Outside world has few options to ease Kenya tensions

LONDON (Reuters) - While eager to stem violence after Kenya's disputed election, the international community has few immediate options beyond simply trying to persuade the government and opposition to talk to lower tensions.

Only last week, Kenya was talked of as a beacon of political and economic stability in a volatile region as it went to the polls in the tightest election since independence.

Now, rights groups put the death toll from ethnic clashes at more than 300, with the government accusing the opposition of planning "genocide" and both sides saying the vote that put President Mwai Kibaki in power was rife with rigging.

European Union election monitors have said the poll lacked credibility, but experts say while some sanctions are possible they would lack impact and not stem immediate violence.

And they would focus blame on the government, in a situation where it is difficult to assign blame to one side or the other in the mix of apparent fraud and ethnic violence.

The United States initially congratulated Kibaki, but later joined Britain in raising concerns over the result. Experts say serious talk is the best next step forward.

"The first thing is to reduce the violence and the second is to address issues around the election," said Sally Healy, associate fellow at London's Royal Institute of International Affairs.

"It is not so much about pressure as simply helping them to get to the stage where they can resolve the situation. Countries like Britain always want to be seen as doing something -- but the African way is to do things much more behind closed doors."

British Prime Minister Gordon Brown has been on the phone to both Kibaki and opposition leader Raila Odinga, while African Union chairman and Ghanian President John Kufuor was due to fly to Nairobi shortly to mediate.

"It is very important that the international community supports the efforts of President Kufuor," said Brown. "He is trying very hard with other people to bring an end to the violence, and we will give whatever support we can."

Analysts say what is needed is more calls from both sides to stop the violence, followed by an interim government of national unity and then either a poll recount or, if that proved impossible, potentially an agreement for new elections.

AID OPTIONS

"There needs to be a home-grown response to the unrest with buy-in from the main players in Kenya," said Razia Khan, head of African economics for Standard Chartered bank.

"Pressure from outside powers -- for example in reducing aid -- is unlikely to bring about an immediate halt to violence. It seems there is little the international community can do at this stage."

Aid cuts would have almost no effect on Kenya, since one of Kibaki's undisputed achievements has been improving tax collection so that the upcoming budget is funded entirely by government revenue.

Aid does come to Kenya, but it is usually humanitarian assistance aimed at helping the government boost programs aimed at the poor or to deal with temporary crises.

And with China and other Asian powers willing to invest in governments without the usual Western regard to human rights and democratic benchmarks, Western sanctions would have narrow impact, since Africa now often banks in the Middle East.

"These days a lot of the money goes to Dubai and putting targeted sanctions on money there is simply not on the agenda," said Richard Dowden, executive director of the Royal African Society. "India and China have purely commercial interests."

The scene of a major al Qaeda attack on the U.S. embassy in Nairobi in 1998, Kenya is seen as an important U.S. ally -- and a reduction in military aid is regarded as unlikely.

But any ongoing violence will unquestionably weaken the previously well-performing economy, primarily by hitting both local and international investor sentiment. This would have a much greater impact than any international sanctions or aid cut.

It could also block key road transport links essential to many east and central African countries currently dependent on the Kenyan port of Mombasa, as well as possibly undermining global confidence in Africa just at a time when it was seen emerging from decades of stagnation and instability.

"There are elections in other parts of Africa over the next 18 months, in Angola, in Ghana, in Malawi," said British Foreign Secretary David Miliband. "Kenya is very, very important in and of itself and it is important for what it says about the rest of Africa and its approach to democracy."

(Additional reporting by C. Bryson Hull in Nairobi; editing by Philippa Fletcher)