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My main question is what the path to prosperity looks like for a small, mountainous, landlocked country like Rwanda. In his book “The Bottom Billion,” which I’ve mentioned before and recommend highly, Oxford development economist Paul Collier makes a rigorous assessment of why some countries are desperately poor. He focuses much of his analysis on countries, like Rwanda, that are landlocked. Such countries are not, it turns out, doomed, as the case of Switzerland proves. But they are highly dependent on being surrounded by other prosperous countries that offer opportunities to trade and secure outlets to the coasts. In such situations, the landlocked country in the middle can develop a comparative advantage of service to its larger neighbors — Swiss banking, for instance. Rwanda has clearly noticed the model with its string of banks building offices in downtown Kigali.
But Switzerland is surrounded by France, Germany and Italy. Rwanda’s neighbors are Tanzania, Burundi, Uganda and the DRC. To varying extents, all of them occupy an unenviable spot on the scales of corruption and economic torpor. My question is, what can they make that Rwanda can trade for? The number of banking opportunities in Rwanda, with under 10 million people, most of them still desperately poor, are not tiny but not enough to turn Kigali into Zurich. And the neighboring countries who might provide the demand for capital from Rwanda simply aren’t building very much. Indeed that is precisely why they are poor; they don’t make or provide things people in other countries want to trade for. Perhaps that will change; certainly the current relative prosperity of Rwanda compared to its circumstances a decade ago proves countries can change rapidly. But Rwanda had a horrendous event that eventually galvanized the entire country and economy. Tanzania is lucky it never had such an event, but it also does not seem to have anything one can see galvanizing the entire country in the same way. Education, health care and other metrics have declined here over the last 20 years; perhaps in the next 20 they will improve, but dramatically? How? Perhaps the tourist economy will drive economic growth, but that seems unlikely to be dramatic. Perhaps oil or diamonds somewhere on Tanzanian soil. That would ignite the economy, to be sure. But history just about everywhere else except possibly Scandanavia suggests it would probably on balance be terrible for the country as a whole.
The best thing Rwanda has going for it: more than half of its legislators are women, the largest proportion on earth. The mayor of Kigali is a woman, as are numerous cabinet ministers. In East Africa this is a big deal. I just finished the popular “Half the Sky” by Nicholas Kristoff and Sheryl WuDunn; I’ve completely jumped on the bandwagon of its conclusions. Evidence will continue to mount that countries making women’s rights and development a priority will leave behind those that do not. If I were Obama I would make this the touchstone of my entire foreign policy, a lens through which every other action would be considered and evaluated. It would be popular and effective — what other foreign policy strategy would make gradual progress on solving virtually every international problem we face? In the case of a country like Rwanda, I even support their practice (also present in a few other countries) of setting aside a proportion of parliamentary seats for women. The lesson here is clear enough: the men messed things up beyond imagination. Time to try something new.
