Is Paul Kagame’s Leadership Enough?

Just 15 years after the Rwandan Genocide, which left an estimated 800,000 dead, the social fiber of the country torn and the world skeptical that the Rwandan Patriotic Front (RFP) guerilla army that stopped the genocide could begin to govern, Rwanda has seen a complete transformation. It is now called the “Switzerland of Africa”. Much of this transformation owes its thanks to Paul Kagame, the former RFP commander who assumed office in 2000 and became the first
democratically elected leader of the country a few years later.

Recognizing his country’s geographical disadvantage, land-locked and surrounded by other poor countries, Kagame has opted to make Rwanda the service hub of the region, what he calls, the “Knowledge Center”. Broadband Internet is widespread in urban areas and there have been major investments in capacitating the local population. This is where Kagame admits that foreign support does more than simply patronize and debilitate African people. He welcomes technical support and business training programs what would strengthen the locally based business sector. Of course, this is not to say that he’s shied away from foreign direct investment.

He has even made his appreciation of Chinese investment clear. A recent This is Africa report cites Kagame as saying “What questions should China, or any country in the West be asking [when they invest]? The number one question they should be asking is: does it bring good returns for the investments that they are making? Now, if there are issues about governance and politics, they are free to ask these questions. But tying everything to these questions that have been asked for the last 50 years I think borders on, or even goes beyond, hypocrisy and double standards.” According to the World Bank’s 2010 “Doing Business” report, a publication tracking private sector regulation, Rwanda has lowered more barriers to investment than any other country.

Kagame’s unique efforts in a region of notoriously egregious leaders seem to have paid off. The “Doing Business” report also moved Rwanda from 143rd place in 2009 to 67th in 2010, making Rwanda the “World’s Top Reformer”. Indeed, Rwanda is a veritable success story. It experienced impressive growth rates (GDP per capita has tripled since the genocide despite overall population growth). Furthermore, Rwanda has strengthened environmental protections (plastic bags are against the law), and now has more women in parliament than anywhere in the world.

Perhaps most astonishing to a global community helpless in the face of the genocide and without post-conflict solutions, Kagame has found a successful resolution. By presidential decree the Rwandan people have undertaken thousands of reconciliation gacaca trials meant to reward confession, and suddenly murderers are living alongside their victims in a careful balance he holds in his hands. A combination of forcing cohabitation, addressing publically the issues of genocide, and giving wide economic and political strength to the Tutsi victims (Kagame is himself a Tutsi) have gone a long way to reconciling hatred, or at least holding it in check. Whether this ethic balance will last remains a concern, but as new generations are born the history moves farther into the past.

Though clearly a darling of the West, it will remain to be seen whether or not his charismatic and largely successful leadership will win him re-election in August. Kagame has been criticized for resisting opposition and maintaining perhaps an overly- authoritarian rule. This has led Victore Ingabire, a Hutu who was abroad during the genocide, to return to Rwanda in December 2009 and begin his candidacy against Kagame. Other opposition parties are also considering joining forces against Kagame and violence is on the rise.

In late February there were three unclaimed grenade attacks in Kigali injuring 30 and killing at least one person.

Despite unequivocal improvements and impressive leadership the future of Rwanda is uncertain. Whether chronic poverty, disruptive neighborly relations with Congo and ethnic tensions so recently slackened and an upcoming election will ignite another downward cycle rests on Kagame’s leadership. It appears that Paul Kagame is an example of African leadership at its best. But will this be enough for Rwanda?

By Sierra Visher

Food Security: Agro-Imperialism?

In a recent NY Times article, Andrew Rice digs in to a meaty issue: agro-imperialism. He tells us about American Botanist Robert Zeigler who flies to Saudi Arabia to lend his expertise regarding food security to come face to face with the intense reality that the problem is being confronted by some countries with aggressive "land grabs", or "purchases", or "investments", depending on how you see the issue. The fact that countries like Saudi Arabia are increasing their holdings in other countries for food production highlights the deep fear food insecurity poses and perhaps the beginning of a land rush.

The buying or leasing of land at crazy low prices on the one hand seems unfair. It doesn’t belong to them! Its exploitative of a poor country! But its also creating jobs, that pay a whole 75 cents a day. And it wasn’t being used before (if you close your eyes tight enough, you might not see all the people that live there). In Ethiopia every farmer leases land from the government, including, quite legally, the Saudis. Given this, and the fact that despite action to the contrary, development organizations and local governments have been saying for years that Africa needs agricultural investment, is it really a "land grab"? Rice asks us "Is there such a thing as agro-imperialism?"

Well, in Ethiopia, 10 percent of the population suffer from food shortages, so to me, it does seem a bit disgusting to be leasing land to foreign governments. Rice makes an excellent point when he says "it looks bad politically for countries like Kenya and Ethiopia to be letting foreign investors use their land at a time when their people face the specter of mass starvation". The countries leasing the land justify their argument, claiming they are doing it legally, creating jobs, exploiting the land more efficiently. These arguments are all too familiar. Remember the last time foreign countries came to Africa to use the land better? Heck- they managed to find rubber, oil and diamonds! And think of all the "jobs" that were produced!

Rice doesn’t go so far, but for me despite my inability to really pick apart the problem with the whole thing, just feel that its wrong. I’d love to be more specific but I can’t even figure out if food security is a production problem or a distribution problem. I’m hoping to learn more at IPSA’s upcoming Spring Conference on food security.

In the meantime, I’d love to hear your thoughts. Is there such a thing as agro-imperialism?

The Kiva Controversy

To respond to Karen Phillips earlier post about the questions raised by a recent New York Times Article on Kiva.org, I have a few quick points. First, Kiva has held transparency as a core belief since its inception. For instance, the information regarding Kiva’s MFI partners has been accessible on every borrowers profile including background information on the MFI and key statistics. Some lenders even search for borrowers based on the MFI the money goes though because they feel a connection or trust in that particular MFI. Also, since this latest “Kiva Controversy”, Kiva has reworked their webpage to make it even more transparent. I encourage readers to watch the video by a Kiva Fellow, Kieran Ball now posted on Kiva’s How It Works Page and to read Co-Founder and CEO Matt Flannery’s response to the article. For information about how Kiva’s model works on the ground, the Kiva Fellows Blog is a wonderful resource.

I disagree that the “person-to-person” connection is gone. And I doubt that this will discourage the thousands of active and inspired Kiva lenders. I don’t think that this controversy will effect people’s desire to connect to borrowers and lend a helping hand to them, and the Microfinance Institution that serves them. At least I hope not. While the article is correct to push Kiva towards even greater transparency, I am saddened by the fact that the NY Times Article may mislead readers into thinking that the borrowers don’t get the money.

The loans that Kiva provides allows their MFI Partners to reach people that in many cases they wouldn’t be able to without Kiva funds. Though it may take a more circuitous route than many borrowers assumed despite the information on Kiva’s website, the borrowers get the money. I have seen first hand the effects of Kiva loans, the Kiva loan disbursement process, the loan application process and the way that loans are repayed. MFIs see Kiva’s funding as crucial to the success of their borrowers and while they often disburse the loan before it is funded, without the effective “repayment” by Kiva, they couldn’t have made that loan. 100% of each loan goes to the borrower who are touched when they learn that an individual on the other side of the world has lent to them. I am touched when I receive news from other Kiva Fellows, or from the MFIs themselves about the people I have lent to.

I’m surprised that it comes as a shock to many that the money lenders send to their chosen borrower is administered through an MFI. Of course the borrowers in rural Mexico, or slums of Kampala don’t have paypal accounts! And I’m surprised that it comes as a shock that many MFI’s disburse the money before the loan is fully funded on the Kiva website. One of the main needs of microborrowers is flexible products and fast loan processes. If each borrower had to wait a month for their loan to both fund on the Kiva website, and for Kiva to wire that money (there is a cost to wiring money, so it isn’t done for every twenty-five dollar transaction but rather in a monthly lump sum) then one of the main purposes of the loan- patching in times of low cash flow, or jumping on a business opportunity, would be lost. And in cases where the borrower could be serviced by multiple MFIs, the MFI that Kiva partners with may lose their competitive advantage as borrowers seek faster loans from a competitor.

Despite my wholehearted defense of Kiva, I think its wonderful that the article draws attention to the complexity of micro-finance and key transparency issues that Kiva could address.

By Sierra Visher

Thoughts from IPSA Event: Exposing the Green Revolution

Last Thursday I sat with other IPSA members, NYU students, and food-loving, granola-crunching community activists (no judgment here, I unabashedly ate home-made granola in lecture while wearing
Birkenstocks last week) and listened to three panelists discuss the Green Revolution and its myths. All three panelists landed hard on the conclusion that genetically modified food and seeds are bad. That community involvement is good. That sustainability is key. And that the Green Revolution isn’t as much revolution as it is a mis-guided prescription by the developing world.

Useful lessons to be sure. And listening to Karen Washington, a NY City activist working on community gardens, is like adding a spoon-full of sugar- it really goes down. I almost raised my fist, “Yes! I am with you! Bring me back to my roots!”

Seems clear to me now that the Green Revolution may have increased overall food produced (did it really?) but it did not address the real problems of food in the developing world – namely access to markets, stability and distribution. While sold on the problem, I was left wondering about solutions.

Besides, what Josphat Ngonyo calls “education” and what Karen Washington called “enlightenment”, I’d love to hear other suggestions about how to get farmers to adopt more sustainable practices when they are either a) already stuck in a cycle necessitating GMO seeds or b) tempted by the amount of money they can earn by pulling away from sustainable practices that may increase biodiversity, sustainability but not necessarily the income of that farmer.

And most importantly, how could a world-wide, organized civil society movement of the magnitude the panelists suggested we need, be started? Easy.

I’ll give you this image. Me, granola in hand, sitting with a bunch of Kenyan farming women and telling them that the way they used to farm since the beginning of time, and maybe even forgot, is actually right, and how about we join hands across the ocean and push our governments for change? Aren’t I a clever development practitioner?

By: Sierra Visher

[end]

Microfinance and the Financial Crisis

With remittances dropping, commodity prices remaining high, unemployment rising everywhere and credit drying up, how does microfinance fare? The MFIs? The borrowers?

The general consensus seems to be that microfinance has withstood the financial crisis better than most financial institutions. Muhammad Yunus, characteristically thinks that microfinance is doing fine and that the crisis is a real opportunity to restructure financial access. Love that guy’s optimism.

Still, MFIs have been hit. Foreign exchange risk poses a real problem in that managers have to worry about repaying higher interest rates to international lenders (from whom they get most of their money) with their local currency, which has decreased in value. CGAP reports that one Latin MFI reported a loss of 75 percent of net income in a single year from foreign exchange losses. MFIs always have to bear the risk of currency fluctuations, but these fluctuations combined with decreased liquidity from international sources has led to unpredictability on a new scale. I’m left wondering what the long term effects on their clients will be.

In a recent survey by CGAP, 65% of MFIs responded that their loan portfolios are either flat or have decreased in the last 6 months, this must result in fewer hires and perhaps decreased services or increased interest rates in an attempt to pass cost along to their clients.

Clients who are already suffering the effects of the global crisis. For the poor, small changes in their portfolio can result in painful shortages, particularly as food costs remain high. These problems are likely to be exacerbated by a dramatic drop in remittances, which the World Bank estimates will drop by 7-10 percent in 2009. This will surely affect ability to cover day-to-day expenses as well as their ability to repay existing or future loans. However, despite this belt-tightening, many micro businesses are highly resilient and run operations that can quickly change shape and function. As a Kiva Fellow in Bolivia I met one woman who owned a sewing machine and normally made traditional skirts for sale out of her home. When I visited her, I was surprised to see her out front making candles. When asked about her sewing business she told me flatly that there is a crisis (am I an idiot who didn’t realize?) and people aren’t buying clothes. But, everyone still goes to church where they’ll buy candles, and with increased electrical costs, she thinks more people will use candles for light. After a quick analysis of her sales, she completely closed shop and reopened an unrelated business in less than 2 days. We are unlikely to see this degree of flexibility from larger businesses.

Seems that some lessons can be drawn from the microfinance sector. Both for businesses that should learn to be somewhat more flexible, and to financial institutions who may wish to do what most MFI’s have sought from the beginning- to provide personal services to the benefit of their customers rather than the bottom line.

For those interested in more information about the credit crisis and microfinance, CGAP issued a helpful report in May: http://www.cgap.org/p/site/c/template.rc/1.9.34453/

*By Sierra Visher

Sticking in Bolivia- Blog Post

Working as a Kiva Fellow in Honduras and Bolivia led to many adventures for me over the past year. Before I left, I knew I´d be exposed to the surprising ins and outs of microfinance (Kiva uses the internet to connect lenders and borrowers across the world, I would be facilitating that interaction). I did not, however expect the experience to lead down so many unique roads.

I´m travelling now in Northern Peru, post Kiva Fellowship, and on my long bus rides and often quiet nights I´ve been remembering some of the moments. Most of the time, I was face to face with the dynamic, colorful and crushing poverty of two nations as alike in their optimism as they were different in their culture. I´ll forever be moved by images of children with severe iron deficiencies holding the hem of mom´s skirt who used her micro loan to sell jello to school children for less than 3 pennies a cup in a desperate effort to squeak out a living in her home clinging to Tegucigalpan hillsides. Still other moments make me laugh. One in particular caught me off guard on a taxi ride this morning, winding up a dirt road above lost hot springs in a tiny ¨town¨ called Llanguat.

I was riding with my roommate from Coroico to La Paz in the back of a minibus, jaw dropped at the Lord of the Rings- like scenery, when suddenly a cool sensation spreads under my knee. Looking down I realized that in our rapid altitude climb, the wine bottle of honey held by my neighbor had spontaneously exploded! Honey sticking, spreading and oozing across the seats covered my lap, stuck to my fingers and quickly to my hair, the wall, my shoes everything. Everyone starts passing back pathetic little scraps of tissue we tried to use to scoop up several liters of honey. Though my drinking water is always of very high value, I handed over my aligner, here use this. To my surprise, it turns out she was completely unconcerned with the mess is trying to salvage as much honey as possible!! Quickly she dumps the water out the window and starts pouring the remaining honey into my bottle. Thanks so much for this gift she tells me. I didn´t quite get it that she thought I had given her the bottle and thought I´d leave the matter until we arrived back in La Paz.

We get there and I´m trying to tell her, please I need my bottle back, what can we do? I´m thinking, buy another little bottle but she thinks, oh I´ll just buy this one. I cringe when I tell her it is 89 Bolivianos or 12 dollars. A sum she simply cannot fathom for a simple water bottle. I suddenly realize that I´ve come from very far away. Hopefully the honey can stick us together.

This was written by Sierra Visher
More articles about her fellowship can be found at www.svisher.wordpress.com