World Bank Disowned Kagame’s Economic Miracle

Open Letter to Mr. Jim Yong Kim, the President of the World Bank

Presidents Jim Yong Kim and Paul Kagame.

Dear President Jim Yong Kim, this letter refers to the World Bank and Rwanda’s investment climate. Although you have been awarding Rwanda top rankings in Doing Business Indicators since 2006, investments and the private have failed to take off. Your June 2018 Rwanda Economic Updateunequivocally states:

”The private sector’s lower-than-expected response to the improved investment climate is a concern for long-term growth. The recent growth slowdown, after several years of a public investment-led boom, has illuminated the limitations of the public-investment-led model and the importance of the private sector. A lack of private sector responsiveness and failing to increase the private investment rate over time would make it very difficult to sustain a high growth rate in the long run—as is envisioned in the National Strategy for Transformation and Vision 2050.

Mr. President, this World Bank finding raises profound questions. Currently, you rank Rwanda 2nd best in Africa and 41st in the world in the ease of doing business. How then does the World Bank explain this contradiction? How does a country achieve an impressive investment climate ranking but miserably fail to promote investments and the private sector?

Mr. President, we know the answers to these questions . Rwanda’s tiny private sector is not open to competition. It is dominated by the ruling party via its business empire known as Crystal Ventures Ltd. This problem is widely reported as in the following analysis by the US State Department:

”Investors continue to complain about competition from state-owned and ruling party-aligned businesses. Private sector stakeholders continue to stress that they do not have enough visibility on the bidding process for regional projects under the Northern and Central Corridor Initiatives.”

President Jim Yong Kim, having admitted that investments and the private sector failed to take off in Rwanda — the World Bank impressive rankings notwithstanding — now what? The least you can do is to admit that you have been part of the problem. Someone in the World Bank covered up the Rwandan reality, choosing instead to present the country as a model of regulatory reforms. You can redeem yourself by speaking the truth to the power in Rwanda. Your friend President Paul Kagame cannot have it both ways. Rwanda can’t be a model of reform while in reality, it is a Soviet Union style of a command economy.

Yours Sincerely,

David Himbara