Not an Accident … It’s Policy

Rwanda is experiencing unprecedented inequality. Defenders of the status quo pretend that this inequality is something misrepresented or outside of our control … like a change of life that makes needs become more scarce due to the forces of market and demand or  forces of nature that overstretch the limited resources. They argue that it’s due to technological innovation or something else outside of policy-makers’ control.

In reality, inequality is rising due to bad policy.

Nobel prize winning economist Joe Stiglitz said:

Inequality is not inevitable. It is not … like the weather, something that just happens to us. It is not the result of the laws of nature or the laws of economics. Rather, it is something that we create, by our policies, by what we do.

Therefore RPF and Kagame created this inequality or the current job losses we are witnessing in Rwanda. Chose it, really—with [bad] laws and now many public employees are losing their jobs. Rwanda needs a change from a hostage of corrupt senior officials of RPF who masquerade as saints and angels, yet they own all the whole economy for the 12 Million Rwandans.

Gaming the System

The RPF and Kagame are praised for what they call the Rwanda economic success. While Kagame was appearing on the American TVs recently in what he calls Rwanda Day was confronted with a question of the massacres of people in Rwanda and Congo, he said that he should be asked about getting of many Rwandans out poverty not human rights. Kagame has always been deceptive on both his economic and political success; there is a big gap between Kagame’s cronies and the majority of Rwandans.

Why therefore inequality in Rwanda is soaring even though President Kagame has talked for years that Rwanda is making economic success? Because he is saying one thing but doing something very different. And Kagame and his RPF are using smoke and mirrors to hide what’s really going on.

And it’s not surprising … Nobel winner Stiglitz says that inequality is caused by the use of money to shape government policies to benefit those with money. In Rwanda those affiliated to Kagame and RPF or managing Kagame business empires are benefiting indifferent Kagame economic policies.

 

As Wikipedia notes:

A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from “grabbing a larger share of the wealth that would otherwise have been produced without their effort”

Rent seeking is often thought to be the province of societies with weak institutions and weak rule of law. Examples of rent seeking leading to inequality include;

  • the obtaining of public resources by “rent-collectors” at below market prices (such as grabbing public property, or selling public parastatal for a nominal price for the benefit of the government officials.,
  • selling services and products to the public at above market prices (RPF Products made from their own industries or renting Kagame property to the State and the government prohibits government officials  fromnegotiatingprices of similar products on the market, costing the Rwanda government billions of FRW per year),
  • securing government tolerance of monopoly power (The Kagame Lieutenants like Hatari Sekoko, and others who own the newly privatized Hotel industry and other former government corporations). In Rwanda big Public Companies were privatized to what the RPF calls privatization yet they privatize these big Companies to themselves.

One big part of the reason we have so much inequality  Rwanda is that the top 1 percent want it that way or many are coerced to take it that way .Much of today’s inequality is due to manipulation of the financial system, by the Kagame agents. For example the Kigali City Towers is sitting on the land which was a former Tax Park. Where and how did the proprietors obtain this land?

The current Century Hotel which will be or has already been sold to Marriot group of Companies was the Club Jari and where the former Rwanda television operated. The former seat of the ORINFOR (Radio Rwanda) has been acquired by what Kagame and RPF call investors. But in fact the chain of thieves in the RPF under their supreme leader Paul Kagame are in partnership with those they call investors.

The land opposite the current prison in the heart of Kigali City famously known as 1930 is owned by the Kagame- Hatari Sekoko investors. Indeed, they have constructed big shopping arcade which has taken the former government technical school. Whom did they pay for this public land?

The RPF government lends money to financial institutions like Bank of Kigali which is also owned by RPF at close to 0 percent interest and provide generous bailouts on favorable terms when all else fail.  There is no transparency in all the business RPF controlled Institutions which operate on behalf of Kagame and definitely there is a conflict of interest, and in legal terms are illegal.

RPF and Obviously Kagame believe that wealth begets power, which begets more wealth virtually all RPF officials either believe it that way or are made to believe that way. Indeed, most of them are members of the top 1 percent when they are in government. They, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office.

Former US Sectretary of Labor Robert Reich recently noted:

When so much wealth accumulates at the top, with money comes the capacity to control politics… It’s not that people are rich, it’s that they abuse their wealth … The wealthy contribute to political candidates and the access that their contributions buy entrenches inequality by securing subsidies, bailouts and policies that lead to even greater inequality.

Bloomberg reports:

“The financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy [to the banks by the public]. The result is a bloated financial sector and recurring credit gluts”.

Economics professor Randall Wray writes:

“Thieves … took over the whole economy and the political system lock, stock, and barrel”.

Economist Steve Keen says:

“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.

It is in this context that, the RPF and Kagame have let down the Rwandan people, they own all the public finances, they have abolished, scholarships for the poor Rwandans. They instead award the scholarships to themselves and their cronies, they are now laying off all the employees, yet big chunks of business have been taken by the aristocracy of Kagame.

The opening of political space and other human rights freedoms are the only solutions for the Rwandan people to have a choice of the government that will create jobs and put in place good polices that will safe guard public finances,  cater for their needs without fear or favor.

Jacqueline Umurungi