A Tale of Two Countries; Let’s Talk Foreign Development
Last week I left New York City for the first time in 6 months, traveling to Kigali, Rwanda and Zanzibar, Tanzania for a total of 10 days. What I found were two countries’ vastly different approaches to Covid-19 response, which prompted a series of observations on how developing nations legitimize themselves in an effort to attract foreign aid and investment.
It was immediately evident, and well known to its citizens, that Rwanda is using the present pandemic as an opportunity not only to keep its population safe, but also to showcase to the world that they are a sound and responsible investment, among the top ranks of African countries. Recently securing $100 million from China to build a hospital in Kigali, the government has taken every measure to demonstrate just how responsible they can be. To even board a flight to Rwanda one must show a negative PCR test taken no more than 4 days prior to takeoff. Upon landing, visitors are shuttled to a hotel where they are promptly tested for Covid-19 and must remain in lockdown for 24 hours while awaiting the result (26 hours for me — a necessary detail, as I really felt those last elongated two). There is a mandatory mask measure in place, which to my eyes had 100% compliance, a 7pm curfew, and every restaurant or cafe has an obligatory registration card that must be filled out for purposes of contact tracing. You might even be randomly tested walking down the street and the same testing procedures for entering the country are also required for exiting. 1,000 trucks were left sitting in a standoff at the Rwanda-Tanzania border, since Tanzanian drivers refused to turn over their trucks to Rwandan counterparts, as rules presently dictate. Rwanda isn’t messing around and you can’t walk three steps without them letting you know it. Large vans with speakers atop even drive around blaring coronavirus awareness campaigns.
Tanzania on the other hand is what Rwandans refer to as the “Wild West”. There is no test requirement for entry, virtually no masks in sight and upon checking into your hotel the front desk will inevitably tell you without you asking, “there is no coronavirus in Zanzibar”. Clearly Rwanda is playing the long game, dampening tourism in the short-run in an effort to secure further legitimacy, hoping to thrive in the long-run. Tanzania is doing just the opposite, touting its open borders for tourists to come and enjoy, which is indeed bolstering the short-run with tourism on the rebound, contributing 17.2% to GDP.
This is the real-life game of chess that developing nations play in order to secure the funding needed to further develop, which evidently some take more seriously than others. The 1960’s Stanford marshmallow experiment showed that one of the best indications of future success is the ability to demonstrate delayed gratification. Presently Rwanda is doing just that. The world is watching how governments across the globe are conducting themselves in these times, unprecedented in our globalized world, and Rwanda is betting that its efforts will be rewarded in the future. In 2019, foreign direct investment into Rwanda increased $305 million to $910 million, a trend it clearly would like to continue. Tanzania has nearly 9 times the total foreign investment as Rwanda, which is perhaps the reason the Rwandan government feels that now is its moment to prove to the rest of the world that they are not the small, less significant neighbor, but a stable economic and political up-and-comer to be reckoned with. Like that of Rwanda, having what is best for one’s people also be what is best for one’s long-term economic wellbeing, is exactly what we impact enthusiasts like to see.
Jake Greenwald, Business Development
Last week the East Africa Community rolled out a Regional Electronic Cargo and Driver Tracking System (RECDTS) to allow partner countries to electronically share truck driver Covid-19 test results in an effort to ease border restrictions and get cargo moving more freely again. Previously, countries were requiring drivers to pass off their trucks at borders to those native to the destination country, which many drivers refused to do, causing massive backups at border-crossings and widespread supply shortages. Hopefully this will help relieve these issues and restock communities with the supplies they need.
Quip.link is an East African startup based in Kigali creating a marketplace to connect people in need of agricultural and construction equipment with those who own them, both for rent and purchase. Currently the market is extremely fragmented with brokers representing a small number of machines at high prices. Quip.link hopes to reduce costs and expand access to equipment, thereby improving agricultural output and increasing construction projects in areas that need them.
“The End of Poverty” by Jeffrey D. Sachs is a brilliant look into how impoverished countries can and have become prosperous ones.
This newsletter is intended solely for informational purposes, and should not be construed as investment/trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any securities mentioned. Any reproduction or distribution of this document, in whole or in part, or the disclosure of its contents, without the prior written consent of Flat World Partners is prohibited
Thank you for subscribing to our newsletter. Our privacy policy is available at anytime for you to review in order to understand how we protect your personal identifiable information. By subscribing to the newsletter you have consented to our policy
Forwarded this message? Subscribe Here!
Copyright © 2020 Flat World Partners, All rights reserved.
You are receiving this email as a believer in competitive financial and social returns.
Our mailing address is:
Flat World Partners
386 Park Avenue South
18th Floor
New York, Ny 10016
