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Edition: U.S. Article Comments (0) Slideshow Save Email Print Reprints Most Popular Most Shared Cancer cells slurp up fructose, US study finds 02 Aug 2010 Dog chews off Michigan man's toe, saves his life 04 Aug 2010 Wheat races to new highs as Russia halts exports 9:01am EDT Mortgage rates hit record lows 10:56am EDT Factbox: Developments in the Gulf of Mexico oil spill 8:57am EDT Surprise rise in jobless claims casts pall on economy 11:37am EDT Chinese luxury wannabes try to shake off "Made in China" image 04 Aug 2010 Supermodel Campbell tells court of "dirty pebbles" | Video 10:37am EDT Analysis: Google takes on Facebook in social games 04 Aug 2010 BP starts cementing Gulf oil well | Video 11:25am EDT Cancer cells slurp up fructose, US study finds 02 Aug 2010 Dog chews off Michigan man's toe, saves his life 04 Aug 2010 Mortgage rates hit record lows 10:56am EDT U.S. billionaires pledge fortunes to charity 04 Aug 2010 Gay in America 04 Aug 2010 U.S. judge overturns California gay marriage ban 04 Aug 2010 Judge overturns California gay marriage ban | Video 3:21am EDT Analysis: Google takes on Facebook in social games 04 Aug 2010 Geithner blasts Bush policies for debt 04 Aug 2010 Wheat races to new highs as Russia halts exports 9:01am EDT Special Report: In Rwanda Inc., an election exposes repression Digg This Tweet This Share on LinkedIn Share on Facebook Factbox Rwanda's president Paul Kagame 5:58am EDT Related News Timeline: Rwanda heads to August elections 5:58am EDT Analysis & Opinion Uneducate people Related Topics World » 1 / 11 Shelves of skulls are seen at the Ntarama Genocide Memorial in Rwanda, June 19, 2002. Credit: Reuters/Antony Njuguna/Files By Hereward Holland KIGALI | Thu Aug 5, 2010 6:54am EDT KIGALI (Reuters) - Just before noon on Saturday June 19, a black BMW carrying Faustin Kayumba Nyamwasa and his wife Rosette turned into the driveway of their home in Melrose, a smart suburb in a wealthy northern suburb of Johannesburg. Football fans across South Africa were looking forward to three big World Cup matches later that day. In Johannesburg, the sky was pale blue, cloudless. As the Nyamwasas' driver slowed the car, Rosette says a stranger approached and tapped on the passenger window. The man then drew a pistol and shot Nyamwasa in the stomach. Despite his injury, Nyamwasa leapt from his car and wrestled with the gunman. The driver joined the struggle and a second shot was fired. When the weapon jammed, the attacker ran to a getaway car which sped off. Carjackings are common in South Africa, but Nyamwasa was no ordinary victim. A former Rwandan army chief and liberation hero, he fell out with President Paul Kagame a dozen years ago. The animosity between the two men has grown and in February Nyamwasa fled his homeland for South Africa. From the safety of exile he accused Kagame of corruption and using violence to silence opponents -- allegations that Kagame has denied. Still, the speculation began almost as soon as news of the shooting broke: had the Rwandan regime's wrath extended all the way to South Africa? Sixteen years on from Rwanda's genocide in which up to 800,000 Tutsis and moderate Hutus were killed, the country has become a darling of western donors and investors alike. Kagame, a bush war veteran turned civilian autocrat, has helped rebuild the central African nation, propelling its economy to more than 6 percent growth. He's clamped down on corruption and attracted companies such as Starbucks, South African telecoms giant MTN and Gulf investment firm Dubai World, to invest. As Rwandans prepare to go to the polls on August 9, though, rights groups say political repression is on the rise. Human Rights Watch, Amnesty International and some western diplomats believe Kagame's strong-handed leadership style and refusal to permit the birth of a critical opposition now threaten the very stability and growth he has nurtured. The president is widely expected to win re-election. But Rwandans, and the foreign investors who have applauded his leadership over the past few years, have begun to ask whether he'll deliver on his promise to democratize the country. Can he emulate his idols in Asia and stage-manage Rwanda's growth into an IT and logistics hub by 2020? Or is he just a strongman with good PR skills? In the hours after the attack on her husband, Rosette Nyamwasa had few doubts about which way her country was headed, or who was responsible for the attack. "He (Kagame) must have been behind this," she told reporters. "I don't have proof -… but we've been harassed for such a long time." KIGALI CRACKDOWN Rwanda says the idea it might be behind the shooting is "preposterous". It blames Nyamwasa for a string of deadly grenade attacks in Kigali, the capital, earlier this year, and wants South Africa to extradite him to face charges of backing a plot to topple the president. Whoever's responsible, violence in the run up to the presidential poll has Rwandans worried. Clashes between Hutus and Tutsis have marked every election in Rwanda since independence in 1962. The birth of multi-party democracy in the early 1990s brought a new surge of radical ethnic politics that, in part at least, helped spawn the genocide. This time around, racial divisions are echoed by a growing rift within the ruling Tutsi elite. Kagame, say western diplomats in Kigali, is trying to sideline possible threats to his power. Two newspapers -- closely linked with Nyamwasa -- were suspended in April for insulting the head of state, sowing discontent in the army and causing panic. That same month, a human rights researcher was asked to leave the country over irregularities with her visa. Kagame also ordered several senior military officials sacked and reshuffled the army. Police have arrested two aspiring presidential candidates and detained opposition supporters for holding an illegal rally. Victoire Ingabire, a forthright Hutu politician, was arrested in April for denying the genocide, propagating genocidal ideology and collaborating with a terrorist group. Then there are the killings. The body of the vice president of the Democratic Green Party was found partially beheaded and dumped near a river on July 14. In late June, a journalist was shot dead hours after publishing a story linking Rwandan intelligence to the attack on Nyamwasa. The government says the killings are unrelated and it is unfair to link them. But, observes one Western diplomat in Kigali, "the sudden outburst of murders makes that increasingly implausible." HOW STRONG IS STRONG ENOUGH? Donors and investors are divided over what this means for Rwanda's future. Some, both in Rwanda and abroad, are worried about the direction the country might be headed. Kagame, says one analyst on condition of anonymity, "has put more effort into PR than probably anyone else in Africa. But there is a sense in which they are losing control of the story. You have got to ask why these people keep turning up dead. Either it's the government or it is someone else, and neither is good." A foreign businessman who also did not want his name used, because talking about risks publicly could be hazardous for his company's operations in Rwanda, is worried. "If this is a trend, and this trend continues then it will make raising investment capital from western countries more difficult," he says. But others are more sanguine. David Bensusan, chief executive of Minerals Supply Africa, Rwanda's largest metal ore exporter, says Kagame's moves in recent months have been about "dealing with bribery at the top level. He's closed it down everywhere else and he's calling them to account for where they got their houses, and they don't like it." The president, Bensusan says, is "strong enough to push it through, and then you're going to get a very, very good area for doing business." Foreign Minister Louise Mushikiwabo believes international concern is unfounded. Investors, she says, have a different way of looking at the country. "They are more objective, after facts and not speculation." She predicts the violence in the lead up to the election will die down again after the poll. "There is a level of hype with these incidents that have happened in Rwanda," she says. "It's very unfortunate because it gives a picture of Rwanda which is really very slanted." RWANDA INC. The picture Rwanda has painted of itself over the past few years has been a positive one. Kagame has recruited a kitchen cabinet of advisers including Tony Blair, Bill Clinton, U.S. evangelist Rick Warren and CEOs of corporations such as Google and Starbucks. The president himself is regularly feted at international meetings and held up as the leader of a new, economically savvy generation of African politicians. There is no doubting he has helped transform his country. Even before the epochal upheaval of the 1994 genocide, Rwanda struggled to get ahead. The country is landlocked; its population of more than 10 million people jostles for enough space to farm and eke out a living. Rwanda's limited mineral resources have been largely neglected since the Belgians left in 1962, though it does raise large amounts of foreign exchange by re-exporting -- and in some cases smuggling -- metal ore from neighboring Democratic Republic of Congo. Its other main earners are coffee, tea and tourism. Since 1994, when Kagame and his exiled cohorts fought their way into the country and helped to end the genocide, the ruling Rwandan Patriotic Front party has more than tripled household incomes and overseen huge leaps in everything from education to agriculture. Rwandans now have access to universal healthcare insurance and boast a parliament with the highest proportion of female lawmakers in the world -- 56 percent. The tea and coffee industries have been successfully privatized. In 2009 coffee giant Starbucks even set up its regional operations in Kigali. Donor assistance has helped boost food stocks, improvements in taxation have swelled government coffers. The Chinese have built a basic road network and a Korean firm is hastily laying a fiber-optic backbone across the country, to link up with an undersea cable from Kenya. The president says he wants to transform his country into east Africa's service center. Rwanda, he often tells people, should aim to be more like an Asian economic tiger. Work hard and the country can become a middle-income nation within a generation, he says. In some ways that sense of optimism is justified. The World Bank ranks Rwanda among the top five African countries for ease of doing business -- and globally ahead of Brazil, Russia, India and China. Research and lobby group Transparency International says Rwanda is the least corrupt country in east Africa. The Rwanda Development Board, a government agency tasked with streamlining investment, has simplified laws for starting up businesses, increased shareholder access to information and improved regulations on corporate disclosure, director liability and access to credit. Despite the global financial crisis, pledged investment in Rwanda rose 41 percent in 2009 to $1.1 billion, according to the Rwanda Development Board. An ebullient finance minister wants to simplify tax regulation even further and lower Rwanda's debt-export ratio. The country should hit double-digit growth in two years, he says. He's looking to join hands with private investors to help fund a new airport, a railway through Tanzania and hydropower, geothermal and methane gas power schemes. Investors marvel at the red-carpet treatment they receive and have taken to calling the business-focused fiefdom Rwanda Inc. Small herds of foreign investors, local chief executives, lawmakers and entrepreneurs roam the clipped greens of the Kigali golf course. Under wide-brimmed acacia and towering eucalyptus trees they discuss the challenges and opportunities of the business climate, and boast loudly about previous golf rounds. "The advantages are a good banking system, the road structure, it's completely clean -- no bribery, and you can see people very quickly if you do have a problem," says Bensusan. "Compared to most of Africa, it is a very good environment for business." And Rwanda's president, says Alastair Newton, a former British diplomat in Kigali, is the real deal. "It is almost impossible to overestimate the scale of the challenges Rwanda faced in the immediate aftermath of the genocide," says Newton, now a member of the supervisory board of the African Development Corporation, which has investments in Rwanda. "For now at least, Kagame's leadership is almost certainly central, if not essential, to Rwanda continuing on what has been and remains an overall remarkably positive track." REINVENTING THE WHEEL, OVER AND OVER Plenty of hurdles remain, to be sure. Despite its stellar progress, the country is starting from a very low base and still lags bigger, more dynamic economies in the region. It may have ambitions to become a regional logistics hub but there's no getting around the fact it sits 1,600 km (1,000 miles) by road from the Indian Ocean. Running through Uganda and Kenya, the main route to Kigali is peppered with officials asking for bribes or lethargic bureaucrats disinterested in keeping traffic flowing. Matt Smith, director of finance for coffee exporter Rwanda Trading Company, says trucking a container from Kigali to the Kenyan port of Mombasa costs as much as shipping it from Mombasa to "anywhere in the world." The high cost of power has forced mining companies to close valuable processing plants, while the lack of skilled workers has prompted some investors to bring in more experienced Ugandan, Kenyan and international contractors. Sluggish decision-making at lower levels of government is also a problem. Running counter to Rwanda's World Bank ranking for ease of doing business, one American investor says "getting anything done is like reinventing the wheel, and then reinventing that same wheel the next time you go to the same person." In finance, Kigali's fledgling stock exchange lists just four bonds and one cross-listed equity. The week ending July 7 saw a single trade. In neighboring Kenya the Nairobi Stock Exchange lists 48 companies with a market capitalization of $13.55 billion. And while Rwanda touts itself as the new technology nucleus of east Africa, only 3 percent of Rwandans have Internet access, compared with 8.7 percent of Kenyans and 7.9 percent of Ugandans, according to the World Bank. "The (investment) climate is good but it's a bit over-hyped," says Jarmo Gummerus, country director of ContourGlobal, a New York-based power firm making the largest ever single investment in Rwanda -- $350 million on a 100 MW methane gas power plant on the edge of Lake Kivu. "For it to become like an Asian tiger will take some time. It's not a two or three year project. It's 10, 15 years." ESCAPING REPRESSION Even if Rwanda can overcome those economic hindrances, the psychological legacy of the genocide will always be difficult to shrug off. A Rwandan study last year showed almost one in three suffer from post-traumatic stress disorder. For some, there are new reasons to fear. Squatting on a bed of hay in Nakivale refugee camp in Uganda, Karimera Ostas, a 44 year-old farmer, says he fled his home in February after his brother was taken away in the night by the local defense force. Ostas and his brother, supporters of Hutu politician Victoire Ingabire, knew they were putting themselves at risk. "If you don't participate in their political party, the RPF, you may be taken in the night and not seen again," he said, the white tarpaulin roof of his shelter flapping in the breeze. In contrast to the glass office buildings and verdant golf course in Kigali, Nakivale sits in thorny scrubland. It is home to tens of thousands of people, a melange of disaffected Africans from Somalis escaping militant Islamism to Congolese fleeing protracted violence at home. According to the UN refugee agency several thousand Rwandans are now joining them. April brought a surge of around 1,500 seeking asylum in Nakivale and two other camps, while many others went straight to the Ugandan capital Kampala. It said asylum seekers like Ostas claim to be the victims of harassment, abductions, arbitrary arrests, forced subscription into political parties, disappearances or ethnically based discrimination at home. A study by International Refugee Rights Initiative, a New York-based non governmental agency, and Refugee Law Project, a research group from the law faculty at Uganda's Makaere University, argues there are legitimate reasons for those fears. "To the extent that refugee groups can act as a barometer of the situation at home, the findings are a serious indictment of the current Rwandan government," the groups said in a recent statement. Ostas sees Rwanda's reputation as a stable haven in central Africa as a delusion. "If Kagame has a good reputation outside the country in education and other things, why are people fleeing the country?" he asked, surrounded by bundles of firewood and overlooked by a picture of Barack Obama on a black bag hanging from a eucalyptus rafter above his head. A few weeks after Ostas spoke with Reuters, around 2,000 Rwandan refugees at Nakivale and a nearby camp were bundled into trucks at gunpoint and repatriated. Two men died after jumping from the trucks. Marcel Gatsinzi, Rwanda's minister for disaster preparedness and refugee affairs, denied they were being forcibly repatriated. He said they were not genuine refugees, suggesting many were economic migrants or criminals fleeing justice. "Uganda said they are not refugees. When we received them, some of them were saying they went there for reasons like to get farms they can cultivate, get jobs and so on," Gatsinzi told Reuters. DEMOCRACY OR STABILITY? As Rwandans go to the poll for the second time since the genocide, almost every luxury car and public bus in Kigali is pasted with Kagame's profile. His slim bespectacled features gaze down from 40 ft billboards around the city advising Rwandans to "tora" or "vote" Kagame. An opposition candidate makes a single lonely appearance at a bus stop. Kagame's rallies attract tens, even hundreds of thousands of chanting supporters, while his rivals struggle to muster four digits. Can Rwanda's progress continue under an administration seemingly intolerant of political opposition or criticism? Such systems have worked in places like Singapore and Malaysia. Singapore, in fact, is helping Rwanda develop a smarter and better trained workforce. But neither of the two Asian countries have a history of ethnic violence on the scale of Rwanda's. As foreign minister Louise Mushikiwabo puts it: "Singapore is not Rwanda. The context is different." In media interviews over the past few weeks, Kagame has said Rwanda will not slavishly follow a western model of governance. "Your model of democracy, why should it be suitable for me?" he told a reporter for Britain's Guardian newspaper. Strict anti-genocide legislation is necessary to avoid a repeat of the slaughter 16 years ago, he argues. Democracy will come with time. Election analysts predict Kagame will easily secure a second seven-year term, probably with more than 90 percent of the vote, just as he did in 2003. "The gap between the popularity of the contenders, the resources and apparatus that the parties have at their disposition is such that you cannot really see there being much competition between the candidates," said a Western diplomat. But by suppressing open discourse about ethnicity and the history of the genocide, critics say Kagame may be building resentment in the majority Hutu population. "We've seen throughout Africa that military regimes, who come to power through force, find it very difficult to amend themselves and become real democrats. This is a patent case of that," said Muzong Kodi, an associate fellow of the Africa program at London-based think tank Chatham House. "It's not only the 80 percent (Hutu) who since 1994 have been passed off as villains. Quite important fringes of the Tutsi population feel alienated. That's what makes the situation rather explosive." Worryingly perhaps, the army top brass in exile are sounding increasingly belligerent. In a recent interview Rwanda's former spy-chief Patrick Karegeya, who fought alongside Kagame in 1994, described him as a dictator. "A dictator can never step down, they are brought down. It's only Rwandans who can stand up now and fight for their freedom. Kagame will have his breaking point and I think it will be very soon," Karegeya said. (Additional reporting by Peter Apps in London; editing by David Clarke, Simon Robinson and Sara Ledwith) World Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. 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