A guide to business economics in the Great Lakes region

Here is a guide to business economics in the Great Lakes region, in the form of an index for my blog in 2015.  It is arranged by topic and divided into blog entries ordered by the date they were posted.  If you would like to see it in a different language, please visit Google Translate and type http://greatlakeseconomics.blogspot.co.uk in the translation box.

A guide to business economics in the Great Lakes region
Agriculture  

1. Rwanda to be a non-agricultural society within six years? Hmmm.

Banking

1. Retailers, consumers, and bankers talk about Burundi's unrest
2. Are banks financing Burundi's innovative companies?
3. What type of companies do banks fund in Burundi?

Bureaucracy  

1. Is it profitable for businesses to avoid DRC bureaucracy?

Burundi  

1. A market burns and information does too
2. Restoring some of the benefits of Bujumbura's market
3. The Burundian ruling party's position on the economy is...
4. Economy discussions on the websites of the Rwandan and DRC ruling parties
5. 750 days since the fire at Central Market of Bujumbura...
6. The prominence of women in Burundian and Rwandan business
7. Burundi is speaking a different language to the East African Community
8. Government moves closer to business in Burundi, at least geographically
9. Small companies in Burundi are not small large companies
10. Shortages of publicly available goods affect smaller companies worse in Burundi
11. Burundian government disapproval of telephony suppliers 
12. Competition and changes in prices and sales in Burundi 
13. How the Burundian economy is being damaged by the clashes 
14. Retailers, consumers, and bankers talk about Burundi's unrest 
15. Does gender equality offer any advantages to Burundi's companies? 
16. Education and innovation in Burundi 
17. An account of the economic consequences of the Burundian disturbances
18. Major fire in a central Burundian market 
19. Business policy in Burundi after the unrest
20. Helping the Burundian hotel and restaurant sectors to recover 
21. Helping the Burundian hotel and restaurant sectors to recover - a clarification 
22. Are banks financing Burundi's innovative companies?
23. What type of companies do banks fund in Burundi? 
24. Capacity utilisation shows little relation to growth in Burundian companies 
25. Supermarket fire in Burundi, insurance, and opportunities for suppliers of fire prevention equipment 
26. Business policy in the third term of the Burundian government
27. Exciting technological projects in Burundi and Rwanda
28. Burundian manufacturing undercuts international prices

Communications  

1. Great Lakes companies with high speed broadband employ it intensively
2. E-mail: connecting DRC businesses nationally or internationally?

Conflict  

1. I'm back, and the DRC's quieter in the East
2. How much is peace worth?
   How the Burundian economy is being damaged by the clashes
   An account of the economic consequences of the Burundian disturbances

Corruption  

1. Reported corruption experienced by Great Lakes companies

Counterfeits  

1. Counterfeiting, a sword with many edges

Crime  

1. Do foreign owners have a more difficult time in Rwanda than local owners?

Data on business  

1. New survey of companies in Burundi
2. A full, publicly available Rwandan business census

Development  

1. Economic values and the value of lives

DRC  

1. I'm back, and the DRC's quieter in the East
2. Made in Congo, if that's best
3. Leaving the DRC tidy when you go 
4. Economy discussions on the websites of the Rwandan and DRC ruling parties 
5. Splitting revenue to keep the DRC stable
6. Ways and outcomes of splitting the DRC's revenue
7. Entrepreneurial opportunities in the DRC depend heavily on the subregion 
8. East versus West: which port gets Congolese exports? 
9. Difficulties at the DRC port of Matadi
10. Rwando-Congolese border enforcement may alter trade patterns 
11. Central power, and DRC revenue collection and allocation 
12. Productivity per worker in the DRC varies hugely by company 
13. Lobbying and independence of Congolese industry
14. Motivations for the new international market being constructed in Kinshasa
15. The Congolese state backs out of company ownership
16. Product innovation rates across the DRC 
17. Why do managers in the DRC choose their industry?
18. North Kivu promotes its investment opportunities
19. Strategic innovation is frequent in DRC companies 
20. High rates of R&D in Congolese companies 
21. Innovation advantages for subsidiaries compared with stand alone companies in DRC 
22. Does being part of a group help start-up companies in DRC? 
23. Tourism development in the Virunga National Park
24. Sales growth in DRC companies
25. Obstacles for DRC companies, split by the firm growth rate
26. Does innovation increase sales growth in DRC companies?
27. E-mail: connecting DRC businesses nationally or internationally?
28. What is the typical highly innovative company in the DRC?
29. Restrictions on working wives damage DRC businesses
30. Is it profitable for businesses to avoid DRC bureaucracy?
31. Legal constraints on women's economic involvement in the DRC
32. Interruptions in water supply hinder chemical innovation in the DRC
33. DRC growth rates by industry
34. A train is delayed somewhere in the DRC. Should an industrial economist be annoyed?
35. Inflationary ripples in the DRC

East African Community (EAC)  

1. Burundi is speaking a different language to the East African Community
2. Budget reduction at the East African Community

Education

1. Education and innovation in Burundi
2. Workforce education in Rwandan companies

Employment  

1. Rwanda NGO jobs have high pay, but the private sector offers long term prospects

Exports

1. East versus West: which port gets Congolese exports?
2. Do foreign owners help Rwanda export?

Finance  

1. Are banks financing Burundi's innovative companies?
2. What type of companies do banks fund in Burundi?

Foreign investment

1. The Rwandan government works hard for further investment
2. Do foreign owners help Rwanda export?
3. Do foreign owners have a more difficult time in Rwanda than local owners?

Government policy

1. Leaving the DRC tidy when you go
2. The Burundian ruling party's position on the economy is...
3. Economy discussions on the websites of the Rwandan and DRC ruling parties
4. Splitting revenue to keep the DRC stable
5. Ways and outcomes of splitting the DRC's revenue
6. Government moves closer to business in Burundi, at least geographically
7. The Rwandan government works hard for further investment
8. Lobbying and independence of Congolese industry
9. The Congolese state backs out of company ownership 
10. Budget reduction at the East African Community 
11. Rwandan competitiveness recognised in global business indices; Burundi and DRC lag behind 
12. Business policy in Burundi after the unrest 
13. Business policy in the third term of the Burundian government 
14. Political economy in the Great Lakes region

Growth

1. Competition and changes in prices and sales in Burundi
2. Sales growth in DRC companies
3. Obstacles for DRC companies, split by the firm growth rate
4. Does innovation increase sales growth in DRC companies?
5. The growth rate of Rwandan manufacturing companies - a puzzle
6. Capacity utilisation shows little relation to growth in Burundian companies
7. DRC growth rates by industry

Health  

1. Illness and its impact on Rwandan companies
2. Do Rwandan companies led by women have stronger health promotion among their employees?

Industry  

1. Rwanda to be a non-agricultural society within six years? Hmmm.
2. Burundian government disapproval of telephony suppliers
3. Lobbying and independence of Congolese industry
4. Why do managers in the DRC choose their industry?
5. Tourism development in the Virunga National Park
6. Helping the Burundian hotel and restaurant sectors to recover
7. Helping the Burundian hotel and restaurant sectors to recover - a clarification
8. Computer assembly in Rwanda
9. Interruptions in water supply hinder chemical innovation in the DRC
10. DRC growth rates by industry

Inflation

1. A train is delayed somewhere in the DRC. Should an industrial economist be annoyed?
2. Inflationary ripples in the DRC

Infrastructure  

1. Shortages of publicly available goods affect smaller companies worse in Burundi
2. Burundian government disapproval of telephony suppliers
3. Interruptions in water supply hinder chemical innovation in the DRC

Innovation

1. Product innovation rates across the DRC
2. Strategic innovation is frequent in DRC companies 
3. High rates of R&D in Congolese companies
4. Education and innovation in Burundi 
5. Does innovation increase sales growth in DRC companies? 
6. What is the typical highly innovative company in the DRC? 
7. Interruptions in water supply hinder chemical innovation in the DRC 
8. What reforms of business practices accompany innovations in Rwandan companies? 
9. Does radical innovation require extra reforms of business practices in Rwanda?

Insurance  

1. Supermarket fire in Burundi, insurance, and opportunities for suppliers of fire prevention equipment

Manufacturing  

1. The growth rate of Rwandan manufacturing companies - a puzzle
2. Burundian manufacturing undercuts international prices

Markets  

1. A market burns and information does too
2. Restoring some of the benefits of Bujumbura's market
3. 750 days since the fire at Central Market of Bujumbura...
4. Competition and changes in prices and sales in Burundi
5. Motivations for the new international market being constructed in Kinshasa
6. Retailers, consumers, and bankers talk about Burundi's unrest
7. Major fire in a central Burundian market

Obstacles

1. A problem, a money making opportunity
2. What doesn't worry Rwandan companies
3. Entrepreneurial opportunities in the DRC depend heavily on the subregion
4. Obstacles for DRC companies, split by the firm growth rate
5. Legal constraints on women's economic involvement in the DRC

Productivity

1. Productivity per worker in the DRC varies hugely by company

Profits

1. Is it profitable for businesses to avoid DRC bureaucracy?

Regions

1. Splitting revenue to keep the DRC stable
2. Ways and outcomes of splitting the DRC's revenue
3. Entrepreneurial opportunities in the DRC depend heavily on the subregion
4. Government moves closer to business in Burundi, at least geographically
5. Central power, and DRC revenue collection and allocation
6. Product innovation rates across the DRC
7. North Kivu promotes its investment opportunities
8. Tourism development in the Virunga National Park

Rwanda

1. Counterfeiting, a sword with many edges
2. What doesn't worry Rwandan companies
3. Economy discussions on the websites of the Rwandan and DRC ruling parties
4. Rwanda to be a non-agricultural society within six years? Hmmm.
5. The prominence of women in Burundian and Rwandan business
6. Rwando-Congolese border enforcement may alter trade patterns
7. The potential and limitations of "Made in Rwanda"
8. The Rwandan government works hard for further investment
9. Rwanda's new draft law on 100% salary during maternity leave
10. Rwanda NGO jobs have high pay, but the private sector offers long term prospects
11. A full, publicly available Rwandan business census
12. Do foreign owners help Rwanda export?
13. Illness and its impact on Rwandan companies
14. Do foreign owners have a more difficult time in Rwanda than local owners?
15. UK arrest of a Rwandan official
16. Rwandan competitiveness recognised in global business indices; Burundi and DRC lag behind
17. The growth rate of Rwandan manufacturing companies - a puzzle
18. Do Rwandan companies led by women have stronger health promotion among their employees?
19. Workforce education in Rwandan companies
20. Computer assembly in Rwanda
21. What reforms of business practices accompany innovations in Rwandan companies?
22. Does radical innovation require extra reforms of business practices in Rwanda?
23. Exciting technological projects in Burundi and Rwanda

Size of companies

1. Small companies in Burundi are not small large companies
2. Shortages of publicly available goods affect smaller companies worse in Burundi
3. The characteristics of medium sized companies in the Great Lakes region
4. More on the differences between small, medium, and large companies in the Great Lakes

Start-up companies

1. Does being part of a group help start-up companies in DRC?

Subsidiaries  

1. Innovation advantages for subsidiaries compared with stand alone companies in DRC
2. Does being part of a group help start-up companies in DRC?

Tax

1. Splitting revenue to keep the DRC stable
2. Ways and outcomes of splitting the DRC's revenue
3. Helping the Burundian hotel and restaurant sectors to recover
4. Helping the Burundian hotel and restaurant sectors to recover - a clarification
5. Political economy in the Great Lakes region

Technology

1. Great Lakes companies with high speed broadband employ it intensively
2. The UN's Technology Facilitation Mechanism 
3. Exciting technological projects in Burundi and Rwanda

Trade

1. Made in Congo, if that's best
2. Difficulties at the DRC port of Matadi
3. Rwando-Congolese border enforcement may alter trade patterns
4. The potential and limitations of "Made in Rwanda"

Women

1. The prominence of women in Burundian and Rwandan business
2. Rwanda's new draft law on 100% salary during maternity leave
3. Does gender equality offer any advantages to Burundi's companies?
4. Do Rwandan companies led by women have stronger health promotion among their employees?
5. Restrictions on working wives damage DRC businesses
6. Legal constraints on women's economic involvement in the DRC

I'm taking a break from blogging, and will probably be writing about the Great Lakes region and its dynamic economy in academic papers.

Burundian manufacturing undercuts international prices

There's an detailed report of a small manufacturer in Burundi here and in English here.  The report talks to the company's founder, a buyer, and an investment adviser.

The company says that sells its products (sticks of chalk for schools) more cheaply than Chinese or Kenyan imports.  It buys the raw material from these countries, and adds value in the preparation of the end product.  As other developing countries become richer and specialise in production of higher value goods, their manufacturing of lower value goods is likely to become less competitive in the Great Lakes region (as their wage bill rises, for example), opening the door for local producers to move into production.

Political economy in the Great Lakes region

Burundi, the DRC, and Rwanda all have long-serving presidents, and much political debate in the countries relates to their hold on power and their struggles to retain their positions.  Conventional economic debates on taxation and spending attract relatively less attention than in Western countries.  The pressure put on the free media limits critical comparison of economic policies across different political parties.

One frequent argument in conventional political economy is over the level of taxation in the economy.  The maximum rates of personal income taxation in each Great Lakes country are reported here (I haven't independently verified them).  They are 35 percent in Burundi, 30 percent in the DRC, and 30 in Rwanda.  The maximum rates of corporation tax are 35 percent in Burundi, 40 percent in the DRC, and 30 percent in Rwanda.

The taxation rates are not so different across the region.  Rwanda has the lowest maximum taxation, with Burundi and the DRC having higher maximum rates.  None are extreme by international standards.  There's a debate to be had about the optimal rates of taxation, in a discussion of conventional political economy.

Inflationary ripples in the DRC

There's been another burst of inflation in the DRC, in the north western village of Zongo, opposite the Central African Republic's capital of Bangui.  I wrote about inflationary hikes in the country in my last blog post.

Inflation is a rise in prices, often persistent.  In Western countries, two frequent causes of major inflation are government operations to change the money supply, and changes in the price of natural commodities. Both of those also happen in the DRC, but the causes of the recent bursts in the country relate to the arrival of refugees from conflict in the CAR (who want to buy the same goods as the Congolese), and interruptions in transport (reducing the amount of goods to buy).  A feature of these DRC-specific causes is not present in the causes in most Western countries (at least not totally present - government buying and selling of their own bonds is a bit similar).  The feature is that they tend to end fully by themselves.  Transport starts working again, refugees go home.  So an inflationary "ripple" occurs, with a rise above trend, then a fall below trend, then restoration to the trend.

I don't know whether anyone has analysed inflationary ripples, but there is probably a lot of work that could be done there.

A train is delayed somewhere in the DRC. Should an industrial economist be annoyed?

There was a decline in the price of cement from US$35 to US$26 last weekend in Kamina in the south of the DRC.  According to the Fédération des Enterprises du Congo, the cause was the arrival of a train carrying goods.  Transport arrivals, delays, and breakdowns can cause major shifts in prices in the country.

There are a number of ways to think about the issue from a business perspective.  The sudden, large changes in prices make it more difficult for companies to plan, and increase risk.  There are also implications for an efficient allocation of goods.  When the central supplier first puts goods on a train, they don't know for sure what the prices will be when the goods are sold.  There probably won't be a stable price over time.  The distribution of goods across the DRC's territory is unlikely to be the best possible, from the point of view of maximising profits.

Industrial economists - who study markets that don't work perfectly - should be annoyed if the loss of profits for all companies combined is more than the cost of putting on more frequent trains (or mending roads).  This might be the case if there is a problem with financing railways and roads, for example, or lack of information on company preferences.

Exciting technological projects in Burundi and Rwanda

A couple of major technological projects in Burundi and Rwanda caught my attention earlier this week.

In Burundi, a solar energy plant is to be constructed in Mubuga.  Lack of electricity supply is a leading hindrance to business in the country, so the project could help companies nationally, as well as creating jobs around the plant itself.  It looks like an enjoyable project to work for.

In Rwanda, there are plans to set up (reportedly) "the world's first drone airport".  The airport is to be used for transporting medicines and electronic parts around the wider region.  Again, it looks like a pleasant job, with plenty of mental challenges relating to construction and logistics.

Business policy in the third term of the Burundian government

It is almost two months since the Burundian government started its third term in power, and in that time it has undertaken various reforms of business policy in the country, or said that it plans to undertake them.  They are a mixed bag: some are pro-market, while others are interventionist.  The tone seems to lean to the former.  The plans and policies include:

• Removal of a charge on tax registration
• Relocation of the organisation that registers traders ("in order to improve the business climate")
• Control of access to foreign currency by companies
• Stating that it would be beneficial to remove intermediaries between agricultural producers and consumers
• Stating that agricultural reform is needed, through irrigation technology, and distribution of fertilizer and seeds
• Stating the aim of attracting industrial producers and private investors generally
• Stating a commitment to education