Remaking Rwanda: State Building and Human Rights after Mass Violence

6. Aid Dependence and Policy Independence: Explaining the Rwandan Paradox

103  6 Aid Dependence and Policy Independence Explaining the Rwandan Paradox eugenia zorbas Introduction Rwanda is a poor, land-locked, aid-dependent country with few natural resources, unstable neighbors, and a post-genocide legacy of physical and psychological damage (see Collier 2007). This context makes the Government of Rwanda’s economic and social development all the more impressive. Over the past decade, the Government of Rwanda has won praise and trust from its main donors for these achievements and for managing aid efficiently. By 2008, donors were funding nearly 50 percent of the government budget through general budget support (GBS)—a more mature form of aid. During this same period, however, the Government of Rwanda also carried out a number of policies, which caused donor concern. Moreover, high annual growth rates have subsided and problems of acute income inequality and top-down authoritarian governance—which predate the current regime and mirror the pre-1994 period—have resurfaced. Despite this uneven record, the Government of Rwanda continues to receive important aid flows from a 104 A i d D e p e n d e n c e a n d P o l i c y I n d e p e n d e n c e handful of big donors, especially the United States, the United Kingdom, the World Bank, and the European Commission (see table 6.1 and fig. 6.1). This chapter explores why the Government of Rwanda continues to receive such steadfast support from these donors. It lays out four factors that explain this paradox of aid dependence coupled with policy independence: (1) genocide guilt and exceptionalism, (2) the government’s donor-friendly language and positioning, (3) the desire for African success stories, and (4) domestic support for the Rwandan Patriotic Front (RPF) across the political spectrum in the United Kingdom and United States. The chapter also discusses the few notable exceptions when donors imposed or threatened negative conditionTable 6.1. Levels of Official Development Assistance (ODA) as a percentage of Rwanda’s Gross National Income (GNI), postemergency phase, 2000–2007         ODA (USD millions, current prices) . . . . . . . . As percentage of GNI (USD, current prices) . . . . . . . . Source: Organisation for Economic Co-operation and Development (OECD)/Development Assistance Committee (DAC) and UN Statistical Division. Note: Rwanda is heavily dependent on aid: the threshold for high aid dependence is typically around 10 percent of GNI. Figure 6.1 Top donors to Rwanda in post-emergency period, 2000–2007 Source: OECD/DAC, figures in USD millions. Note: Ranked by total Official Development Assistance (ODA) disbursements. E u g e n i a Z o r b a s 105 ality, most strikingly in the context of Rwandan activity in the Democratic Republic of Congo (DRC). Finally, the chapter shows how Rwanda fits into the broader development debates. Support despite Apprehension The RPF has matched, and even surpassed, donor expectations on several counts. Rwanda has had high growth rates, which averaged more than 10 percent per year between 1994 and 2004 and about 5 percent per year since then. In terms of social development, the Government of Rwanda is on target to achieve at least two Millennium Development Goals: universal free education by 2015, and promoting gender equality. It has become known as the “Singapore of Africa” for a civil service largely free of corruption. The Government of Rwanda’s push to modernize and diversify the economy is in line with the prescriptions advanced by Paul Collier (2007) in his influential book The Bottom Billion. The government has also recognized the importance of integration into wider regional markets, joining the Common Market for Eastern and Southern Africa (COMESA) in 2004, the Eastern African Community (EAC) in 2007, and promising to send a delegate to the Communauté économique des pays des Grands Lacs (Economic Community of the Great Lakes Countries, CEPGL) in 2009. Despite this positive record, the Government of Rwanda has also implemented major policies, which have caused donor unease and even criticism. For example, nearly all the donors that were providing funding for shelter programs in the late 1990s (including the United States, the Dutch, and the Germans) raised concerns with the imidugudu (villagization) policy of resettling populations in government-selected sites. The concern arose because the Government of Rwanda had not informed them that their shelter funds were being redirected to villagization, because of bad experiences in other countries such as Ethiopia and Tanzania, which...