Development Of Productive Industries During The Private Sector

1176 Words May 11th, 2016 null Page
Development of Productive Industries in the Private Sector

With fertile land and cultural traditions such as cattle grazing, agriculture flourished in Rwanda; however, the inefficient agricultural sector will prove the first major challenge. In 2011, agriculture accounted for 34 percent of GDP. On the other hand, industry accounted for only 14 percent and service 52 percent. To promote industry – optimizing both the agricultural and industrial sectors – the Rwandan government should encourage the privatization of farms over subsistence farming. Xiaodong Zhu described the impact of such incentive policies in the PRC: “The increase in food availability started a structural transformation that reallocated a large amount of labor from agriculture to industry” (Zhu 2012, 113). Between 1978 and 1984, 19 percent of the Chinese labor force reallocated from the agricultural sector, with most workers moving to rural industrial enterprises (Zhu, 113). Given that 90 percent of Rwandans are subsistence farmers, reallocation would promote economic efficiency (CIA Factbook). After increasing agricultural incentives to drive workers from farms to factories, the Rwandan government should promote productive and private industries, such as renewable energy and tourism. Taking advantage of the mountainous terrain and abundant water supply, Rwandan entrepreneurs should develop geothermal energy plants and hydroelectric dams. Given that 16 percent of Rwandan imports are energy [see Figure 1],…

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