While we are touring Africa, let’s take a look at Rwanda. The Economist wonders: could it become “Africa’s Singapore?”
Well, the institutions are remarkably good.
Rwanda has one huge advantage: the rule of law. No African country has done more to curb corruption. Ministers have been jailed for it. Transparency International, a watchdog, reckons Rwanda is less graft-ridden than Greece or Italy … The country is blessedly free of red tape, too. It ranks 45th in the World Bank’s index of the ease of doing business, above any African nation bar South Africa and Mauritius. Registering a firm takes three days and is dirt cheap. Property rights are strengthening, as well—the government is giving peasants formal title to their land.
And yet, the human capital is not so good.
Skilled labour is scarce. Only 5.7% of the domestic workforce have a tertiary qualification. An agri-businessman says that he can trust only one of his employees with complicated duties. “Most domestically educated Rwandans have never learned how to think independently and critically,” says the Legatum Institute. “Many Rwandan businesses do not even grasp the idea of bulk discounts, and tend to charge premia for larger orders.” Rwandans admit they are not good at wheeling and dealing.
This will be an interesting test case: will good institutions be effective, or even last, without good human capital.