2006-03-28 05:29:00
Embassy Kigali
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DE RUEHLGB #0286/01 0870529
O 280529Z MAR 06




E.O. 12958: N/A
FRAZER, APRIL 5-8, 2006






E.O. 12958: N/A
FRAZER, APRIL 5-8, 2006


1. Post warmly welcomes your visit to Rwanda. Rwanda is a
country struggling to overcome its past and bring its people
and economy into the 21st century. The legacy of the 1994
genocide in which up to one million people were killed still
haunts the country and underlies the tension faced by a
government attempting to balance the goals of internal
security and democracy. While the current government has
made dramatic progress in rebuilding the country's
infrastructure and economy which was devastated by the
genocide, there are many remaining challenges.

2. On March 11, for the second time in seven months,
President Kagame reshuffled his cabinet, dismissing three
ministers reportedly for poor performance. The Rwandan
Civil Aviation Authority and SN Brussels Airlines are still
in negotiation to resume operation of SN Brussels flights
between Europe and Rwanda that have been suspended since
late February as a result of a dispute. Ongoing criticism
by GOR officials and genocide survivors of "Hotel Rwanda"
hero Paul Rusesabagina continues to call into question his
credibility, reputation, and hero status. The campaign
coincides with his outspokenness against the government.
Former President Bizimungu remains in prison, along with
former Minister of Transport and Communication Charles
Ntakirutinka, on charges of misappropriation of public
funds, criminal association, civil disobedience, and treason
after the Supreme Court upheld the lower court's 2004
conviction and 15-year sentence on February 17. Critics
have questioned the independence of the judiciary and the
political motivation behind the conviction.

3. Following the recent release of the 2005 Human Rights
Report, the government took the initiative to promptly
create a senior-level inter-ministerial working group to
focus on human rights issues and opened a dialogue with
Embassy to address areas of concern. The GOR understands
the importance of improvement in human rights and democracy
to its chances of becoming eligible for the Millennium
Challenge Account.

Bilateral Relations

4. Relations between the U.S. and Rwanda are cordial, with
frequent exchange of views on a range of bilateral,
regional, and international issues. The U.S. became
Rwanda's largest bilateral donor in 2005, with USD 80
million in assistance to Rwanda that year. Rwanda is
eligible for tariff preferences under the African Growth and
Opportunity Act (AGOA) and will receive USD 72 million in
new HIV/AIDS assistance under the President's Emergency Plan
for AIDS Relief (PEPFAR). Rwanda is taking steps to qualify
for the Millennium Challenge Account.


5. Rwanda is Africa's most densely populated country, whose
8.3 million people live in an area the size of Maryland.
Government policy downplays ethnic divisions, which had led
to the genocide, but the three traditional ethnic groups are
Hutu (84 percent),Tutsi (15 percent),and Batwa (1
percent). The population is young (almost half under the
age of 17),and the current population growth rate of 2.7-3
percent would lead to a doubling of the population by 2030.
It is a primarily rural society with 85-90 percent of the
population engaged in subsistence agriculture. Primary
exports remain coffee, tea, minerals, and pyrethrum (used in
insecticides),but new ventures in horticulture, essential
oils, and peppers are providing additional export
opportunities. Eco-tourism is the second largest foreign
currency-generating industry.

The Rule of Law

6. The Rwandan judiciary 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 ten months
due to substantial reforms, including the dismissal and
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 soon begin operation.

The AU Mission

7. The Rwandan Defense Forces (RDF),one of the most
competent and professional militaries in sub-Saharan Africa,
have deployed 2,022 troops to the African Union Mission in
Sudan (AMIS). In addition to RDF soldiers and officers
serving in six-month rotations as force protection and
military observers in Darfur, there are 50 civilian police
serving under AMIS and 250 RDF troops in Khartoum in support
of the United Nations Mission in Sudan (UNMIS). The USG has
been providing logistical and training support for the
Rwandan contribution to AMIS since initial deployment in
August 2004. The U.S. Air Force and U.S.-funded contract
airlines have provided transport for all troop deployments,
and U.S. contractors have conducted training for over 2,900
RDF soldiers in preparation for the Darfur deployments; an
additional 530 are currently being trained.

Regional Ties

8. The U.S. has taken the lead in promoting regional
stability by fostering improved cooperation among Rwanda,
the Congo, and other countries in the Great Lakes region.
While there is still mutual distrust, Rwanda's relations
with the Congo and Burundi have improved. After the August
elections in Burundi, the Rwanda-Burundi relationship has
steadily improved, with the training of Burundian military
officers by the RDF. Relations with Uganda, although still
lukewarm, have also improved, although it remains to be seen
whether President Kagame will accept Uganda's invitation to
attend the May 12 presidential inauguration of newly re-
elected Museveni. Reduced tensions will promote regional
stability, enhancing prospects for economic and social
development. Rwanda anticipates joining the East African
Community and has the support of Kenya, Tanzania, and
regional countries, but the membership process, originally
scheduled to be completed by early 2006, has been prolonged
by Uganda.

Political Pluralism

9. 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 local elections, and in early
March 2006 the new mayor of Kigali City was elected. 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 opposition
participation in the political process was limited, with
relatively few non-RPF candidates, which raised questions
about possible political influence in the selection of

Economic Development

10. Rwanda's economy remains largely dependent upon foreign
aid, while its population remains overwhelmingly rural with
85-90 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 low
corruption rate relative to neighboring countries. In 1996,
there were a total of 91 parastatal enterprises; 51 of those
enterprises were privatized by the end of 2004.
Privatization of the telecommunications and banking sectors
have been completed, and Electrogaz is scheduled to be

privatized in FY 2008.

Poverty Reduction

11. 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. The GOR is also attempting to improve
access to health care through greater decentralization to
ensure adequate health services at the local level. 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 to promote self-reliance through development of
income-generating skills.

12. Rwanda has a Poverty Reduction Strategy Paper tied to
its participation in the Heavily Indebted Poor Country
(HIPC) debt relief initiative. Rwanda met HIPC requirements
in 2005 and significantly reduced its overall debt, 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.

Global Health

13. HIV/AIDS: Recent results of a 2005 demographic and
health survey, preliminarily but not yet officially released
by the GOR, indicate a national HIV prevalence rate of 3.0
percent (3.6 percent for women, 2.3 percent for men). The
survey suggests that women are contracting HIV/AIDS at a
younger age than men and that for both sexes prevalence in
urban areas is approximately three times higher than in
rural areas. Over the next five years, the USG's PEPFAR
program in Rwanda will provide 50,000 people with ARV
treatment, prevent 158,000 new HIV infections, and provide
care and support to 250,000 people affected by HIV/AIDs,
including orphans and vulnerable children. FY06 PEPFAR
funding for Rwanda is approximately USD 72 million.

14. Malaria: Rwanda is among a short list of four
countries currently under consideration for FY07 funding
under the President's Malaria Initiative, a five-year, USD
1.2 billion effort to rapidly expand malaria prevention and
treatment in seven sub-Saharan African countries. Funding
in FY07 will total USD 135 million for the seven countries.
Three countries -- Angola, Uganda, and Tanzania -- were
previously selected to launch the Initiative.

USAID Assistance

15. Democracy and Governance: The USAID Democracy and
Governance program focuses on three areas: local government,
civil society, and reconciliation. The agency supports
decentralized governance through an innovative program in
which health and governance objectives combine to ensure
local management and delivery of high quality health
services. The program is intended to demonstrate ability
for local governments to manage and fund public services.
The program is complemented by a civil society program that
will give over 400 small grants to local organizations that
provide services, income generation, or other economic
development opportunities. The agency also supports a
series of smaller projects related to reconciliation, such
as activities in women's micro-finance, women's legal
rights, land policy and law, and youth trauma therapy.

16. Specialty Coffee: In 2001 when USAID spearheaded the
specialty coffee sector in Rwanda, the country produced only
low-grade commercial quality beans for export despite coffee
being Rwanda's traditional number one export earner. Over
the past five years, USAID has invested an estimated USD 10
million in promoting and developing the Rwandan coffee
industry, building and rehabilitating coffee washing
stations, training farmers and "cuppers"(coffee tasters),
organizing cooperatives, encouraging banks to lend to
Rwandan investors to build coffee washing stations, and
improving rural infrastructure. Today, Rwandan coffee has
become known as one of the "best of the best" coffees in the
world. In 2005, Rwanda exported 1,100 tons of high quality
specialty coffee, earning top prices for the coffee growers.

These coffee revenues have resulted in better health care,
education, and housing in coffee farming communities, giving
Rwandan farmers hope for a better future. Most recently, on
March 14, Starbucks launched a promotional campaign
featuring the best of Rwandan coffee which will be seen by
an estimated 19 million customers per week in over 5,000
Starbucks retail stores throughout the U.S.

Mission Staffing

17. The Mission consists of 42 direct-hire Americans
(including 3 NEC project personnel assigned by OBO),7
American contractors, 8 Eligible Family Member positions and
185 locally engaged staff spread among State, USAID, Defense
and CDC. The post has grown by 20 percent over the past two
years, including the activation of a Marine Security Guard
Detachment, and is likely to expand further. Construction
of a new Embassy compound is under way and is scheduled for
completion in 2007.