How the small African country is reinventing itself 15 years after the genocide
New York, March 18, 2009 – Fifteen years after the genocide that killed an eighth of its population (1 million people in 100 days in 1994 alone), the small African nation of Rwanda remains one of the world’s poorest places: 90% of its adults are subsistence farmers, and its per-capita income is about $1 a day. But the country is now trying to reinvent itself-and conquer poverty-by embracing a new model of economic development: Build a global network of powerful friends-including CEOs from Costco, Starbucks, Google, and RealNetworks-to lure private investment, and market the brand of Rwanda. Fast Company’s Jeff Chu reports on how President Paul Kagame and other leaders are transforming the fabric of Rwanda’s economy. “Rwanda Rising” appears in the April issue of Fast Company and online at www.fastcompany.com, beginning March 18.
“Rwanda’s biggest challenge is reputational,” says economist Jean-Louis Warnholz of Oxford’s Center for the Study of African Economies. “It’s associated with war. It’s seen as so poor that people think of it as a place to do charity. The opportunities are there, but it hasn’t been taken seriously as a place to do business.”
That is starting to change, thanks to the relationships fostered by Kagame’s Presidential Advisory Council-which has never before been profiled in the Western press. Kagame (who still faces troubling questions about his involvement in the region’s ongoing conflicts) established this unpaid, business-savvy team to help market and promote the country for outside investment. Perfect example: in 2006, Costco CEO Jim Sinegal was asked by Dan Cooper, a partner in Chicago’s Fox River Financial Resources, if he would have a lunch meeting in New York with Kagame. That meeting led to a presidential stop at Costco HQ near Seattle, which led to Sinegal’s promise to visit Rwanda. Today Costco is one of the two biggest buyers of Rwandan coffee beans – about 25% of the country’s premium crop. “I knew the Rwanda story, but I wasn’t intimately involved,” Sinegal says. “It took more elbow grease to get this started up, but it has been very profitable. Good for us and good for them.”
How good? Sinegal introduced Kagame to Howard Schultz, CEO of Starbucks, now the other top buyer of the country’s coffee. “Rwanda has no oil and few minerals,” Fast Company’s Chu writes, “but it does have one abundant asset: well-placed friends.” Sinegal. Schultz. Former British Prime Minister Tony Blair. “Purpose-driven” pastor Rick Warren. RealNetworks CEO Rob Glaser. Google CEO Eric Schmidt. All are part of Rwanda’s ever-expanding network of influential supporters.
Chu reports that President Kagame’s goals are ambitious: to boost GDP sevenfold, find paying jobs for half of Rwanda’s subsistence farmers, nearly quadruple per capita income to $900, and turn his country into an African center for technology, all by 2020. Investors and donors seem thrilled at the chance to participate in the rebuilding of a country whose recovery from unimaginable tragedy is seen as inspiring. RealNetworks CEO Glaser, who has created internships at his company for Rwandans and given more than $6 million to build health centers in Rwanda, offered a typical reaction: “If we can make this place a beacon of hope – a place where just 15 years ago, an eighth of the country was murdered in the most brutal way possible – then that hope should be possible anywhere.”
One of those beacons of hope-and an example of how local ingenuity can lift people out of poverty-is Marta Mukakalisa, 30, who supports her four children and an orphan while her husband is off in the army. She has singlehandedly built a small dairy-distribution business, and now earns twice the government’s goal for per-capita income. Mukakalisa embodies the entrepreneurial spirit and daring that developing countries will need more of to compete in the global economy. She told Chu that she plans “to make a lot of money.” Why will she succeed where her neighbors haven’t? “Some people here, they’re reluctant to take risks,” she says. “I like to take risks.”