Until recently, Burundi had shown signs of much-needed stability after years of a devastating civil war. However, President Nkurunziza’s constitutionally controversial bid to seek a third term has led to widespread public discontent, violence, and even a coup. So far, international and regional analysts have focused on the internal dynamics of the political turmoil. This is with good reason: Estimates suggest that over 20 people have died and 431 have been injured in the demonstrations in just the last month. But might this instability create problems that spill over the border? As threats of a divided army, widespread violent demonstrations, large refugee outflows, and ethnic tensions continue, we provide a quick look at risks facing the region and, in particular, the East African Community (EAC), which, along with Burundi, includes Kenya, Uganda, Tanzania, and Rwanda. The EAC has embarked on a commendable agenda to strengthen regional integration, but to what extent is the Burundi conflict having negative effects in the rest of that economic community? There are three major channels for spillover effects:
Threats to regional security
The unrest could have serious implications for regional stability. In the wake of the recent coup led by General Godefroid Niyombar, tensions between different factions of the army supporting the coup and those backing Nkurunziza have become ripe. Increased political tensions and civil disturbances combined with military activity have kept the situation volatile in Burundi for nearly a month. For the EAC more broadly, this poses the risk of the deteriorating security situation spilling over to Burundi’s neighbors in the shape of armed conflict. As concerns of political interest groups stoking ethnic tensions are being raised, danger of a cross-border shock is significant. The Hutu-Tutsi ethnic dynamics played a key role in the deadly civil war that continued till early 2000s, and, earlier this month, the Rwandan Foreign Minister Louise Mushikiwabo warned of rebels from the Hutu-dominated Democratic Forces for the Liberation of Rwanda (FDLR) based in the Democratic Republic of the Congo (DRC) taking this opportunity to participate in the unrest—a threatening scenario given the history of the FDLR.
Threats to the region’s economic outlook
Violence and instability create immediate impacts on local and nearby economies and can happen in several ways. We distinguish the impact on the economic health of the region through two channels: First, the direct impact of the refugee inflow, which includes additional costs on already hard-pressed public and social welfare budgets. The second impact results from changes in domestic and international investment sentiment.
Since the start of the protests, over 105,000 people have fled to neighboring regions in Rwanda, the DRC, and Tanzania and the United Nations Refugee Agency (UNHCR) expects the number to nearly double to 200,000 in the next 6 months. These refugees create considerable financial burden on the host nations and compete for limited resources in these economies. Although humanitarian aid and benefits arising from expansion in consumption alleviate the costs in the long run, the costs of absorbing over thousands of refugees can be large in the immediate aftermath of the protests.
Concerns of regional instability can cloud investment and hurt the business climate of the region. However, a quick look at Table 1 below shows that the demonstrations in Burundi should have little impact on informed investors abroad: Burundi is landlocked, one of the region’s smallest and poorest countries, and has little stock of natural resources, so repercussions on regional economies through this second channel should be minor.
Table 1: Burundi vs. the EAC (2013)
The conflict, however, is making the EAC’s efforts at regional integration a more tenuous task. Burundi’s capital city, Bujumbura, is an important part of the trade routes the EAC wants to develop in the region—the turmoil can potentially impede this process. A slowdown in these efforts can prove to be even further detrimental to Burundi —although the Burundian economy has been an economic laggard, it’s within the EAC that it has made great progress and has huge scope to grow like its neighboring state Rwanda. There is thus an amplified concern of increased inequality in the region too. Burundi—the world’s second-poorest nation with a life expectancy of mere 54 years at birth (even lower than an average of 62 years for low-income countries)—can’t afford another conflict. As we see the conflict continue or even escalate, it is only fair to expect not only serious fiscal and short-term growth-related risks for Burundi, but also an uncertain business climate. A quick look at past data also shows that welfare effects of the unrest can be long lasting. While economic growth stabilized around the 4 percent mark after the civil war, GDP per capita decreased from $230 in 1992, to $192 in 1997 (just before the civil war), to $174 in 2008 (five years after the civil war). Recent research has also shown that, upon return, refugees can take eight to 10 years to reach the welfare levels of their neighbors who were not displaced. Thus, the long-run impact of the turmoil on regional poverty can be substantial.
Threats to the political climate
The current political instability and the uncompromising government is certainly a test for the region’s democratic credentials. Burundi had made important democratic gains since emerging from years of armed conflict. Admittedly, President Nkurunziza’s efforts to tread the boundary of term restrictions haven’t been the first on the continent. Over 15 African presidents have tried the same move (some unsuccessfully) since the introduction of these democratic reforms to limit terms in order to end the undemocratic phenomenon of “presidents for life.” Just over six months ago, former President of Burkina Faso Blaise Compaoré’s struggle to bid for another term led to widespread violent demonstrations in the country and his departure from office. With elections due in the DRC and Rwanda in the next couple of years, President Nkurunziza’s decision to seek an extra term despite the constitutional restrictions could pave the way for other regional presidents to extend their rule.
In conclusion, although Burundi poses little threat to the economic stability of the region, the conflict could have substantial repercussions for regional peace and security. Regional leaders have called on the president to postpone elections to wait for a “conducive environment.” An immediate end to the violent protests is indeed vital; however, a delay in the elections without the president’s consent to step down is, at best, a temporary remedy. Burundi should get its act together and be an important actor in the effort towards regional integration.