Models for African Revival

As the twin menaces of tribal conflict and civil war continue to engulf Rwanda, Burundi, and Zaire, long-term economic reconstruction in these countries is low on the international agenda. But when ethnic Hutu and Tutsi refugees return home eventually and again attempt peaceful coexistence, attention will have to turn to the process of establishing the physical and policy underpinnings for development.

Despite devastation and a lack of political consensus, the three countries have useful models near at hand. Neighbors Kenya, Uganda, and Tanzania have embraced stabilization and structural reform. They have integrated trade and investment, raising incomes and curtailing historical confrontation.

Zaire remains Central Africa's mineral-rich giant, whose potential has been squandered by decades of corruption and mismanagement. President Mobutu Sese Seko, its leader since independence, is believed to have amassed a multibillion-dollar fortune through diamond concessions. Fighting between government soldiers and rebels has renewed fears of hyperinflation. Prices soared more than 2,000 percent in 1994-95. Gross domestic product (GDP) has not risen for several years, and the country has been suspended since 1991 from receiving International Monetary Fund (IMF) and World Bank aid for failure to service debts.

The outlook for Burundi and Rwanda is similarly bleak. Values for key exports like bananas and coffee have slumped as ethnic massacres have decimated populations and agricultural estates. Civil servants have not been paid for months, and few major companies have maintained operations. Burundi is under an African commercial embargo to protest human rights violations.

In contrast, Uganda, which also experienced mass slaughter during the reign of Idi Amin, today records GDP expansion of 10 percent. Once a pariah, it is a favorite of the development banks and will be the first beneficiary of their just-completed debt reduction plan. Uganda's crop production has skyrocketed since former guerrilla Yoweri Museveni took power and abolished monopolies. He has also aggressively moved to privatize budget-draining state enterprises.

Kenya, as well, is enjoying an export rebound as industry restructures in the face of sudden competition from South African goods. The country showed an overall balance-of-payments surplus in 1996. Cautious fiscal and monetary stances have won praise from the IMF and World Bank.

Tanzania, which once epitomized a command-type socialist economy, has reversed course to promote free enterprise, including a stock exchange. The new president, Benjamin Mkapa, dubbed "Mr. Clean," has pledged to curb official venality. He recently forced his finance minister to resign amid controversy about the granting of tax privileges. The economy is poised for 5 percent growth and single-digit inflation in 1997.

These nations have resumed initiatives toward East African economic cooperation, which collapsed at the end of the 1970s. Common tariff charges and infrastructure and tourism ventures are priorities.

As ethnic battling and insurrection ease, Rwanda, Burundi, and Zaire can participate in these attempts at regional alignment. As a prerequisite, they must not only lay down arms but adopt principles and actions to redress the economic deterioration of the past five years. African leaders elsewhere are showing that tribal animosities can be quelled and strategies of wealth creation pursued. This difficult turnaround can come only through the policy soundness and practical modernization adopted in nearby countries.

* Gary N. Kleiman is senior partner at Kleiman International Consultants in Washington.

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