Of Autocrats and Second-Hand Clothes

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Rwanda has just commemorated the genocide in 1994 during which close to a million people – no one knows the exact number – were slaughtered in a frenzy of brutality. That’s as if over a third of the population of Botswana were wiped out over a three month period!
Much of the credit for ending the massacre, and the civil war that followed, goes to Rwanda’s President Paul Kagame who led the rebel military forces which put a stop to the horrific carnage and brought about an uneasy peace in the east African nation.
The World Bank, and other international financial institutions, have recognized Rwanda as the second most business-friendly country in Africa, scoring its Ease of Doing Business ranking at 41 – a full 40 points ahead of Botswana.
Kagame has been President since 1980, and since the abolition of term limits, could become another president for life, like his friend and neighbour Museveni in Uganda. Although respect for human rights, democracy and democratic institutions do not seem to be one of Kagame’s strong points, with increasing attacks on the media and opposition parties, his autocratic rule has been relatively free of widespread corruption. He has also successfully promoted Rwandan economic empowerment and the growth in the local business sector.
A recent example is his ban of the importation of second hand clothes from the United States, despite incurring the ire of another increasingly autocratic leader President Donald Trump. The dumping of second hand clothes from the United States, and Europe, has contributed to the close death of textile industries throughout the continent.
The supply chain of how these second-hand clothes end up in Africa is particularly perverse. The US imports cheap clothing from countries such as Bangladesh and Vietnam, made by workers earning next to nothing. These are then sold in major retail stores with huge mark ups to mainly low-income Americans. After they have been used many second-hand clothes are donated to charity shops where they are bought by even poorer Americans. However, an increasing amount is being scooped up for next to nothing by companies which then fill containers exported to Africa, where the clothes end up in street markets being bought by even poorer Africans.
President Kagame wants to put a stop to this trade which has been killing Rwanda’s garment industry. Hence the ban on second hand clothes from the US.
In response the Trump administration has threatened to ban Rwanda’s free access to the US market under the African Growth and Opportunities Act (AGOA). This is unlikely to have a great impact on its economy as, like Botswana, Rwanda exports very little to the US.
In global terms, the ban on US second hand cloths by a tiny Africa nation does not seem to pose a threat to the world’s largest economy. Or wipe out thousands of jobs and a whole industrial sector.
In Botswana our open door policy has virtually wiped out the domestic construction industry, and SME’s struggle to survive in an economy dominated by multi-nationals.
While we whole heartedly support the principles of free trade, this should not be at any cost, and Botswana may be wise to consider the potentially devastating impact this may have on economic diversification.