Rwanda is a small landlocked country located in east-central Africa with a population of about 11 million inhabitants. Its two major ethnic groups—the minority Tutsi and the majority Hutu—had been clashing with each other since before the Belgians took control of the country after World War I. (The country became independent from Belgium in 1962.) The constant social and ethnic tensions ended in a genocide that took the lives of some 800,000 people—mainly Tutsi.
.. the recovery was quite fast and solid, with GDP growing at 35 percent in 1995. It has managed to sustain high growth rates ever since, not even losing steam in the last decade. The economy grew an average 6.6 percent per year from 1994 to 2010, substantially higher than the sub-Saharan African average. In 2001 Rwandan inhabitants lived on an average of 50 cents a day; today this figure has risen to $1.50 a day. Recent poverty and welfare indicators—taken from the Third Household Living Conditions Survey—are also encouraging ..
.. Rwanda had been able to achieve three key goals: rapid growth, sharp poverty reduction, and reduced inequality.
The economic growth in Rwanda has been primarily driven by liberalization in the agricultural sector—mainly coffee and tea, the country’s main exports. These reforms allowed producers to greatly benefit from an export boom, increasing incomes and boosting productivity through capital investments. Dynamic tourism and industrial sectors—mining and construction—have also contributed to the recent economic success.
The country still has severe problems, some of which are common to other low-income economies. These mainly consist of high rates of malaria and AIDS, lack of access to safe drinking water and electricity, and a strong dependence on subsistence agriculture, a sector that employs about 70 percent of the labor force.
Furthermore, the Rwandan economy suffers from a number of vulnerabilities that may hinder its growth. First, the country depends excessively on foreign aid ..