Blood for Diamonds: The African Situation

Africa's poverty and its wars over natural resources are related, says RODERIC ALLEY. A major plan for poverty alleviation is needed to end gross inequalities of wealth and poverty that fuel military recruitment, corruption and conflict.

Michael Klare in his book Resource Wars has identified internal warfare over natural resources, including minerals, as "one of the most prominent and disturbing features of the current political epoch." That concern is magnified given the close relationship that exists between Africa's contemporary resource wars and its poverty.

Eight of the ten countries at the bottom of the United Nations Human Development Index for 2002 are African and have experienced either internal wars or serious domestic conflicts. Those eight countries include Angola, Mozambique, Sierra Leone, Chad, Central African Republic, Guinea Bissau, Rwanda and Burundi. Other sub-Saharan African states fare little better, and include the Democratic Republic of the Congo (DRC), Sudan and Algeria. In the Congo, there has been egregious exploitation of mineral wealth through conflict and the personal enrichment of corrupt ruling elites. Consequently resource conflicts in Africa must be viewed against a background of serious poverty and development failure throughout the continent.

Considering the problem in more detail:

• About 55 percent of the world's annual supply of rough diamonds come from sub-Saharan Africa.
• As well, this region is well-endowed with cobalt, copper, gold, coltan and even uranium. Much of this is destined for foreign processing and sale.
• In key conflicts in the region, particularly the DRC and in Angola, there is a continuing perception that peace efforts are compromised by the financial incentives offered by trade in these resources.
• Resource extraction, and sometimes the prospect of finding resources, offers strong commercial motivation for the involvement of foreign governments as well as mercenary groups.
• Conflict areas within Africa provide examples. The support of foreign entities, on whatever side of these events, is tied to mining and other resource exploitation concessions.
• Conflict environments thus provide opportunities for the advancement of commercial ventures involving foreign governments usually in association with local warlords, local ruling elites and international entrepreneurs.
• Often the perpetuation of war is considered profitable business through which local and international actors invest and expect to gain profits, all parties benefiting from a local war economy.

Among these beneficiaries are: political leaders; multinational corporations; intermediary networks; local military commanders; warlords; organised crime syndicates. Financial self-interest also motivates soldiers, commanders, and their political backers through activities that sustain conflicts as profitable enterprises and where they gain a stake in the resource wealth involved. This can result in both violent conflict, but also collusion between combatant interests.

War economies that involve valuable but illicitly traded goods such as gems, hardwoods, and drugs, circumvent regulation and taxation, contributing to the growth of the black, parallel or informal economy. The deregulation and internationalisation of trade through globalisation has greatly facilitated commercial links. Criminalisation occurs when the marketing of illicit commodities requires armed movements to develop downstream partnerships through illegal networks to then facilitate trade or retail sales.

However instability caused by conflict is not always conducive to profits, although conflict helps eliminate competition.

• In Southern Africa several states produce diamonds. The diamonds recovered illicitly from conflict areas in Angola and the DRC are infused with an export stream of clean diamonds from those exporting legitimately.
• To avoid creating an audit trail, smuggling and bribery sees collusion of public figures at the highest levels through the attractive financial rewards available. The causal link between corruption and civil strife is not always direct, but the corrosive effect on local economies is ultimately destabilising.
• In some instances, an imposition of sanctions is destabilising when making normal economic activities illicit, and pushing the state to engage with criminal gangs to run smuggling operations.
• A wide variety of commercial penetrations occurs including use of migrant labour, individual smugglers, small companies in neighbouring countries, and either junior or larger transnational corporations.
• The involvement of mercenaries or private military companies has become widespread in mineral rich countries in Africa. Their role is less that of fighting wars, than the protection of strategic economic interests for recognised governments. This leaves the population of resource-poor areas without public services, and at the mercy of predatory rebel groups.

Impacts of Africa's resource conflicts

• Local inhabitants may be involved in the exploitation of these resources for usually low wages.
• They are exploited as forced labour.
• They are treated as a hindrance and either forcibly evicted or killed.
• They are neglected as the focus is placed exclusively on resource exploitation at the expense of local sustainable development.
• Populations generally suffer the adverse effects of lost taxation, unaccountable and corrupt governance, and distorted national development.

Attempted controls include stronger transparency in the international marketing of diamonds (as in The Kimberley Process), efforts of a network comprising the Diamonds and Security Project; the International Peace information service in Antwerp, and the Network for Justice and Development operating out of Freetown in West Africa. Although the Kimberley Process agreement has provided conceptual agreement over what is a "conflict" diamond and over certification, its rules lack enforcement capacity. There is no system incorporating credible international monitoring of diamonds produced through conflict. Some countries are refusing to back the establishment of a secretariat to co-ordinate the functions of the Kimberley process including collection and analysis of diamond production and sales data. Others are concentrating their efforts on ensuring that the Certification scheme is "free-trade friendly."

An African representative from ActionAid, Amboka Wameyo, claimed that: "Governments and the diamond industry are dragging their feet in agreeing details of a system that will control and regulate the industry. I challenge representatives attending the Kimberly Process to look a mutilated child in the eyes and explain why they cannot spare even a tiny fraction of the industry's vast profits to police the diamond trade."

In the last three years, Belgium as a major diamond trading country has moved to make the importation of conflict diamonds more difficult. While controlling conflict diamonds is important, attention here should not obscure other resource conflict issues in Africa including gold and oil. The environmental and social costs of such activity, as in Nigeria, have registered publicly and negatively for government and corporate interests concerned. This offers scope for public pressure to demand greater accountability and sustainable management of resource extraction in Africa.

Key needs include harmonisation and circulation of statistical information on production, export and import activity that can be recorded on certificates of import and subject to independent international audit. Harmonisation of criminal penalties for illegal trading is needed. Reforms in the domestic criminal justice systems of states concerned are essential. Reduction of the power of monopolies is also needed. Angola is a good example.

UN monitoring illegal resource exploitation

The Fowler Report (2001) has identified governments and interests breaking the UN embargo on trading with UNITA in Angola. The UN also established a panel investigating illegal resource exploitation and other forms of wealth in the DRC. It found an elite network of Congolese and Zimbabwean political military and commercial interests seeking to maintain their grip on minerals. This network had transferred ownership of at least $US 5 billion of assets from the state mining sector to private companies under its control during the last three years with no compensation. Although its methodology has been criticised, a December 2002 report identified interests in Rwanda, Angola, Zimbabwe and Uganda as collaborating over illicit resource trading in the DRC. This panel had its mandate renewed for a further six months by the UN Security Council under Resolution 1457. This noted with concern that the "plundering of natural resources continued, and was one of the main elements fuelling the conflict in the DRC." It demanded that all states concerned take immediate action "to end these illegal activities perpetuating conflict, impeding economic development, and exacerbating the suffering of the people."

To sum up, resource conflicts in Africa have resulted in the domination of the economy by the military and resource sectors. The military destabilise development, and the resource sector corrupts politics and undermines African economies. As the non-military and non-resource sectors decline, then the decay of wealth and power is increasingly dependent on controlling rents from the resource sector with wealth transfers to and from the military apparatus. This motivates those already in control of resource rents to protect their privileged access to such earnings at all costs, including fighting against those contesting control. This deeply dysfunctional conduct will not cease without a comprehensive programme of poverty alleviation in Africa, and an end to the gross inequalities of wealth fuelling military recruitment into the continent's resource wars.

This article is based on a presentation made by Dr Roderic Alley, Victoria University of Wellington, to the Pacific Institute of Resource Management Forum Resource Wars: From the Global Economy to Iraq, Wellington 22 March 2003.

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