Outlook for 2011-12

The clean sweep in 2010 of municipal, presidential, and legislative elections by the ruling Conseil national pour la défense de la démocratie-Forces pour la défense de la démocratie (CNDD-FDD) and the incumbent president, Pierre Nkurunziza, points to their continued dominance. However, the turbulent electoral period has led to heightened tensions between the government and opposition parties, including the Forces nationales de libération (FNL), which appears to be re-arming in eastern areas of the Democratic Republic of Congo (DRC) for renewed violent struggle against the government. Despite political uncertainty, the Economist Intelligence Unit forecasts real GDP growth of 4.5% in both 2011 and 2012, driven by agricultural production and investment.

The political scene

The National Assembly elected the country's first ever ombudsman on November 12th. The selection of an ombudsman may have been welcomed, given that the position had been vacant since it was created by the Arusha peace accords in 2009. However, opposition parties and civil society groups were outraged at the selection of a ruling party loyalist to the position, which is meant to act as a check on the government's abuse of power. The selection of a mute ombudsman is particularly worrying, because the government has continued it's harassment of the opposition. Human Rights Watch and various local non-governmental organisations (NGOs) documented several cases of politically-motivated violence and arrests of opposition activists and journalists. For its part the government has denied claims that opposition political groups have returned to armed struggle, and has instead insisted that it is dealing with pockets of banditry. Meanwhile, the UN has significantly reduced the capacity of its office in Burundi, now called the UN Office in Burundi (BNUD).

Economic policy

The government adopted the 2011 budget in December, which anticipates a 19% increase in spending and an optimistic 26.4% rise in domestic revenue. Prior to the adoption of the budget an IMF mission conducted a review of the economic reform programme, which it described as "broadly satisfactory".

The domestic economy

After an extended delay, a new semi-autonomous revenue agency, the Office Burundais des Recettes, has started operations.

Foreign trade and payments

The Belgian government and the UN's Food and Agriculture Organisation (FAO) have announced a joint aid package for agriculture worth US$129m.

Land area

26,338 sq km

Population

8.3m (2009 IMF estimate)

Population density

315 people/sq km

Main town

Bujumbura (capital), population 800,000 (2008 estimate)

Climate

Tropical

Weather in Bujumbura

Average annual temperature, 24°C; driest months, June-September; wettest months, February-May; average monthly rainfall 65 mm

Languages

Kirundi and French

Currency

Burundi franc (Bufr) = 100 centimes

Time

2 hours ahead of GMT

Public holidays

January 1st (New Year's Day), February 5th (Unity Day), April 6th (President Ntaryamira Day), May 1st (Labour Day), June 2nd (Ascension), July 1st (Independence Day), August 15th (Assumption), October 13th (Rwagasore Day), October 21st (Ndadaye Day), November 1st (All Saints Day), December 25th (Christmas Day)

Official name

République du Burundi

Form of state

Unitary republic

Legal system

Based on Belgian law; a new constitution was adopted in 2005

National legislature

National Assembly elected in July 2010, with 106 members; Senate elected by communal councillors in July 2010

National elections

Following elections in 2010, the next National Assembly and Senate elections will be held in July 2015

Head of state

President elected in June 2010 for a second five-year term by popular vote; next election is scheduled for June 2015.

National government

Appointed in August 2010

Main political parties

Conseil national pour la défense de la démocratie-Forces pour la défense de la démocratie (CNDD-FDD); Front pour la démocratie au Burundi (Frodebu); Union pour le progrès national (Uprona); Mouvement pour la réhabilitation des citoyens-Rurenzangemero (MRC-Rurenzangemero); Parti pour le redressement national (Parena); other parties include: Conseil national pour la défense de la démocratie (CNDD); Forces nationales de libération (FNL); Inkinzo; Parti du peuple (PP); Parti pour la libération du peuple Hutu (Palipehutu); Parti pour la socio-démocratie (PSD); Parti pour la réconciliation du peuple (PRP); Rassemblement pour la démocratie et le développement économique et social (Raddes); Rassemblement pour le peuple du Burundi (RPB)

President: Pierre Nkurunziza (CNDD-FDD)

First vice-president: Thérence Sinunguruza (Uprona)

Second vice-president: Gervais Rufyikiri (CNDD-FDD)

Key ministers

Agriculture: Odette Kayitesi (CNDD-FDD)

Civil service & social security: Anonciata Sendazirasa (CNDD-FDD)

Commerce & industry: Victoire Ndikumana (Uprona)

Defence: Pontien Gaciyubwenge (military)

East African Community affairs: Hafsa Mossi (CNDD-FDD)

Education & scientific research: Julien Nimubona (Uprona)

Energy & mines: Moïse Bucumi (CNDD-FDD)

Finance: Clotilde Nizigama (CNDD-FDD)

Foreign affairs & co-operation: Augustin Nsanze (CNDD-FDD)

Good governance & state inspection: Jean-Baptiste Gahimbare (Frodebu-Nyakuri)

Health: Sabine Ntakarutimana (CNDD-FDD)

Interior: Edouard Nduwimana (CNDD-FDD)

Justice: Ancilla Ntakaburimvo (neutral)

National solidarity: Immaculée Nahayo (CNDD-FDD)

Public security: Alain-Guillaume Bunyoni (police)

Telecommunications & information: Concilie Nibigara (Uprona)

Transport & public works: Saidi Kibeya (CNDD-FDD)

Central bank governor

Gaspard Sindayigaya

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Please see graphic below

The president, Pierre Nkurunziza, of the Conseil national pour la défense de la démocratie-Forces pour la défense de la démocratie (CNDD-FDD), was last year re-elected unopposed for another five-year term. Meanwhile his party secured clear victories in local and legislative elections, and therefore their continued domination of the political scene seems assured for the forecast period and beyond. However, since most opposition parties boycotted the 2010 election cycle and several of their leaders have since gone into hiding for fear of persecution, there are still uncertainties about the legitimacy of Mr Nkurunziza and his party's rule.

In this context, it has been helpful to Mr Nkurunziza that the predominantly Tutsi Union pour le progrès national (Uprona), after some hesitation, decided to contest the legislative elections, despite withdrawing its candidate from the presidential election, and is now participating in the government, albeit in a bad tempered manner. This has enhanced the credibility of the electoral process and Mr Nkurunziza's victory, and also bolstered the president's argument, particularly internationally, that other opposition parties are just bad losers. Nonetheless, the decision by the CNDD-FDD's major-and predominantly Hutu-rivals, Forces nationales de libération (FNL) and Front pour la démocratie au Burundi (Frodebu), to disengage from the electoral process, and the subsequent harassment of their party members, will continue to undermine Mr Nkurunziza's credibility as president domestically, particularly in provinces where these two parties are strong, such as Bururi and the capital, Bujumbura, and in the Great Lakes region as a whole.

A minority FNL faction, apparently sponsored by the CNDD-FDD, and hastily recognised last August by the government as the true leaders of the party, wants the FNL to resume participation in the political process. Yet the faction, headed by Emmanuel Mubiro, is unlikely to win the loyalty of the party's rank-and-file, many of whom appear inclined instead to resume armed struggle. Agathon Rwasa, who insists he is still the FNL president, fled the country last June, apparently to eastern Democratic Republic of Congo (DRC), from where he has been covertly recruiting combatants. Both he and the government deny this is happening, but the Economist Intelligence Unit anticipates instead that their conflict will come into the open. Renewed armed struggle from Mr Rwasa's FNL will probably not pose much of a threat to the government in the short term, particularly since the FNL no longer enjoys the support it once had from the Tanzanian government.

A renewal of hostilities between the government and the FNL will further harden the former's stance towards opponents in general, which has already taken a sharp turn for the worse since the election. We anticipate further arrests of opposition party and civil-society activists, which will put Uprona under intense pressure to pull out of the government. Should Uprona do so, it would be a blow to Mr Nkurunziza and the CNDD-FDD, although it remains to be seen whether Uprona can use this threat to exercise any significant leverage. Another critical issue will be the position of the courts. Burundi's judiciary is generally pliant to the executive, but occasionally digs its heels in and acquits political opponents of the government. The way the courts handle the many trials of opposition party activists and journalists that are heading their way will play an important role in determining the extent to which the government succeeds in imposing its ongoing restriction of political space in the country.

Alexis Sinduhije of the Mouvement pour la sécurité et la démocratie has, like Mr Rwasa, fled the country, and rumours are circulating in Bujumbura-denied by Mr Sinduhije-that his party may also take up arms against the government, possibly in alliance with the FNL. Moreover, some senior CNDD-FDD figures have accused members of the armed forces who came from the previous, Tutsi-dominated Forces armées du Burundi (FAB) of being sympathetic to this alleged rebellion. Forner FAB officers have denied the charge. The CNDD-FDD first came to power in 2005, and since then ex-FAB members of the armed forces, who fought against the party when it was still a guerrilla army, have largely distanced themselves from the country's political struggles. If the position of the former FAB members has changed, or if the CNDD-FDD has decided that the time has come to take on the old FAB, or both, this would also not bode well for the country's security prospects over the forecast period.

Burundi held elections for all levels of government during 2010. The next series of elections are not scheduled to take place until 2015.

International donors were deeply unimpressed with the opposition party boycott of the electoral process after the May local elections, and have thus far been inclined to support the government of Mr Nkurunziza. However, this will change if the administration's treatment of its opponents continues in the openly hostile manner seen since the elections. We expect donors to proceed cautiously, and disburse funds gradually in reaction to events.

Burundi's deepening integration into the East African Community (EAC), which manifested itself in July 2010 through the introduction of a common market protocol and further in December when Mr Nkurunziza assumed the rotating EAC chairmanship, will continue to improve regional political and economic ties. The South African government worked hard to ensure the success of the political transition that brought Mr Nkurunziza to power, and will continue to exert influence despite the withdrawal of its troops from the country. We anticipate that Burundi will sustain its current level of troop deployment to the African Union (AU) peacekeeping mission in Somalia over the forecast period, despite further loss of life suffered by the Burundian military in Somalia, and threats against the country from Somalia's Al-Shabaab militia.

The government says that it will refocus capital spending towards agriculture and infrastructure projects that can relieve supply bottlenecks, and we anticipate that there will be some new state spending on electricity generation and rural infrastructure over the forecast period. However, the country's public expenditure management is so weak, and the political incentives to keep it that way are so strong, that we are doubtful of a substantive reorientation in the government's capital expenditure patterns.

Economic policymakers in the government will come under increasing pressure from their EAC counterparts to bring themselves up to regional standards, and we believe this pressure will bring positive results. However, we doubt that the country's economic governance can be brought to a level within this period that would enable it to join the EAC's planned single currency in 2012, as currently envisaged, although it seems highly improbable that such a major step will actually be taken by EAC heads of state in two years' time. The recent, broadly positive assessment by the IMF of Burundi's economic reform programme under its extended credit facility (ECF) indicates that the government is likely to negotiate a replacement programme with the Fund when the current ECF expires in mid-2011.

Despite its sober promises to the IMF and the fact that the elections are over, the government's instinct over the next two years will be to take an expansionist approach. Public spending on civil service and military pay awards will increase, and some of the measures called for in the national development strategy will be implemented, which will also entail the use of state funds. A new semi-autonomous revenue agency, the Office Burundais des Recettes (OBR), will have a positive impact on domestic revenue growth during the forecast period, although not to the level optimistically assumed by the government's 2011 budget forecast. With expenditure set to remain high, revenue likely to grow more modestly, and donors only expanding their disbursements slowly, we believe the fiscal balance will remain substantially negative and trend slowly downward over the forecast period, from 6.5% of GDP in 2010 to 6.8% of GDP in 2012.

A major challenge for the Banque de la République du Burundi, the central bank, is to engage in a more productive way with the Ministry of Finance to improve monetary and fiscal policy co-ordination. The bank will receive help in this regard from donor-funded technical assistance, which will improve liquidity management. Monetary policy over the forecast period will be characterised by the conflicting aims of creating looser credit conditions that are more conducive to economic expansion while restricting the growth of money supply sufficiently to avoid worsening inflationary pressures in the face of rising international prices for staple foods and commodities.

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A continued peace dividend, which appears increasingly unlikely, would go a long way towards ensuring that economic growth remains relatively robust over the forecast period. The manufacturing sector is expected to continue on its modest growth path, but textile output has collapsed and energy shortages will remain a significant problem. Nonetheless, we expect modest increases in the production of beer and household consumer goods. In its role as a regional trading hub, Bujumbura should benefit from continued stability, and further integration with the EAC will prompt growth in the wholesale and retail sectors. Agricultural production is expected to improve, although weather patterns are uncertain and production is vulnerable to erratic rain patterns. Overall, we expect the main drivers of economic growth to be increased food production and higher investment, and forecast real GDP growth of 4.5% in both 2011 and 2012. The main threats to this are a return to political instability, particularly if the FNL resumes its armed struggle, and possible poor performance from the agricultural sector because of inadequate rains.

Global price spikes in the fourth quarter of 2010 and a global outlook for buoyant commodity prices will put pressure on Burundi's consumption basket, particularly given Burundi's susceptibility to international price increases. Furthermore, robust demand in areas such as construction and continued growth in the money supply will further add to inflationary pressure and we have raised our inflation forecast to an average of 13% in 2011 before falling back to 11% in 2012.

The Burundi franc has been relatively stable all year, albeit with a slight depreciation during the election period. The poor balance-of-payments position will exert downward pressure on the value of the local currency, but donor inflows over the forecast period, notwithstanding political turmoil, will mitigate this to some extent. Overall, we expect the Burundi franc to average Bufr1,251:US$1 in 2011 and Bufr1,300:US$1 in 2012.

Imports to Burundi typically exceed exports by roughly 400%, and there appears to be no prospect of this ratio altering significantly over the forecast period. We expect tea and coffee production volumes to rise during 2011-12, but this will be offset by a fall in the international price of tea. Recorded earnings from "other primary products", which include gold smuggled in from the DRC, will fall, because although plenty of gold is still coming into Burundi, more and more of it is also being smuggled out of the country and thus going unrecorded.

Increased global competition for markets, which is pushing down prices, and the introduction of the EAC, which is reducing regional tariff and non-tariff barriers, will mitigate the rise in import costs during the forecast period. Burundi's services deficit is expected to widen as increased trade volumes result in higher freight costs. Current transfers, supported by donor aid, will counteract this slightly and we forecast that the current-account deficit will edge down from 10.7% of GDP in 2010 to 10.6% of GDP in 2011 and 8.3% of GDP in 2012.

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The National Assembly elected the country's first ever ombudsman on November 12th. This position was a requirement of the Arusha Accords of 2000, although it had remained vacant until November. The ombudsman's main task is to investigate public complaints about the government, but the elected ombudsman, Mohamed Rukara, is a parliamentarian of the ruling Conseil national pour la défense de la démocratie-Forces pour la défense de la démocratie (CNDD-FDD). The ruling party's selection of a senior CNDD-FDD member has caused outrage within the political opposition and civil society, who have argued that a neutral person should have been selected. The Union pour le progrès national (Uprona), a predominantly Tutsi party with 17 seats in the National Assembly, boycotted Mr Rukara's election in protest, as did the three representatives of the Twa ethnic group. The CNDD-FDD, however, was unrepentant.

The ruling party does not consider itself entirely bound by the prescriptions of the Arusha Accords, having come to power despite never having signed it. In particular, the CNDD-FDD has been hostile to the Accords' requirement that both a tribunal and a truth and reconciliation commission (TRC) be established to examine the civil war of the 1990s and early 2000s, in which the party was an armed participant. Rather than establish a TRC and tribunal, the government played for time by establishing a commission in 2007 to investigate whether people wanted a TRC (February 2009, The political scene; August 2006, The political scene). This committee was supposed to do its work in six months, but only concluded its work in early December 2010, reporting that over 80% of those it had asked said they wanted a TRC and tribunal. Since the commission's findings were publicised there has been no formal response from the government.

The president, Pierre Nkurunziza, used the traditional New Year's radio address to promise the country peace and reconciliation (a common theme in his speeches), which is also a pillar of the country's "Vision 2025" policy document (see Economic policy). Yet, over the last few months government security forces continued to harass members of the Alliance des démocrates pour le changement (ADC-Ikibiri; the Democratic Alliance for Change), which groups together the opposition parties that boycotted presidential and parliamentary elections in mid-2010 in protest at what they claimed to have been widespread fraud (The political scene, November 2010). Edouard Ndiwumana, the interior minister, has asserted, unconvincingly, that the ADC-Ikibiri alliance is an illegal grouping, and there have been no formal meetings between ADC-Ikibiri parties and the CNDD-FDD since it won the disputed polls. Instead, several opposition leaders have fled into hiding, and many of their followers have been arrested and detained on questionable grounds.

Human-rights observers of the UN Integrated Office in Burundi (BINUB) documented the arrest of 280 opposition political activists between May 24th and September 7th 2010, according to a new report from Human Rights Watch (HRW), the New York-based lobby group, entitled Closing Doors? The Narrowing of Democratic Space in Burundi. Moreover, HRW's report claims that BINUB judged that at least 25% of documented arrests between May and July could be considered "politically motivated". The report maintains that activists belonging to the Forces nationales de libération (FNL)-the leader of which, Agathon Rwasa, went into hiding in June (August 2010, The political scene)-have been particularly targeted, many of whom have been charged with "participation in armed groups". According to HRW, three FNL members arrested by the police on October 2nd were later found dead in the Rusizi River, while six other FNL detainees are still "missing". The police subsequently claimed the three dead activists had been released from custody, alive, on October 4th.

In November a local human-rights non-governmental organisation (NGO), the Association Burundaise pour la Protection des Droits Humains et des Personnes Détenues (APRODH), alleged that 22 FNL members had been killed, apparently by the security forces, since September. The government established a panel of inquiry in November to investigate these claims, which was supposed to report its findings a month later, but nothing has been heard from it publicly so far. Meanwhile, members of the opposition Mouvement pour la sécurité et la démocratie (MSD), the leader of which, Alexis Sinduhije, fled the country in July, have also been picked upon by the security forces, according to HRW's new report, although the MSD spokesperson, François Nyamoya, who was arrested in late September, has since been released on bail. The main author of HRW's report was deported from Burundi back in May 2010, forcing HRW to rely heavily on information from local NGOs and from telephone interviews. The government has angrily rejected the report's findings and recommendations, saying the organisation is seeking "vengeance" for having been expelled from the country.

In addition to targeting opposition activists, the security forces have arrested civil society workers and journalists. Two journalists from Iwacu, a local newspaper, were detained for 48 hours in early November without charge, and Jean-Claude Kavumbagu, who edits an often-controversial, broadly pro-Tutsi news agency called Net Press, went on trial for treason on November 9th. Mr Kavumbagu's crime was to write, in mid-July, of his concerns about whether Burundi was sufficiently prepared for an attack by Al-Shabaab, a Somalia-based Islamic militia, following the co-ordinated attacks that took place in Kampala, Uganda, on July 11th, in retaliation for the country's troop deployment in Somalia (November 2010, The political scene). Mr Kavumbagu, who has been arrested and detained four times before this instance, has been held in a pre-trial limbo since his arrest on July 17th. He went to trial on July 30th, but the court retroactively declared itself incompetent to hear the case amidst the mysterious transfer of one of its judges to another court, and he remained illegally detained, according to HRW, until his trial began in early November. Although the state's case appears somewhat flimsy-Mr Kavumbagu's lawyer has argued that he cannot have committed treason since Burundi is not at war-the judge is likely to face considerable pressure from the government to rule against the defendant.

On Janurary 1st the BINUB became the UN Office in Burundi (BNUD), shedding much of its capacity and budget (maintaining only one-third of its original capacity). The UN mission also received a new mandate from the UN Security Council at the same time. The BNUD is charged with promoting and facilitating dialogue, supporting mechanisms aimed at ensuring greater public participation in politics, combating impunity and corruption, and the promotion and protection of human rights. The BNUD is headed by Karin Landgren, a Swedish national, who replaced Charles Petrie. Mr Petrie gave a final briefing to the UN Security Council in December, saying that while the country had moved away from its violent past and had made "remarkable progress", security remained concerning, and people were still being killed for "political reasons". The reduced scope and capacity of the UN mission at a time when local and international human-rights groups accuse the government of human-rights abuses, worryingly indicates that the international community may turn a blind eye to some of Mr Nkurunziza's excesses.

The government has strongly rejected widespread reports that the FNL is preparing a new rebellion from eastern Democratic Republic of Congo (DRC) (November 2010, The political scene). Despite a rising level of clashes between armed assailants and the military within Burundi itself, particularly in areas that have previously been FNL strongholds, the government has insisted that the country is instead suffering from a wave of criminal "banditry". The government has also invited Mr Rwasa-who is suspected to be in eastern DRC-back to the country, saying that he would be safe if he were to return. Mr Rwasa has declined the offer. Mindful of the lack of support among heads of state in the region for renewed armed insurgency in Burundi, Mr Rwasa has still not publicly revealed his intentions, but some sources within eastern DRC continue to report that the FNL is recruiting combatants, and forging a tactical alliance with eastern DRC-based Rwandan Hutu militia. Meanwhile, on November 30th Richard Delvaux Ciramunda, a Burundian with a Belgian father, announced on Gabon's Radio Africa Number One that he is the leader of a new armed group called the Front Patriotique pour la Libération (FPL), which he claimed had strong support inside and outside Burundi, and which was launching an armed struggle against the country's "corrupt and nepotistic" government. Although Mr Ciramunda's claims of support appear far-fetched and some have accused him of being a fraud, if he teamed up with the FNL this could present a fresh guise for it to launch a new rebellion in the country.

The UN High Commission for Refugees (UNHCR) announced in early November that it had resumed its assisted repatriation of Congolese refugees from Burundi, after a hiatus of over two years. There are an estimated 28,000 Congolese refugees in Burundi, most of whom are ethnic Tutsis who have fled pogroms in the DRC's South Kivu province. Some 20,000 refugees live in camps, and 1,000 of these, so far, have indicated that they are prepared to risk going home. An initial group of 173 refugees returned to South Kivu in late October, apparently without incident, paving the way for further returns during the course of 2011. The UNHCR says it plans to assist 12,000 refugees to return this year, although this will depend on the evolution of South Kivu's frequently troubled political and security environment.

Mr Nkurunziza became chairman of the five-country East African Community (EAC) in December, during the Community's 12th heads of state summit, taking over from the Tanzanian president, Jakaya Kikwete. The rotating chairmanship of the EAC lasts for a one-year term. Burundi is the poorest, least economically integrated and most politically turbulent member of the EAC and little leadership is expected during Mr Nkurunziza's tenure at the top. The hope of regional diplomats, however, is that Mr Nkurunziza's appointment will encourage more measured domestic political decision making from his government, and greater efforts at economic reform.

The government in late November sent a further 850 troops to the African Union (AU) mission in Somalia, which is defending the Somali government against a determined insurgency by Al-Shabaab. The troop deployment brought the AU mission's strength to 8,000 and came despite a renewed warning from Al-Shabaab earlier in the month that it would attack Burundi. No such attack has yet materialised, but the Burundian government claimed that it has already foiled several attempts and that the threat of a further effort by Al-Shabaab is "very high". Only Burundi and Uganda have been prepared thus far to contribute troops to the AU's Somalia mission, which is one of the most dangerous international military operations in the world, but which has earned the two countries valuable kudos and support from Western governments, and particularly the US.

With a history of political instability, ethnic strife and civil war, Burundi is positioned in the lower half of the Economist Intelligence Unit's democracy index, ranked 110th out of 167 countries, four places lower than its rank in 2008. Although Burundi's slow transition towards democracy has placed it in the category of a "hybrid" regime, rather than in the category of "authoritarian regime", worrying signs of politically-motivated repression during and after the mid-2010 election period generated a downward revision of the country's ranking and score. The country's performance in functioning of government remained stable at 3.29. The ruling Conseil national pour la défense de la démocratie-Forces pour la défense de la démocratie (CNDD-FDD) no longer struggles with legislative paralysis as a result of its decisive electoral victories in 2010 in the face of a near-complete opposition boycott; however, the president, Pierre Nkurunziza, and his government are much less accountable (so far refusing to meet with opposition parties) as a result. Moreover, investors and foreign agencies cannot rely on speed or predictability in their dealings with the slow-moving government agencies on which they depend, and neither can the justice system be relied on to enforce contracts or property rights. Political participation has improved in a historical context: the constitution was approved in 2005 and outlines a requirement for balance of power between Hutus and Tutsis at all levels of government. In practice, however, abiding by the constitutional requirements for gender and ethnic participation in the government appears to be a box-ticking exercise for Mr Nkurunziza. With only two parties-the Union pour le progrès national (Uprona), a predominantly Tutsi party that ruled the country during the 1970s and 1980s, and a small breakaway faction of the predominantly Hutu Front pour la démocratie au Burundi (Frodebu), called Frodebu-Nyakuri-participating in legislative elections, the government was not forced to branch out widely to form a unity government.

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Zero accountability and a muzzled media

Documented cases of politically-motivated violence in the lead up to the 2010 elections and after took place in an atmosphere of zero accountability. Moreover, the pace at which journalists and opposition activists are arrested appears to have quickened, which has led to a large downward revision in the civil liberties category. The selection of a senior member of the ruling party as ombudsman-which took place after the democracy score was finalised-indicates that domestic institutions designed to control the government's excesses will be silenced. Meanwhile, the expulsion of a Human Rights Watch researcher in May 2010 in response to the publication of a report that claimed members of the government were both involved in political violence and did nothing to hold perpetrators to account, will reduce the ability of the international community to monitor human-rights abuses within the country.

Squeezing democratic space

Burundi's score for electoral process also fell in the 2010 index. Although international observers were broadly satisfied with municipal elections, opposition parties alleged fraud and boycotted the remaining polls (with the exception of Uprona and Frodebu-Nyakuri contesting the legislative election). As a result, the presidential election in 2010 resembled a referendum for the president, which failed to generate a dynamic democratic exchange. Political culture is still Burundi's best scoring category in the democracy index in 2010, propped up by the general support among its citizens for democracy. However, the score fell from 2008, as citizen's perception of democracy deteriorated during the recent election cycle.

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Democracy index 2010: Democracy in retreat, a free white paper containing the full index and detailed methodology, can be downloaded from www.eiu.com/DemocracyIndex2010.

Note on methodology

There is no consensus on how to measure democracy and definitions of democracy are contested. Having free and fair competitive elections, and satisfying related aspects of political freedom, is the sine qua non of all definitions. However, our index is based on the view that measures of democracy that reflect the state of political freedom and civil liberties are not "thick" enough: they do not encompass sufficiently some crucial features that determine the quality and substance of democracy. Thus, our index also includes measures of political participation, political culture and functioning of government, which are, at best, marginalised by other measures.

Our index of democracy covers 167 countries and territories. The index, on a 0 to 10 scale, is based on the ratings for 60 indicators grouped in five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. The five categories are inter-related and form a coherent conceptual whole. Each category has a rating on a 0 to 10 scale, and the overall index of democracy is the simple average of the five category indexes.

The category indexes are based on the sum of the indicator scores in the category, converted to a 0 to 10 scale. Adjustments to the category scores are made if countries fall short in the following critical areas for democracy:

• whether national elections are free and fair;
• the security of voters;
• the influence of foreign powers on government; and
• the capability of the civil service to implement policies.

The index values are used to place countries within one of four types of regime:

• full democracies-scores of 8 to 10;
• flawed democracies-scores of 6 to 7.9;
• hybrid regimes-scores of 4 to 5.9;
• authoritarian regimes-scores below 4.

The minister of finance, Clotilde Nizigama, presented the 2011 budget to the National Assembly on December 29th, which approved it unchanged soon after. The budget envisages spending of Bufr1trn (US$832m), 19% higher than the spending forecast in the 2010 budget (February 2010, Economic policy). Ms Nizigama told the Assembly that she had budgeted for Bufr432.6bn in domestic revenue this year, a hefty 26.4% up from Bufr342bn earned by the state in 2010 (which was Bufr17bn lower than had been estimated), showing considerable, but perhaps misplaced faith in the effectiveness of the recently established Office Burundais des Recettes (OBR; see The domestic economy). Ms Nizigama said she anticipated that 51% of total revenue would come from donors, with grants totalling Bufr469.1bn, an improbable 31.4% higher than the Bufr357bn budgeted for 2010.

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A significant feature of the budget was a higher allocation for agriculture than in previous years. The Ministry of Agriculture was allocated Bufr43.2bn, about 4% of total envisaged spending, of which Bufr36.2bn was for capital projects-8% of the total-and the highest single allocation to any ministry. Confusingly, in his New Year's radio address Mr Nkurunziza promised that spending on agriculture would increase by even more, to 11% of the budget in 2011, although this was later clarified to mean as a proportion of domestic, and not total revenue. Mr Nkurunziza said in his address that increasing food production was essential for development in a country where 90% of people lived off farming. The agriculture ministry has been unable to spend its full budget allocation in the past and will almost certainly struggle again this year, but the increased allocation has been widely welcomed nonetheless as a signal that the government is taking rural development, which has languished for years, more seriously.

Boosting economic growth through rural recapitalisation and the modernisation of agriculture is one of the pillars of Vision 2025, an economic and social policy document that the president, Pierre Nkurunziza, says will guide his period in office. Mr Nkurunziza launched the Vision 2025 project in 2007, with a document emerging in late 2010 that was adopted by the Senate on December 27th. The document has still to be debated and voted on in the National Assembly, but is so closely associated with Mr Nkurunziza that it is unlikely to encounter much resistance. Burundi's Vision 2025 consciously mimics Rwanda's Vision 2020, which was adopted by the government there in 1999 and which has since achieved considerable success in focusing economic decision making and in mobilising donor support. Vision 2025 imagines a country with "strong, visionary leadership ... presiding over a radical change in national mentality and behaviour", enabling the restoration of national unity, economic growth, food security, and an end to the scourges of illiteracy and unemployment. The document expresses the intent to increase GDP per head from its current estimated level of US$137 to US$720 by 2025, and to reduce the poverty rate from the 67% that the government says it stands at today, to 50%. In addition to economic growth, the other pillars on which the Vision 2025 strategy rests are:

• good governance, including the promotion of reconciliation;
• the development of human capital, particularly through education;
• regional integration;
• "aggressive" policies to lower the rate of population growth;
• the reconstruction of "social cohesion";
• a "voluntary" process of villagisation and urbanisation, aimed at boosting the rate of urbanisation from an estimated 10% currently, to 40%; and
• partnership with civil society, the private sector and donors.

Vision 2025 appears to require for its successful implementation a strong, resourced state brimming with idealistic and competent bureaucrats, who engage creatively with an enthusiastic population for the greater good. The reality, however, is somewhat different. State capacity has been devastated by years of conflict, corruption and, more recently, rapid affirmative action that has catapulted young CNDD-FDD loyalists into senior leadership positions throughout the civil service. There is scant indication from the political elite of its interest in reconciliation or partnership (see The political scene). Still, there is much in Vision 2025 that is sensible and worth attempting. Rural recapitalisation, regional integration and improving the education system would all help the country. The average population growth of 2.9% per year between 2002 and 2009 is also a concern, although the prospect of the government engaging in family planning is potentially alarming. This will probably be the main difficulty with Vision 2025. The document depicts a much kinder, more benign state than the one Burundians, and development partners, encounter. In order for the vision to be realised, its call for reconciliation, partnership and reconstruction will need to be accompanied by a visible change to the style of governance.

An IMF mission visited in early December to conduct the fifth review of the government's implementation of the economic reform programme linked to the Fund's extended credit facility (ECF; August 2010, Economic policy). The mission later released a statement describing implementation as "broadly satisfactory", despite what it delicately termed the "risks" posed by the recent electoral cycle. The mission said that all quantitative performance criteria for the programme had been met and that structural reforms remained on track, noting in particular that the OBR was ready to start operating (see The domestic economy). The IMF said that it hoped to see more capital expenditure on key infrastructure during 2011, and the country's accelerated integration with other members of the East African Community (EAC). The mission welcomed the government's stated policy of zero tolerance for corruption, but was silent concerning the degree to which this is being honoured in practice, despite a recent major scandal. The fifth review is expected to be concluded by the IMF's executive board in February, which is expected to ensure continued ECF funding and assistance in Burundi's dealings with other donors. Given the positive assessment, the Economist Intelligence Unit expects the government to negotiate a replacement programme with the Fund when the current ECF expires in mid-2011.

After an extended delay, the Office Burundais des Recettes (OBR), which will centralise the government's tax collection efforts, has started operations, having finally appointed its full staff complement. The OBR commissioner general, Kieran Holmes, who is from Ireland, only partially managed to maintain the strict, technocratic recruitment standards, and thereby exclude under-qualified ruling party loyalists (November 2010, The domestic economy). The recruitment process proved highly acrimonious and OBR officials have apparently received a number of threats from unsuccessful applicants. The OBR is under considerable pressure to deliver higher revenue this year, to ensure that the government meets the 26.4% increase in domestic revenue anticipated in the 2011 budget (see Economic policy). To this end the OBR announced increased vehicle import taxes and duties as well as a rise in fuel taxes in late October.

The Autorité de régulation de la filière cafe du Burundi (ARFIC) has forecast that the 2010/11 crop will be 31,000 tonnes, significantly higher than in 2009/10, when production fell to 6,381 tonnes. Coffee harvests are cyclical, with good years generally alternating with poor ones, and this season's harvest forecast is in line with production in 2008/09.

Prices for the national coffee crop have been rising in recent months, in line with global trends, reaching US$4.1/kg in December, although this is still much lower than the price for branded, specialty coffees of the kind Rwanda now produces, that can sell for US$22/kg and upwards. The Office du thé au Burundi (OTB), meanwhile, reported in late December that earnings from the sector have been hit by falling international tea prices, but that nonetheless total revenue for January-November 2010 was US$16.9m, better than the US$14.2m earned for the same period the year before, owing to higher volumes and improved quality.

The Belgian government and the UN's Food and Agriculture Organisation (FAO) are making a concerted bid to extract maximum value from the government's stated commitment to agriculture (see Economic policy), with the two announcing a joint aid package for the sector worth US$129m in late October. The FAO has pledged US$61m and the Belgian government US$69m. The assistance should help build capacity at the Ministry of Agriculture, and begin to address some of the urgent problems troubling rural areas, including the impact of climate change, the accommodation of returning refugees and falling land yields.

The World Bank announced that it had just approved a US$25m grant to support economic reforms in the country on December 9th. The grant will focus on two areas: budgeting and planning; and improving the business environment and performance of the tea and coffee sectors. The World Bank's vice-president for Africa, Obiageli Ezekwesili, visited the country in November, and angered the government by suggesting that it suffered from both a skills shortage and a corruption problem. The Bank's grant announcement, however, made no reference to this, and instead noted the country's progress towards macroeconomic stability.