RWANDA REPORT FOR 2006 PRESIDENT'S REPORT ON

UNCLAS KIGALI 000242 SIPDIS DEPT FOR AF/C, AF/RSA, EB/TPP, AND DRL DEPT ALSO FOR AF/EPS FOR MNORMAN, CTRIMBLE SIPDIS E.O. 12958: N/A TAGS: ETRD ECON PHUM XA RW SUBJECT: RWANDA REPORT FOR 2006 PRESIDENT'S REPORT ON AGOA REF: STATE 026707 ¶1. Per reftel, information below provides a summary of each of the requested areas. Market Economy/Economic Reform/Trade Barriers -------------- ¶2. Economic Situation: Rwanda's economy remains largely dependent upon foreign aid, while its population remains overwhelmingly rural with over 90 percent of families earning a living through subsistence agriculture and 60 percent of households living below the poverty line. However, Rwanda has achieved an average GDP growth rate of 6 percent over the past five years and increased the total value of exports by 23 percent in 2005. The government has established important oversight for managing the economic health of the country, including in the areas of tax collection, banking, trade agreements, anti-corruption, and fiscal policy. It has improved road conditions throughout the country, and maintained a relatively low corruption rate compared to neighboring countries. The government has also made progress on privatization. In 1996, there were a total of 91 parastatal enterprises; 51 of those enterprises were privatized by the end of 2004, including the state-owned telecommunications monopoly (Rwandatel),two banks (BACAR and the Commercial Bank of Rwanda),and one tea plantation (Pfunda) in 2004. Privatization of the telecommunications and banking sectors have been completed, and Electrogaz is scheduled to be privatized in FY 2008. IMF assessed Rwanda's Poverty Reduction Growth Facility (PRGF) programs to be on track, and Rwanda has reached the Highly Indebted Poor Country (HIPC) completion point and significantly reduced its overall debt. ¶3. Trade Liberalization: There are no significant trade barriers that affect the importation of goods and services to Rwanda, and the government is continuing further liberalization. The government is also emphasizing the importance of promoting private investment, particularly foreign, as an engine of economic development. The GOR has implemented several initiatives to increase investment and exports. The Rwandan Investment and Export Promotion Agency (RIEPA) has developed information materials, organized trade fairs domestically and abroad, and established assistance offices in Rwanda to encourage and assist investors. Political Pluralism/Rule of Law/Anti-Corruption -------------- -- ¶4. Political Pluralism: In 2003, President Kagame was elected to a seven-year term with 95 percent of the votes, and members of Parliament were elected. In February 2006, local officials were elected to five-year terms in elections at the cell, sector, and district levels, with the Kigali City election held on March 4. The next legislative elections will be held in 2008, Presidential elections in 2010, and local elections in 2011. The 2003 presidential and legislative elections were peaceful but marred by irregularities. The most recent elections (local elections) were generally considered free and fair, with no indication of coercion, harassment, or intimidation of voters. The extent of non-RPF participation in the political process was limited, with relatively few non-RPF candidates, which raised questions about possible political influence in the selection of candidates. ¶5. Rule of Law: While the Rwandan judiciary continues to face significant challenges in the aftermath of the 1994 genocide which virtually destroyed its institutional capacity, it has made notable progress since the GOR initiated judicial reforms in 2001. In 2003, a new Constitution established the judiciary as a separate branch of government, and the GOR continues to make efforts to strengthen the independence and capacity of the judiciary. In 2004, the regular courts were inoperative for 10 months due to substantial reforms, including the dismissal/replacement of many judges and the training of court personnel. The GOR has plans to increase the presence of lawyers throughout the country (currently only 147, based mostly in the capital) to improve access to legal services and to establish circuit courts throughout the country, especially in the rural areas, to reduce the backlog of pending cases (currently approximately 47,000). A new legal training institute is due to begin operation at the end of March. ¶6. Anti-Corruption: The extent of corruption in Rwanda is limited due, in part, to the government's active efforts to combat it. In 2003, it established the Ombudsman's Office to investigate corruption within government, focus on corruption prevention, and review financial disclosure reports of senior government officials to ensure transparency and accountability. The Inspector General of the Supreme Court is charged with investigating judicial corruption, while the Superior Councils of the Judiciary and of the Prosecution serve as disciplinary bodies. In addition, the GOR has provided training to the National Police to improve professionalism and to promote respect for rule of law. The Senate summons high-level government officials, including ministers, to ad hoc public hearings to probe government action in response to topical reports. An independent Auditor General, who reports directly to the Parliament, issues annual audit reports, and the Accountant General for the Executive oversees the financial aspects of the executive branch. Poverty Reduction -------------- ¶7. The government has made efforts, with measurable results, to reduce poverty and to improve access to health care and education, despite its severely limited resources. Under its national policy of universal primary education, the GOR provides free primary education to all children. A joint GOR-donor task force is focusing on improvement of girls' education. An education cluster headed by the Ministry of Education and DFID conducts an annual joint review of the education sector with all stakeholders to assess progress and to identify areas for improvement. ¶8. The GOR is attempting to improve access to health care through greater decentralization to ensure adequate health services at the local level. It has been encouraging citizens to pool resources and to join mutual health insurance schemes, supported by donors. In addition, it has implemented plans for the prevention, protection, and reintegration of street children (currently 7,000 out of 4.2 million children),including vocational training, such as carpentry and tailoring, to promote self-reliance through development of income-generating skills. ¶9. Rwanda has a Poverty Reduction Strategy Paper tied to its participation in the HIPC debt relief initiative. Rwanda met HIPC requirements in 2005, but faces challenges due to food insecurity resulting from less-than-anticipated rainfall in recent months, and insufficient energy capacity. Anticipated GDP growth is estimated at 3-5 percent, while inflation is likely to decrease to 5 percent. Human Rights/Labor/Child Labor -------------- ¶10. Human Rights: Widespread poverty and the destruction of the country's socio-economic fabric, human resource base, institutional capacity, and economic and social infrastructure during the 1994 genocide continued to have an adverse impact on the country's human rights situation. There were instances when the government committed serious abuses, but there were some improvements during the year. There were restrictions on political activities and freedoms but, unlike in the previous year, there were no reports of politically motivated disappearances, and fewer reports of police abusing suspects and the government arbitrarily arresting members of civil society groups and opposition politicians. ¶11. Labor: Rwandan law provides all salaried workers, including some civil servants, with the right to form and join labor unions without prior authorization, and workers exercised this right in practice. There were no restrictions on the right of association for non-civil servants. While all unions must register with the Ministry of Labor for official recognition, there were no reports of the government denying recognition. The law, however, prohibits unions from having political affiliations and from publicly expressing political opinions. The law also provides for collective bargaining, but this right was severely limited in practice. In November 2005, the GOR created a National Labor Council with equal representation of government, private sector management, and labor unions. Rwanda has ratified ILO Conventions 29 and 105 on prohibitions on forced and compulsory labor. ¶12. Child Labor: Except for subsistence agricultural workers, who account for approximately 90 percent of the workforce, the law prohibits children under the age of 16 from working outside of the household without their parents' or guardians' permission and prohibits children under 16 from participating in night work or any work deemed hazardous or difficult, as determined by the Minister of Labor. However, child labor was prevalent in the agricultural sector. The minimum age for full-time employment is 18 years, and 14 years for apprenticeships, provided that the child has completed primary school. According to a 2003 UN report, 31 percent of children between the ages of 5 and 14 engaged in child labor, and during the year children headed 106,000 households. Rwanda has ratified ILO Conventions 138 and 182 on the minimum age for employment and the worst forms of child labor. The Government is currently supporting projects to combat child prostitution and child labor in quarries, mines, and tea and coffee plantations. ARIETTI