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Rwanda submits citizens to a development tax

Rwanda has been working hard on in-house development, after several major international donors have slammed the cash box over alleged military involvement in neighbouring Congo conflicts. A recently launched Development Fund invites Rwandan people to donate money to the country’s development in order to close the gap for international development aid.

In late August the Rwandan government launched an alternative source of Rwanda’s future development: Agaciro Development Fund. The fund, which name means ‘dignity’ in Kinyarwanda, aims to ensure the continuation of Rwandan development after several of the largest development donors to Rwanda, including the U.S., UK and Sweden, have frozen parts of development assistance to the country. Funds were cut due to the accusations of Rwanda’s active participation in mobilizing financial and military support to a militia group M23, which is in battles with the Congolese military in the east part of DRC.

What makes Agaciro Development Fund so special is that it is Rwandans themselves who donate money to the fund and thus actively contribute to the country’s future development. One could call it a kind of voluntary development tax. The idea behind the fund and its descriptive name is that despite funding cuts of the major international donors, this should not prevent the country from developing – on the contrary. –

Political pressure

Since a UN experts reported that Rwanda supports the militia M23 in Congo, the Rwandan government has been in strong international headwind. M23a rebel group mostly led by ex CNDP (a Tutsi rebellion which, signed a peace agreement with the Congolese government in March 2009). The fighting has caused more than 260,000 people to flee since April 2012 – many of them have gone to refugee camps inRwanda.

The Rwandan government strongly denies all accusations of its active support to the M23 and similar militias and according to Paul Kagame – President of Rwanda “it is absurd to believe that Rwanda might be interested in supporting a military conflict in theCongo”. And this despite the fact that a UN report presents clear evidence of Rwanda’s role in the form of interviews with former soldiers, access to confidential correspondence between M23, top Rwandan politicians and military officials, pictures and other materials..

Absurd or not, the allegations (and evidence) have led to many of the largest international donors to Rwandato stop parts of their aid flows to the country, the last one being the European Union, which announced having suspended millions of dollars on the 25TH of September. Half of the Rwandan national budget is based on foreign development aid. According to the Rwandan government, this financial penalty from donors is a clear sign that the power relations between Rwanda and its donors are twisted and odd. “The donor’s response is a wake-up call for Rwanda and other aid recipient countries to actually start fending for ourselves and figure out a way to sustain our development without being subjected to bullying and pressure from donors.” Louise Mushikiwabo – Rwandan Foreign Minister told the BBC.

In addition, President Kagame, who has for many years benefited from being a favourite African leader of many Western countries – not only because he is described as the one who put a definitive end to the genocide when he took over Kigali as the front man of the RPF in 1994 – and who is most likely to take up a chair in the UN Security Council soon, recently in an interview with Metro New York hinted to the fact that the major donor countries were using their power inappropriately by stopping their financial support . He calls it a timely reminder to Rwandans that “we still have some way to travel as a nation before we are truly independent’, and he warns against using aid money as a weapon to impose political will. Thus, in response to the donors’ withdrawal of development funds, the Rwandan government has now launched Agaciro Development Fund.

Multiple donors

The Fund has been created through contributions from large and small investors, rich businessmen, Rwandans living abroad and all the way down to street sweepers and moto-taxi drivers who can donate an amount equal to almost one U.S. Dollar via SMS service. The Fund’s portfolio ‘s goal is to exceed the amount thatRwandahas received so far from international donors of development aid. Thus the objective probably serves as an emphatic statement thatRwandadoes not intend to succumb to the international political pressure. The financial amount that has been cut by donors such as the U.S., UK, Sweden and the Netherlands altogether amount to about 150 million U.S. dollars this year.

It should be noted that such an amount is being withdrawn from a country that today, despite great economic progress in recent years, is still considered to be among the world’s poorest nations. But so far the Fund seems to be a success; in the first four hours an amount equivalent to 2 millions U.S. dollars was collected, and the size of the fund is now thought to have exceeded 23 millions U.S- dollars. However, it must be noted that certain donations are from mandatory “donation” solutions implemented by the government, and these so-called solutions do not give Rwandans much freedom to decide whether and how much they want to donate. For example, employees in many of the large public companies have to donate half, or their entire month salary, to the Fund. There’s little freedom of movement in the small country, which is known to be controlled with an iron fist by Kagame.

If this massive support to the Fund continues, it is tempting to question whether Rwanda will need to receive such large sums of development aid in the future as it did in the past, or whether the country is gradually preparing for greater economic independence.It is still unsure whether the Fund will maintain its sustainability in the long term, or whether it is a strong one-time response to the country’s economic situation and international pressure. But so far there are indications that the donor’s economic power demonstration has not worked out as planned. On the contrary, the M23 is still fighting and has installed its own government in Rutshuru, a large area in North Kivu in eastern Congo.

by By Jeph Mboneye.

Source: Jambonews

September 27, 2012   1 Comment