute terms. In urban Kenya the number of the absolute poor has increased at an alarming rate while their plight has worsened. At the same time the urban elites have been the main beneficiaries of the SAPs and have experienced a rapid rise in their real incomes, real assets and general economic well-being. This process has tended to create two distinct classes in urban Kenya: the absolute poor or the have-nots as a distinct economic class at the bottom and the rich or haves as an economic class at the top. The paper also posits that by increasing the gap between the haves and the have-nots and and also by making the latter desperately poor SAPs have created the conditions for potential conflict between these two emerging classes. From time to time this has exploded into violence especially in Nairobi. Such incidents include the Muoroto crisis of 1990 and others especially in the slums of Nairobi.

II.3.10: Table 1 shows the magnitude of absolute and food poverty in the rural areas of Kenya in 1994, while Table 2 shows the situation in the urban areas. The tables show widespread poverty in Kenya, with overall food poverty affecting about 33 per cent of those living in the rural areas and 29 per cent of the urban population. Similarly, absolute poverty is pervasive in the country, affecting about 32 per cent of rural dwellers and 29 per cent of those living in urban Kenya.

II.3.11: Table 3 shows how Kenyans perceive their poverty situation at present compared to five years ago. About 77 per cent consider that their poverty situation has worsened, 15 per cent that the sitution has not changed, and only 8 per cent perceive that their poverty situation has improved! This general perception of worsening poverty situation further confirms the claim that structural adjustment has aggravated poverty in Kenya, particularly in the urban areas.

II.3.12: According to the Nairobi Household Budget Survey of 1974 only about 15 per cent of urban households where below the poverty line. However by 1994 this had risen to about 30 per cent. As the numbers of the poor have exploded and their situation become more desperate, tensions and frustrations have intensified in the urban areas and in most cases it has required a little spark or provocation for the urban poor to riot or take to the streets in an orgy of looting and violence. It appears that in most cases they vent their frustrations on the haves who they perceive as having enriched themselves at their expense. Although much of the fury has been directed towards the Asian community, property belonging to other communities has not been spared.

III.1.1: Adjustment has 'social effects', which are those extending beyond individual households to the whole society. For example, in the short run macro-economic adjustment reduces the overall level of income in the economy, which translates to lower incomes for most households. The main losers during adjustment are producers of non-tradables such as public sector employees and other workers in the urban formal sector, as well as producers of non-tradables such as pastoralists, subsistence farmers, informal sector operators and workers, and so on. Those who gain are mainly producers of tradables such as exports, and others who are able to take advantage of the opportunities adjustment fosters.

III.1.2: SAPs have considerable social effects. These effects take various forms such as political and administrative as well as the impact on social structures and crime.

III.1.3: Structural adjustment programmes have both direct and indirect effects on the political structures of an adjusting country. This is because they change the political attitudes and behaviour of those who gain or lose as a result of the adjustment processes. The main losers from the adjustment processes in Kenya have been the urban poor such as informal sector operators who produce non-tradables. This constituency has tended to react by blaming the Government, and by inference the ruling party KANU, for their economic plight. They have responded to all this by moving more staunchly and fanatically to the opposition parties especially the more militant ones, such as the Islamic Party of Kenya (IPK), and the National Democratic Party (NDP).

III.1.4: Adjustment programmes often have adverse administrative effects. This is because a cost-recovery programme in a country like Kenya where public sector incomes and wages are very low tends to encourage mis-appropriation of funds, bribery and general corruption. To the extent that adjustment encourages and worsens corruption, it is likely to impact itself negatively on the very poor who are least able to provide the necessary bribes to access the services they require. Bribes and general corruption can slow down administrative processes and bias administrative decisions against those least able to pay such as the urban poor. This is because the administrators have little or no incentive to process their claims since this can be done only at the expense of potentially more lucrative clients.

III.1.5: SAPs also increase the debt burden of a country in terms of local currency. Therefore in order to service such debts funds have to be diverted from pressing administrative needs such as the police force, judiciary, courts, and so on. This reduces the capacity of the society to fight and manage crime. As the state weakens at the centre criminals realize that the probability of getting away with crime has increased. One of the potential alternative sources of income which some of the households adversely affected by adjustment often seek to exploit in response to a loss of income caused by adjustment is crime. This applies particularly to theft, the manufacture and sale of illicit brew, the illegal production of and trading in drugs, and the looting of business premises and other property that often accompanies riots. There is substantial anecdotal evidence that such forms of crime increase significantly in all countries undergoing structural adjustment especially in urban areas. For example, as the poor have become poorer as a result of structural adjustment in Kenya, there has been a serious upsurge in criminal activities, especially in the slums where most of the poor and destitute live. The urban poor have not hesitated to rob the haves and loot their property whenever t opportunity arises as happens when there are riots in the major urban centres.

III.1.6: The decision as to whether to engage in criminal activities is based on the individual's perception of the costs and benefits of committing the crime compared to not doing so. The economic benefit to an individual of committing a crime is the value to the criminal of the goods acquired or the financial gains it generates. On the other hand the cost of committing a crime to the perpetrator is the possibility and fear of punishment and the individual's reluctance to commit an offence or immoral act due to his or her conscience or social conditioning. The fear of punishment is itself determined by the probability of being punished and the severity of the punishment which is expected. Therefore an individual will commit a crime if and only if the value to him or her of the material gain resulting from the crime is greater than the combination of the perceived probability of being punished multiplied by the perceived cost of the likely punishment plus the individual's own reluctance to commit the crime.

III.1.7: Structural adjustment has five potentially important effects on a criminal's calculation in this regard:

III.1.8: In summary, structural adjustment programmes can have serious adverse social effects. They lead to increased poverty, insecurity, crime and violence. As the poor become more desperate and destitute, they easily resort to such criminal activities as looting when riots break out. This is because the poor increasingly ascribe their plight to 'exploitation' by the rich, especially Asians. These adverse social effects are more profound among the urban poor and the underclass.

IV.1.1: Although there have been a number of papers written on the impact of structural adjustment programmes on the welfare of the poor and vulnerable groups in Kenya, there has been little systematic analysis of the manner in which such policies affect poor households on class formation and the development of class conflict. This paper attempts to address this issue through an analytical basis for considering the impacts of adjustment at the household level.

IV.1.2: The impact of adjustment at the household level has several elements:

V.1.1: As already noted, the urban poor include the unemployed, unskilled workers and those in the informal sector. In the recent past these groups have engaged in riots in which property has been destroyed, people maimed and even killed. Examples are the Muoroto crisis of 1990 and the Saba Saba and other riots of 1997. In all these cases the urban poor have been tempted to vent their frustration on the rich and their property.

V.1.2: The Muoroto incident has its roots in the frustrations meted out by the Government on the informal sector in urban Kenya. As Kenya experienced increasing economic problems in the 1970s and 1980s unemployment increased particularly among the youth. As part of their survival strategies, the youth in urban areas involved themselves in petty and marginal activities such as selling fruits and vegetables in the streets, hawking of utensils and second hand clothes, the repair and fabrication of cooking utensils and other household goods, welding and vehicle repairs, etc. In most cases these activities were unlicensed and were carried out in unauthorised premises, quite often under no shade. They subsequently came to be referred to as informal sector activities or 'Jua Kali' enterprises. From time to time the Government has indicated its desire to legitimize these activities. However, attempts to accomplish this have been frustrated by rich business men and women in formal manufacturing, trade and commerce who perceive informal sector operators as unfair competitors since they do not pay rent or taxes. This has pitted the have-nots against the haves in urban Kenya and set the stage for violent conflicts.

V.2.1: Muoroto developed as a sprawling slum-cum-informal sector activity area. It is located next to the main Country Bus Station (often referred to as 'Machakos Airport') in Nairobi near the commercial hub of the city. This area is adjacent to the busy River Road, Racecourse Road, Kirinyaga Street and Landhies Road on one side, the populous Muthurwa which houses low income railway workers, the slums of Majengo, the low-income housing estate of Maringo, and the vast open-air markets of Gikomba, Shauri Moyo and Burma. By the early 1990 many of the informal sector operators in Muoroto were living within their business premises which in most cases consisted of crude structures made of cartons, plastic sheeting, and timber cannibalized from building sites, etc. Muoroto had therefore become a huge slum where the urban poor struggled to eke out a meagre existence.

V.2.2: Although in 1990 the population of Muoroto consisted of desperately poor people they constituted a powerful constituency which was articulate and politically astute, so much that it became one of the hotbeds of political activism, the source of political thugs and the main opposition to the ruling elite, especially in KANU. 1990 was the beginning of the intensified clamour by Kenyans for multi-party democracy. The KANU government resisted this with all its might and intended to keep Kenya a one party state forever (President Moi said Kenya would remain a one party state under KANU for the next 100 years!). It therefore considered places like Muoroto as having forces aligned with the opposition and wanted to crush them.

V.2.3: On May 25^th 1990 the busy Nairobi Country Bus Station and all roads leading to it were turned to an area of total confusion as baton-wielding Nairobi City Commission askaris engaged in a fierce confrontation with hundreds of stone-throwing hawkers and residents of nearby slums who were resisting eviction. The confrontation in the Muoroto slums spread to several parts of the city including Gikomba, Kariokor, Kamkunji, Landhies, Railway Quarters and parts of River Road and Tom Mboya Street. The Government had to mobilize a contingent of anti-riot police to disperse the rioting hawkers and quell the disturbances. Several civilians were seriously injured and some city council askaris received minor injuries.

V.2.4: The trouble started around 8.00 a.m. when a squad of City Commission askaris in ten lorries arrived at the slum with orders from the Director of City Inspectorate to stand guard while an earth-moving tractor bulldozed the shelters, kiosks and sheds belonging to the hawkers. When the hawkers saw the askaris they sounded the alarm, armed themselves with stones and sticks and engaged the askaris in pitched battles in defense of their properties. As the fighting intensified the askaris withdrew and hid at the bus station in the packed buses and matatus.

VI.1.1: Class and economic conflict inevitably results in substantial economic and social costs. Conveniently, these costs could be classified into three categories:

VI.1.2: The financial costs of the Muoroto conflict are not known. However it was reported that property worth millions of shillings was destroyed as the poor and criminal elements broke into shops and stores which they looted. Goods stolen were reportedly worth millions of shillings. However, although no precise figures on the actual financial costs of the conflict are available the cost in terms of human life and suffering was enormous. For example it was reported that at least ten people died including several children, although the Government refuted these reports.