A successful dev’t strategy has need for sustenance

One other factor that is of significance to the impressive Rwanda’s growth episode is strong alignment of development partners to government policies, which is a success story of how aid can be effective if only there is joint ownership of polices and objectives of a country’s development agenda. Proper utilization of donor and multilateral funds has generated mutual trust that is not easy to replicate in other environments. This is one area where prescriptive solutions that have failed in many African economies far to longer, has been negated by Rwandans. Rather national policies /goals/goals/strategies are initiated by Rwandan government with consensus of Rwandans and thereafter refined in partnership with development partners for effective implementation and monitoring. Nonetheless, we need to sustain such growth for over 20 years for our country to usher into self sustaining growth mode. For, whereas attainability of vision 2020 is no longer a strategic objective of intent but a reality, distribution of incomes generated through the growth of our economy will have to percolate to the grass root levels. Recent statistics attest to this income distribution pattern, but more pro-poor policy measures will have to be seriously anchored to our next generation of EDPRS II if we are to realize this noble objective of our development. Our past record shows that, commitment to this end abound.The average growth rate of 8 per cent per annum recorded in the last ten years means that, growth and high incomes will raise households’ incomes above the subsistence level, below which they cannot save. The positive influence of growth on savings has played a central role in the successful development of all countries that emerged from poverty to prosperity, and was typical of the development episodes in Asian Tigers’ development model. According to this view, East Asia’s unprecedented accumulation trajectory (described as a virtuous growth cycle), is a mutual causation process where rapid growth raises savings rates which feed back into faster growth by financing more capital accumulation. This view was supported by The World Bank (1993b), which emphasized that, “in the case of East Asian economies there was a virtuous circle going from high growth to high savings, to even high growth...” The only difference here is that, World Bank, despite many failed prescriptive solutions, came to terms with the success of home grown solutions. In the case of Rwanda, the virtuous process is bound to emerge through monetization of the economy, which will need to be scaled up to the next level, and financial development given high priority than it is currently. It is only through financial deepening that, savings generated from the impressive growth can be pooled together to finance both private as well as public investments. “The path we took as a developmental state will outlive EDPRS II, until the economy goes into self propelled growth mode”.Our financial systems are still too shallow to enable us to move on to the next level of growth and development. More long-term financial institutions as well as long-term financial instruments will need to be introduced into our economy with the government acting as a strong agent of their development through incremental incentive schemes for these to set shop in Rwanda to finance our next level of development. We cannot usher to our next desired level of development without these. In tandem with the above, is the fast tracking of development of Rwanda as an offshore financial centre/hub. Like the trekking free trade zone, an offshore centre is an economic trigger that has the utmost potential to propel our economy to the next level of development especially given our central location. EDPRS II will have to define these clearly, if it is to attain the desired level of growth we need. The path we took as a developmental state will outlive EDPRS II, until the economy goes into sell propelled growth mode. This is the traditional development model, and we do not have to invent the wheel to this end. Higher level of clearly defined instruments of economic as well as social development are necessary to leap frog our growth and thus development to the next level. EDPRS II cannot just be an incremental development strategy of EDPRS I. It has to depend on fundamentally different economic drivers that can take our economy to a middle income by 2020. Thus for instance, pro-poor strategies as one cow per family will have to be scaled up, and the market for the same be established. Rural infrastructure and electrification development holds key to our development, and these two will have to be priorities of priorities for us to move to our next stage of growth and thus development. Import substitution industries will have to be targeted in this era, a strategy that has for so long been neglected, at the expense of our high import bill of even the basic goods, that a country should and must produce at home. To be continued …

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A successful dev’t strategy has need for sustenance