TWO questions are regularly asked of Rwanda: how important is a tiny mountainous country of 10m people? And can it really transform itself, as its leader proclaims, into the Switzerland of Africa?

The answer to the first is clear. Rwanda is a key to the stability of the Great Lakes region at the heart of Africa. The 1994 genocide in Rwanda, in which at least 800,000 Tutsis and moderate Hutus were slaughtered, helped ignite a war in the neighbouring Democratic Republic of Congo which led to the loss of 4m lives and still rumbles on in the country's east.

The answer to the second question is a lot fuzzier. President Paul Kagame, who is among the most austere and inscrutable of Africa's leaders, is trying to turn landlocked Rwanda, devoid of oil and minerals, into a trade and technology hub. Many see Rwanda's experiment in development as a test-case for the rest of Africa, which has enabled the country to draw on a lot of foreign goodwill and cash. But progress is patchy. Just as important, big doubts remain about Rwanda's political direction.

Mr Kagame's loyal officials say he is the "pillar" of national reconstruction. And he continues to impress at the polls. Last week Rwanda completed its second general election since the genocide. As expected, Mr Kagame's Rwandan Patriotic Front (RPF) won in a landslide, taking 42 of the 53 contested seats in a proclaimed turnout of 98.5%. Even allowing for the sometimes creepy pressure on rural Rwandans to toe the government line, there was clearly a sense of unity and purpose. A further 23 women, two youths, and one disabled member of parliament were selected indirectly, making the assembly remarkably balanced between the sexes. International election observers said the vote was clean and well organised. Mr Kagame himself looks certain to be re-elected president for a final seven-year term in 2010.

His detractors, however, say his rule is increasingly dictatorial. An umbrella opposition group in exile, the United Democratic Forces, called the election a "smokescreen", pointing out that the so-called opposition, the Social Democratic Party, which won seven seats, and the Liberal Party, which won four, backed Mr Kagame in the last presidential election and serve in his cabinet. His critics also highlight his past as the military commander of the RPF, which was accused of torture and killings following the genocide in Rwanda and of further looting and killing in Congo between 1998 and 2003.

Western diplomats in Kigali, the capital, applaud the country's stability but worry that the RPF is suffocating democracy. On radio talk shows and in person across the country, Mr Kagame hammers away with a simple message: one Rwanda, one people, one future. Debate is conducted exclusively on the RPF's terms: to oppose the party is to oppose Rwanda's development. A new media law was meant to have improved the training of journalists but has stifled critical voices. The BBC's local Kinyarwanda service is under pressure. A senior government official says the BBC is biased towards "[Hutu] fugitives in Europe and in the forests of Congo".

Though several important ministries are run by Hutus, the government still includes a privileged core of English-speaking Tutsis, most of whom, like Mr Kagame, grew up in exile. But for a Rwandan to resent that openly is to invite trial on charges of "divisionism" that could lead to up to 20 years in jail.

Still, the government hails progress in all the areas that have bedevilled most other would-be reforming African governments. It has cracked down on corruption and had RPF officials imprisoned for pilfering public funds. The police are professional, even enforcing laws on litter to make Rwanda the cleanest country in Africa; plastic bags are confiscated at the airport. Those and other achievements in poverty-reduction and education, as well as guilt over the 1994 genocide, have attracted generous aid. Foreign governments generally overlook the nasty politics and focus on the improving statistics on poverty.

Britain, in particular, is very cosy with Mr Kagame's regime. Rwanda may be asked to join the Commonwealth next year, cementing its place in English-speaking Africa. Britain has promised Rwanda $100m in aid a year over the next decade, with only "light conditionality" (in essence, an understanding Rwanda will not reinvade Congo). By contrast, relations with France remain glacial, with Rwandan officials accusing the French of complicity in-not just covering up-the genocide.

In late October, Rwanda is to host an East Africa International Business Forum in partnership with the Commonwealth Business Council, identifying itself as part of eastern rather than central Africa, under the slogan "One Market, One Destination" for east Africa's 120m people. But for all Mr Kagame's efforts at pitching Rwanda as a business hub, its economy is still tiny. Exports of high-quality coffee and tea have grown but, along with minerals, amount to only $120m a year. The mountainous countryside is visibly overpopulated, with even precipitous slopes planted with beans and other staples. Large sections of the population are outside the cash economy. Kigali has yet to reach its Dick Whittington moment, when the rural poor are lured to the city in the hope of a better life.

A minnow in a turbulent ocean

The shock waves earlier this year from the disputed Kenyan election, and the rising cost of fuel, cruelly exposed the fragility of Rwanda's landlocked economy. The price of bringing a container from the Kenyan port of Mombasa to Kigali has rocketed, pushing up the already inflated price of imports. Banking remains rudimentary for a country hoping to emulate Switzerland, with limited provision for credit cards and an unwillingness to lend money. A "one-stop shop" has helped draw in foreign investment, but the initial invitation is often followed by disappointment. The government says it is tackling businessmen's concerns by-among other things-easing taxation and recruiting commercial judges from abroad. But the great leap forward will rely on deeper changes in the country, as well as getting inputs such as fertiliser to farmers, irrigating their land and building power stations that burn methane drawn from the depths of Lake Kivu.

Rwanda's development also depends on stability in next-door Congo. Congolese minerals and timber are exported through Rwanda. Some Congolese businessmen use Rwanda as a safe haven for their savings and families. Kenya's biggest supermarket chain, Nakumatt, which recently opened a branch in Kigali, plans to set up a mall on the Congo-Rwanda border.

But the security there, in North and South Kivu, has deteriorated badly since August. The UN says the situation is "extremely volatile", with some 100,000 Congolese displaced in the past few weeks. Peacekeepers and aid workers have been targeted by angry mobs, with UN vehicles stoned and hijacked, water supplies cut off and medicine looted.

Mr Kagame is plainly fed up with the Congolese. He wants Congo's president, Joseph Kabila, to distance himself from Hutu militias, including remnants of Rwanda's previous regime of Juvenal Habyarimana, and to rein in his own troops. Mr Kagame denies that a renegade Tutsi general, Laurent Nkunda, whose militias terrorise much of Kivu, has been armed by fellow Tutsis from Rwanda. If the situation in eastern Congo gets much worse, Rwanda, with its relatively strong army and aggressive security service, may be tempted to intervene directly yet again. But if Rwanda is to prosper as a regional trading hub, it must avoid any more cross-border wars.