FACTBOX-Key political risks to watch in Kenya

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Kenya passed a raft of bills critical to bedding down the new constitution but the process highlighted the extent to which partisan interests drive politics in the east African country, while discontent is brewing over rising prices.

Here are some of the risk factors ahead:

KENYA IN LIMBO

The country is on tenterhooks as hearings at The Hague get under way to confirm charges against six high-profile Kenyan suspects named by the International Criminal Court (ICC) for being behind 2007-08 post-election violence, Reuters reports.

The fallout over the ICC trials remains the country’s main political risk, because it could trigger angry reactions along tribal lines and ignite more fighting should key suspects be found guilty of crimes against humanity.

Steep food and fuel prices have fanned discontent in east Africa’s biggest economy, raising the spectre of some form of protests from labour and consumer groups.

Food shortages have been worsened by steep inflation running at 16.67 percent in August, and a local currency that has tumbled about 10 percent against the dollar this year.

In a rare intervention, Finance Minister Uhuru Kenyatta challenged the central bank to restore monetary stability after overnight rates rocketed.

In the background, security agencies worry of attacks by Somalia’s al Qaeda-linked al Shabaab rebels, who, according to a new U.N. report, have extensive funding, recruiting and training networks within Kenya.

At stake is an economy projected to grow by 5.7 percent this year. High inflation, the weak shilling and drought in parts of the agriculture-based economy could undermine real growth.

CONSTITUTION ON THE ROPES

Kenya’s political class scrambled to beat a one-year deadline for the passing of dozens of crucial bills central to the new constitution.

However, analysts say a huge amount of work remains to make the new charter a reality on the ground, such as defining the boundaries for new electoral constituencies.

But probably the most crucial outstanding constitutional issue is when the next election will be held. Despite the new constitution, which states the poll should be in August 2012, many lawmakers argue the election date should be later.

The last minute rush also highlighted lawmakers’ reluctance to set aside partisan and ethnic interests that have delayed the bedding down of the new basic law adopted last August.

The constitution aims to trim presidential powers and curb the corruption, political patronage, land-grabbing and tribalism that have plagued Kenya since independence.

Some progress has been made. Analysts have hailed the process used in appointing a new chief justice — interviews were conducted live on television. The squabbling between President Mwai Kibaki and Prime Minister Raila Odinga over the running of the coalition cabinet appears to have subsided.

Odinga axed rebel party members from his cabinet, including William Ruto, one of the six ICC Kenyan suspects.

The fight against corruption in Kenya suffered a setback when parliament passed legislation establishing what on paper should be a more powerful anti-graft watchdog.

That law required the exit of the watchdog’s director, Patrick Lumumba. His stinging rhetoric against corrupt politicians raised hopes among many Kenyans the battle against graft was about to get serious, but upset political leaders.

What to watch:
— Will political leaders set aside partisan and ethnic interests and hasten the implementation of the new law?
— Who will be the country’s next corruption tsar and will the graft watchdog’s bite be allowed to match its bark?

ICC AND POLITICAL FALLOUT

International Criminal Court (ICC) prosecutor Luis Moreno-Ocampo in December named three government ministers, the cabinet secretary and a former police chief as key suspects behind the violence that shook Kenya in early 2008.

The ongoing confirmation of charges hearing is to decide on whether the suspects will stand trial later next year.

The stakes are high. Two of the suspects, former cabinet minister Ruto and Kenyatta, son of Kenya’s founding father Jomo Kenyatta, plan to run in next year’s election. Analysts say their chances would be seriously damaged by a trial.

The case has split the cabinet.

Analysts say Kibaki and his allies want to shield top suspects by trying to block the ICC from hearing the cases, so they can run for president in 2012 elections and block Odinga from succeeding him.

Analysts say Odinga’s camp is keen to have ICC trials proceed so that his key rivals are locked out of the running.

Opinion polls show Odinga — who accused Kibaki of robbing him of victory in the December 2007 polls — as the frontrunner to replace Kibaki, who is barred by law from seeking a third term, but also show his rivals’ combined support could unsettle him.

What to watch:
— The government’s stance is that it will cooperate fully with the ICC. Will this continue to be the case?
— Failure to cooperate with the ICC would concern foreign investors and Western governments who want Kenya to combat impunity and rein in politicians who fan tribal animosities.

MILITANT STRIKE

Although seen as a counter-terrorism triumph of global importance, the killing in Somalia of top al Qaeda plotter Fazul Mohammed could ignite retaliatory strikes in the country and the wider region.

Al Shabaab’s warnings of attacks against neighbour Kenya have grown in significance, especially because they blame Nairobi for training Somali army troops.

Twice hit by al Qaeda attacks, Kenya has long cast a wary eye at its lawless neighbour Somalia and is among countries in the region supporting the fight against al Shabaab.



What to watch:
— Does al Shabaab, weakened by internal rifts, have the appetite to attack outside of Somalia? How will Kenya and neighbours respond to al Shabaab’s latest threats?