International Development Institutions and Rwanda

INTERNATIONAL DEVELOPMENT INSTITUTIONS and RWANDA

By: Gerald F. Witherspoon, Sr. 20140821

The World Bank has two essential goals: “Push extreme poverty to no more than 3% by 2030 and promote shared prosperity and greater equity in the developing world” (World Bank 2014). The World Bank Group (WBG) consists of five organizations and has a new Country Partnership Strategy (CPS) that focuses on three main areas: Advancing economic growth, raising productivity and incomes of the poor, and supporting accountable governance (World Bank 2014). The WBG intends to achieve its goals by focusing on private sector growth, job creation, rural development, social protection, public financial management, and decentralization. The International Development Association (IDA), International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) work together on behalf of the CPS to support Rwanda’s development. World Bank has committed US$509 million in aid with key projects including the Rwanda Electricity Access Scale-up and Sector Wide Approach (SWAp) Development Program (US$70million), Land Husbandry, Water Harvesting and Hillside Irrigation (US$69 million), and Rwanda Second Support to Social Protection System (US$50 million) (World Bank 2014). Between 2001 and 2010, the World Bank supported the development of more than 7,200 hectares or marshlands and 30,000 hectares of hillsides.  Additionally, there has been an increase in maize, rice, and potato yields ranging from 3-7% and rural infrastructures have made productive areas more marketable. The rural sector Support Project (RSSP) benefited 61,000 people, the LWH benefited 87,000, and more than half were women (World Bank 2014). The World Bank supports increased electricity provisions through the Rwanda’s Electricity Access Rollout Program (EARP) and increased generation capacity through Sustainable Energy Development Project. Finally, by supporting Rwanda’s Vision 2020 Umurenge Program (VUP), the World Bank has assisted in benefiting more than a half a million people, 68% of which were women (World Bank 2014).

According to its website, “The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world” (IMF 2014). One of the ways it accomplishes its goals is through a Policy Support Instrument (PSI). The PSI communicates the strength of a country’s economic policies to donors, creditors, and the general public and is designed to help member countries achieve their poverty reduction strategy objectives. Rwanda was one of 16 members approved by the Executive Board. An October 8, 2012 press release (No. 12/508) reported Rwanda’s economic performance as “favorable” and policy performance as “strong” (IMF 2012).

The UN Conference on Trade and Development uses recent statistical analysis to inform the international community on how globalization affects developing countries, promotes development through international trade, offers member states investment and enterprise related expertise, assists more than 90 countries in achieving economic progress, and uses research findings to help developing countries design and implement technology that stimulates innovation (UNCTD 2013). In Rwanda, UNCTAD has helped establish a world class online Investment Guide. It prepared an industrial mining sector and FDI promotion strategy, drafted a model mining convention, assisted in the process of mandating the new Mining Code implementation, and trained staff of Rwanda Geology and Mines Authority on promotion and management of international investments. UNCTAD helped the government build skills attraction and dissemination programs. It offered legal, regulatory, and institutional reform advice regarding the new immigration laws. UNCTAD’s eRegulations made it easier for businesses to gain business permits and it conducted a study on investment flows and registration (UNCTD 2013).

UN Development Programme is the author of the Millenium Development Goals (MDGs) (UNDP 2012). Along with these goals, the UNDP provides expertise in three main areas: Poverty Reduction and Environment, Democratic Governance and Peace Consolidation, and Aid Coordination. The organization has aligned the United Nations Assistance Framework (UNDAF) with the Government of Rwanda’s Economic Development and Poverty Reduction Strategy (EDPRS) and Vision 2020 to help Rwanda achieve the MDGs. In 2011 US$19.6 million was evenly split between Governance and Peace Consolidation (51%) and Poverty and Environment (49%), and the One UN Country team has partnered with Rwanda to improve child health care, more enrollments in school, access to justice in rural areas, and woman empowerment (UNDP 2012).

 

Reflections

There seems to be a pattern amongst developing states of reports of growth with a pending revelation of corruption. That is, many state websites advertise the strides they have made and all the improvements they are expecting.  Then, Human Rights Watch, or some other nongovernmental organization conducts an independent investigation that reveal mind numbing data and contradictory information that demonstrate how any progress made has been undermined or manipulated by political agendas.

The World Bank has repeatedly been reported loaning money to developing states where corruption was evident and large amounts of money were not accounted for, but, it continued to loan money. Therefore, it remains a strong suspect for political corruption as well. Borrowing does not always translate to more development and corruption has a way of absorbing potential increases. So then, at a macro-level, it would seem that developing states remain stuck in a cycle of underdevelopment because there is no way to guarantee governments remain corruption free. Further, developing states remain stuck in a cycle of underdevelopment because the global financial institutions entrusted to finance development and growth, consciously and prejudicially finance instability. That is, they take political outcomes into consideration during the loan underwriting process. From this perspective, global financial institutions have the capacity to affect the balance of power within the international system, because development requires capital, and capital, is directed through politically-prejudicial lending.

Reflecting on the dependency theory, Herath stated, “Development and underdevelopment both result from the same process of capital accumulation (Herath 2008, 821).

 

References

Herath, Dhammika. 2008. “Development Discourse of the Globalists and Dependency Theorists: do the globalisation theorists rephrase and reword the central concepts of the dependency school?.” Third World Quarterly 29, no. 4: 819-834. Academic Search Premier, EBSCOhost (accessed August 11, 2014).

International Monetary Fund. Statement by the IMF Mission at the Conclusion of Its Visit to Rwanda. October 8, 2012. http://www.imf.org/external/np/sec/pr/2012/pr12508.htm.

International Monetary Fund. The Policy Support Instrument . April 03, 2014. http://www.imf.org/external/np/exr/facts/psi.htm.

United Nations Conference on Trade and Development. Investment Policy Review: Rwanda. 2013a. http://unctad.org/en/pages/PublicationArchive.aspx?publicationid=508.

United Nations Conference on Trade and Development. What we Do. 2013b. http://unctad.org/en/Pages/AboutUs.aspx.

United Nations Development Programme. What We Do. 2012. http://www.rw.undp.org/content/rwanda/en/home/ourwork/overview/about_our_work/ (accessed August 21, 2014).

World Bank. Ending Extreme Poverty and Promoting Shared Prosperity. April 19, 2014. http://www.worldbank.org/en/news/feature/2013/04/17/ending_extreme_poverty_and_promoting_shared_prosperity (accessed August 20, 2014).

World Bank. Rwanda Overview. 2014. http://www.worldbank.org/en/country/rwanda/overview#3 (accessed August 20, 2014).

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