Paul Kagame, the first democratically elected president of Rwanda, was in New York this week for the United Nations General Assembly meetings. He also attended a reception in Midtown Monday night to discuss another diplomatic deal: a partnership between Macy's Inc. and his country's basket weavers.

Mr. Kagame, in a dark suit and wire-rimmed glasses, was greeted by Macy's Chief Executive Terry Lundgren and three toga-clad bongo players in a reception area on Macy's 13th floor. In a speech, Mr. Kagame remarked that "business brings together women of different backgrounds to work together for a common interest."

Path to Peace baskets
Macy's 'Path to Peace' baskets. Credit: Macy's Inc.

"Last year our company gave away millions of dollars," said Mr. Lundgren, who visited Rwanda with his family last summer and had dinner with Mr. Kagame. "But I don't think there's anything we've done that's more powerful than this."

Mr. Lundgren said that when he was first approached by Willa Shalit, the founder of an export company that markets ethically manufactured goods, he thought she was asking him for a donation. Ms. Shalit told him that she didn't want a handout. She wanted Macy's to sell traditional baskets handmade by Rwandan women, many of whom had been widowed in the country's genocide of the early 1990s and had no source of income. "She dragged out this bag, and showed me the baskets. And they were absolutely magnificent," said Mr. Lundgren. (Indeed, his wife Tina says they have several of them in their home.)

Over the past four years, Macy's has grown its "Path to Peace" baskets, sold online and in five of the retailer's biggest stores, from a $50,000-a-year business to more than $1.5 million a year, and has recently added home products from Cambodia and Indonesia under its "Shop for a Better World" program. The basket business, which now employs more than 3,500 artisans throughout Rwanda, has sold out of its entire stock every season. In the store's home furnishings department, the baskets were artfully displayed on night stands and in glass cases and a flat panel TV screen played interviews with some of the Rwandan weavers.

As the business has grown in the U.S., baskets have emerged as Rwanda's top non-agricultural export. Kaliza Karuretwa, trade attaché for the Republic of Rwanda, says that Macy's purchases more than 80% of the country's baskets, enabling women to send their children to school and pay for health care. Rachel Dodes