Burundi Development think tank report

Current Status of Country’s Development:

The United Nations Development Program gives Burundi an HDI of 0.4, ranking the country number 184 out of 188 countries (“Human Development Reports”). Many of Burundi’s problems stem from political upheaval and an unstable government. The UN has accused the Burundian government of gross human rights violations against its citizens, and in the past two years, it has verified the occurrence of over 564 government executions in which citizens were horribly tortured (Burke). The GDP per capita of the country is just $747, placing over 80% of the Burundian population in multidimensional poverty (“Human Development Reports”). Economic improvement does not seem to be on the table for Burundi yet— since 2015, the country’s GDP is estimated to have dropped over four percent (“Burundi Economic Outlook”). It currently stands at around $7.6 billion (“Human Development Reports”). Combined with the fact that the country has lost 33% of its international aid since 2015, economic growth has slowed dramatically (“Burundi Economic Outlook”).

Currently, the life expectancy for Burundians stands at 56.7 years (“Human Development Reports”). It has an infant mortality rate of 60.4 deaths out of every 1,000 live births, the 20th worst in the world (“Country Comparison”). Burundi has a high rate of malaria infection for its citizens as well as poor access to healthcare. Sadly, nearly 60% of the population is considered to be chronically malnourished. These health issues combined with a government that features widespread crackdowns and poor levels of civil society create a poor quality of life for the citizens of Burundi (“Burundi” World Food).

Causes of Underdevelopment:

Burundi did not become an independent state until 1962. Before that, it had been a Belgium colony since WW1, and it had been under German control prior to that (Elolia). Often, countries that had been long-term colonies, especially countries in Africa, develop at a much slower pace than countries that have enjoyed long-term in dependence. Additionally, since its independence, much of Burundi’s history has been plagued by war and unstable government institutions. The country experienced military rule until 1990, and then the government was overthrown again in 1996. Starting in 1993, the country became entangled in over 15 years of civil war, and it may be on the brink of another (“Burundi” World Food). All of this instability has given the country little opportunity to develop. On top of that, a lot of this conflict stems from two major ethnic groups—the Hutus and Tutsis. Aside from causing difficulties in politics, countries with vastly different ethnic groups often have a harder time developing due to lack of a shared common interest.

Another major impact to Burundi’s development is its climate and geography. Many political scientists, most famously, Jared Diamond, argue that geography is the key to development. Burundi has a tropical climate, causing soil to be less fertile and diseases such as malaria to be more prevalent. Burundi is also landlocked. This would have been very difficult in the past because of lack of access to waterways for trade. And although 93% of the economy is based in agriculture, agricultural products and exports make up only 40% of the country’s GDP (“Burundi”).

History of Development Attempts:

Until 2007, foreign direct investment, FDI, had been largely nonexistent in Burundi. The country was been ranked number 152nd out of 189 countries in the annual Doing Business Report in 2016. In general, the country has unfavorable business conditions, drawing away investment. Burundi’s most successful sectors are its mining and agricultural sectors, and the country’s biggest investors are France and Japan. In 2014, Burundi received an inward FDI flow of just $47 million (“Burundi: Foreign Investment”). As one of the least developed countries in the world, Burundi is also a large recipient of foreign aid. Most of this aid is used in the public health sector. Despite recent cuts in aid to the country, the United States still granted Burundi $44.6 million in aid in 2016 (“U.S. Foreign Assistance”). This is nearly as much as the country receives in FDI in a year.

The most notable of Burundi’s development attempts is the East African Community. This regional intergovernmental trade organization was established in 2000 by the countries of Kenya, Uganda, and Tanzania. Burundi joined the EAC in 2007. The hallmark of the EAC is the Common Market Protocol, which went into effect in 2010. This established legislation regarding the transport of goods, services, and workers across borders to develop a common market and increase trade in the region. It is the EAC’s goal to establish a common currency in the region by 2023 (“Burundi”).

Policy Suggestions to Encourage Development:

It is clear that Burundi has a long way to go in terms of development. Economically, politically, and socially, Burundi struggles to provide its citizens with basic necessities and a comfortable standard of living. One initiative that the country should consider following is the introduction of Import Substitution Industrialization. ISI is an economic strategy in which a country replaces its imports with domestic production. Although this strategy is highly controversial, often cutting a country off from globalization and decreasing the quality of products, Burundi is in desperate need of a way to develop industry. 93% of the country’s economy is based solely in agriculture, leaving very little room for industrial development (“Burundi”). While Burundi makes $184 million in exports each year, it spends $733 million on imports (“Burundi (BDI)”). For comparison, Nigeria makes $99 billion in exports each year, while spending only $52.3 billion on exports (“Nigeria (NGA)”). Burundi’s unfavorable balance of trade is strong evidence for its need to implement ISI and develop its own industries. Because Burundi’s government is highly unstable, the implementation of this policy will not be easy. We recommend taking an untraditional approach by using micro-finance NGOs such as Kiva or Oxfam to start the grassroots development of industry in Burundi.

On the other side of the coin, Burundi may also be wise to encourage foreign direct investment in the country. While there are many factors that make Burundi an unfavorable spot for investment, one thing Burundi could do to encourage investment would be to lower their corporate tax rate. The global average corporate tax rate is 22.5% (Pomerleau). In Burundi, the corporate tax rate stands around 35% (“Burundi”: Foreign Investment”). If Burundi lowers its corporation taxes, perhaps more Multinational Companies will be willing to invest and start businesses in Burundi. While their are certainly downsides to MNCs such as violation of state sovereignty and the exaggeration of poor conditions, they can also greatly help a country improve its development.

The third recommendation for increasing development in Burundi is the large-scale distribution of mosquito netting across the country. Malaria is a huge issue in Burundi, and a large sick population means a small working population. If NGOs like the World Health Organization or USAID could facilitate distribution of these nets, which are cheap to make and easy to distribute, the country could begin to make large strides in development.

Works Cited:

Burke, Jason. "UN Report Accuses Burundi Government of Human Rights Abuses." The Guardian. Guardian News and Media, 21 Sept. 2016. Web. 23 Feb. 2017.

"Burundi." Global Issues in Context Online Collection. Farmington Hills, MI: Gale, 2016. Global Issues in Context. Web. 18 Feb. 2017.

"Burundi." World Food Programme. World Food Programme, 2017. Web. 23 Feb. 2017.

“Burundi (BDI) Exports, Imports, and Trade Partners." OEC. The Massachusetts Institute of Technology. Web. 24 Feb. 2017.

"Burundi Economic Outlook." African Development Bank Group. African Development Bank Group, 2017. Web. 23 Feb. 2017.

"Burundi: Foreign Investment." TradePortal. Banco Santander, S.A, 2017. Web. 23 Feb. 2017.

"Country Comparison: Infant Mortality Rate." The World Factbook. Central Intelligence Agency, 2016. Web. 23 Feb. 2017.

Elolia, Samuel K. "Burundi." Worldmark Encyclopedia of Religious Practices. Ed. Thomas Riggs. 2nd ed. Vol. 2: Countries, Afghanistan to Ghana. Farmington Hills, MI: Gale, 2015. 253-260. Global Issues in Context. Web. 18 Feb. 2017.

"Human Development Reports | Burundi." United Nations Development Programme. UNDP. Web. 23 Feb. 2017.

"Nigeria (NGA) Exports, Imports, and Trade Partners." OEC. The Massachusetts Institute of Technology. Web. 24 Feb. 2017.

Pomerleau, Kyle, and Emily Potosky. "Corporate Income Tax Rates around the World, 2016." Tax Foundation. Tax Foundation, 18 Aug. 2016. Web. 24 Feb. 2017.

"U.S. Foreign Assistance to Burundi." Inside Gov. GRAPHIQ. Web. 23 Feb. 2017.

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