Posts tagged with: paul kagame

The Detroit News published a new column today by Acton president and co-founder Rev. Robert A. Sirico:

Faith and Policy: Free markets, not aid, will help poor nations best

Rev. Robert Sirico

At the recent G8 and G20 meetings in Toronto, a hue and cry was raised by nongovernmental organizations and other activists about the failure of industrialized countries to make good on promises to raise aid to the developing world.

Instead, the activists should have called for a summit of African and Asian leaders and others who are calling for expanded trade, not more dependency in the form of foreign aid.

It has not been aid, after all, that has lifted hundreds of millions of people out of poverty in China and India but the move to market-oriented reforms, freer competition and the unleashing of the creative, entrepreneurial spark in the human person. In a recent book, one of India’s former finance ministers put it this way: “We got more done for the poor by pursuing the competition agenda for a few years than we got done by pursuing a poverty agenda for decades.”

The poverty agenda ignores, for the most part, market mechanisms in favors of huge grants to government leaders, who often pocket large chunks of the aid. The market makes room for the free interactions of people pursuing their own limited economic goals, in an almost infinite number of daily interactions. The market economy, despite the superficial appearance of chaos, ends up creating a larger social or common good for the largest number of people.

When we speak of the idea of the common good, we need to also be mindful of the political and juridical institutions that are most likely to bring it about. The answer is not to be found in the “commonality of goods” but in the very institutions that the socialists worked so hard to discredit. Let me list them: private property in the means of production, stable money to serve as a means of exchange, the freedom of enterprise that allows people to start businesses, the free association of workers, the enforcement of contracts, and a vibrant trade within and among nations (with benefits that would ultimately flow to Michigan) to permit the fullest possible flowering of the division of labor.

In an interview with Der Spiegel published this month, when Rwandan President Paul Kagame was asked a question about Africans complaining of exploitation, he responded that it was the wrong question: “Why don’t we talk about how we can get on our feet on our own? We do not always want to be the victims and to serve as a battleground for foreign interests.”

The market economy moves Africa and other developing nations away from dependency and offers the hope of real growth, a growth that provides vastly improved conditions for all.

Our gifts are to be put to work for the common good, and as such our talents and our wealth need to be put into action — not reduced to a line item in some aid bureaucrat’s master plan.

Last week Rick Warren’s church hosted the fourth Saddleback Civil Forum. This time the forum focused on reconciliation, particularly on the roles of the church and the government in promoting and fostering reconciliation after crime and conflict.

The forum included special guests Paul Kagame, the president of Rwanda, and Miroslav Volf, a prominent theologian and native of Croatia.

One of the things that typically happens in the course of tyranny and genocide is that the church’s social witness is either sidelined and marginalized or simply subsumed under governmental control. President Kagame said that during the Rwandan genocide, the government and the church “were almost one and the same.” This severely hampered the church’s ability to act as a critical and mediating institution between the government and its individual citizens.

We featured the book, As We Forgive, on a past series of posts here on the PowerBlog when we asked, “What social conditions promote reconciliation?” This book is a powerful exploration of concrete cases of restorative justice at work in Rwanda after the genocide.

In a guest post on the PowerBlog, author Catherine Claire Larson described the essential role that economic institutions play in reconciliation. In describing ministries that work to promote micro-finance, Larson writes that “by creating economic opportunities where interdependence is vital, they are really creating ideal environments for reconciliation and restoration.”

The inspiration for Larson’s book, a documentary film of the same name, premiered on PBS earlier this year.

I also explored different Christian views of the government’s role in promoting restorative justice in a law review essay, “To Reform or to Abolish? Christian Perspectives on Punishment, Prison, and Restorative Justice” (PDF).

That the government has some positive role to play in promoting restorative justice rings true in a number of concrete cases. Of course the state must respect the vital role that other institutions, like the church, must play. But sometimes punishment can be a means toward restoration.

Chef Jeff, a prominent personality on the Food Network, was in Grand Rapids earlier this year to discuss how his time in prison gave him the opportunity to reflect on his life and make positive changes to promote social well-being.

“In prison, it was the first time in my life I ever read a book. The first time in my life that someone told me that I was smart. The first time someone told me I had potential,” he said.

As Chef Jeff puts it, “Prison saved my life.”

Unlike the flooded market for conventional coffee products, the specialty coffee market enjoys increasing demand along with limited supply. This means that the potential exists for developing countries to increase the quality and quantity of their coffee production to meet the demand.

Rwanda is a case in point, and shows how market pressures help to effectively and efficiently signal which and in what quantity such commodities should be produced. As Laura Fraser writes in The New York Times, “From the late 1960’s until the genocide, most of Rwanda’s coffee was sold to Rwandex, a virtual monopoly controlled by the postcolonial government, for whatever price the company would offer, so farmers had no incentive to pick out the bad cherries.”

The government monopoly stifled any incentives to innovate and improve quality, since there was no potential for increased profits. More recently, however, under the administration of President Paul Kagame, the coffee industry has been liberalized and Rwandan growers are now enjoying the increased ability to compete freely with other specialty growers around the globe.

Over the last decade, “Worldwide, overproduction of high-yielding varieties caused conventional coffee prices to bottom out, but specialty coffee prices remained relatively strong. President Kagame liberalized coffee trade, sold the government’s interest in Rwandex and began working with A.I.D. to develop specialty coffee.”

According to the International Coffee Organization, Rwanda’s production of coffee has remained relatively steady between the years 2000-2005. But with the increased competitive incentives and profit motivations, the quality of Rwandan coffee has blossomed.

Writes Fraser, “Partly because of abundant labor, which allows farmers to pick through and hand-sort cherries, the coffee that goes to market is exceptionally clean, or free of imperfect beans.”

“Geoff Watts, who oversees coffee buying for Intelligentsia Coffee and Tea Inc., a premium roaster based in Chicago, said, ‘Rwanda’s gone from zero to sixty, from a complete unknown in the specialty coffee industry to becoming the source of some of the cleanest coffees in East Africa.’”

“Five years ago, all Rwandan coffee sold at the C-grade, or lowest-quality, price. Now, demand for fully washed Rwandan coffee (about 7 percent of the crop) far exceeds supply.”

The liberalization and opening the Rwandan market to freely compete has allowed the specialty coffee industry to thrive, without artificial incentives of “fair trade.” The incentives of the market are helping reward an area that has natural resources well-fit for the production of quality coffee. Coffee exports now account for about thirty percent of Rwanda’s exports, or about $35 million.