Lyal White
31 March 2008
opinion
Johannesburg — RWANDA has emerged as a new focal point of the aid and development debate. Following a devastating history that culminated in genocide just 14 years ago, the Rwandan government has earned a reputation as one of the most effective and progressive governments in Africa, making it the darling of western aid agencies and a real-life development experiment for the many organisations and advisers seeking a silver-bullet solution to end poverty forever.
But in a country where aid is by far the largest foreign exchange earner, accounting for about a quarter of its $2,5bn economy, and the relevance of foreign agencies is measured by the size and shine of the newest 4x4 vehicles, Rwandans are earnestly striving to rid themselves of their dependency on the booming aid trade.
President Paul Kagame's government has turned what was once Africa's poorest and certainly one of the smallest countries on the continent into a business-friendly location, hungry for foreign investment. Social development through economic growth has been prioritised and one US entrepreneur based in the capital, Kigali, describes Rwanda as the new frontier of opportunities, where years of misgovernance and conflict have starved the country of basic goods, services and skills -- which are now in high demand.
However, others see Rwanda as the new aid frontier, where the sentiment toward aid is different to other parts of the developing world, and where debate and theory meet stark economic realities. Take Latin America, for example. With poverty and inequality prevalent in countries across the region, the development debate has been hijacked by leftist ideologues, whose countries are blessed with industrial diversity and a wealth in natural resources -- especially those with oil and hydrocarbons. This provides them with sufficient leverage and an alternative to aid and external support. Poor countries in Africa are in a less fortunate position.
Life is not easy in Rwanda and the constraints to ordinary economic growth remain high. People spend most of their productive time walking long distances to collect water or produce. L iteracy and life expectancy are still among the lowest in the world, and with about 90% of the working population dependent on subsistence agriculture, few Rwandans are actively involved in the formal economy.
These challenges keep the shackles of aid firmly in place, and make Rwanda a hotbed of international advice and developmental experiments.
This is not to say that aid and development have avoided the ideological prejudices in countries such as Rwanda. The new ideology of development is steaming forward at full throttle, with a heated contest between the big pushers of aid versus piecemeal proponents, both desperately seeking tangible results while vying for government recognition.
At this stage it is hard to say who is winning. While the big pushers seem to have fame and fortune on their side -- with the support of a diverse bunch, from Tony Blair and Bill Clinton to Bono and Bob Geldof, history tells another story.
Detailed studies show that aid does not stimulate sustainable growth and has no effect on investment. Increases in aid flows to Africa have done little to increase per capita income on a continent where half the people still live on less than a dollar a day. School teachers in Rwanda earn less than $60 a month and some parents struggle to pay just fifty US cents a child for each quarterly school term. Put simply, you cannot solve a problem by throwing money at it. Evidence shows that it has not worked before, so why should it work now?
William Easterly of the piecemeal school suggests that the problems -- and thus the solutions -- are home grown and home owned. He provides a strong argument for the role of politics and policy in the growth and development game. Poor countries with bad governments and policies are unlikely to be pulled from the clutches of poverty through a robust injection of aid.
Rwanda is a prime example. Aid did little for the plight of the people through years of misgovernance. Even now with a good government and appropriate policies in place, delivery is slow and often poorly executed. Countries such as Rwanda are saturated with foreign aid and advice. But it is the human and institutional capacity to effectively use this aid and advice that is in short supply.
Systems and constructive implemen-tation by the local population themselves -- beyond planning and political will -- is a reality that is often neglected or forgotten in the development debate. Even the recipients need to be accountable in some way. This helps create the necessary urgency for delivery and self-sustainability.
We can only hope the ultimate winners of the great development debate are those whose lives need improving, and the result is more than just another well documented ideological jousting contest between academics, policy makers and aid agencies.
White is executive director of The Institute of Policy Analysis and Research in Rwanda.
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