Rwanda rising: A new model of economic development: Part 4

Several NGOs are experimenting with rural job-creation programs. What’s particularly interesting about Rwanda Community Works -- started in 2007 by Columbia University public-health professor Josh Ruxin -- is that its strategy is similar to Kagame’s: It focuses on building coalitions of rich people to help the poor. David Bonderman, founding partner of private-equity giant TPG, provided Ruxin’s organization with $750,000 in seed funding. Ruxin corralled Garth Brooks’s Ngeruka donation as well as hundreds of thousands of dollars from the Schmidt Family Foundation -- Google CEO Eric Schmidt’s personal philanthropy -- for another Bugesera health center. “When people stop dying, they want to create wealth,” Ruxin says. “We’re going to demonstrate, in one district, that through a variety of business-driven approaches, they can achieve it.” Ruxin’s team, which includes a former National University of Rwanda business lecturer and an ex-ING project manager, has launched experiments in agribusiness and partnerships with basket-weaving and knitting cooperatives. (The co-op model is one of the government’s pillars for rural development.) The goal is to build what would essentially be a Bugesera conglomerate, with all the profits reinvested in new businesses. “When people stop dying, they want to create wealth,” says Josh Ruxin. his NGO is building businesses -- but are they sustainable? The first fully-to-market product from Ruxin’s organization was a line of $85 silk-mohair knitted scarves for Whitney Port, star of the MTV reality show The City. The project’s startup funds and the connection to Port came from Megan Chernin, wife of News Corp. president Peter Chernin. Each knitter is paid about $5 per scarf, and the remaining profits -- about $45 -- are reinvested in other projects. “That we’re able to produce something with extraordinary levels of profits here is a huge accomplishment,” Ruxin says. “The question is, can something be left behind that becomes organic, that grows on its own?” Terrific question. The scarf project’s chief virtue is that it provides income from previously inaccessible markets. But it risks creating new forms of dependency. Rwanda Community Works has a PR person in New York and a master salesman in Ruxin, who has generated so much press that both government officials and some in Kigali’s NGO community voiced concerns to me that it’s too much about him and not enough about Rwanda. The big issue, though, is that RCW isn’t building a bridge that Rwandans can use for generations to come -- it is the bridge. On their own, the knitters have no more access to TV starlets than they did before. And surely nobody believes that this business would have come to Bugesera’s women if not for their tear-jerking story. But pity is not a renewable resource that anyone wants to cultivate. One afternoon, I stood in chicken poop with Marta Mukakalisa, 30. We were in the chicken coop, which doubles as her kitchen -- a perverse reminder to the birds of their destiny -- and she was telling me about her four kids, plus an orphan she supports. She wants to make enough to pay their way through school; she never got past fourth grade. Her husband is off in the army, so she’s basically on her own. She has had some help. The government gave her a cow, and RCW extended credit so she could buy higher-quality feed, which helped boost the cow’s milk production from 6 liters a day to 12. But it’s her ingenuity and entrepreneurialism that turned those inputs into much more lucrative outputs. She calculated that if she saved some milk for the kids and sold the rest to the dairy collection center in town, she could net about 1,500 francs a day, about $2.75. “It wasn’t fair,” she says, “because the collection center pays 170 francs a liter but sells for 250.” So she went to a nearby military camp and offered to sell them milk. She wasn’t going to undersell the collection center -- the per-liter price would still be 250. But here’s what she offered: Free delivery. Full liters (since the collection center notoriously skimps). And freshness. Since she has no refrigeration, her milk has to be delivered immediately, so it’s fresher than the collection center’s -- an advantage spun from an apparent disadvantage. Today, Mukakalisa sells 60 liters a day. She employs two bicycle deliverymen. She shares the wealth with neighbors, paying them nearly 20% more per liter than the collection center. And she has lifted herself out of extreme poverty -- her annual income is roughly double the government’s $900-per-capita goal. “Tell the people in America that I am the best businesswoman. I expect to make a lot of money. Some people here, they’re reluctant to take risks,” she says, one hand planted on her hip and the other waving dismissively in the air. She looks at me. “I like to take risks.” May Rwanda find millions more just like her. Ends

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Rwanda rising: A new model of economic development: Part 4