Doug discusses three separate Burundian issues in his penultimate post in the Burundian series. The first topic concerns the country's ethnic divide. It's pervasive, but considering recent history the story is remarkably positive.
The second topic concerns customs duties. Burundi, like many African countries (and a few Central American ones) relies heavily on trade taxes for a quarter of its government revenues. This is the unheralded elephant in the room during free trade discussions. These countries have a pressing need for more public revenue, to build infrastructure and pay judges and carry out very basic state functions. Yet they lack the administrative capacity to collect high levels of internal taxes. Borrowing to build a state could square that circle, in theory; in practice, that hasn't worked out so well. So what to do?
One possibility is to make like Angola or Mozambique, both of which have effectively handed control over their customs administration to foreigners. (British foreigners, at that. Crown Agents, whose flag is pictured above, specializes in running revenue collection in other countries.)
That sort of empire-by-invitation doesn't seem to be on the table in Burundi, however, although one might think that the French government might be able to play a more pro-active role, if it wanted to.
The third and final topic concerns an issue I find fascinating: how do banks function in an environment where the politics is unstable and the rule-of-law close to nonexistant? I wrote my first book about that, and it's fascinating to watch a Togolese (or is it Nigerian?) bank and Burundian politicos deal with the same issues today. Ecobank is an institution that bears further watching.
Comments