VZCZCXYZ0000
OO RUEHWEB

DE RUEHLGB #0242/01 0721926
ZNR UUUUU ZZH
O 131926Z MAR 06
FM AMEMBASSY KIGALI
TO SECSTATE WASHDC IMMEDIATE 2516

UNCLAS KIGALI 000242 
 
SIPDIS 
 
DEPT FOR AF/C, AF/RSA, EB/TPP, AND DRL 
DEPT ALSO FOR AF/EPS FOR MNORMAN, CTRIMBLE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PHUM XA RW
SUBJECT: RWANDA REPORT FOR 2006 PRESIDENT'S REPORT ON 
AGOA 
 
REF: STATE 026707 
 
¶1.  Per reftel, information below provides a summary of each 
of the requested areas. 
 
Market Economy/Economic Reform/Trade Barriers 
--------------------------------------------- 
 
¶2.  Economic Situation:  Rwanda's economy remains largely 
dependent upon foreign aid, while its population remains 
overwhelmingly rural with over 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 relatively low corruption rate 
compared to neighboring countries.  The government has also 
made progress on privatization.  In 1996, there were a total 
of 91 parastatal enterprises; 51 of those enterprises were 
privatized by the end of 2004, including the state-owned 
telecommunications monopoly (Rwandatel), two banks (BACAR 
and the Commercial Bank of Rwanda), and one tea plantation 
(Pfunda) in 2004.  Privatization of the telecommunications 
and banking sectors have been completed, and Electrogaz is 
scheduled to be privatized in FY 2008.  IMF assessed 
Rwanda's Poverty Reduction Growth Facility (PRGF) programs 
to be on track, and Rwanda has reached the Highly Indebted 
Poor Country (HIPC) completion point and significantly 
reduced its overall debt. 
 
¶3.  Trade Liberalization:  There are no significant trade 
barriers that affect the importation of goods and services 
to Rwanda, and the government is continuing further 
liberalization.  The government is also emphasizing the 
importance of promoting private investment, particularly 
foreign, as an engine of economic development.  The GOR has 
implemented several initiatives to increase investment and 
exports.  The Rwandan Investment and Export Promotion Agency 
(RIEPA) has developed information materials, organized trade 
fairs domestically and abroad, and established assistance 
offices in Rwanda to encourage and assist investors. 
 
Political Pluralism/Rule of Law/Anti-Corruption 
--------------------------------------------- -- 
 
¶4.  Political Pluralism:  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 elections 
at the cell, sector, and district levels, with the Kigali 
City election held on March 4.  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 non-RPF participation in the political process was 
limited, with relatively few non-RPF candidates, which 
raised questions about possible political influence in the 
selection of candidates. 
 
¶5.  Rule of Law:  While the Rwandan judiciary continues to 
face significant challenges in the aftermath of the 1994 
genocide which virtually destroyed its institutional 
capacity, it 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 10 months 
due to substantial reforms, including the 
dismissal/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 begin operation at the end of 
March. 
 
¶6.  Anti-Corruption:  The extent of corruption in Rwanda is 
limited due, in part, to the government's active efforts to 
combat it.  In 2003, it established the Ombudsman's Office 
 
to investigate corruption within government, focus on 
corruption prevention, and review financial disclosure 
reports of senior government officials to ensure 
transparency and accountability.  The Inspector General of 
the Supreme Court is charged with investigating judicial 
corruption, while the Superior Councils of the Judiciary and 
of the Prosecution serve as disciplinary bodies.  In 
addition, the GOR has provided training to the National 
Police to improve professionalism and to promote respect for 
rule of law.  The Senate summons high-level government 
officials, including ministers, to ad hoc public hearings to 
probe government action in response to topical reports.  An 
independent Auditor General, who reports directly to the 
Parliament, issues annual audit reports, and the Accountant 
General for the Executive oversees the financial aspects of 
the executive branch. 
 
Poverty Reduction 
----------------- 
 
¶7.  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.  An education cluster headed by the 
Ministry of Education and DFID conducts an annual joint 
review of the education sector with all stakeholders to 
assess progress and to identify areas for improvement. 
 
¶8.  The GOR is attempting to improve access to health care 
through greater decentralization to ensure adequate health 
services at the local level.  It has been encouraging 
citizens to pool resources and to join mutual health 
insurance schemes, supported by donors.  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, such as 
carpentry and tailoring, to promote self-reliance through 
development of income-generating skills. 
 
¶9.  Rwanda has a Poverty Reduction Strategy Paper tied to 
its participation in the HIPC debt relief initiative. 
Rwanda met HIPC requirements in 2005, 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. 
 
Human Rights/Labor/Child Labor 
------------------------------ 
 
¶10.  Human Rights:  Widespread poverty and the destruction 
of the country's socio-economic fabric, human resource base, 
institutional capacity, and economic and social 
infrastructure during the 1994 genocide continued to have an 
adverse impact on the country's human rights situation. 
There were instances when the government committed serious 
abuses, but there were some improvements during the year. 
There were restrictions on political activities and freedoms 
but, unlike in the previous year, there were no reports of 
politically motivated disappearances, and fewer reports of 
police abusing suspects and the government arbitrarily 
arresting members of civil society groups and opposition 
politicians. 
 
¶11.  Labor:  Rwandan law provides all salaried workers, 
including some civil servants, with the right to form and 
join labor unions without prior authorization, and workers 
exercised this right in practice.  There were no 
restrictions on the right of association for non-civil 
servants.  While all unions must register with the Ministry 
of Labor for official recognition, there were no reports of 
the government denying recognition.  The law, however, 
prohibits unions from having political affiliations and from 
publicly expressing political opinions.  The law also 
provides for collective bargaining, but this right was 
severely limited in practice.  In November 2005, the GOR 
created a National Labor Council with equal representation 
of government, private sector management, and labor unions. 
Rwanda has ratified ILO Conventions 29 and 105 on 
prohibitions on forced and compulsory labor. 
 
¶12.  Child Labor:  Except for subsistence agricultural 
workers, who account for approximately 90 percent of the 
workforce, the law prohibits children under the age of 16 
from working outside of the household without their parents' 
or guardians' permission and prohibits children under 16 
 
from participating in night work or any work deemed 
hazardous or difficult, as determined by the Minister of 
Labor.  However, child labor was prevalent in the 
agricultural sector.  The minimum age for full-time 
employment is 18 years, and 14 years for apprenticeships, 
provided that the child has completed primary school. 
According to a 2003 UN report, 31 percent of children 
between the ages of 5 and 14 engaged in child labor, and 
during the year children headed 106,000 households.  Rwanda 
has ratified ILO Conventions 138 and 182 on the minimum age 
for employment and the worst forms of child labor.  The 
Government is currently supporting projects to combat child 
prostitution and child labor in quarries, mines, and tea and 
coffee plantations. 
 
ARIETTI