II ~I ~ ~II~ ~~ ~II ~ ~II - IFES

•The EconomyIV. EFFECTS OF POLITICAL CHANGEBurundi has entered a period of relative political stability. Its leadership is sincere aboutmaking progress towards ethnic reconciliation and democratization. However, except foranticipating a greater flow of foreign aid which will likely come as a reward, the governmenthas little sense of how a link between democracy and economic development will be achieved.While the government can be credited for having liberalized the economy under a World Bank. Structural Adjustment Program, it still has no clear plan for addressing the nation's three mostpressing economic issues. These are (I) reform of the agricultural sector, (2) expansion of thesecondary and informal sectors of the economy, and (3) equalizing opportunity among the twomajor ethnic groups.•Burundi ranks as the 12th poorest nation in Africa. In 1991, per capital income was $250.Agriculture employs 94 percent of the work force and generates more than half the country'sGDP ($1.106 billion at 1990 market prices). Coffee provides most of Burundi's foreignexchange (total export value was $72.67 million in 1990). Foreign aid is equivalent to abouttwo-thirds of the nation's exports.The government controls most economic activity, but under the reforms of the SAP severalparastatal enterprises have been liquidated, reorganized, or scheduled for privatization. Themajority shareholding in the Banque Commerciale du Burundi is held by Burundian nationalsand institutions. Coffee is bought from farmers, many of whom live on cooperatives, and isprocessed and marketed by state-owned companies. The same is true of the two other majorcash crops, tea and cotton. Private enterprise plays a small role in construction, industry andcommerce. Foreign ownership is minuscule.The team's survey found that rural Burundians believe ethnic reconciliation and democratizationhave brought some tangible improvements in their lives, like less costly transportation, moreschools and greater access to consumer goods. Nevertheless, the team would agree with theWorld Bank's recent assessment that government control of rural life, and the resultingeconomic stagnation of farmers, has left most rural people "disillusioned."19