ECONOMIC DEVELOPMENT & POVERTY
REDUCTION STRATEGY 2008 - 2012
A critical review
The government of Rwanda has just released a paper painting a glowing picture of a "stable nation, on the path to achieving better lives for each and every one of (the country's) citizens".
The FDU Inkingi does not share this optimistic diagnosis. Indeed, the so called achievements are not self sustainable in the medium and long term as they are based on heavy external aid.
For example, for the fiscal year 2010-2011, out of a total budget of billions 984 RWF, 345 billions are expected to be foreign funded.
This is a result of the government economic priorities which do not address the most urgent problems of national cohesion, economic equal opportunity and self sustainability.
A declining Agriculture
There is no chance of significantly reducing poverty in Rwanda without giving a fair share of the government investment to a sector which provide income to more that 70% of the population.
Item 3.20 of the government paper acknowledges that " Agriculture accounts for over one-third of GDP, but its average annual growth rate of 4.8% in 2001-2006 was only half that registered in 1996-2000 (9.5%)". Although the government does not provide any convincing explanation of this decline, one can guess it:
ü The land policies:
Traditionally Rwanda used to be a subsistence economy. Without any meaningful consultation, the government simultaneously launched two major land reforms which destabilised the population. The first one was a regionalisation of the agriculture, where as the second one was the IMIDUGUDU.
Much as the objectives may be commendable, the implementation lives a lot to be desired.
A regionalisation of the agriculture needs a backing infrastructure. Farmers have to be assured of selling their products at a fair price and buying food which they can no longer grow. Currently, a large section of the population still faces immense transportation obstacles to bring produce to markets. They don't see any value added of this reform.
Regarding the Imidugudu, instead of being community based settlement with all the basic amenities, the have become, as pointed out by Pax Christi Netherlands, tools for controlling and "overseeing the population at all administrative and territorial levels"
Constructing 5,700 more imidugudu sites, in addition to the existing 5,486(Item 3.29), without addressing the current problems is counter productive.
ü The investment in agriculture
Although the agriculture sector accounts for more that one third of the GDP, the country does not invest enough in the sector. Indeed, Table 6.3, page 123 shows that the agriculture gets a pity 4.1% of the total investment. Compared to the 14% spent in Defence or 23% in public administration, it looks indeed like peanuts.
ü The agriculture manpower
The paper overlooks the impact of the lack of manpower. Most of the active rural population that used to be involved in agriculture is either in prison, in court proceeding or attending to relatives in prisons. This is a significant manpower which is withdrawn form the agriculture.
ü Another factor is the government decision to foster cash crop agriculture at the expense of food crops. This has led to squandering of lands. The case in mind is the Jatropha growing in the Eastern province.
A poor domestic saving
The government paper does not address the crucial issue of low domestic saving (Table 4.1, page 49) which is a prerequisite for the expansion of private investment. This shows again how foreign generated is the much trumpeted up economic growth.
Domestic saving can not be isolated from the political and security environment. An economic agent not feeling secure will not think about future investment but about immediate survival. Even if he has a surplus, he will invest it abroad.
Of recent, there has been a trend of medium business men leaving the country and investing in neighbouring countries. Competitiveness does also encompass national security and stability. In this particular area, Rwanda lags well behind all her neighbours. Should the investment climate for nationals be more conducive, these flights of capitals would not be so high. How is the government going to reverse this trend without acknowledging the need for more political and economic space? How will the government boost the national private investment without addressing political interference in private business?
An expansive cost of doing business
As explained here above, the government goal of making Rwanda the most competitive business environment in the region (item 4.8) is out of reach, if no fundamental changes are brought in. On top of the worsening security forecasts which will ultimately affects the country's investments attraction, the cost of energy is another stumbling block. Energy "remains very expensive in Rwanda, accounting for 14% of all non-food expenditure, though the proportion is higher for poorer households" according to the paper. A genuine and good neighbourliness policy would have allowed the resumption of the defunct Great Lakes region community and the extension of Rusizi power plant, which could reduce the price of energy.
A widening trade deficit
Item 2.6 of the paper boosts of "a strong trade performance with exports growing at an average of 12.5 % per year since 2001 (Appendix Figure 2)". The issue is to find out how this performance has been achieved. Moreover, during the same period, the imports grew by 15%. Thus, according to the paper, the trade deficit rose from 8% of the GDP in 2001 to 12% in 2006. This predicts a worsening balance of payments in the future, as foreign aid will not indefinitely increase. Moreover, a close look at the National Bank data does not show that this increase in exports resulted primarily in investment goods which could reverse the trade deficit trend.
A persistent poverty
Ascertaining that poverty has fallen under the leadership of the current regime is far from the truth. Indeed the bottom line should not be 1994, but well before the war. According to UNDP, the total number of people living under severe poverty is 60% (see also table 2.2.). This figure was 47% under the previous regime.
Exit strategy that is put forward by the government paper suggests among other to increase paid employment (page 24). Yet, even some of the paid workers live now under the poverty line. A recent survey by our economic desk shows that a medical worker (infirmier) earns 90.000 RWF. Assuming that he is married and has two children, which is well conservative. He will spend, according to our survey, a minimum of 141.000 RWF per month on basic items like foods, transport fees, and house rent. This leaves a deficit of over 50.000RWF to this medical worker. The situation is worse for primary school teacher. Some of them are simply running out of their profession as they can no longer sustain their families with their salaries.
Double inequality in wealth distribution
As acknowledged by government paper (item 2.20) income inequality is increasing, both between rural and urban areas, and between Eastern province and the rest of the country, the Southern province lagging well behind. The GINI coefficient (page 142, figure 7.3) rose from 47% in 2001/2002 to 51% in 2005/2006. Rwanda was well above the average of the other African countries’ Gini coefficients. In other word, around 40% of the national wealth is in the hands of 10% of the rich. The so much lauded economic growth has therefore not contributed to the reduction of poverty, as it mainly benefited to the already rich class.
This is the "tendon d'Achile" of the government Vision 2020 which does not provide for any corrective measures. Reducing poverty is more than cleaning the streets of Kigali or planting flowers along the streets. Reducing poverty is fighting it where it is the most severe, i.e in rural and suburb areas. It is unacceptable that "68% of the total poverty reduction in the country be accounted for by a single province (page 25), which is by any standard the most populated.
The government paper stresses that "the priority objective of Rwanda’s recent education policy has been to increase secondary school enrolment" (item 2.53). The number of students in the eighteen higher learning institutions, six of which are publicly funded, increased from 10,000 in 2002 to 27,787 in 2005 (item 2.57)
This massive enrolment has been achieved to the expense of quality. During one of his visit to the National University of Rwanda in BUTARE, president Kagame himself complained about the quality of education and blamed it on teachers. In reaction, university teachers blamed in turn the secondary school education. It is therefore nonsense for this paper to talk of "user household satisfaction of 57%" (item 2.56) in secondary schools.
The paper states also that the free education policy has been extended to the 3 first years of secondary school. This does not take into account a number of costs in terms of stationary, and others administrative fees that are charged to students. There are still students dropping out of school for lack of school fees. Once again the increase in enrolment that has been observed is accounted by richest household. Indeed, it is 10 times higher than the poor household (item 2.55). Thus, it is irrelevant to poverty reduction.
The situation is compelled by the introduction of the so called TRONC COMMUN (3 years) after the primary school. This system is seen as a system of the poor households. Indeed, it is enforced only in public schools where most of the poor children enrol. Private schools are still exempted from it.
The result of a combined lack of teachers' incentives and a trial and error education system is the poor 0.5% of graduates in the Rwandan population with the African average being 4% (item 2.57).
For a country that ambitions to be the most competitive economy in the region, this is not encouraging.
The government should target the regional market and train our manpower accordingly. According to the teaching community, the result of the brutal introduction of English is poor performance both in English and French. Competitiveness means that the level of education matches the needs of the regional market. Increasing the number of teachers, even by 40%, will not increase the quality of education.
Expanding access to Technical and Vocational Education and Training (TVET) and ensuring existing centres are adequately equipped (item 3.17) has so far been empty promises for cheap propaganda purposes, and so is the government pledge to equip all student with laptops.
Accountability to be factual
Accountability is enforced through an independent judiciary, the National Electoral Commission, the Office of the Ombudsman and the Auditor General’s office (item 2.67). The paper goes on to say that "Rwanda has ratified or adopted a significant number of key international standards and codes in corporate governance, including the NEPAD Framework Document (2001), Principles of Corporate Governance (Organisation for Economic Cooperation and Development, and Commonwealth (item 2.62)
These are smoke screen rhetoric. The latest Ibrahim report , just to say a few, ranks Rwanda as 32nd out of 53 African countries covered Instead of taking stock of it and putting in place corrective measures, the regime as usual protested.
Accountability means also allaying worries of corruption wherever they come from. Despite repeated revelation about the so called Repli Investments 29 (Pty) Ltd., a company registered in South Africa., the government has never come out with an explanation other than brushing them aside.
Another major loophole is the financial empire of the ruling party RPF. A recent document written by former high ranking officers alleged that the party runs a wide range of enterprises under the umbrella of TRISTAR. Once again, neither the government nor the RPF as a party ever deemed it necessary to react.
Citizen participation (item 2.66)
Accountability goes with a genuine citizen involvement in governance. The government paper merely states that "the new constitution has provided a framework for representation and participation of citizens" (item 2.66). Citizen participation should not be mere propaganda.
Participation implies freedom of expression. Yet, according to Reporters Sans Frontières, Rwanda was ranked 157th out of 175 countries in the 2009 press freedom index. This was the fourth lowest ranking in Africa, above only Eritrea, Somalia and Equatorial Guinea. The government target of ensuring that 75% of the population believing that the media is free and independent (item 3.45) is therefore out of reach.
The paper talks also about encouraging the emergence of an independent press and media (item 3.53 ). For a government which banned around 30 media within half a year, this is an insult to the profession. The trend has rather been to suppress all independent media.
Justice and reconciliation
Human rights observance is intertwined with economic development. One can not talk about economic growth in isolation of human rights records. The government paper does not show how it will reverse the trend of serious human rights violations that have been witnessed by all major human rights organisations.
The government paper acknowledges that one of the major weaknesses facing the economic future of the country is "the unstable border with DRC" (page 50, table 4.2). Although the paper does not elaborate, this is as a result of a refugee problem that has been dragging on for the last 16 years. The same problem exists with Uganda and to a lesser extent all countries sheltering the many Rwandan refugees. Experience has shown that a military solution was ineffective. What does the government put forward in order to find a lasting solution to this headache?
Both the Rwandan government and UNHCR have so far privileged "push measures" which proved their usefulness. It is time to try "pull measures".
These include creating a conducive atmosphere inside Rwanda. A joint report compiled by International Refugee Rights Initiative, Refugee Law Project, and Social Science Research Council (CITIZENSHIP AND DISPLACEMENT IN THE GREAT LAKES REGION , WORKING PAPER NO. 4 JUNE 2010 , Dangerous impasse of Rwandan refugees, page 7) states as far as Rwandan refugees in Uganda are concerned, that "there are legitimate reasons for Rwandan refugees refusing to return to Rwanda".
Among these reasons, the report mentions the GACACA courts.
Pretending that during the so called Ubudehe survey, justice and gacaca courts in particular were viewed favourably by 72% of respondents (item 2.60) is just hiding the head under the sand.
Instead of tabling government own surveys, donors should consult independent bodies, like Avocats Sans Frontières or human rights organisations, to get the true picture of the justice system.
Refugees mentioned also the IMIDUGUDU policy. According to IKV Pax Christi (op.cit. page 4), the IMIDUGUDU hidden agenda was to "increase in the number of supervisory staff to oversee the population at all administrative and territorial levels of the country". Instead of being real development pools, they are perceived by the population as locked zones where you are under constant surveillance by government agents.
Our plea to the donors is to "seek ways to ensure that it builds institutional capacity for the country’s continued progress, not political capacity for Kagame’s continued power"
As put by Charles Landow (op.cit.) a constrained political climate punctuated by violence is hardly the way to preserve economic stability and poverty reduction in a country still recovering from wars and in a region full of conflict and the potential for more. Continuing to dish in financial aid without taking into account this reality is like pouring water in a bottomless pit.
Chairperson FDU Inkingi
 IKV Pax Christi Netherlands, Rwanda beyond the sterile debate between believers and non believers, march 2010, page 4
 It was far below 0.30% before 1994
 Pax Christi Netherlands, op.cit., pg 7.
 Rwanda Briefing , August 2010.
 See Amnesty Internation index: afr 47/005/2010
 As a result, it has been argued that gacaca has become ―no longer [a] community-based conflict-resolution mechanism, but part of a centrally-organised state initiative-put the investigative power of the state at the service of the prosecution while prohibiting legal assistance for the accused. (page 24)
 Charles Landow , associate director of the Civil Society, Markets and Democracy Initiative at the Council on Foreign Relations. The Kagame Dilemma, September 8, 2010)