Country Report Rwanda May 2002 Main report
Summary--Rwanda - May 2002
Outlook for 2002-03
Army operations against Hutu rebels have disrupted plans to attack Rwanda from the Democratic Republic of Congo (DRC). The finalisation of Rwanda's constitution will continue over the next year and should be ready in time for the general election in 2003. Party politics will remain suspended until before the election, giving enormous advantages to the ruling Rwandan Patriotic Front (RPF), which is keeping tight control over political liberalisation. Rwanda will maintain close relations with major donors, despite increasing international pressure for it to withdraw from the DRC, where its position is becoming more difficult. Agreement on a new poverty reduction and growth facility (PRGF) is being held up by a dispute between the government and the IMF over the fiscal deficit. Real GDP growth is expected to stay at 6% per year over 2002-03, underpinned by macroeconomic stability and continuing foreign assistance.
The political scene
A faction from Rwanda's proxy force, the Rassemblement congolais pour la democratie (RCD), has broken away and is fighting the Rwandan army in the DRC, saying that its presence there has antagonised other ethnic groups and made the position of Congolese Tutsis more vulnerable. The constitutional commission has claimed that Rwandans are hostile to the return of party politics and has asked the parties to make a case for their own right to exist. The UN Security Council passed a resolution in March requiring the RCD to withdraw from a town it had captured. The incident underlined international hostility, particularly from France, to Rwanda's military presence in the DRC. The training of judges in gacaca -- the traditional courts that are to be empowered to try genocide cases -- began on April 8th. Meanwhile, the International Criminal Tribunal for Rwanda (ICTR) has said that it will have finished its work by 2008.
Economic policy and the economy
The IMF is in dispute with Rwanda over its spending plans, claiming that the fiscal deficit in the 2002 budget and the poverty reduction strategy paper (PRSP) is too high and cannot be sustained. Rwanda is holding firm; an IMF mission to the country in April departed without an agreement on the issue, or on a new PRGF. The World Bank has meanwhile requested changes to the education and agriculture sections of the PRSP. The cash budgeting system has resulted in problems with the spending plans of the various ministries. The 2002 "A" season harvest was up by 30% on the previous year. There have been further delays in Rwanda's slow moving privatisation programme. Direct flights to Europe were due to resume in late April.
Foreign trade and payments
Rwanda's revenue losses from joining the free-trade area (FTA) of the Common Market for Eastern and Southern Africa (Comesa) appear to be almost four times higher than initially expected. The finance ministry is considering whether to impose fresh tariffs to recoup lost revenue. The government has borrowed US$12m from the International Fund for Agricultural Development (IFAD) to fund the development of infrastructure in Umutara province.
