* Kisumu businesses looted, burnt in riots after 2007 vote
* Some firms draw down stock, shut before Monday's ballot
* Bloodletting five years ago brought economy to standstill
By Duncan Miriri
KISUMU, Kenya, Feb 26 Some businesses in Kisumu,
Kenya's third-largest city, have reduced stock or closed ahead
of Monday's presidential elections for fear of a repeat of the
tribal violence that killed more than 1,200 people at the last
such vote five years ago.
On the outskirts of the Lake Victoria port city, abandoned
ruins still bear witness to the weeks of looting and torching
that brought East Africa's biggest economy to a standstill.
"Last time most of what was targeted was alcohol, foodstuffs
and non-breakables," said Saga Shah, who works for a firm that
runs a supermarket on the city's main street that rioters turned
into an inferno after the close race of 2007.
"So a lot of people are reducing these items and stocking
basics that are required on a day-to-day basis," he said.
The ethnic tensions that led to violence in 2007 still
linger. And, as in the past, tribal loyalties will trump
policies for many of Kenya's 14 million eligible voters.
In a worrying sign, leaflets have been scattered in Kisumu
calling for the eviction of Kikuyu and Kalenjin tribes, which
have formed an alliance against Prime Minister Raila Odinga, of
the Luo tribe, who is seeking the presidency.
Odinga is running in a neck-and-neck battle with Deputy
Prime Minister Uhuru Kenyatta, a Kikuyu who backed President
Mwai Kibaki in 2007. The two are well ahead of the other six
hopefuls, according to opinion polls.
Kenya cannot afford a re-run of the violence as it struggles
to lift the nation out of poverty, which will depend on enticing
tourists and drawing in investment needed to improve creaking
infrastructure and develop a nascent oil and gas industry.
After the last election crisis, Kenya's growth tumbled to
1.7 percent in 2008 from 7.1 percent in 2007.
WORD OF CAUTION
This time round, none of the main candidates offers a vision
that would change the course of Kenya's broadly open economy,
which analyst say means that growth now running at almost 5
percent is not threatened by the result itself.
"Kenya's growth prospects look very good and are unlikely to
be affected by the election outcome one way or other," said
Mwangi Kimenyi, senior fellow of global economy at The Brookings
Institution in Washington.
"The critical issue is whether the elections are free, fair
and peaceful," he added.
Investors have so far brushed off worries about violence,
encouraged perhaps by candidates' pledges to respect the
outcome. The main share index has climbed 8 percent so far this
year, and the Kenyan shilling has held broadly steady to the
dollar - with occasional help from the central bank.
But some are nervous. Tom Gichuhi, chief executive of the
Association of Kenya Insurers, said demand for political risk
cover by businesses had risen in the last six months.
"This has picked up purely because of the fears that members
of the public have over the risk they face," Gichuhi said.
In Kisumu, which was virtually shut down by the violence,
the burnt-out stone and concrete shells of once-thriving
businesses are a constant reminder of those risks.
Abbysinia Iron and Steel, a plant that makes reinforcement
rods for construction, closed up in late December. The owners
told workers the factory would re-open after the vote, residents
and employees said.
LOSING A LIVELIHOOD
"They were fearing the type of chaos that erupted after the
2007 election so that was the main reason they shut down," said
George Onyango, a father of two working at the plant's furnace.
With a 2,000-strong workforce, the factory was one of the
biggest employers in the area. Its temporary closure has had a
ripple effect on the local economy, down to the 60 or so women
who sell food at its gates.
Lucy Awino, a 23-year-old mother of one who sold chapatis,
beans, fish and juice, lost her only source of income.
"My stock would sell out. I would get a decent profit," she
said of business before the closure. "After the workers were
told about the plant's closure, demand for our food went down."
Kenyan security forces have said they are prepared this
time. Joseph ole Tito, head of police in the Kisumu region, has
doubled his force to 6,000 for the vote and said he would have a
helicopter on standby to look out for trouble spots.
That has not reassured some residents after skirmishes
accompanied voting in January for party primaries to choose
candidates for governor, senator and other posts to be elected
alongside Monday's presidential vote. Youths armed with stones
barricaded roads and looted shops.
However, some executives are more upbeat. They say a new
constitution passed in 2010 could encourage Kenyans to turn to
the judiciary, not the street, to resolve disputed results.
"Under the new constitution, the judicial arm is stronger
and people should go to court if they are aggrieved," said Vimal
Shah, vice chairman of the Kenya Private Sector Alliance, a
national business lobby.
A reluctance to use courts perceived as inefficient and
corrupt was blamed for exacerbating the 2007 crisis, analysts
say. This time, Chief Justice Willy Mutunga, appointed in 2011,
has been praised for reforms that included firing corrupt judges
and setting up special teams of judges to handle vote disputes.