Rwanda 1994: Gen. Paul Kagame letter of 10. August 1994 (Confidentiel)

EU’s new regulation plans to scrap imports of conflict minerals by 2021!

The people back home wouldn’t buy a ring if they knew it cost someone else their hand”Maddy Brown (Blood Diamond, 2006).

The European Union are acting out of care and thinking of transparency for the industrial imports and mineral exporters. This is happening just a little month after the United States opened up their legislation for importing more from conflict zones. While the European Union plans to close the gate from areas and from sources that export Conflict minerals.

So the EU laws are becoming more stricter than the United States, even if the law they have enacted in the European Parliament and Council of the European Union, will be effective from 2021. So it is 4 years until it has giant effect and gives time to refinery and importers to change behavior. Something that is necessary, as well as the public have to grow concern of the affects of buying conflict minerals. Even as the conflict minerals still come into the market of Europe and into the refineries so the consumers doesn’t know and cannot follow where their products who contain minerals comes from war-zones.

That the European Union takes this serious and acts upon this Nobel, and proves that they does not want to support militias and guerrillas that keeps control of mineral rich areas and their exports to supply weapons and continue warfare in for instance the African Great Lakes Region. Take a look!

Background of new rule:

This Regulation, by controlling trade in minerals from conflict areas, is one of the ways of eliminating the financing of armed groups. The Union’s foreign and development policy action also contributes to fighting local corruption, to the strengthening of borders and to providing training for local populations and their representatives in order to help them highlight abuses” (EU, P: 8, 2017).

Conflict Minerals from Great Lakes Region:

The Commission and the High Representative of the Union for Foreign Affairs and Security Policy should regularly review their financial assistance to and political commitments with regard to conflict-affected and high-risk areas where tin, tantalum, tungsten and gold are mined, in particular in the African Great Lakes Region, in order to ensure policy coherence, and in order to incentivise and strengthen the respect for good governance, the rule of law and ethical mining” (EU, P: 16, 2017).

Trade of Minerals funds armed conflicts:

Preventing the profits from the trade in minerals and metals being used to fund armed conflict through due diligence and transparency will promote good governance and sustainable economic development. Therefore, this Regulation incidentally covers areas falling within the Union policy in the field of development cooperation in addition to the predominant area covered which falls under the common commercial policy of the Union” (EU, P:17, 2017).

Important Article:

Article 3: Compliance of Union importers with supply chain due diligence obligations

1. Union importers of minerals or metals shall comply with the supply chain due diligence obligations set out in this Regulation and shall keep documentation demonstrating their respective compliance with those obligations, including the results of the independent third-party audits” (EU, P: 23, 2017).

Date of Application:

Articles 1(5), 3(1), 3(2), Articles 4 to 7, Articles 8(6), 8(7), 10(3), 11(1), 11(2), 11(3), 11(4), Articles 12 and 13, Article 16(3), and Article 17 shall apply from 1 January 2021” (EU, P: 51, 2017).

What the statements on the law:

The Commission will consider making additional legislative proposals targeted at EU companies with products containing tin, tantalum, and tungsten and gold in their supply chain should it conclude that the aggregate efforts of the EU market on the responsible global supply chain of minerals are insufficient to leverage responsible supply behaviour in producer countries, or should it assess that the buy-in of downstream operators that have in place supply chain due diligence systems in line with the OECD guidance is insufficient” (…) “In the exercise of its empowerment to adopt delegated acts pursuant to Article 1(5), the Commission will take due account of the objectives of this Regulation, notably as set out in recitals (1), (7), (10) and (17). In doing so, the Commission will, in particular, consider the specific risks associated with the operation of upstream gold supply chains in conflict affected and high-risk areas and taking into account the position of Union micro and small enterprises importing gold in the EU” (…) “In response to the request of the European Parliament for specific guidelines, the Commission is willing to develop performance indicators specific to the responsible sourcing of conflict minerals. By means of such guidelines, relevant companies with more than 500 employees that are required to disclose non-financial information in conformity with Directive 2014/95/EU would be encouraged to disclose specific information in relation to products containing tin, tantalum, tungsten or gold” (EU, P: 57-58, 2017).

The European Union is doing something positive with this. That they show effort and care for the imports and what affects the export has locally, so if the minerals export is shady, the export will cease. So if the due diligence regulation works and the industry complies, the effect can be enormous. The consumer will also know that there are not supporting by third party purchase to pay for ammunition rebels, warlords or guerrillas in far away lands. This should all be seen as step of making a better world and honorable society. Where the money is where the mouth is! Peace.

Reference:

Council of the European Union – ‘Proposal for a Regulation of the European Parliament and of the Council setting up a Union system for supply chain due diligence self-certification of responsible importers of tin, tantalum and tungsten, their ores, and gold originating in conflict-affected and high-risk areas – Outcome of the European Parliament’s first reading (Strasbourg, 13 to 16 March 2017) – (20.03.2017).

Burundi: Le Ministère de la Défense Nationale annonce qu’aucun Groupe armé n’a été aperçu traversant la frontière entre le Burundi et le Rwanda (13.03.2017)

Opinion: Suddenly President Kagame doesn’t want Rwanda to be dependent on the West!

For Africa as we wait to see what unfolds and adjust, we should be learning the lesson that we should not be entirely dependent. We will wake up to the reality there are things we should be doing for ourselves. You have made it appear that your situations are perfect and you want others to emulate you. Then you are surprised by what unfolds. It is what you have been hitting us with that is coming back to bite you. I did not change the constitution. If you want to know the truth you will find it is the people who did, not me. My satisfaction lies in the truth that we have not been involved in harming our people. What we are doing is to develop our country. If we don’t take care of ourselves, no one else will. As long as Rwandans are happy, we will keep doing what needs to be done. We will be listening to what others say but we will not be distracted from what needs to be done.”

-President Paul Kagame speaks to Gerard Baker, editor in chief of the Wall Street Journal, at the closing session of Invest in Africa conference.

President Paul Kagame of Rwanda, the long lingering Executive of Rwanda has compelled his words against dependency of the West. Surely, he has had this in mind for while in his own haven, as the Rwandan government has been a donor friendly. Therefore, that he claims now to take a stand against them shows the sudden change of attitude. However, it is sudden donors and programs that have stopped coming Kagame’s way, therefore the Rwandan government have started to run a giant tab of external debt instead of donor aid grants. Like look at some quotes from companies that establish the economic output and the financial flow of nations, like Deloitte and KPMG!

Rising debt:

“According to BMI, total external debt levels in the country have been rising steadily in recent years, from 16.1% of GDP in 2010 to an estimated 30.5% of GDP in 2015. Debt levels for 2016 and total external debt are forecast to amount to 35.2% of GDP and will be composed mostly of government debt” (Deloitte, P: 4, 2016).

Failing Foreign Aid, therefore rising debt:

“The primary headwind to the Rwandan economy in the 2016-2025 period will be the impact on debt as a result of falling foreign aid. Despite prudent fiscal policies to date, increases in debt levels will follow from the fall in foreign aid, since Rwanda is now deemed fit to transition from grant-based financing to loan-based financing by the IMF” (Deloitte, P: 5,2016).  “The government has been compelled to adopt a more prudent fiscal policy stance in an attempt to reduce the country’s dependence on donor support and increase fiscal autonomy. Recent external headwinds have encouraged the government to ease demand for imports by reassessing its infrastructure investment programme. This will undoubtedly have a negative impact on economic growth. That being said, the benefits of lower donor dependence and improved macroeconomic stability should outweigh the costs related to lower growth over the short term. Turning to external balances, Rwanda’s wide merchandise trade deficit is expected to maintain a shortfall in the overall current account going forward” (KPMG, P: 4, 2016).

“Aid harmonization has been improved and progress continues to be registered in the implementation of the Paris and Busan commitments especially the use of national budget and procurement systems. The Bank was the 6th largest Official Development Assistance (ODA) provider to Rwanda in 2013/14, accounting for 9.4% of total ODA26. The World Bank and EU invest in agriculture and energy whereas the leading bilateral DPs focus, among other things, on human development and social protection (Annex 8a). Annex 8b summarizes the progress made in implementing selected indicators as captured by the Donor Performance Assessment Framework. Use of the sector budget support (SBS) instrument has increased the share of Bank support disbursed using country systems. Under the DPCG, the Bank actively participates in activities to enhance the implementation of EDPRS II such as the 2014/15 assessment of SWGs” (AfDB, P: 9, 2016).

So if you look at the financial policies of the republic of Rwanda, some of it is not really chosen as the donors funds that has been suspended or stopped might be for several of reasons. That might be that if they accept the funds they have to follow a spectre of policies and interferes with the power that Kagame wish to achieve. The RPF and Kagame has total control of Rwanda, the export and the import, also owns dozens of the businesses. So the Rwandan government had to switch their economy with more loans, instead of donor aid. The loans are coming in through external debt as the external donor funds and grants have dwindled.

Therefore, the excuse of suddenly wanting to be independent is more a need, than a wish. If it was a wish earlier, than the AGOA or USAID to the RPF would have stopped decades ago. That should be common knowledge of the relationship between Paul Kagame and Bill Clinton. It is not that it is positive that the Rwandan Government want’s less aid is a healthy stance. Still, the excuse isn’t eaten by me.

The reality is that the increased debt instead of donor grants will hurt the economy, as the levied interest rates and other cost will hurt the economy. It isn’t healthy to be dependent of the aid either, but the reasons now seem more to reactionary than real intent. I am sure Paul Kagame would love funds from Belgium and France to build hospitals and clinics in rural regions of Rwanda. So, suddenly the West isn’t good enough, especially when they are questioning his reasons for staying in power and not having any successors while his regime is keeping a close lid on the opposition. Therefore, the economy and independent from the world becomes more important because then he needs to less show of transparency and accountability. Peace.

Reference:

AfDB – ‘RWANDA BANK GROUP COUNTRY STRATEGY PAPER 2017 – 2021 (October, 2016).

Deloitte – ‘Rwanda Economic Outlook 2016 The Story Behind the Numbers’ (June 2016)

KPMG – ‘Economic Snapshot H2, 2016 – Rwanda’ (15.10.2016) link:

https://home.kpmg.com/content/dam/kpmg/za/pdf/2016/10/KPMG-Rwanda-2016-Snapshot.pdf

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