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Security expected to uplift economy.

The chances of greater security for Rwanda, eastern Democratic Republic of Congo (DR Congo) and the whole of the Great Lakes region were given a massive boost at the end of March, with the news that the Democratic Forces for the Liberation of Rwanda (FDLR) is to cease hostilities. The predominantly Hutu armed group, which includes members of the Interahamwe, agreed to end the fighting after intense talks in Rome and the decision could herald a much brighter political and economic future for the troubled region.

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Most FDLR combatants are based in eastern DR Congo, where they fled with many other Hutus following the 1994 genocide.

From there, they have launched raids into Rwanda, prompting the Rwandan government to invade DR Congo on at least two occasions, whilst simultaneously backing anti-FDLR forces within the country. They were supposed to disarm as part of the 2002 DR Congo peace deal but have failed to do so.

Speaking in Rome, the group denounced the genocide and agreed to return to Rwanda to campaign for power by peaceful and democratic means. The government in Kigali, for its part, has assured the FDLR that they can return in peace, although anyone suspected of involvement in the genocide will be arrested.

Increased security could also help the Rwandan government in its attempts at economic reconstruction. Consecutive years of strong economic growth have been registered but the economy was obviously starting from a low base. Average growth of 8% over the past decade must be set against a 50% decline in 1994. More recently, however, there have been signs that more deep seated growth is being achieved.

Progress on micro level

At present, the economy is heavily dependent on coffee and tea exports, plus donor support. Indeed, coffee cultivation provides work for over half the population, but prices and yields tend to fluctuate wildly and the government is keen to diversify agricultural production in order to provide more stable income.

Given the level of population movement during and just after the genocide, there is also a problem with determining land rights. Some people currently farm land that they found abandoned in 1994 and there are many local disputes across the country.

However, it is vital that economic activity does not just rely on working the land. Rwanda is already one of the most densely populated countries in Africa and pressure on land resources has become a serious problem.

On the macro-economic front, the government appears to be progressing well. Most of the 72 parastatals that were listed for privatisation in 1996 have either been sold off or are being prepared for sale. The country's main tea plantations are being privatised and telecoms sector deregulation has enabled private sector companies, such as Terracom Broadband to begin offering services.

There has also been something of a construction boom in Kigali in recent years, partly fuelled by returning expatriates and partly by foreign investment in hotels and other infrastructure.

Yet it is vital that other sectors can begin to contribute to GDP if the current high levels of economic growth are to be sustained. Insecurity is almost always fed by economic weakness, so the government needs to ensure that the returning rebels find a country with rising employment and economic opportunities for all ethnic groups. The Rome deal is to be welcomed, but the healing process goes on.
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Title Annotation:RWANDA
Publication:African Business
Geographic Code:6ZAIR
Date:May 1, 2005
Words:561
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