Burundi Essay

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Chapter 2 Burundi’s economy and challenges
2.1 Brief information of Burundi’s economy
Burundi is among the poorest countries in the world in the human development index it ranked 166 out of the 169 in the listed countries. Burundi has not yet started the transition from a traditional society, with most of the population is employed in subsistence agriculture, to a modern society where most of the population lives in urban areas and is employed in manufacturing and services. In most countries that have already undergone such transformation, this transition has taken decades; along the modernization path, subsistence agriculture was gradually displaced as more sophisticated and organized forms of agricultural, manufacturing, and services production increased their relative shares of GDP. Due to the conflict several obstacles are critical to this transformation and modernization of the economy. They are political instability and the menace of violence; poor physical infrastructure, particularly the low supply of electricity; low productivity in agriculture; the low level of integration of the economy with the rest of the world and between the rural and urban economies within the country; poor governance and government decision-making capacity; the low levels of education and health of the population; and high population growth. Through strong links and interdependencies, these obstacles cannot be seen independently. The capacity to surmount these obstacles will determine Burundi future economic growth trends.
Political instability and the menace of conflict is still a powerful deterrent to economic growth and poverty reduction. The assassination of the presidents of Burundi and Rwanda in 1993 sparked an ethnic clash and genocide in R...

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...n. Exports have been low, averaging less than 10 percent of GDP over the last 10 years. The main export crops are coffee and tea, with coffee accounting for about two thirds of the export value. The performance of exports has been erratic, owing largely to the volatility of coffee production. Imports, on the other hand, are increasing, mainly financed by the increasing level of foreign aid. Consequently, the current account deficit has been rising.
In summary, neither exports nor private investment (except over the past three years) have contributed significantly to economic growth during the recovery period. This fact, combined with the analysis of growth by sector of origin, supports the view that the stagnation of agriculture and low expected return on investment have been at the heart of poor economic performance in Burundi during the post-conflict period.

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