Economic Causes Notes

Economic Causes

1. Population pressure
   1. Rwanda was one of the world’s smallest and most densely populated countries, with around 5 million people by 1978.
   2. The population density was about 800 inhabitants per square kilometre of arable land.
   3. This caused intense pressure on limited fertile farmland.
2. Dependence on coffee
   1. Rwanda’s economy heavily depended on coffee, which made up about 75% of exports.
   2. Unsustainable farming practices, lack of crop diversity, and declining yields made Rwanda vulnerable to global coffee price fluctuations, especially after prices collapsed in 1989.
3. Global coffee crisis (1989)
   1. The collapse in prices was mainly due to oversupply in the international market, especially from Brazil and Vietnam.
   2. It was worsened by falling demand in developed countries.
   3. This global glut caused a sharp decline in coffee prices, severely affecting countries reliant on exports, including Rwanda.
4. Impact on Rwanda’s income
   1. Since coffee accounted for 75% of export earnings, the price collapse drastically reduced foreign exchange revenues.
   2. This caused a significant drop in national income.
5. Weakening of government capacity
   1. The loss of revenue weakened Rwanda’s balance of payments and limited the government’s ability to fund imports and development programs.
   2. With reduced earnings, GDP growth slowed, worsening poverty and unemployment, especially among rural farmers reliant on coffee.
6. Social and political effects
   1. The economic shock increased competition for dwindling resources, particularly fertile land.
   2. It exposed Rwanda’s vulnerability from over-reliance on a single export and lack of diversification.
   3. These pressures intensified social tensions and contributed to political instability in the early 1990s.

1. Hutu farmers and poverty
   1. Most Rwandans lived in poverty, but Hutu farmers were disproportionately affected because of their social and economic position.
   2. The majority of the population were Hutu, mainly subsistence farmers who relied on small plots of land for survival.
2. Population growth and land scarcity
   1. By the late 1980s, rapid population growth put increasing pressure on already limited arable land.
   2. Rwanda had an annual population growth rate of 3%, with six children per woman and a life expectancy in the low 50s.
   3. Land was often divided equally among sons on inheritance, making plots smaller and less viable over generations.
   4. This worsened poverty and insecurity among Hutu farmers, who lacked resources or political power to improve their livelihoods.
3. Economic inequality and perceptions of Tutsi elites
   1. Tutsi elites were often perceived as controlling larger land holdings, business opportunities, or government positions.
   2. This gave them relative economic advantages compared to impoverished Hutu farmers.
   3. Combined with economic stagnation and falling coffee prices, this perception made many Hutu vulnerable to political messages promising protection and power, fueling ethnic tensions.
4. Corruption and failed governance
   1. Both the First Republic (Kayibanda) and the Second Republic (Habyarimana) were marked by widespread corruption that undermined governance and economic development.
   2. Habyarimana cultivated a public image of modesty and religious devotion, but his inner circle accumulated wealth and privilege.
   3. Elite enrichment took place amid persistent economic challenges such as poverty, land scarcity, and declining agricultural productivity, which the regime neglected to address.
   4. The failure to implement reforms deepened public dissatisfaction, particularly among impoverished Hutu farmers, fueling unrest and raising ethnic and political tensions.
5. RPF invasion and civil war
   1. In 1990, worsening economic and ethnic unrest coincided with the Tutsi-led Rwandan Patriotic Front (RPF) launching an armed invasion from Uganda.
   2. This triggered a civil war that escalated instability and set the stage for genocide.