While great progress has been made since the 1994 genocide, what are Rwandas main economic challenges?
Kostial: Rwanda’s progress since the genocide is amazing. To keep up the progress, the private sector must become the driving force for growth in Rwanda. This will require addressing the country’s severe infrastructure gap. Rwanda is a small, landlocked country with very high transportation costs. The road and railroad networks—inside Rwanda and in neighboring countries—are weak, severely constraining Rwanda’s access to markets. In addition, the supply of electricity is limited and tariffs are the highest in the region, skilled labor is scarce, doing business is expensive, and the financial system is shallow. The related and really big challenge is reducing poverty. We were struck by a recent household survey, which showed that between 2000-01 and 2005-06, poverty had declined only by about 4 percentage points—from about 61 percent of the population to around 57 percent. It is now very important that the new Poverty Reduction Strategy Paper (PRSP), which is expected to be completed in
