Sunday, 8 March 2015

The potential and limitations of "Made in Rwanda"

There's an advert / editorial in the Rwandan New Times newspaper, entitled "Made in Rwanda: Let us consume local to reduce trade deficit".  I'm not sure whether the government or industry has paid for it.  Putting aside the subjective position taken, there are some attractive presentations of individual Rwandan manufacturing companies throughout the article.

The presentations (and some searching on-line for further information) show companies with genuine Rwandan stamps on them: in the materials used, production processes, and ownership.  Nevertheless, foreign goods, skills, and investment are also present: in vehicles and machines used, and in training and management.  Rwandan industry is developing impressively, and is becoming internationally competitive, and has required use of goods and skills that are "made somewhere else".

The early stages of this industrial evolution may be associated with a widening of the trade deficit, as foreign equipment is purchased.  The next stage of evolution, where companies may become internationally competitive and able to produce more cheaply than in the developed or newly developed countries, will tend naturally to result in a reduction of the deficit or emergence of a trade surplus.  The surplus emerges because of the quality of the goods, rather than nationalist preferences.  This isn't an inevitable path, but it is a common one.

Having said that, if I was in Rwanda today, I would consider the Rwandan goods shown for my house, factory, or supermarket, as their quality seems high.

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