Rwanda's Economy: An Unlikely Success Story

East Africa is a tough place to do business. Want to open shop in Kenya? Prepare for a month of paper work, surly officials and bribes. To the west, in Rwanda, it's a different story.

"Registering a business takes just a matter of hours. It no longer takes months, weeks, as it used to be," says Rwandan President Paul Kagame.

This year, Rwanda moved up seven spots on the World Economic Forum's competitiveness index to number 63 out of more than 140 countries. In recent years, it has posted average, annual GDP growth of more than 7 percent. The country's unlikely economic success can be traced back to its president.

Learning By Example

Stephen Kinzer, a former New York Times correspondent, recounts Kagame's radical experiment in his book, A Thousand Hills. He says Kagame transformed Rwanda by eliminating problems that have plagued other African economies.

"Kagame's concept was: 'If we can have a country that really works, everybody speaks English, the Internet is super fast, the airport is totally free of corruption, we can then lure to Rwanda all the companies and economic interests that are working in this entire region,' " Kinzer says.

Kagame brought in American agronomists to help boost Rwanda's low-quality coffee to super-premium grade. Famously, he also studied the strategies of East Asia's "Tiger" economies.

"We want to learn a lot from Singapore that has been very successful, that has turned a lot of challenges historically into a lot of opportunities," Kagame says. "It's about how they have invested in people, skills, technology, high-value products they have been able to put in the marketplace. So, it's our aspiration."

Tall, thin and angular, Kagame is a former rebel leader who dresses business casual and talks like a CEO. For instance, as apparel manufacturing leaves China because of rising labor costs, Kagame sees opportunity.

"I have seen some of these industries have shifted to Ethiopia," he says, "and in this case, they are producing high-end products from leather. In Rwanda, a similar situation can happen."

For all of Rwanda's recent success, most of its people are still poor subsistence farmers.

Governance In Question

Rights groups routinely blast Kagame for crushing critics at home and allegedly backing rebel forces abroad. Last week, a Human Rights Watch report said the Rwandan army is aiding a rebel group in the Democratic Republic of Congo called M23, which is accused of slaughtering civilians and raping women.

"None of these things are true," Kagame says.

Instead of blaming Rwanda, he says, people should focus on Congo's failure to control violence among its myriad rebel forces.

"Congo has very serious governance problems. It has institutions that don't function," he says.

When asked if he repudiates everything M23 is doing there, Kagame replies:

"Again, this is part of the problem. Before I even talk about repudiating anything M23 is doing, because I'm not a spokesman of M23, I even don't know why anyone would be asking me about M23. M23 is Congolese."

Kagame wraps up his second presidential term in 2017. The constitution bars him from a third. He has says he won't run again, but when pressed, he's coy.

In the long run, though, the big question for Rwanda is this: Can the country's grand experiment live on beyond the rule of its creator?

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