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This section begins with a discussion of the history of Rwanda's apparel sector and describes how recent bilateral and domestic pressures have blocked industrial policy. Until , there were no large factories producing textiles or garments in Rwanda. Although some cotton was produced domestically in the s, it was exported to neighbouring countries.

In , Utexrwa began printing and dyeing imported raw cloth.

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Utexrwa benefited from public procurement contracts to supply uniforms to the army and public institutions and won a lucrative contract to supply garments on order to the Democratic Republic of Congo DRC , profiting from Habyarimana's close relationship with DRC President Mobutu. During the genocide, Utexrwa lost its trained workers. Parts of the factory were destroyed and raw materials warehouses were burned The New Times , Jobanputra left Rwanda shortly after the genocide but retained control of Utexrwa. He moved to Uganda where he had already established a printing company and later bought a textiles factory.

In , as part of Uganda's privatization programme, Jobanputra purchased the struggling parastatal, Nyanza Textile Industries Limited Nytil. Nytil has now been renamed Southern Range Nyanza Ltd. As Jobanputra expanded his interests in Uganda, Utexrwa continued to operate in Rwanda. In the early s, Utexrwa enjoyed support from the government and a consultancy company, On The Frontier, as it worked to diversify its production to include silk products.

During this time, Utexrwa was awarded a contract to supply uniforms to the military, the police and some local industries, and began to export products to North America. However, representatives from Jobanputra's apparel companies in both Uganda and Rwanda mentioned the difficulties experienced in meeting the requirements and deadlines of American buyers; consequently, they focused their efforts on producing for the regional market.

By , Utexrwa was targeting new domestic customers, producing antibacterial medical fabrics and supplying uniforms to hotels, schools, colleges and laboratories. Silk was considered a priority sector since Rwanda enjoys a suitable climate for mulberry cultivation, giving it the potential to produce silk inputs. At that time, Utexrwa employed workers and had processing functions from spinning, weaving and printing to garment making. In , it launched its production line for silk products and established the brand name, Silk Hills.

However, it needed 7. As of , despite the government's efforts to reorganize the supply chain by supporting 40 cooperatives in four provinces, Utexrwa's silk production was no longer in operation. The Ministry of Defence still has full ownership of the company. In its place, a Korean investor has committed to establishing a silk yarn factory and the government is supporting farmers to rehabilitate 1, hectares of mulberry plantations across the country MINICOM, In the late s, Utexrwa lost the lucrative contract to supply military uniforms when the military chose the cheaper option of importing uniforms from China.

This decision had a detrimental effect on Utexrwa's profit margins. However, the DMRS has provided some new opportunities for the company, with domestic institutions including schools and hospitals now encouraged to buy domestically produced uniforms and garments. Despite these new opportunities, prospects remain dismal for Utexrwa, with capacity utilization dropping to just 20 per cent in The government has now found a new Chinese partner for the apparel sector.

Managers within the company said that they were investing in the Rwandan market because of the country's leadership and the incentives that were on offer. Within Rwanda, it has won lucrative public procurement contracts to supply police uniforms. However, this factory is currently operating far below capacity and its products are not gaining traction in the domestic market Gahigi, a. Production costs are high because of high transport costs, and inputs are not always readily available.

Huajian's investments target the production of shoes, clothes, bags and electronic equipment for the US market Bizimungu, In recent years, the government has supported the establishment of other garment and shoe factories. Abahizi Dushyigikirane was the second company to receive EPZ status and employs workers.

In the last three to four years, Rwanda's apparel sector has received significant government attention after being ignored for the previous decade. An aggressive push for import substitution has significantly shaped strategies of stakeholders within the sector. The increased duties were expected to lead to higher prices in the short term, as local newspapers warned Esiara, ; Mugabo, However, US influence has tried to counter the ban. Trump's decision also had the perverse effect of cutting the supply line from Rwanda of an American company, Kate Spade. While the withdrawal of AGOA benefits does not amount to a death sentence for the industry, companies will have to rethink their future strategies.

The decision was taken without paying any attention to developing linkages: the country doesn't have a tannery or a ginnery and is largely dependent on imports for the production of finished garments.

The government also has to stop goods being smuggled across borders, and manage the interests of importing cartels. The Rwanda Revenue Authority impounded tons of clothes and 27 tons of used shoes in the last six months of Esiara, a. However, there are few other avenues for the poorest Rwandans to buy affordable clothes and shoes. Although government officials see no other way to support their ailing apparel industry, even if the sector grows, it will be some time before affordable clothes will be available for the poorest Rwandans.

The government has also struggled to develop effective state—business relationships.

As described above, the government's relationship with the local company, Utexrwa, has been strained over the years. In summary, the case of the apparel sector demonstrates several aspects of the challenge of revitalizing the sector. First, it faces significant constraints in the form of high transport costs, availability and price of inputs, and high energy costs.

For most goods in the textiles sector, tariffs of 0—25 per cent are applied in line with the CET. However, for 17 goods with different harmonized system codes, tariffs are applied at between 25 and 50 per cent. Some of these tariffs exceed bound tariffs but no complaints have yet been filed with the WTO. The previous section showed the impact that bilateral pressure can have on industrial policy; this section, which begins by describing the history of Rwanda's cement sector, focuses on how domestic and regional pressures are shaping that sector's evolving political economy.

In July , the Rwandan government established a joint venture with the Chinese government to construct a cement production plant. The plant had an initial capacity of 50, tons per year. In , the Chinese loan expired and the government chose to privatize the company. RIG had promised to build a new plant but did not deliver. One reason for the lack of activity was that one of RIG's leading investors, Tribert Rujugiro, left Rwanda because of tax evasion and money laundering charges. However, as of , KCC has rarely been in operation, with difficulties in accessing raw materials, difficulties in its clinker plant in Tanzania and an ongoing court case in relation to debt allegedly owed to the Rwanda Enterprise Investment Company by former owners Esiara, b.

In , local cement demand was estimated to be between , and , tons per year. While CIMERWA's production almost tripled from , tons in to , tons in Bizimungu, , the figure is still only just over half of the plant's installed capacity. Though CIMERWA's cement production struggles to compete with the prices of imported cement, the Rwandan government supports the company by providing guaranteed contracts for strategic projects like the Kigali Convention Centre and Kigali Heights shopping complex, demonstrating how public procurement has been used to support local companies.

Although this has been beneficial, CIMERWA owners were still in a tricky position and in urged the government to ensure that local consumers bought locally produced cement including in government projects. It can even do more to protect its local companies. DRC, Uganda and Cameroon all stopped imports before.

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If we don't get enough government support, we might default on the loan. During the construction boom, existing and new Ugandan, Tanzanian and Kenyan importers seized their opportunity and captured most of the market. Smaller regional players like Bamburi, Savannah, Twiga and Nyati also operate as importers.

It is establishing sales offices across the country, matching the emphasis that Hima and Simba place on expanding their operations.

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CIMERWA's cement is more expensive than that of importers, reducing the competitiveness of locally produced cement in the market. Since Hima and Simba do not have to pay duties, the Rwandan government is unable to protect locally produced cement from competition. Cement importers also argue that they continue to buy imported cement not just because of the price but because they trust the quality. This, however, brings challenges.

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As Rwanda's investments in infrastructure continue to increase, domestic demand for cement will also increase in the coming years. However, if CIMERWA's plant encounters difficulties at any point, or if its owners face financial difficulties, such as loan repayments, cement shortages may drive up prices or delay construction of strategically important projects.

Indeed, one instance of this has already occurred. With CIMERWA's existing cement stocks reserved for some strategic projects, the resulting cement shortage caused prices to increase significantly, leading to a cement crisis in the latter half of The government's attempt at privatizing CIMERWA was unsuccessful and failed to deliver the investments required because of its soured relationship with the crucial local investor, Tribert Rujugiro.

Yet dependence on CIMERWA to meet local market demands carries risks in a sector that is crucial to the government's development strategy. Neither the government nor CIMERWA has prioritized investments in forward linkages, partly due to inadequate production quantities, with the plant running well below full capacity.

Although new factories are being built by local Prime and regional KCC firms, these cannot provide an immediate solution: Prime needs to learn and acquire technological capabilities quickly as this is the company's first foray into the sector, while KCC is currently stuck in legal wrangles. International pressures — from donors or at the multilateral level — are marginal, largely because there are no actors operating within the sector from outside the EAC. Regional competition is much more significant. Despite making progress, CIMERWA's production falls far short of meeting the needs of the domestic market, with production at just over half of its installed capacity in Without government support through public procurement contracts and incentives subsidizing electricity , CIMERWA cement will struggle to compete against regional imports.

At the same time, the government's growing reliance on CIMERWA — as the only domestic production plant — has showcased the vulnerability that accompanies such dependence.

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Thus, while recognizing that there has been positive growth within the sector, there is no certainty that such progress can be sustained, given the regional and domestic context. The idea of industrial policy is enjoying a revival across Africa; the academic literature reflects this revival, analysing the prospects for industrialization within African countries. However, there are few studies to date that highlight how international, regional and domestic pressures shape the evolving political economy of industrial policy in developing countries. This article contributes to the industrial policy literature by showing how the Rwandan government has navigated pressures from multiple scales while attempting to revive its manufacturing sector in the 21st century.

Enacting industrial policy is a challenge, given the constraints imposed by multilateral organizations and the enticements, with strings attached, offered by bilateral donors. With Trump's decision to withdraw Rwanda's preferential access to US apparel markets through AGOA, the strength of bilateral pressures has forced the Rwandan government and locally based firms to rethink their future strategies.

For a small country like Rwanda, gaining access to larger markets is a precondition for the expansion of its manufacturing sector. The challenge of sustaining relationships with local manufacturers is further complicated by the volatile trading environment in which developing countries must implement their industrial strategies.

Despite the government's concerted efforts, its aggressive industrial policies are continually countered by bilateral pressure, regional competition and the challenges caused by increasing reliance on individual firms. Even where the political will for industrialization is secure, the challenges of enacting industrial policy in a 21st century trading environment create uncertainty and vulnerability. Pritish Behuria pritish.

His current research examines how the domestic politics of economic transformation is being reshaped by global economic shifts. His fieldwork experience is largely concentrated in East Africa and South Asia. Volume 50 , Issue 4. The full text of this article hosted at iucr. If you do not receive an email within 10 minutes, your email address may not be registered, and you may need to create a new Wiley Online Library account. If the address matches an existing account you will receive an email with instructions to retrieve your username. Development and Change Volume 50, Issue 4.

Original Article Open Access. Tools Request permission Export citation Add to favorites Track citation. Share Give access Share full text access. Share full text access. Please review our Terms and Conditions of Use and check box below to share full-text version of article. Figure 1 Open in figure viewer PowerPoint. Figure 2 Open in figure viewer PowerPoint. Figure 3 Open in figure viewer PowerPoint. Regional Trade Policy The RPF government's attitude to regional integration and opening up of Rwanda's borders is different from the protectionist Rwandan governments of the past.

International Pressures In the last three to four years, Rwanda's apparel sector has received significant government attention after being ignored for the previous decade. Figure 4 Open in figure viewer PowerPoint. Amsden, A. Crossref Google Scholar. Wiley Online Library Google Scholar.

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Password Changed Successfully Your password has been changed. Returning user. Community Reviews. Showing Rating details. Sort order. About Ben Fine. Essential for students of development studies. Beyond the developmental state : industrial policy into the twenty-first century by Ben Fine Book 3 editions published in in English and held by 98 WorldCat member libraries worldwide Moving beyond abstract economic models and superficial descriptions of the market, Beyond the Developmental State analyses the economic, political and ideological interests which underpin both the state and the market.

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The rise and fall of social capital at the World Bank is critically explained as is social capital's growing presence in disciplines, such as management studies, and its relative absence in others, such as social history.