Coming from the genocide, the government knows they have to
start somewhere. The biggest benefactors of the Rwandan economy are agriculture, miners tourism. The agriculture, miners, tourism make up of majority of the GDP the
economy makes. This makes the country more rural based and because of this, a
lot of people in Rwanda are living in poverty making less than 1 dollar a day.
Ever since the genocide in 1994, the economy had to pick itself up from this
disaster and the country as a whole show they want improvement. The economy went from a decline of 40% in real GDP to an increase of 9% within the next
year in 1995 with the help from other countries. The main priorities that Rwanda are
focusing on “poverty reduction, infrastructure development, privatization
of government-owned assets, expansion of the export base, and trade
liberalization.” Rwanda knows they face a problem with getting too much foreign aid and
is trying to stop getting aid because it “dehumanizes” them. The economic
relations with other countries is that Rwanda is in a situation where they need
a lot of foreign aid for rebuilding themselves back up so I believe this is
their “rebuilding stage”. Also for recent years, the U.S and Rwanda has been
working together. For example, the U.S has investments in local mineral production and biofuel
projects and signed a treaty for their investments. In 2011, Barack Obama made
the investments even bigger by giving the investments legal protections for
investors to show the commitment for both countries in the “open investments
and trade policies”. The major source of the economy is mostly tea and coffee
from the agriculture, coltan from the minerals and tourism of course. It’s interesting to
note the way Rwanda is forming its economy is to have a huge network to
attract private investors. For example, Kagame met with the CEO Jim Sinegal,
of Costco’s to be able to sell coffee beans in the company and is currently selling
25% of Rwanda's coffee beans to Costco. This network from Singeal of Costco then led a meeting with CEO Howard Schultz
of Starbucks to improve even more of their coffee beans sales. This example
shows their resistance to what the country was mostly known for, the war, and
place that mindset into something more healing and hopeful. Kagame’s strategy
to attract private investors seems like it is working for the country but every
plan is not flawless. The country still faces problems with exporting less and
importing more. The president, Kagame does have future plans for a major shift in the economy by 2020 and hopefully provided have better life such as health,
education, electricity and lessen poverty rate for everyone in Rwanda.
Sources:
http://www.fastcompany.com/magazine/134/special-report-rwanda-rising.html?page=0%2C0
http://www.iss.co.za/AF/profiles/Rwanda/Economy.html
http://www.state.gov/r/pa/ei/bgn/2861.htm#econ
http://www.infoplease.com/ce6/world/A0860865.html
Like you said, coming out of such a devastating occurrence such as the genocide impacted the country of Rwanda in so many ways. Economically, Rwanda is in a very tough situation. To understand that the poverty level is so bad that people are making the equivalent of 1 dollar a day is gut wrenching. I would agree with Rwanda that they need to stop taking so much foreign aid. It is so much easier said than done because they need serious help. But the more help they get, the more they are in debt.
ReplyDeleteAlthough the economy is struggling, it is comforting to know that slowly but steadily are on the rise. To know that President Kagame is meeting with large corporations is a huge step. This will increase their exports exponentially. As long as Starbucks and Costco can continue to be successful companies, Rwanda’s economy will continue to grow. It is a great investment made by Rwanda and it has this economy headed in the right direction.