How Rwanda Plans to get Insanely Rich
in 1994 Rwanda was in the midst of one of the worst genocides in African history in 100 days 800 000 Tutsis and moderate hudu people had perished in a government-planned extermination with Millions more fleeing from the violence Rwanda had lost 30 percent of its entire population life expectancy in the country was just 21.9 years its already small economy stopped functioning infrastructure was completely destroyed and any semblance of a social fabric ceased to exist Rwanda was a failed state by every conceivable definition it had become the closest you can get to Hell on Earth today however a startling border exists to the north of Lake kivu on one side there are slums chaotically strewn about almost no homes have running water or access to electricity violent crime and poverty are and have been endemic for decades armed Rebel groups constantly threaten the livelihoods of those that live there to get into the country you'll be forced to pay a bribe and you'll have to pay even more to leave yet just a few meters to the east across the border it's almost as if you're on a different planet not all streets are tarmac but they are astoundingly clean drivers follow the speed limit and police officers never ask for bribes economic opportunities permeate the city and it shows in their neatly built sturdy homes Healthcare is cheap and Universal and the homicide rate is even lower than in the United States but what may surprise you is that this side is Rwanda despite what happened in 1994 despite it lacking substantial natural resources and despite it being the most land scarce Nation on the continent what has happened in Rwanda in the last 30 years is nothing short of a miracle by almost every metric from life expectancy infant mortality GDP per capita violent crime poverty rates educational enrollment and more have substantially improved while almost all other nations in the region have stagnated or even worsened but how is Rwanda become so much better off in such a short period of time and is rwanda's ongoing economic Miracle just too good to be true for people leaving their second apartment empty renting it out is an easy way to generate more income because in 2022 you can't have all your eggs in one basket especially since experts predict a typical portfolio heavy on stocks is expected to literally Flatline this year and that's a best case scenario and with inflation taking nine percent of your money straight out of your bank account people are scrambling for options but let's take a cue from the world's best investors because a groundbreaking Ernst young Study last year revealed that 8 and 10 ultra high net worth individuals invest in Alternatives things like real estate gold and private Equity but bna's CIO recommends investing in one specific High performing alternative to rescue your cash Fine Art two-thirds of millionaires already hedge against inflation with art according to UBS because the last time inflation was this high are appreciated by an unprecedented 33.2 percent annually and with Masterworks diverse to find your portfolio with paintings from Legends like Picasso and Banksy only takes a few clicks but the best part it doesn't take millions of dollars either actually I take that back the best part is that Masterworks has delivered an unbelievable 25 net returns for the last four years in a row through covid a bear Market in scathing inflation past performance is no guarantee of future results but they've done so well that there's a line of people waiting to be let onto the platform so use my link in the description to skip the waitlist and get started today thank you Masterworks for sponsoring this video foreign the original inhabitants of the African Great Lakes Region were the Hutu into a lesser extent the Tua people while fiercely debated today it speculated that in the 1500s the Tutsi people migrated from the Horn of Africa these Tutsi along with their cattle which was the primary source of wealth in the region slowly came to militarily and economically dominate the area by the 1700s the Tutsi who only made up about 15 percent of the population had established a highly militarized and centralized Kingdom and the vast percentage of wealth power and resources started to accumulate to the minority Tutsi population eventually the kingdom was colonized by first the Germans and then the belgians after the first world war seeing as directly ruling over a colony in the heart of Africa was expensive the belgians decided to Ally themselves with the existing Tootsie dominated power structure the Tutsis would retain their privileged position in society in return for funneling resources from the Hutu to the belgians along with forcing the population to carry identification cards marked Hutu Tutsi or Tua the belgians have exacerbated the power gap between the groups and this led to a rapidly growing resentment against the privileged Tutsis the hutus by contrast were relegated to heavy taxes and forced unpaid labor wanting to make the colony more profitable the belgians also introduced coffee which quickly came to dominate the economy and led to even harsher treatment of the hutus but this structure didn't last long out of fear that the hutus with their vastly Superior numbers would eventually rise up in Rebellion the belgians started a transition toward favoring the majority Hutu this transition along with the death impossible assassination of the king and centuries of Oppression at the hands of the Tutsi allowed for a massive rise in anti-totsi violence the first wave of violence came in 1959 in which an estimated 150 000 Tutsis fled Rwanda to neighboring countries the ryzen who do power along with anti-colonial sentiments culminated in pendants in 1962 with hutus now in control they reversed the system now institutionalizing discrimination against the Tutsi and occasionally carrying out systematic violence against them over decades millions of Tutsi refugees would flee the country despite this Rwanda would experience sustained economic growth due to generous amounts of external Aid favorable trade deals and most importantly a large rise in international coffee prices with this economic growth came rapid population growth Rwanda was already the most densely populated African nation and therefore land became ever more scarce which was a major problem since most of the population only ate what they grew on their individual plots of land and like most Nations that become too reliant on a single export the plunge and coffee prices in the late 80s sent shockwaves across the Rwandan economy to make matters even worse rwanda's agricultural land was starting to show signs of heavy deterioration due to excess cultivation if that was not enough a significant drought occurred in 1988 and 1989. Rwanda had too many mouths to feed their farmlands had become unproductive and because of low coffee prices the government did not have the resources to step in and help that government which by now was a totalitarian one-party state that had grown ever more tyrannical corrupt and inefficient started to use the tootsies as a scapegoat to their mounting issues one of Paul kagame's earliest memories was him and his family narrowly escaping death during one of the outbreaks of violence against the Tutsis they would successfully flee Rwanda living amongst hundreds of thousands of other refugees in southern Uganda while there kagame Rose the ranks of the military eventually becoming a senior officer before helping to overthrow the Ugandan government in a military coup he would go on to join and eventually lead the Rwandan patriotic front or RPF which was a militant Global Network of Tootsie refugees who had the goal of returning back to their country the RPF was a streamlined highly competent and experienced fighting force the deteriorating situation in Rwanda in the sustained human rights abuses against the tootsies provided the perfect timing to launch their plans in October 1990 they invaded Rwanda while initially successful a prolonged stalemate eventually led to a shaky peace settlement in 1993. this came to an end when a private jet carrying the president of Rwanda was shot down in April 1994. what happened next can only be described as hell on Earth in the Years prior the Rwandan government had secretly been arming militant groups and locating all Tootsie households during which vicious anti-totsi propaganda have been broadcasting with increasing frequency the government had been planning for an extermination of the Tutsi population and the Downing of the president's plane was the Catalyst for it to commence over the next 100 days 800 000 tootsies and moderate hutus were murdered instantly kagame and the RPF resume their fighting and the killings did not cease until they captured the capital of kagale when the RPF took control of Rwanda it was hardly a nation 77 of all tootsies were gone the rest were forever traumatized millions of hutus fled in fear the RPF would take revenge in some total Rwanda had lost approximately a third of its in entire population nearly all infrastructure was destroyed the economy was barely producing much of anything and the extreme social resentment remained how do you possibly rebuild such a failed state that was widely regarded by the International Community as an irreparable Nation in the immediate aftermath the RPF did three things the first was the rapid establishment of a temporary government headed by RPF leaders the government that would coalesce would largely resemble that of the original fighting force who was highly transparent efficient and structured to fight against corruption its aim was to stabilize Rectify unify and create a Nation free of ethnic labels the second objective was to stop further Violence by using the military as police and imprisoning as many of the perpetrators as possible in a country of now 6 million a hundred and twenty thousand were in prison seeing as it would be impossible to give each prisoner a proper trial Rwanda had to resort to a traditional justice system in which local courts judged by Elders would quickly process trials it's unknown just how fair the trials were but rwanda's lack of resources meant it did not have another option those that actively planned the atrocities were tried in an international criminal tribunal the Third objective was to accept help from the world that had neglected Rwanda due to a lack of political appetite after failing to secure peace in Somalia the U.N did almost nothing to stop the
atrocities in the aftermath out of guilt the U.N and many nations individually poured massive amounts of resources into Rwanda approximately 700 million dollars of humanitarian Aid was sent in the first year after the conflict with this Aid infrastructure was rebuilt Health Care Facilities were restored and schools opened once again while still in poor shape by the year 2000 the situation in Rwanda had stabilized and was gradually improving while Paul kagame states he originally had no political aspirations he became vice president of the temporary government and controlled the national Army when then president bizamungu was forced to resign after falling out with the RPF in 2000 kagame would take his place in that same year Rwanda would set in stone its Vision 2020 that would outline its plans for Rapid development with the goal of becoming a middle-income country in just two decades rwanda's Vision 2020 was based on six key priorities including good governance International integration and the rapid development of the private sector infrastructure human resources and agriculture but the unwritten key priority was making sure the nation did not break out into violence once again even if that meant controlling the nation with an iron fist by 2003 a new constitution in permanent government was established with kagame winning the first election but Rwanda is not Democratic provisions of of the Constitution effectively turned Rwanda into a one-party State political opponents are banned from running in elections jailed or even murdered Free Speech was Stamped Out and basic tenets of democracy were never established while not absolute after 1994 Rwanda has been largely controlled and administered once again by the Tutsi minority and with that fact kagame and the RPF knew the only way they could build and maintain political legitimacy was through providing security and Rapid economic growth while making sure any voices of dissent were silenced rwanda's unique situation in history therefore necessitated and heavily motivated those in charge to establish corrupt-free transparent and effective governance to which rapid Economic Development could then take place with kigami in charge they did just that today Rwanda is the second least corrupt nation in Africa just behind Botswana and even ahead of some European nations like Italy and Greece while not perfect in the context of its region rwanda's lack of corruption has given it a significant Advantage this in turn has created a positive feedback loop when it pertains to foreign aid Rwanda receives Aid which is used effectively to which nations are then more willing to continue supplying with this the Rwandan economic miracle was born Rwanda lacking any substantial natural resources followed in Singapore's footsteps kagame knew the most valuable resource Rwanda had was its people when he took office the average life expectancy was just 47.2 years Access to Health Care was low and of poor quality therefore kagame focused a large percentage of Aid to improving the Health Care system which in theory would provide a more productive Workforce large undertakings have managed to build modern hospitals and local clinics all over the country extensive work and funding has gone into training new doctors and nurses bringing back health care workers who fled the nation in 1994 and incentivizing foreign doctors from all over the world to help train manage and further increase the medical knowledge of the nation to ensure medical coverage is distributed all rwandans can be fully insured for just two dollars a day those that cannot afford this get free service all of these efforts have dramatically increased the availability and quality of health care services and has resulted in life expectancy increasing to 70 years today the second approach to investing in the nation's people came in the form of educational improvements to do this Rwanda has allocated 30 percent of its entire budget to education which represents its largest share of government expenditure much like Health Care a heavy Focus was made in training as many teachers as possible utilizing humanitarian organizations to help build schools and eventually implementing a 12-year mandatory education from less than 50 percent in 2000 today Rwanda has a 98 enrollment rate in basic education furthermore Rwanda has recently been pivoting its priority to building technical schools in hopes of eventually becoming a hub for information and communication technology in Africa but one of the most important factors for rwanda's success is its police force while initially they were inefficient and untrusted major reforms transformed it into one of the strongest institutions training was increased for officers with a focus on human rights in institutions became subject to external oversight by seven other governmental and civilian committees later reforms required the police force to work in conjunction with their communities by frequently broadcasting their objectives setting up toll-free Anonymous phone lines and actively asking the community for information on how to better prevent crime as a result Rwanda has some of the lowest crime rates in Africa in fact according to a 2018 Gallup poll Rwanda ranks in second place for Law and Order in Africa foreign safety in increases in Access to Health Care and education proved to be the perfect foundation for which the government was able to implement policies to unlock rwanda's economic potential the government put a heavy focus on infrastructure to Spur growth including the building of Road networks to connect the country constructing large Hydro power plants to finally bring electricity to households and industries and critically they invested in Kigali airport with Rwanda being landlocked it was crucial that it enhanced its connection to the world through air travel and cargo shipments the government also invested in a 95 million dollar 2300 kilometer telecommunications Network this has resulted in Rwanda being ranked third in Africa for internet connectivity the transportation infrastructure significantly decreased rwanda's Transportation costs making exports much more competitive as a result and in conjunction with a concerted effort to transform the productivity of the agricultural sector profits and thus wages have improved for the poorest in the nation who disproportionately work in agriculture however Rwanda has gotten quite lucky in that the price for their most important export coffee has substantially increased since 2001. but Rwanda did not want to be reliant on the coffee industry forever in order to diversify in more profitable markets Rwanda has made major progress in increasing how attractive it is to foreign investment since 1994 tariffs on exports were slashed taxes reduced and the process to start a new business or operate in the country has been streamlined unnecessary regulations were done away with and laws regarding enforcing business contracts were strengthened Rwanda improved its business environment so much that according to the world bank's ease of doing business index Rwanda was the most improved nation in the world moving from 142nd place in 2008 to 29th in 2019. this ranks it second in Africa and even ahead of more advanced economies like Japan the Netherlands and Switzerland this in turn has spurred a huge rise in foreign investment from just 8 million dollars in 2005 to 366 million in 2018. this for an investment combined with Rwanda becoming much safer contributed to a substantial increase in growth in all sectors but specifically in tourism which today has become the primary source of foreign Capital the revenue generated from tourism has increased from 27 million dollars in 2000 to 635 million in 2019. the service sector
which includes tourism along with banking retail hotels Transportation communication and other basic Services has been the fastest growing sector helping to diversify the economy and bring higher paying jobs yet one of the most debated pieces of rwanda's Economic Development has been the establishment of state-owned Enterprise Crystal Ventures the rpf's holding company has a huge hold on the economy they have investments from telecommunications milk processing Road building fancy coffee shops and luxury estate Horizon is another large holding company that is controlled by the ministry of defense that works in logistics and construction proponents argue these companies help the final resources into longer term projects acting as an icebreaker to markets that the private sector in foreign investors shy away from this included the successful establishment of a mobile phone network in 1998 that many thought was impossible however critics argue these companies get preferential government contracts that prop up loss making Ventures and inefficiencies but the real problem is the intersection of commercial and political power in finding the right time to allow the private sector to take over these large conglomerates have been useful in making business where no business was to be found however it appears they are increasingly becoming obsolete economically inefficient and potentially politically dangerous in the future nevertheless they have been important to rwanda's development thus far the focus on increasing human capital investing in infrastructure and making Rwanda an attractive destination for foreign Capital has resulted in some astounding results since 2000 Rwanda has averaged a GDP growth of over 8 percent representing a five-fold increase in total economic output making it one of the fastest growing economies in the world the average Rwandan is much healthier richer and educated than ever before the nation is no longer food insecure in citizens no longer need to worry about violence and crime but it's not all perfect despite its growth Rwanda is still a poor Nation seventy percent of its population still only eats what they grow and economic opportunities are still limited there are even some that think the government has been budging the numbers and their speculation that Rwanda has been illegally plundering resources from the Congo on top of this rwanda's economic Miracle has come at a risk since 2000 kagame has ruled the nation with an iron fist while this style of governing was a necessity to bring Rwanda back from ruins today it appears to be risking its very future there is still ethnic tension which may be building up to dangerous levels due to the government's efforts to stifle free speech and political Freedom over the last 20 years rwandans have put up with the lack of political freedom because the government has provided security and Rapid development should this fail to continue the nation could erupt into violence once again while Rwanda appears poised to be a middle-income country in 2035 and possibly even a rich country in 2050 its real test will come when it eventually experiences life after kagame the totalitarian nature of the government could easily be used to enrich the elite at the expense of the people should someone less benevolent come into power this surely will be the result rwanda's government should seek to Pivot toward a style of governance like Botswana which I have a video on because the democracy will ensure continued political stability yet this appears unlikely because the Tutsis in charge are terrified of relinquishing power nevertheless for the current moment Rwanda appears to be one of the few African success stories [Music]
2022-10-10 22:55
