The ethnic thing is pervasive, and affects my work in weird ways.
It's meetings meetings meetings all day long, yah? Well, the way people respond can vary a lot depending on which ethnic group they're in. For instance, some Tutsis -- not all, but quite a few -- are still smoldering with resentment at the fact that it's now a Hutu-majority government. (Because Tutsis, although a minority, always ran everything that mattered.) These guys tend to go off a lot on rants about the incompetence and corruption of the current governmet, and also to wax nostalgic about the good old days "devant La Crise".
There's a piece of truth here. Everything was better "before the Crisis". The decade-long insurgency and civil war was an utter disaster. It destroyed Burundi's society and economy, slashing already low incomes by 50% and more, and dropped the country from "average for Africa, and clean and pretty with real growth potential" to "desperately poor even by African standards". So, true that. It's just that, in some cases, you can hear that what they're really saying is "back when the Right Sort of People were running things".
As for Hutu interviewees, there are fewer of these -- they're still underrepresented among the elites of business and trade -- but they tend to clam up a bit. My translator is Tutsi, you see.
Government is huge here, a whopping 40% of GDP. Unfortunately the Burundians can't begin to collect enough money to pay for that. Revenue collection is only 20% of GDP -- which is still pretty high -- and donors chip in the rest. Which means donors are paying half the cost of that large (though none too competent) government, yes.
Two interesting elements of revenue: customs collections are about 27% of total revenue, which means they're (27% of 20%) about 5.5% of GDP. Which is highish but not crazy, except when you consider that for every dollar collected there's at least another dollar being paid in bribes. Second, the single biggest taxpayer here is the Amstel brewery, which has been here forever, and is so big and so well managed that it has survived everything Burundi's difficult history could throw at it. Amstel supplies all Burundi with decent beer -- it's a prestige/luxury good, I think -- and also exports to Rwanda and Eastern Congo.
The brewery by itself pays a whopping 30% of all non-customs tax revenues, or about 4.3% of GDP. The brewery's output is just over 15% of GDP. In other circumstances, that would be awesome.
There's a surprisng amount of African capital here. I had a fascinating interview at a local bank that had been purchased and rebranded by Ecobank, which is a West African bank based in Togo. (Apparently it's really Nigerian money and management, but everybody dislikes Nigerians, so they went with Togo instead.)
Compared to Citibank or Wachovia, Ecobank is pretty dinky, but in an African context it's huge, with a reach that's extending across the continent year by year. They came to Burundi, shopped around, and found a local bank that was in trouble -- weak management, lots of bad loans. "Lots of bad loans" is very relative; the best bank here has 10% bad loans, the sectoral average is 15%-16%. This bank was approaching 50%, which was a bit much even for Burundi. So the N/i/g/e Togolese Ecobank was able to pick it up for a song, and is now busy restructuring it. Two new managers -- a Togolese and a Rwandan -- were brought in, and they fired a few people, hired a few people, and got busy trying to collect those bad loans. In four months of banging on doors and shaking trees they've collected about $600,000, or around 10% of their total portfolio value.
Meanwhile -- this is interesting -- they drastically slashed rates on deposits. See, because of all the bad loans, the previous management was desperate to attract deposits. So they were paying 6% on demand deposits, and 7% to 10% on term. This was a lot higher than other banks, so they were having some success, but it wasn't a long-term viable strategy -- you can't pay those rates for money, even in Burundi, and hope to make it up on the loan side.
But the new management, as soon as they came in, rebranded the bank (i.e., repainted the sign on the building) -- and did something rather unBurundian: launched a marketing campaign, with signs and radio ads, announcing that Ecobank, "the Bank for Africa!" had arrived in town. (Burundians aren't so great at marketing. Long story.) Well, everyone was intrigued by the idea of a big international bank coming to town, so a lot of people came in to open accounts. So, even though the new management sharply slashed deposit rates -- like, in half -- they were still able to attract more deposits than the old management ever had.
What's interesting is that Ecobank could have eaten all of the bad loans if it wanted to. We're taking a few millions... chump change for even a middleweight bank. But no. Instead, they've sent two (youngish, hungry) managers to restructure the bank, recover those bad loans, tank up on deposits, get the bank back on its feet, establish the brand... and then, if that works, they're going to push a bunch of money into it and start expanding. This strikes me as an eminently sensible business strategy. I guess that's why I've gone on about this: it's Africans doing something with African money in Africa, and (as far as I can see) doing it well.
Today was not an interview day, but busy anyway as we prepare for tomorrow's wrapup / round table / presentation of preliminary findings. The constant haze almost cleared this afternoon, and there was a nice view from the hotel roof of Lake Tanganyika and, across it, the hills of the northeastern Congo. I have no idea why it's so hazy all the time. Global warming? Something burning? Normal weather? I'm sorry not to see the tropical stars, which I've missed.
What else. Oh, got sick a little this week. That's really common for first-time visitors, and it wasn't a big deal. Generic GI bug: tender stomach, diarrhea, sweats, weakness. Half a day of feeling increasingly bad, a day of feeling wretched, a day of recovery, done.
But I had to work through the bad day, because when you have nine days to learn everything about (say) the country's banking sector, you can't lose a one. This is not to tout my grit, but rather to note in passing that your lower large intestine? does not care if you're in a meeting with the Director of the Central Bank. Also that Imodium is your very special little friend. And that sleep -- sweet, blessed sleep -- remains the best of medicines.