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Lessons on Rwanda and Senegal From the IMF

02/02/2015 12:26 EST | Updated 04/04/2015 05:59 EDT
Pier Marco Tacca via Getty Images
MILAN, ITALY - DECEMBER 09: Christine Lagarde, managing director of International Monetary Fund (IMF) attends the Bocconi University's opening of the 2014/2015 academic year on December 9, 2014 in Milan, Italy. (Photo by Pier Marco Tacca/Getty Images)

The International Monetary Fund (IMF) is a powerful institution. It may be likened to global police that keeps member countries under "surveillance" for identifying and countering weaknesses that may cause economic or financial instability. The surveillance involves ongoing consultations with ministries of finance and central bank officials of member countries; in more recent years the views of parliamentarians, business leaders, and civil society are also actively sought.

And so a country visit by the IMF's Managing Director is an important occasion, especially for developing countries which need the agency's approval for securing development assistance from donor states.

The visit to Rwanda and Senegal by the IMF's Managing Director, Christine Lagarde, between January 26-30, therefore, offers useful insights. From official statements made in the respective states, we draw Lagarde's and IMF's views on the two countries' political economy. In so doing, it becomes evident that Senegal and Rwanda are as different as night and day -- which Lagarde freely acknowledges.

In her speech in Senegalese parliament on January 30, 2015, Lagarde described Senegal as follows: "Your democracy has been a model for Africa, as exemplified by the diversity of this Parliament. You are recognized for your education system, dynamic civil society, and strong civil service."

Senegal has, of course, distinguished itself in building democratic governance institutions since independence in 1960. The first president, Léopold Sédar Senghor, was succeeded by Abdou Diouf. Diouf was later defeated by Abdoulaye Wade, the third president, in an election that also marked a successful and peaceful transfer of power from one political party to another. The current and fourth president is Macky Sall triumphed over the incumbent, in elections in which power changed hands among political parties for the second time. This, after Wade tried to hang on to power in 2012, with people power embedded in a strong civil society taking over the streets to guard and save Senegalese democracy. So Lagarde is absolutely right -- Senegal is a model of democracy and dynamic civil society proven by a 55-year legacy since independence.

In Rwanda, Lagarde steered clear of such topics as democracy, civil service, and civil society. The closest she came to the matter in her speech of January 27, 2015, in Rwandan parliament is: "This parliament is a case in point -- more than 60 per cent of you are women. This is the world's highest and more than double the average for parliaments in other countries."

In an iron-fisted dictatorship, even the Managing Director of the International Monetary Fund would think twice about talking about democracy and civil society. Post-independence politics in Rwanda shows the reverse of Senegal. The current president, Paul Kagame, keeps his predecessor, Pasteur Bizimungu, in virtual house arrest after imprisoning him for establishing a political party. Before Bizimungu was President Juvénal Habyarimana, shot down by a missile as his aircraft was landing in Kigali, the Rwandan capital. Habyarimana had starved his predecessor, Grégoire Kayibanda, to death.

On the economic front, Senegal is a middle-income country of 14 million with a GDP of USD$14.7 billion and per capita of USD$1,046.6. Rwanda is low-income, 12-million inhabitants, GDP of USD$7.5 billion, and per capita of USD$639. But Lagarde was not happy with either as far as economic performance is concerned and provides each with suggestions of how undertake deeper reforms for growth and development. In her Senegal speech, she indicates what she considers successful countries in Africa to emulated, which are, in Lagarde's own words, "African lions such as Cape Verde, Mauritius, and Uganda."

Paul Kagame will be most disappointed by the exclusion of Rwanda from Africa's "economic lions." He seizes every opportunity to proclaim his low income nation of USD$639 per capita an African economic lion, for example in his article "Rwanda and the New Lions of Africa" in the Wall Street Journal of May 19, 2013.

Beyond Lagarde's speeches in Senegal and Rwanda, we can draw another another lesson by the IMF's attitude towards the two countries. IMF's surveillance requires Senegal to report quarterly on the country's financial and economic state while Rwanda is obliged to report bi-weekly. This indicates IMF's institutional confidence for Senegal and lack of it in the case of Rwanda.

Lagarde's visits also illustrate how the IMF itself has changed by shaking off the political stigma related its past engagement with member countries. This negative image mainly stemmed from the IMF's neglect of civil society's views in the crises of the 1980s and 1990s. The IMF's reputation in Africa remains tarnished due to its recommendations on deep budget cuts and privatization of state enterprises that threw so many in unemployment ranks.

In her Senegal and Rwanda visits, we see a different IMF, striving to reach out to a broader community beyond just the executive branch of government in an effort to improve its reputation. The activism of Lagarde is also refreshing. Prior to her visit to Rwanda and Senegal, Lagarde has previously visited Côte d'Ivoire, Kenya, Mali, Malawi, Mauritius, Mozambique, Niger, Nigeria, and South Africa.

But most of all to hear the IMF's boss praising democracy and dynamic civil society is truly amazing -- indeed gone are the days when the Fund's religion seemed to be "win first the kingdom of economics, money will flow, and the rest, including politics, will be a given."

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