12 April 2004

The 1994 genocide

Ten years ago, beginning on 7 April 1994, within a period of three months, more than one million Rwandans - the exact figure has yet to be determined - were exterminated because they were Tutsis or thought to be. Several tens of thousands of Hutus were also killed - political opponents of the regime and people who refused or might have refused to support the genocide. The population of Rwanda before the atrocities is estimated to have been about 7.5 million.

Comparisons with the genocide of the Jews and Gypsies are fully justified. Of course, there are differences: the absolute number of victims (the Nazis murdered six million Jews) and the methods used (the Nazis designed and used industrial techniques to implement the final solution).

But what occurred in Rwanda was a genocide - that is, the planned destruction of an entire community through mass murder, with the objective of preventing it from reproducing itself biologically and socially.

Policies of the multilateral financial institutions

It is crucial that we examine the role of international lenders. My contention is that the policies imposed by the international financial institutions - the Habyarimana regime’s main lenders - accelerated the process that led to genocide. In general, the negative repercussions of these policies are not taken into consideration to explain the dramatic conclusion of the Rwandan crisis. Only a handful of scholars highlight the responsibility of the Bretton Woods institutions (such as Chossudovsky, 1995, Chossudovsky and Galand, 1996). The institutions themselves reject all criticism on this score.

At the beginning of the 1980s, when the Third World debt crisis broke out, Rwanda (like its neighbour Burundi) had an extremely low level of indebtedness. Elsewhere, the World Bank and the IMF jettisoned their policy of active lending, preaching austerity instead. In Rwanda, however, they adopted a different approach, and began to lend large sums. Rwanda’s foreign debt increased twenty fold between 1976 and 1994. In 1976, it stood at 49 million dollars; by 1994, it was more than a billion dollars. Most of this growth took place after 1982. The country’s main lenders were the World Bank, the IMF and related institutions. The World Bank and the IMF played the most active role. In 2001, they held 87% of Rwanda’s foreign debt, which at the time was spread as follows: 87% owed to the multilateral institutions, 13% owed bilaterally, 0% to private creditors (source: World Bank, GDF, 2003).

The dictatorial regime in place since 1973 was a guarantee against progressive structural change. For this reason, it received the active backing of Western powers, particularly of Belgium, France and Switzerland. It was a bulwark against those states in the region that sought to protect their independence and effect progressive change (for example,neighbouring Tanzania under the progressive president, Julius Nyerere, one of the African leaders of the non-aligned movement).

Between 1980 and 1994, Rwanda received large sums in loan money; the Habyarimana dictatorship channelled a significant share of this money into its own coffers. The loans were meant to help Rwanda integrate the world economy more fully by developing its coffee, tea and tin-exporting capacities, to the detriment of crops destined for domestic consumption. This model worked until the mid-1980s, when world tin prices collapsed - soon followed by world coffee and tea prices.
When the US broke up the coffee cartel in the early 1990s, the Rwandan economy, for which coffee was the main source of hard currency, was devastated.

International loans used to prepare genocide

A few weeks before the Rwandan Patriotic Front (RPF) launched its October 1990 offensive, the Rwandan authorities signed an agreement with the IMF and the World Bank to implement a Structural Adjustment Programme (SAP).

The SAP was implemented in November 1990, one of the first measures being a 67 % devaluation of the Rwandan franc. In exchange, the IMF provided credit in the form of quick disbursing loans to enable the country to maintain the flow of imports. As a result, the country was able to redress its balance of payments. There was a meteoric rise in the price of imported goods; petrol rose by 79 %. Earnings from the sale of imported goods on the domestic market enabled the government to pay the salaries of members of the armed forces, whose ranks were growing rapidly in size. The SAP prescribed a drop in public spending; there were indeed wage freezes and dismissals in the public sector, but part of the savings were transferred over to the armed forces.

While import prices soared, in response to IMF insistence, the price at which coffee was bought from local producers was frozen. As a result, hundreds of thousands of small coffee farmers were ruined (Maton, 1994). Alongside the poorest sectors of the urban population, these destitute farmers became a permanent reservoir of recruits for the Interahamwe militia and the army.

The measures imposed by the World Bank and the IMF as part of the SAP included: increased taxes on consumption and lower business taxes; increased direct taxes on low-income households through a reduction in tax allowances for large families; and cuts in lending programmes for small farmers.

To account for the sums loaned by the World Bank and the IMF, Rwanda was authorised to present old invoices for imported goods. Thanks to this system, the regime was able to finance massive arms purchases used in the genocide. Military spending tripled between 1990 and 1992 (NDUHUNGIREHE, 1995). The World Bank and the IMF sent several delegations of experts during this period; they highlighted the positive features of Habyarimana’s austerity policies but nonetheless threatened to suspend credit unless military spending stopped increasing. The Rwandan authorities manoeuvered their way around these restrictions in order to hide rising military spending. Lorries imported for the army were put on the Transport ministry’s account; a significant share of the petrol used for militia and army vehicles was put on the Health ministry’s account; and so on.

Finally, the World Bank and the IMF suspended financing at the beginning of 1993 - neglecting, however to freeze the large sums of money held in accounts in foreign banks, which the regime used to buy arms. It can be argued that the Washington-based institutions failed in their duty to monitor the way in which loan money was used. They should have suspended credit in early 1992, when they realised that the money was being used for arms purchases. They should have alerted the UN. By continuing to provide financing until early 1993, they helped a regime that was preparing a genocide. Since 1991, human-rights organisations had been reporting and condemning the massacred that paved the way to genocide. The World Bank and the IMF systematically helped the dictatorship, since it was an ally of the USA, France and Belgium.
From 1991 onwards, reports coming in from human-rights organisations had been condemning the massacres that paved the way to genocide. The World Bank and the IMF systematically helped the dictatorship, since it was an ally of the USA, France and Belgium.

Rising social conflict

For the genocide to be perpetrated, more was required than a regime that had merely developed a blueprint and equipped itself with the necessary hardware. It was also necessary to have an impoverished population, a population that had been ’lumpenised”, prepared to do the irreparable. In Rwanda, 90 % of the population live in the countryside, 20 % of peasant families own less than half an acre. Between 1982 and 1994, there had been a process of large-scale impoverishment of the majority of the rural population while, at the same time, a tiny section of the population had grown fabulously rich.

According to Jef Maton, in 1982, the wealthiest 10% of the population took in 20% of rural revenues; in 1992, they took in 41%; in 1993, 45%; and by the beginning of 1994, 51% (Maton, 1994). The catastrophic social impact of policies dictated by the IMF and World Bank, and the fall in coffee prices on the global market (a fall linked to the policies of the Bretton Woods institutions and the USA), played a central role in the Rwandan crisis. The massive social discontent was channelled by the Habyarimana regime into implementing its plan for genocide.

The genocide’s financiers

Betwen 1990 and 1994, Rwanda’s main arms suppliers were France, Belgium, South Africa, Egypt and China. China also provided 500,000 machetes. Egypt - whose joint minister of Foreign Affairs, responsible for relations with the African continent, was none other than Boutros Boutros-Ghali - granted Rwanda a 6 million-dollar interest-free loan in 1991 to purchase arms for its infantry divisions. When the genocide got under way, France and the British firm Mil-Tec provided arms to the rampaging army via the Goma airport across the border in Zaire - violating the 11 May 1994 UN embargo on arms sales to Rwanda (Toussaint, 1996b). Once the Rwandan capital, Kigali, had been overrun by the opposition FPR, a certain number of the key leaders of the genocide were received by the French president. Rwandan leaders-in-exile set up the head office of the Banque Nationale du Rwanda in Goma, with the help of the French army. Until August 1994, the Banque disbursed funds to repay debts for previous arms purchases and to buy new arms. Private banks (Belgolaise, Générale de Banque, BNP, Dresdner Bank, among others) accepted payment orders from those responsible for the genocide and repaid those who financed the genocide.

Rwanda after the genocide

After the fall of the dictatorship in July 1994, the World Bank and the IMF demanded that the new Rwandan government limit the number of public-sector employees to 50% of the number agreed upon before the genocide. The new government complied.

Initial financial assistance provided by the USA and Belgium in late 1994 went towards repaying the Habyarimana regime’s debt arrears with the World Bank. Financial aid from the West has been barely trickling into the country since then, despite the urgent need to rebuild the country, and provide for the more than 800,000 refugees on its soil since November 1996.

According to David Woodward’s report for Oxfam, agricultural production did recover somewhat in 1996. However, it was 38% lower than usual first harvests and 28% lower than usual second harvests. Industry was taking longer to recover: only 54 out of 88 industrial concerns in operation before April 1994 had resumed activity; most were operating well below previous levels. At the end of 1995, the total value of industrial production was 47% of its 1990 levels.

A 20% wage increase in the public sector in January 1996 was the first such rise since 1981; official estimates, however, are that 80% of public-sector workers live below the poverty line. It comes as no surprise that Rwandans prefer to work in NGOs as drivers and cooks rather than in the public sector. These poverty statistics are not peculiar to the public sector: in 1996, the World Bank estimated that 85 to 95% of Rwandans lived below the threshold of absolute poverty.

It should be noted that there has been a significant increase in the number of households run by women: from 21.7% before the genocide to 29.3% now, with peaks of 40% in some districts. Their situation is particularly disturbing in view of the profound discrimination against women in such matters as inheritance, access to credit and property rights. Even before the genocide, 35% of women heads of households earned less than 5,000 Rwandan francs (17 dollars) per month; the corresponding figure for men was 22%.

In spite of a high rate of adoption of orphans (from the genocide and AIDS deaths), there are between 95,000 and 150,000 children without families.

In the education system, only 65% of children are enrolled in primary schools; and no more than 8% in secondary schools (Woodward, 1996).

In 1994, Rwanda’s foreign debt had reached nearly one billion dollars, the totality of which had been contracted by the Habyarimana regime. Ten years later, the debt had increased by about 15% and Rwanda is under structural adjustment policy since 14 years.
The debt contracted before 1994 fits the definition of “odious debt” perfectly: it follows that the new regime should have been totally exonerated from paying it off. The multilateral and bilateral creditors knew very well who they were dealing with when they lent money to Habyarimana’s regime. After the change of regime, there was not the slightest justification for transferring their claims onto the new Rwanda. Nevertheless, it was done quite shamelessly.

The new Rwandan government that came into power in 1994 tried to persuade the WB and the IMF to renounce their loans. The two institutions refused, threatening to cut off funding if Kigali persisted. They put pressure on Kigali to keep quiet about the aid they had provided to the Habyarimana regime, in exchange for new loans and a promise of future debt cancellation as part of the initiative in favour of the Heavily Indebted Poor Countries (HIPC), launched in 1996.

One can only deplore that the government should have accepted such blackmail. The consequences are pernicious: continued structural adjustment, with its disastrous social and economic consequences, and an increase in foreign debt. In complying, the government of Kigali has gained “good pupil” status in the eyes of the IMF, the WB and the Paris Club. Worse still, the Rwandan regime has become the accomplice of the USA and Great Britain whose policy is to weaken the Democratic Republic of Congo, by taking part, as of August 1998, in the military occupation of its neighbour, the DRC, and by plundering its natural resources.

Ten years after the genocide, Rwandan citizens must be freed from the burden of the debt and from the dictatorship of the Bretton Woods institutions.

Biblio :

CHOSSUDOVSKY, Michel et autres. 1995. « Rwanda, Somalie, ex Yougoslavie : conflits armés, génocide économique et responsabilités des institutions de Bretton Woods », 12 p., in Banque, FMI, OMC: ça suffit!, CADTM, Bruxelles, 1995, 182 p.

CHOSSUDOVSKY, Michel. The Global economic crisis, Department of Economic, University of Ottawa and Committee for the Cancellation of the Third World Debt (COCAD), Bruxelles, 1995, 18 p.

CHOSSUDOVSKY, Michel et GALAND Pierre, « Le Génocide de 1994, L’usage de la dette extérieure du Rwanda (1990-1994). La responsabilité des bailleurs de fonds », Ottawa et Bruxelles, 1996, http://globalresearch.ca/articles/CHO403F.html

MATON, Jef. 1994. Développement économique et social au Rwanda entre 1980 et 1993. Le dixième décile en face de l’apocalypse, Université de Gand, Faculté de Sciences économiques, 1994, 43 p.

NDUHUNGIREHE, Marie-Chantal. Les Programmes d’ajustement structurel. Spécificité et application au cas du Rwanda. Mémoire de licence, UCL, Faculté de Sciences économiques, 1995, 162 p.

TOUSSAINT, Eric. 1996. « Nouvelles révélations sur les ventes d’armes », 2 p., CADTM 19, Bruxelles, 1996.

TOUSSAINT, Eric. 1997. « Rwanda : Les créanciers du génocide », 5 p., in Politique, La Revue, Paris, avril 1997.

WOODWARD, David. 1996. The IMF, the World Bank and Economic Policy in Rwanda : Economic, Social and Political Implications, Oxfam, Oxford, 1996, 55 p.