By Oleg Giberstein

Executive Summary

In 1994, one of the worst crimes against humanity of the past century took place in Rwanda with the slaughter of over 800 000 innocent people. Largely, these killings have been attributed to “tribal violence” (Jefremovas, 2002: 30) and elite rivalries (Jean, 2007: 5-6). However, it is the purpose of the African Union to demonstrate that exogenous factors are largely responsible for the events. The development of the international coffee trade and policies of the International Financial Institutions, namely the World Bank and the International Monetary Fund, influenced the odds against the Rwandan people. In the context of these events, it shall become clear how colonialism created an awful starting position for Rwanda in the first place, and how decisions related to the lives of Rwandan people were made not in Rwanda but in the cities of their former colonizers. Eventually, this cumulated in the exertion of genocide by internal forces, both motivated and created by the after-mentioned conditions. This policy brief is an appeal to reform the system of international governance in order to give the African people a stronger voice on the international stage. Only after such a step is taken, will it truly become possible to prevent catastrophes like the Rwandan genocide and stop the spread of neo-colonialism.

History, Context, and Implications for Rwanda

The first part of the following section will present how colonial forces encouraged ethnic hatred and created a situation in which Rwanda was put at a great disadvantage within the world’s economic system. In the second part, the function of the International Coffee Organization will be explained and it will be shown how little control Rwanda had over its own future. Finally, the last part deals with how the collapse of the international coffee price affected Rwandan society. In the following sections, it shall become clear how a fatal combination of “colonial history and global economic integration” caused the genocide in Rawanda (Robbins, 1999: 293). However, for a more detailed historical background, the reader should use other literary sources, such as “The Rwanda Genocide” by Christina Fisanick (2004).

The Legacy of Colonialism

The legacy of colonialism lies heavily on the shoulders of the Rwandan people. While ethnic hatred and local elites indeed played a sad role in the genocide, one has to look farther back in time in order to properly understand the motivation behind their actions. Historical evidence proves that ethnicity never played a decisive role in pre-colonial Rwandan history (Robbins, 1999: 294). Yet, using “modern scientific methods like the measurement of nose and skull size”, the colonizers established a system of “rigid ethnic classification” soon after their arrival (Uvin, 2004: 49). As the Belgian colonial minister stated, Tutsis possessed a “natural refinement of feelings” which the Europeans rarely found “among primitive people” (Jean, 2007: 4). The Hutus, on the other hand, were seen as “indicative of the inferior Negro” (Ibid. 4).

Although just one of many examples across Africa, this demonstrates how the colonizers used racist theories to enforce their strategy of ‘divide et impera’, or ‘divide and conquer’. Hatred among the ethnic groups, which were not properly separable by physical appearance, grew quickly and were even used to discourage ethnic “intermarriage[s]” (Robbins, 1999: 294). Later, colonizers introduced identitiy papers that (Uvin, 2004: 49) were helpful for the ‘Genocidaires’ in 1994 to detect Tutsi. The root of hatred is easily planted but is hard to fight.

Shortly before the colonizers ended their official ownership of Rwanda in 1962, they “began favoring the Hutu over the Tutsi […] in the name of democracy” (Ibid. 49). Thousands of Tutsi were murdered and “more than 100 000 others” fled the country (Ibid. 49). The process of constructing ethnic hatred had been finalized. The Hutu now had reason to fear the return and vengeance of the Tutsi who had fled , while the Tutsi had lost their dominant position in Rwanda and many now faced diaspora and life in refugee camps. From here on, the Rwandan genocide can be regarded as a scenario of “unusual tribal violence”,moving away from the scenario of ‘usual’ tribal violence.

Implanting and spreading ethnic hatred did not remain the only gift of the colonizers. As Rwanda does not possess any valuable resources, the colonizers discovered coffee as a way to “extract wealth from the region” (Kamola, 2005: 6). In fact, all parts of the agricultural sector were forced to “shift their activities from subsistence or food crops to export crops, such as coffee” (Robbins, 1999: 294). A situation of economic dependence on one single primary commodity was successfully introduced. In 1990, shortly before the collapse of international coffee prices, Rwanda was heavily dependent on coffee and tea exports which “brought in 85% of the nation’s foreign currency” (Kamola, 2005: 14), a prime example of dependency theory. At this stage, it also should be pointed out that soil used for coffee production had become “useless for most other crops” (Robbins, 1999: 296), and provided a situation which would prove fatal for the people of Rwanda.

The International Coffee Organization

The national and international importance of coffee is frequently underestimated. It practically “stands next to oil as the most valuable commodity” of the Southern Hemisphere and is “worth roughly U.S. $10 billion per year” (Bates, 1997: 3). It is a common occurrence that the rise and fall of the coffee price has decided the destiny of regimes and governments, ranging from Latin America to Africa. Realizing this is crucial in order to understand the relevance of the International Coffee Organization (ICO).

Founded in 1963, the ICO included virtually all coffee exporting countries and all significant importing countries, “comprising 99 percent of the world coffee market” (Kamola, 2005: 14). The main driving force behind it was an alliance of “northern firms” and “southern governments” that acted as a kind of cartel to control prices (Bates, 1997: 161). Initially, large American coffee roasters like General Foods and Procter & Gamble were in favor of the agreement as it helped them produce “more accurate profit predictions” (Kamola, 2005: 14), whereas for countries like Brazil and other big coffee exporting countries it was a way of increasing revenue (Bates, 1997: 11). Since America, as the largest coffee importer, somehow had to be convinced that higher prices for its consumers would be beneficial, the National Coffee Association came into play. This interest group, who would later play the decisive role in the breakdown of the ICO, successfully advocated to US legislators the need for such organization (Ibid. 132) . With the entrance of the United States of America, other countries of the non-communist world were, de facto, forced to join the ICO as well if they did not want to face market exclusions of all kinds (Ibid. 133). A new trade regulating organization had been created.

Ironically, while the collapse of the ICO later proved to be disastrous for Rwanda, the country was initially one of those suffering from its foundation. African countries found themselves “locked […] into small and inflexible market shares during a period” when they would have been able to expand and maybe “out-produce” some of their competitors (Kamola, 2005: 15-16). However, once again, the decisions were not made in favor or even with any regard to the African continent, and in this particular case, to Rwanda.

This also becomes evident if one considers the distribution of votes on the executive committee of the organization. Brazil, as “the largest exporter”, was given 332 votes; America, the biggest importer, had 400 votes (Ibid. 15). Rwanda, on the other hand, with revenues comprised to about 80% from coffee exports, received 6 votes (Ibid. 15). The country found itself caught in a neo-colonialist structure within the world economic system and did not have any decision making power that was essential to the everyday life of its population.

Eventually, a number of factors combined in the 1980s to finish off the International Coffee Organization which had, up to this point, been an effective institution (Bates, 1997: 25). Bates describes, how “consumer preferences” started to shift, making fixed production and export quotas an increasingly undesired system, at least from the perspective of the coffee-roasters (Ibid. 172). In addition, the European food giant Nestlé entered the American coffee market. Buying its coffee in the “nonmember markets of Eastern Europe”, the company was able to put significant pressure on its American competitors (Ibid. 173). Not surprisingly, the National Coffee Association reversed its stance and immediately started advocating the rupture of the ICO, a position which was in line with the zeitgeist of neoliberalism and the “Washington Consensus” (Ibid. 173-174). In 1989, the International Coffee Agreement, which had to be re-negotiated every 5 years according to ICO statutes, collapsed due to the pressure of the US government and the National Coffee Association which had stood behind it. While Rwanda had no voice in the process of decision making, it felt the consequences immediately as will be shown in the next section.

Impact of the Collapse of the International Coffee Organization on Rwandan Society

International coffee prices crashed dramatically within months. The impacts of this development “were felt at every level of Rwandan society” (International Panel, 1998: Internet). Evidence for this is provided by the ICO itself. Between January and December 1990, the “prices paid to growers in exporting Member countries” fell from 90.92 US cents to 47.25 US cents (ICO: Internet). The “averages of ICO indicator prices” fell from 126.69 US cents in 1989 to 45.89 US cents in 1992 (Ibid.). There had been much fluctuation in prices prior to 1989 as well, Yet, in the time between 1977 and 1989 the ICO indicator prices average had only fallen three times slightly below 100 US cents. After 1989, it remained extremely low, pending somewhere between 40 and 70 US cents, until 1994, the year when a new International Coffee Agreement was signed. The time between 1989 and 1994 was also the period in which Rwanda faced the greatest political instability which eventually peaked with the genocide.

The link becomes obvious upon examination of further data. Rwandan receipts from coffee exporting, the decisive source of income, “fell from $144 million in 1985 to $30 million in 1993” (Uvin, 2004: 53). Considering that in the same period of time Rwanda was dealing with the invasion of the Front Patriotique Rwandais (RPF) and was therefore heavily invested in its military. The country soon reached the brink of collapse. It should be noticed that before the collapse of the country, Rwanda had been enjoying the reputation as “the Switzerland of Africa” (International Panel, 1998: Internet). It was seen as a “model developing country” and even just one year prior to the genocide, the author Ford was praising its “good governance” (Uvin, 1998: 46).

The African Union does not deny that the first problems had begun before the collapse of the ICO, among them a drought in 1989 (International Panel, 1998: Internet). Nevertheless, between 1965 and 1989, Rwanda had an average GDP growth of 4.9% as well as a “record low inflation” (compared to other Sub-Saharan African countries) of just 4% (Kamola, 2005: 20). Although by no means wealthy, Rwanda should have been able to handle its internal problems and most likely it would have done so had a majority of its income not disappeared, literally, from one day to the next.

As Rwandan farmers began losing their income they desperately tried to grow food crops, but these attempts largely failed (Robbins, 1999: 296). As already mentioned, coffee crops had made the soil useless for other crops. Famine broke out across the country. Another statistic of the International Coffee Organization demonstrates the impact of this development. In 1988, Rwanda had produced a total of 678 000 bags of coffee (ICO: Internet). In 1995 this number had fallen down to 329 000 bags (Ibid.). In an attempt to improve the conditions Rwandan president Habyarimana introduced massive, debt-financed, subsidies (Kamola, 2005: 21). In order to receive further aid and loans, Rwanda needed to seek more support from the IMF and the World Bank. The consequences of this decision will be analyzed in the following section.

Failure of the International Economic System

This third part will describe how the International Financial Institutions failed to support Rwanda and how they critically worsened its situation for Rwanda. The first section will explain how governance is organized, and how the Institutions can not represent African interests. The second section will focus specifically on the negative impacts of IFI policies in Rwanda.

The Unequal Distribution of Power in the International Financial Institutions

The influence of the IMF and the World Bank on the lives of billions of people around the world is immense. Murilo, Portugal comes to the conclusion, that in terms of power, the IMF is second only to the UN Security Council (2005: 77). With these realities in mind, one cannot help but worry about the lack of accountability, modicum of transparency, and misrepresentation that characterized the International Financial Institutions (IFI). These problems resulted from a flaw in the system that places “control of the institutions in the hands of a small group of industrial countries” (Buira, 2005: 8). On the other end of this two class society of creditors and debtors lies developing countries who become “subject to policies and rules made by others” (Ibid. 8).

The empirical data provides evidence for such a claim. Despite being the second biggest continent in terms of population, African countries only hold a combined 5.7% of the total votes in the World Bank executive (Ibid. 10). The Industrial Countries hold a total of 60.8% (Ibid. 10). It is also remarkable, that since the creation of these organizations, the presidents and directors have always been Europeans and Americans (Gros, Prokopovych, 2005: 72-73). The current structure dates back to the immediate aftermath of the Second World War (Ibid. 72), yet the world has changed rendering the current institutional organization ineffective.

This is further exemplified by the organization of the IMF executive council. The board consists of 24 directors. Five countries have one director; the other countries are split into 19 constituencies, each represented by a further director. The average size of these constituencies is 11 countries (Portugal, 2005: 96), only the two African constituencies include 20 and 23 member states (IMF: Internet). Rwanda, part of the 23-state constituency, has 1051 votes; as a total, the whole group has 29 855 votes which is 1.35% of the total vote (Ibid.). Belgium, the former colonizer, and never considered a world super power, has 46 302 votes, and the United States holds a total of 16.77% of the vote (Ibid.). One can conclude that African countries, especially not Rwanda on its own, do not have any significant influence on the decisions of the IFIs. All this is based on a system of quotas and basic votes, especially the former are decisive for the number of votes per country. The quotas are assigned according to a number of complicated and opaque variables which are supposed to portray “size” and “importance” of an economy (Buira, 2005: 11). Yet, this structure is deeply flawed, biased and based on outdated information.

Consequently, countries which are most dependent on the IFIs and have an “intensive care” relationship with them have the least say (Woods, 2005: 151). The following case provides strong evidence of this neo-colonial relationship

“In Ghana, a decision by the government, approved by Parliament, to provide modest protection to local industry was quietly shelved in 2003, after the local representative of the IMF apparently objected. Interestingly, this decision complied with the rules of the World Trade Organization (WTO), but not those of the IMF.” (Gros, Prokopovych, 2005: 73)

Once again this proves the influence of the IFIs, even on a relatively prosperous nation such as Ghana. Yet, the IFI’s approach to solve problems with neoliberal Structural Adjustment Programs, as it became popular in the 80s, has had disastrous implications across Africa. Gros and Prokopovych point out how “dependent countries would have no choice but to agree to SAPs or face collapse”; at the beginning of the 90s and through no fault of it’s own, Rwanda had found itself in such state of dependency (Ibid. 20). What this meant will be presented in the next section.

How Structural Adjustment Programs of IMF and World Bank worsened the Situation in Rwanda

In it’s typical orthodoxy, IMF and World Bank identified structural economic problems as the main source of this crisis. The enforced solutions were “rigid and harsh policies” with the intent of giving Rwanda an “economic shock therapy” (International Panel: Internet). Namely, “privatization of state enterprises”, reduction of state size, various economic liberalizations and an elimination of subsidies were, as usual, the applied policies (Kamola, 2005: 16). The most fatal blow to Rwanda turned out to be the devaluation of the Rwandan Franc. Although completely opposed by the Rwandan government, this measure was pushed through by the IFIs (International Panel: Internet); the Rwandan Franc was devalued by 40% in 1990 and shortly after by another 15% (Kamola, 2005: 17).
Following this, costs for almost everything, from basic necessities like water to school fees, skyrocketed (International Panel: Internet). At the same time, since real incomes were in free fall, people could not afford to buy food. All over Rwanda, the situation was turning from bad to worse. Some indicators prove this development: inflation – which had been so low compared to other parts of Africa (as mentioned above), rose to 19.2% (Chossudovsky, Goland, 1996: Internet). Foreign debt, in 1976 at a paltry $49 million, rose to $1 billion in 1994 (Kamola, 2005: 17). Simultaneously, the education and health system more or less fell apart, child malnutrition was going up “dramatically” and the number of malaria cases increased by 21%; all of this began with the introduction of SAP measures (Robbins, 1999: 296). Tens of thousands of people, especially the young, were pushed into unemployment and left without hope or perspective (Newbury, 1998: 91). Many of these “embittered and desperate” young unemployed were recruited as Interahamwe militia members, the most dedicated killers during the genocide, (Ibid. 91). One should also keep in mind, that all of this occurred in the context of an ongoing war. World Bank and IMF constructed the SAP program as conditionality for loans, yet they excluded all “‘non-economic variables’ [like the war] from their calculations and simulations” (International Panel: Internet). Once again, neither organization proved to be flexible in their operations.

Eventually, over time and to a significant extent, Rwanda has been coerced into disaster from all sides without any possibility to make it’s voice heard. A combination of the colonial legacy, the structure of the global economic system and the Structural Adjustment Programs of the IFIs created a context in which the Rwandan genocide suddenly appears in a different light. Endogenous forces were the conductors and the triggers, but none of them would have played a comparable role had there not been the massive influence of exogenous forces. In the Rwandan genocide, neo-colonialism had raised its ugly head. Thus, the last part of this policy brief will give an account of what needs to be done to avoid such a human tragedy in the future.

Give Africa a Greater Voice; End Neocolonialism Now

In 1993, one year prior to the genocide, Riccardo Petrella, a “former European Union official”, published an article warning of the horrific power of “economic warfare” and predicting “unprecedented slaughter” in the future (Depelchin, 2005: 143-144). His forecasts came true sooner than anyone could have expected. Once again, “military, economic and political relations” between Africa and the rest of the world had brought “a great deal of poverty” to the African continent (Ibid. 143). Besides vaguely claiming that the poverty inflicted on Africa must be reveresed, the African Union has noted a number of policy changes which would have an immediate impact.
More representation, transparency and democracy are needed in the International Financial Institutions which have such a huge impact on the lives of so many Africans. The World Bank and the IMF must start admitting responsibility for “poorly conceived policies” and at the same time go beyond fighting only the “symptoms” of poverty (Gros, Prokopovych, 2005: 15, 18). The amount of failures these two organizations have produced is detestable, and it is time to start questioning their policies.
The UN Economic Commission for Africa (ECA) published the African Alternative Framework to Structural Adjustment Programs (AAF-SAP). This alternative framework has pointed out that SAPs do not fight the root causes of poverty, and at the same time the “social cost[s]” of these policies are far too high (Ibid. 32). It is about time for a flexible, individual approach which concentrates on helping the poor instead of trying to change illusionary structural problems. The ‘one-size-fits-all’ school of thinking should be reconsidered. Each problem is different and an economic situation can never be seen without the wider political and social context. Development is not just higher economic growth; it has to be seen as general improvement of the living conditions for the impoverished.

More concretely, African countries need more of a voice on the international stage. Past experiences, such as the Rwandan genocide, have proved that the international financial institutions have no incentive to protect African interests, especially if they are unable to do so themselves. . General consensus is that a “pro-poor” approach is possible and that Africa would be able to address its own problems only if were able to attain proper representation in the International Financial Institutions (Ibid. 72). Upon the foundation of the IMF, John Maynard Keynes had imagined the IMF to be an “independent international institution” (Kelkar et al., 2005: 69). Currently, it is run by the large industrial nations who, more often than not, act in accordance with their own interests before those of other countries and of pressure groups active in them.

Eventually, the system of quotas and basic votes that determines the total amount of votes in the decisive and executive committees has to change. The technical details of such a change have been continually and frequently suggested (Buira, 2005), yet the African Union has yet to see an independent commission taking on the mission of reform and change. If African countries have more votes on the executive committees as well as more directors representing them, only then will the continent have enough means to battle the neo-colonialist policies and influences of the global economic system. If this does not happen, the Rwandan genocide will prove that history does in fact repeat itself, and that this slaughter was definitley not the last of its kind.


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