How Rwanda is Becoming the Singapore of Africa

Africa is often viewed quite poorly on the world stage. The continent holds plenty of violent, corrupt, and unstable nations and the majority of world’s least developed countries, but Africa is big. There are 54 countries there and not all fall into the generalizations of the continent as a whole. Perhaps most notably, Rwanda. One of the easiest ways to compare countries is through their indicators and Rwanda’s are impressive. For every 100,000 residents, Rwanda has, on average, only 2.5 murders per year. As a point of comparison, that’s lower than India’s 3.2 or the United States’ 5.4. It’s even more impressive when looking at the kind of neighborhood Rwanda is in. Uganda has 11.5, Tanzania has 7, Burundi has 6, and the Democratic Republic of the Congo has 13.6 murders per 100,000. In addition, Rwanda is ranked as the 48th least corrupt country in the world. That’s not perfect, but on the continent, only Botswana, a far richer country, ranks higher. The country also has a 67 year life expectancy, tied for forth best in Africa, and only slightly below the world average. That 67 year number is believable, but what’s truly unbelievable is that 25 years ago, the average Rwandan had a life expectancy of 28 years. 25 years ago, Rwanda was in the midst of one of the most horrific genocides in history. In only 100 days, 800,000 Rwandans were murdered in the midst of this ethnic conflict. The group primarily targeted, the Tutsi, saw the loss of about 75% of its population. With time, though, the country emerged from the other end, peace prevailed, and its indicators began their steady climb upwards to where they are today. It is now the 15th fastest growing economy in the world as its government has set out a clearly defined mission—they want to become the Singapore of Africa. To understand what this means, though, you have to understand what Singapore is. It’s easy to forget that east Asia was not the highly developed, economically powerful place it is today 100 years ago. Many refer to the 1800’s as Britain’s century, the 1900’s as America’s century, and the 2000’s as Asia’s century. It’s thought that we are currently in the century where Asia will prevail and one of the countries driving that is Singapore. Singapore sits at the top of all the indicators—not just for Asia, but the world. It’s the eighth safest, third richest, third least corrupt, third longest living country in the world. 60 years ago, in 1960’s, Singapore’s economy had a size of about $700 million. Today that number is $320 billion. In the last ten years alone its GDP has doubled. It went from a definitively third-world country to a definitively first-world country in less than a lifetime. The country is intensely focused on being the business hub for Asia. Of the world’s 20 largest companies, 15 have operations in Singapore. It’s tough to look at the results of Singapore’s economic development without being impressed. They have done the nearly impossible. Some of the ways Singapore has achieved this growth, though, has met some criticism. The way Singapore is run politically has been described as, “paternalistic.” It’s not quite authoritarian, but some freedoms are lacking. One of the few indicators that Singapore does rank at the top of is the Democracy Index. It scores a 6.4 out of 10 which ranks it at 66th in the world and categorizes it as a, “flawed democracy.” The elements of this paternalism range from small things like the country’s ban on chewing gum for cleanliness purposes to big things like the limitations on freedom of speech, assembly, and the press. To this, proponents would say, “look at the results.” The country has succeeded economically based off the trade that seemingly more and more countries are embracing, “liberty for prosperity.” Rwanda has been paying attention. Paul Kagame, its president, declared that mission to turn the country into, “the Singapore of Africa,” and in many ways, it’s already well on its way. Arguing that Rwanda is authoritarian is easy. On the same democracy indicator where Singapore is categorized as a, “flawed democracy,” Rwanda earns a score of 3.4 out of 10 and the categorization of, “authoritarian.” Paul Kagame was first elected in 2003, then again in 2010, then again in 2017 with 98.8% of the vote. The US Department of State, though, described that third election as having some, “irregularities.” That also came after a constitutional amendment lifting term limits to let Kagame take power again. He is clearly well-liked and impressive. He began his career in the military, played a part in toppling the oppressive governments of Uganda, Rwanda, and the DRC, and has been described as, “perhaps the most successful general alive.” He is by all accounts a military genius and since his fighting days he has risen Rwanda from chaos into peace and prosperity but as a political leader, he himself is still oppressive. Just like Singapore, there are severe limitations on the freedom of speech, assembly, and the press. There are even accusations of Kagame supporting or arranging the assassination of his political opponents. Looking at the ends, though, there are clearly more parallels with Singapore. Singapore’s success as a business hub is can be attributed to three factors: geographic centrality, political stability, and ease of doing business. As part of Kagame’s mission, Rwanda is working to improve these same three factors. For the first factor, Singapore’s sits as a central point in the world. Within an eight hour flight one can get to the major business hubs of the middle east in the UAE and Qatar, all of India, all of east Asia’s major business hubs, and all of Australia. Meanwhile, Rwanda sits only 600 miles or 950 kilometers from the geographic center of Africa. It is about as central as you can get on the enormous continent. For both countries, though, geographic centrality means nothing unless you can actually get to them. One of Singapore’s largest companies is Singapore airlines—often considered one of the best if not the best airline in the world. Thanks to this airline, one can get from Singapore to five different continents in a matter of hours. It’s easy to underestimate the importance of having a globally competitive airline to establish a city as a business hub. It’s safe to say that other business hubs, such as Dubai and Doha, would not be as influential as they are today without their airlines. Rwanda has clearly noticed this. Their national airline, Rwandair, which is government owned, has grown from a tiny operation with a few regional jets to a significant, intercontinental airline operating brand new planes. They now fly all around Africa, to Dubai, Brussels, and London and have even announced plans to start one-stop service to both Guangzhou, China and New York. While the airline is not yet nearly at the level of some larger players on the continent like Ethiopian Airlines and South Africa Airways, it’s serving its job effectively of connecting Rwanda to the world. The second factor to Singapore’s economic success is political stability. The World Bank rates countries in terms of, “political stability and absence of violence and terrorism,” and for this, Singapore, unsurprisingly, comes up in the 99th percentile—better than almost any country in the world. This is a big reason why a CEO might choose to set up their Asian hub in Singapore over Hong Kong, for example, which only scores in the 75th percentile for political stability and is trending downwards. They want to operate in a place that they know won’t change quickly on a political level since there are inherent costs involved with a changing external environment. Rwanda sits at the 48th percentile for this political stability indicator, well in the middle of the pack. This isn’t phenomenal but, compared to the sub-Saharan average of 31, it’s doing alright. It’s a contentious issue whether elements of authoritarianism promote or impede political stability. In Rwanda’s case, with so few years under the current form of government, it’s tough to know if the country really is stable or not. Rwanda is now, by many accounts, a police state. There are random checkpoints all around the country and strict security at most buildings in Kigali, the capital. Kigali is now one of the cleanest cities in Africa, let alone the world, partially due to a ban on single-use plastics and plastic bags but also because all able-bodied members of the population are required to participate in a community cleaning day on the last Saturday of each month. According to one report, there’s even widespread unlawful detention of what are described as, “undesirables,” on the streets. The test of whether this country is truly stable or rather in a state of temporary fear-based obedience might not have yet come. Rwanda has not experienced a transition of power since 2000 and nobody really knows whether the country can continue on the right path after Kagame leaves. He himself even said that if he had not groomed a successor by 2017, “It means that I have not created capacity for a post-me Rwanda. I see this as a personal failure.” It’s now well past 2017 and Kagame is still in power with no signs of leaving. Regardless of the reasons, though, for Rwanda’s current political stability, it’s sure that businesses like it. It’s one of the top factors they look at when deciding which countries to operate in. The third factor that led to Singapore’s business success, ease of doing business, is perhaps the most important one and it’s also the one at which Rwanda most excels. This is a broad factor but it’s one that the World Banks tracks with a well known indicator—the Ease of Doing Business Index. This looks at ten factors—ease of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. Singapore ranks as number two in the world behind New Zealand and is followed up by Denmark, Hong Kong, and South Korea. Rwanda, meanwhile, scores as the 29th. This is an impressive score by itself but it is incredibly impressive when considering how the rest of the continent ranks up. Rwanda is by far the highest ranked among mainland African nations. The nearest trailing African nation is Morocco at number sixty and plenty of highly developed countries like the Netherlands, Switzerland, and Japan rank lower than Rwanda. To achieve this Rwanda has made plenty of economic and legislative reforms to foster the business-friendly environment. They’ve also been focusing on building both soft and hard infrastructure. The government, in collaboration with private investors, built an enormous $300 million convention center along with a five star Radisson Blu hotel to attract the convention market in addition to less flashy infrastructure projects building roads and airports. Overall, Rwanda is on the hunt for international investment in the country and so far, that’s paid off. In 2005, $10.5 million were invested from abroad in Rwanda. In 2017, that number was $293 million. Clearly a lot is working in Rwanda. It’s safe, clean, and growing economically. What more could a country want? Well, there are serious questions from abroad on whether Rwanda’s growth is ethical, replicable, sustainable, and even real. The way Rwanda has achieved its current stability and growth have some external observers condemning it. Appearances of Rwanda can also be deceiving. It is still one of the poorest countries in the world with the average resident earning only $750 a year. Some question whether the country should be spending so much on its airline, its infrastructure, and its capital when so many in the country are so poor. Some question whether the country is growing for its middle and upper class while leaving its rural poor behind. It’s no surprise, though, that many of the countries neighbors, curbed by violence and poverty, have pondered whether they should be replicating the ways of Kagame. External observers have given mixed answers to that question. Some believe that the the current authoritarian policies will let dissent bottle up and eventually explode. They worry that the country will erupt into violence again. Some say that the current regime is solely focused on making things seem like they’re improving through climbing up the indicators without making real, rational change. There are even some accusations that Rwandan GDP growth figures might be inflated or otherwise manipulated. It’s sure that Rwanda has been growing enormously, but is it really this much? There is no one recipe for economic growth. The fact that the United States became the superpower of the 20th century and China is becoming the superpower of the 21st century proves that more than anything. Democratic states grow and autocratic states grow—they might grow in different ways, but there are success stories on both ends of the spectrum. What external observers have so much trouble answering is the means to the end question. Should Rwanda’s growth be lauded given how it is achieved? Can you tolerate some bad in exchange for much good? In the end, Rwanda is the country of Rwandans and they are the only ones that matter with these questions. If Rwanda is truly working for all Rwandan’s, then Rwanda is working. There are a lot of, “ifs,” but if Rwanda’s growth is sustainable and if Rwanda’s politics are stable and if Rwanda’s investments pay off and if businesses pay attention to Rwanda, there is a very good chance that the country is well on it’s way to becoming the Singapore of Africa.