RWANDA: Economic inequalities affecting poverty reduction efforts

Tuesday, July 31, 2007

Rwanda has progressed in education, gender equality and democratic governance, but a concentration of wealth within the top income bracket is affecting overall poverty reduction efforts, a United Nations report said.

"Soaring inequality is threatening poverty reduction and economic growth," the National Human Development Report 2007 noted, adding that Rwanda’s high growth rates have hidden large and growing inequalities between social classes, geographic regions and gender.

Titled 'Turning Vision 2020 into Reality: From Recovery to Sustainable Human Development', the report said to achieve the Millennium Development Goals (MDGs), Rwanda needs a mutually accountable partnership that links aid to national development and public spending to the MDGs.

"The report constitutes a rigorous and objective piece of research, which takes a hard look at the facts without trying to embellish them or tweak them to suit one or the other interest," Moustapha Soumare, the UN Resident Coordinator in Rwanda said.

The report, which calls for a new agenda to scale up investment and increase development assistance, was commissioned by UNDP and prepared by a group of researchers from the National University of Rwanda. Different stakeholders from government, civil society and donors participated in its preparation.

"Disparities cut across all sectors and undermine Rwanda’s progress towards the MDGs in all areas from health to education and even poverty reduction," Soumare said.

According to the report, Rwanda’s recent growth has bypassed the rural poor leading to a concentration of wealth at the top of the income distribution bracket - a situation that could lead the country to exhaust its ability to reduce poverty rates through economic growth alone.

At the same time, Rwanda has been finalising the Economic Development and Poverty Reduction Strategy.

The strategy estimates that total investment of approximately US$140 per capita per year is needed for MDG-related interventions. With the extent of poverty and the small size of the private sector, the bulk of these investments would have to come from the public sector.

"Rwanda needs to increase investments in development sectors, mainly in agriculture," James Musoni, Rwanda's Minister of Finance and Economic, planning told reporters during the 26 July launch of the report. He also expressed concerns over high population growth.

According to official statistics, life expectancy in Rwanda now stands at 51 years, partly because of efforts to reduce HIV/AIDS related deaths; while the number of people relying on agriculture is projected to drop from 90 percent to 50 percent by 2020.

"In some sectors progress has been recorded but the target is still to be met," the minister added.

Source: IRIN