The Emergence of a New Order? Resources and War in Eastern Congo

Koen Vlassenroot & Hans Romkema [1]

1. Introduction

On the surface it seems that the present conflict in the Democratic Republic
of Congo is all about gold, coltan, diamond and petrol rather than about security
concerns, national power or political representation. For many reasons, the
Congolese conflict has been presented as an illustration of the shift to a new
type of conflict, in which national armies, liberation movements and political
ideologies are replaced by warlords, informal economic networks, ethnic hatred
and greed. The opinion of most observers is that the mineral trade is the driving
force of the current conflict in the DR Congo. When dealing with the Congolese
war, most of the international attention is focused on the illegal extraction
of natural resources by the different belligerents, particularly after a UN
Panel of Experts in April and November 2001 came up with some remarkable research
results. Based on the conclusions of this Panel, most observers agree that
the different actors mainly direct their struggle at the benefits gained from
the vast Congolese mineral resources rather than at the achievement of long-term
political aims. A conclusion that is perfectly in line with the ‘greed’ account,
which came to dominate the debate on present conflicts.

That the nature of conflict has changed is undoubtedly the case, as is the
fact that the present conflict in Congo is a good illustration of many aspects
of the new types of conflict. Yet what should be the focus of discussion is
how to interpret these changes rather than to limit the comprehension of these
‘new wars’ to ethnic hatreds, state collapse or to criminalised economic
networks. Instead of focusing on wars as a breakdown of a particular system,
one should try to understand how elites and societies are familiarising themselves
with global changes and a context of war. What is easily interpreted as a return
to African barbarism or greed-driven behaviour, could also be understood as
different strategies to adapt to globalisation.

Nevertheless, the least one can say about Collier and others’ focus on war
economies is that it highlights some thought-provoking issues. The thesis that
“it is the feasibility of predation which determines the risk of war” [2] forces observers to look at present conflicts
from a new angle and to integrate the economic dimensions of civil war into
their basic framework of analysis. The best way to do so is to start from a
stakeholder analysis of violence, including both those directly responsible
for war and the secondary stakeholders that help maintain it. From this argument,
a number of issues can be formulated that require some specific attention if
the aim is to get a clearer understanding of the present symbiotic relationship
in eastern Congo between violence and economic activities. First, the economic
rationality of conflict for the warring parties needs to be investigated. Second,
the nature of the pre-war local economy has to be considered. Third, the local
and international economic strategies that the different belligerents are developing
to consolidate their positions, have to be explored. Fourth, it has to be clarified
how local markets cope with the new conditions of war. Finally, the role of
economically motivated violence as a barrier to ending conflict needs to be
identified.

2. The local level: conflict in the Kivus

The Kivu region is located on the eastern side of the Congo and shares borders
with Uganda, Rwanda and Burundi. As a highly populated though very fertile
region, the highlands of Kivu reflect the realities of both the densely populated
highlands of Rwanda in the east, and the under-populated Congolese hinterland
in the west. Originally this region was one administrative unit but now consists
of three provinces: Maniema, North Kivu and South Kivu. Its geographical position
and the enormous presence of natural, easily exploitable resources facilitated
the expansion of unrecorded trade in Congo, which offered an enormous potential
for the development of commercial activities across its borders and for the
building of a certain degree of political and economic independence. This geographical
position also explains why the eastern provinces of Zaire always have been a
transit-zone for regional trading routes. Different trade networks linked local
markets in eastern Congo to markets in eastern and southern Africa, but also
in Dubai and the Far East. The first major route linked the north-eastern parts
of Congo to Uganda via Beni and Butembo, which were two of the most vibrant
commercial centres of eastern Zaire. The second route was used primarily for
the exchange of agricultural and manufactured products between Bukavu and Kampala
via Goma and Rutshuru. The third trading route carried goods and people between
Uvira and the Burundian capital Bujumbura. The last route linked the main ports
along Lake Tanganyika (Uvira and Kalemie in Congo) to Zambia or to Tanzania
(via Kigoma).

Politically, however, the two Kivus have always been a hotbed of conflict and
turmoil. While there is the undeniable impact of the nature of the Congolese
political system, the local potential for social conflict is mainly due to its
geographical position and local history. Political events in both provinces
have always been linked to the social and political dynamics of neighbouring
Rwanda and Burundi, which can be explained by the history of the Banyarwanda
and Barundi migration to Congo. Closer scrutiny, however, also suggests the
existence of a number of internal dynamics undermining stability in North and
South Kivu.

The most important one is the link between violence and social and political
stratification. The principle of stratification under Mobutu –converting political
loyalty into economic assets – required the regular recycling of the political
elite, under his proverbial divide-and-rule strategy. As the crisis of the state
became more pronounced, the available assets dwindled. Combining this aspect
with the push for democratization in the nineties, Mobutu encouraged exit-strategies
based on ethnic criteria. Local political leaders enforced the suggested exit
of a particular group by mobilizing outsiders to that group. The loot would
be based on ‘self-service’. Destined to be a self-defeating strategy in the
long run for Mobutu, it did introduce violence based on ethnic identity as a
legitimate instrument to bring about change. More especially, it upgraded the
status of those young men marginalized in the customary networks of dependency.
The consequent context of state-desintegration and growing insecurity gave rise
to the development of new local strategies of economic control. Disorder, insecurity
and a general state of impunity encouraged the formation of new and militarised
networks for the extraction of economic benefits. Reference to ethnic belonging
became an integral and crucial part of both strategies of control and resistance.

These dynamics came to be consolidated when Burundian
and Rwandan refugees poured into the Kivus in 1993 and 1994 as a consequence
of the Burundian political crisis and the Rwandan genocide. This crisis led
to a dollarisation of the local economy and further reinforced the view that
violence based on ethnicity and carried out by groups of mobile youth had become
the dominant principle to effect structural change. Yet, this refugee crisis
also gave a regional dimension to the Zairian political and economic crisis.
It is very likely that the refugee crisis would not have resulted in wide-scale
violence if the Zairian regime had not been in near collapse and had not tried
to rehabilitate itself through exploiting the refugee tragedy. Given the particular
position of the Zairian state, the influx of more than one million refugees
who were armed and resourced from the outside affected the local population
in many ways and created the logic for future conflict, putting the Rwandan
Hutu-Tutsi antagonism at the heart of local struggle. From the refugee camps,
however, extremist elements started undertaking small-scale incursions into
Rwanda, without being prevented by the host regime. It is precisely this position
of the Mobutu regime towards the former Rwandan army and the Interahamwe militias
that provoked the formation of a regional coalition that aimed at making Zaire
safe for its eastern neighbours and ousted Mobutu from power with surprising
ease. Instead of putting an end to the political crisis, the 1996-campaign
set in motion a further intensification of the regional struggle for political
power and economic control. Soon after the victory of the Kabila-led alliance,
his eastern ally Rwanda started preparing a new military campaign in the DR
Congo. Although security reasons were once again presented as the guiding motives,
after the start of the RCD campaign in August 1998, it became more and more
apparent that economic motives also had to be taken into consideration if one
wanted to explain the position of the different protagonists of this second
Congolese war.

The rationality behind the current conflict, indeed,
should be seen as a mixture of security reasons and the search for economic
survival. Today, the DRC war can be explained as the next phase in a much larger
and more deeply rooted conflict consisting of at least three different, yet
closely related, sets of dynamics. The most analysed of these is the regional
dimension or the Great Lakes conflict, which at present is strongly linked to
a larger regional struggle (involving at least six countries) for zones of political
influence and economic control. This layer is related to the disparity of wealth
between the different countries of the Great Lakes region and the relative weakness
of the Congolese state. As a consequence, the presence of the Rwandan army
on Congolese territory can be explained as part of a strategy to protect its
borders from incursions from Interahamwe forces and to guarantee the Rwandan
regime’s economic survival. Although one should not read the Rwandan presence
in the DRC as part of a broader strategy of Rwandan or Tutsi commercial expansionism,
the search for economic and politico-military security of the Rwandan regime
adds an additional dynamic to the Congolese conflict. The second level of conflict
is the armed struggle among the Congolese themselves for the control of national
political power. The causes for this level of the conflict are strongly linked
to the two other layers and concern the political system and the access to resources.
This national dimension, however, is strongly influenced by the respective links
of the rebel movements and their foreign patrons. Finally, in both North and
South Kivu, there is an historical but continuing conflict between different
communities that is unrelated to, but highly influenced by, events in neighbouring
countries. These conflicts are caused by a complex set of factors including
access to and control over land, political representation and the respect of
traditional authority. All three different levels exhibit a certain logic of
their own but, at the same time, influence one another. In eastern Congo, however,
the situation is very particular since local, national and regional dynamics
are closely intertwined. When analysing the current situation in the Kivus,
one has to acknowledge that the 10-year old political crisis has resulted in
a situation that is characterised by a profound social disintegration, a shift
from patrimonial to military control over resources, a growing importance of
armed militia as an escape from further alienation (with violence becoming the
main mode of discourse) and a total ‘re–tribalisation’ of politics
and society as a consequence of the search for strategies of control and resistance
for which ethnic identity offers a perfect instrument.

3. Pre-War Informal Trade Networks in eastern Congo.

Even if today the international attention for the current Congolese conflict
seems to be mainly focussing on the economic dimensions, we want to demonstrate
that the present local economy (including the ‘war economies’ of the different
belligerents) is hardly based on new modes of organisation and control. Also,
in the case of eastern Congo, war is causing a serious disruption of the local
economic order. Nevertheless, our research suggests that the developed war
economies do not genuinely differ from the economic practices that were already
in use before the start of the AFDL campaign in October 1996. This is the case
even though today the identity of the main economic actors have changed and
the practices are no longer described as informal but as illegal activities.
The development of informal trade networks is not just the result of the recent wars but has to be analysed
from the perspective of the very nature of the pre-war Zairian state. However,
this does not defend the ongoing criminal and militarised exploitation of Congolese
resources. But this intertwining of the previously existing local parallel networks
and war economies at present makes it extremely difficult to separate those
‘criminalised’ networks that help to sustain war efforts from the pre-war
situation. Duffield even concluded, “they are both part of a complex process
of actual development”. [3] This interconnection can
best be explained by the observation that before the outbreak of the two consecutive
wars, informal economic networks were the only remaining economic realities
on the ground. This parallel economy was not a simple substitute for the official
economy but was parasitic upon it to the extent that the official economy stopped
functioning almost completely. This has facilitated the rebels’ search for quickly
accessible and financially profitable resources. The result has been a take
over of the (informal but solely functioning) economic networks from the Mobutu
inner-circles by the rebels of the AFDL and later the RCD.

Since the nineteen seventies, the parallel economy in Congo has generally included
a wide variety of activities in trade, transport and construction. Nevertheless,
scholarly literature pays most attention to the juiciest parts of it, i.e. the
large-scale clandestine trade of food crops and minerals. Even if Congo is
not a unique example, here the proliferation of parallel economy activities
came to be so extensive that it was not only responsible for the undermining
of state effectiveness but also brought about important changes in the social
structure. Even if it is impossible to accurately quantify the amount of commodities
smuggled across Congolese borders, the loss of state revenue because of smuggling
and fraudulent export was enormous. According to Vwakyanakazi Mukohya, local
traders in North Kivu reckoned that local producers or buyers through Goma International
Airport fraudulently exported more than half of the production of papaya, tea
and cinchona. For coffee it was estimated that in 1985-1986 some 60 % of the
local production was smuggled or exported through the parallel economy.
[4] The same fraudulent export and barter, however, was to be noticed for
mining products. Different local sources confirmed that in Kivu more gold was
smuggled than officially exported. [5]

The dramatic increase of cross-border economic transactions, both in volume
and in its illicit character, consolidated the emergence of a vast regional
network of informal trade, which became “the means by which seemingly disastrous
national economies manage to keep going”. [6] In the case of eastern Congo,
these networks were based on regional trading patterns and linked the eastern
part of the country to the markets in eastern Africa or beyond. Most of these
networks were controlled by members of the same ethnic community, thereby expressing
the need for trust when doing business. Where official international treaties
failed to create regional economic integration (although these facilitated the
free movement of people across the state borders, they failed in reducing tariffs
and other official market regulations), unrecorded cross-border trade resulted
in unofficial market integration beyond the state. “It was partly owing to
the ingenuity of local entrepreneurs that (…) Zaire was able to ward off harsh
blows of a decade-long flight of foreign capital and cuts in economic assistance”
[7] . But not only local entrepreneurs profited from these smuggling activities:
“private businesses, transportation companies, and tax-collecting bureaucracies
throughout the region benefited significantly from the informal sector and the
income opportunities it provided”
[8] . The regional importance of these smuggling activities cannot be neglected.As
official export figures reveal, some neighbouring countries became exporters
of raw materials even if they do not naturally posses them. With the growing
political disorder during the nineties, the fraudulent export by neighbouring
countries of natural products originating from Congo only increased.

 

4. The Economic Rationality of the AFDL-Rebellion

 

During its military campaign in 1996 and 1997, the AFDL did not change the
essence of these local trading networks; neither did it try to modify the local
parallel economies. On the contrary, in order to finance its war efforts the
regional coalition that was supporting this rebel movement mainly tried to attract
external private sources in order to buy into the existing systems.

To consolidate his political position, contacts with junior foreign companies
became an essential part of warfare for Laurent Desiré Kabila, the leader of
the AFDL. Through the establishment of a dynamic external trade in diamonds,
gold, timber, cobalt etc., Kabila could generate the necessary financial input
for his war efforts, extend his political control and deny these resources to
his opponents. In return, Kabila’s proposed private deals for the mining companies
and commercial networks guaranteed some degree of privilege and protection.

The deals between the rebels and the often freshly created international mining
companies, which were basically replacing the trade relations between the Mobutu
protégées and a selected group of foreign investors, can be seen as a consolidation
of the pre-war economic system. However, the actors changed and most of the
profits were directly used to pay for the war effort. The growing role that
was played by private security companies, mercenaries and junior mining companies
during the AFDL rebellion even meant a true shift in the conduct of war in Africa.
Never before had these kinds of actors been tied up with local conflicts to
such an extent, as was the case in DRC in 1996-1997; never before had local
conflict dynamics come to be so closely linked with the global search for new
markets.

Military-commercial networks took over the control of a system that was previously
held by Congolese citizens or foreigners, who were part of the Mobutu inner
circles. Often, it was Kabila’s direct foreign allies that started dominating
these military networks. Especially on the Ugandan side, the development of
a politico-military complex aiming at the exploitation of Congolese resources
and the control of the local market for manufactured goods could be witnessed
on an impressive scale. While President Museveni initially perhaps dreamt of
the creation of an open regional market, other Ugandan officials mainly aimed
at fending for themselves by getting a considerable share in this new regional
economy. Some of the best known and documented examples concern Museveni’s
younger brother Major General Salim Saleh
[9] and Brigadier General James Kazini, even though a long list of senior
Ugandan official can be added.

Saleh’s main points of interest were the diamond trade in Kisangani and the
gold concession of Kilo-Moto, although he also tried elsewhere to get a grip
on the local commercialisation of mining products.

This mushrooming of foreign-owned companies that were controlling important
parts of the Congolese economy was possible because of Kabila’s initial attitude
of laissez-faire when it concerned his allies’ business enterprises.
After his arrival in Kinshasa, however, he attempted to limit the growing influence
of, amongst others, Ugandan businessmen in eastern Congo.

A few months later, the declarations of the Congolese Minister of Economy
and Oil, Victor Mpoyo, created a heavy blast in the relations between Congo
and Uganda: in a provocative statement, broadcast by Congolese radio on May
22nd, 1998, he accused Ugandan government officials of warlord practices.
[10]

In Goma and Bukavu, the first, AFDL war also saw the emergence of a new group
of regional businessmen (often close to the military) controlling the local
trade. As most of them spoke Kinyarwanda, Kirundi or English (and not Swahili,
Lingala or French as was the case before the war), their control of the markets
also contributed to the increase of local ethnic tensions. Their success in
accessing the Congolese market was largely due to their ability to by-pass the
customs facilities at the borders. This new class of businessmen did in fact
replace the Congolese middlemen that were used by the Mobutu elite to access
local markets. On the eve of the RCD rebellion, especially in Bukavu, the influence
of this new class of Rwandan businessmen was under serious pressure because
of a growing efficiency of the AFDL administration, resulting in a gradual recuperation
of their former positions by local businessmen. Yet immediately after the start
of the RCD campaign, they would be granted renewed access to the most flourishing
parts of the Congolese informal economy.

5. Greed or Grievance? The Economic Logic Behind the RCD Rebellion

After an initial period of riot and looting, the RCD and Rwanda tried to finance
the war, as the AFDL had done before, through the attraction of external private
resources. As a result of the general disorder in the territory controlled
by them and the limited international support for the rebellion, it proved to
be difficult to attract investors. Without sufficient access to external capital,
the rebels and their allies were forced to develop new strategies in order to
generate enough funds to finance the war. The result has been that since August
1998 the economic activities in the East of the DRC have often been characterised
as the ‘looting of Congo’s natural resources’.

And indeed, plunder was among the first opportunities of rent seeking. During
the first months of the second war, in and around Uvira (South Kivu) most of
the remaining economic infrastructure, stocks of international humanitarian
agencies and some of the local hospitals were pillaged by Rwandan and Burundian
army elements. Perhaps the most important acts of looting were the removal and
transport of the coltan and cassiterite stocks of the mining company Sominki
by the RPA in November 1998, and the available reserves of the Central Bank
in Bukavu and Goma.

Soon after the start of the RCD campaign, a complex informal network of economic
control was established which was mainly aiming at maximising the generation
of revenues through a control over Congolese natural resources. Through the
control of the pre-war chain of transactions and intermediaries between mining
centres and urban trading posts, or through direct exploitation of mining centres,
top-ranking officers from Rwanda and Uganda could lay their hands on most of
the local mining production. Price-fixing and forced monopoly helped to consolidate
a total control of the exploitation of resources. Different financial networks
have been set up by Kigali or Kampala in order to back this system and to guarantee
the financing of the war efforts, while new networks of transportation, increasingly
based on air transport, eased the exchange of goods with the Congolese interior.
One of the first recorded examples was the smuggling of timber by Ugandan UPDF-officers.
Additional proof was the crash on 25 September 1998 of a little Tropical Airways
Cesna aeroplane in the Beni region.

It is generally agreed upon that the real objective of this flight was to
buy gold in eastern Congo. [11] Probably the best-organised
structure of illegal exploitation, however, is the system of economic control
established by the Rwandan regime. In contrast to the Ugandan side, the Rwandan
pyramidal, integrated network that was put in place for the exploitation of
Congolese resources, primarily for financing the Rwandan regime and its war
efforts. Only on a secondary level is it serving the interests of private businessmen
or top- ranking politicians. [12] Crucial to this Rwandan structure are the strong links between the army,
some politicians and the business community.

The aim is to maximise the income-generation by the RCD and the extraction
of resources in the Congolese hinterland. For that purpose, two different strategies
have been developed. Firstly, there is the financial network that includes a
financial bridge with the RCD rebel movement. Secondly, there is the wide use
of intermediaries, often of Congolese origin, in order to control the local
pre-war informal networks of mineral trade and the strong commercial links between
the Rwandan nomenclature and the Congolese rebel structures.

The financial network that allows the RPA to continue its war efforts in the
DRC links Rwandan banks with RCD elements and RPA suppliers. The objectives
of this network are twofold. On the one hand, it has to secure the interests
of Rwandan suppliers of the RCD, whose shareholders in most cases are familiar
with RPF officers. On the other hand, it has to permit an effective control
of RCD finances. Even more, “the RCD statute indirectly recognises the role
of Rwanda in overseeing the finances of the movement and its participation in
decision-making and control/audit of finances ”.
[13] The examples of the Rwandan ‘Banque du Commerce, du Développement
et de l’Industrie’ (BCDI) and SONEX, in this respect, are illuminating.
The BCDI was instituted in November 1996, only a few weeks after the Rwandan-backed
AFDL had started its military campaign against the Mobutu regime. It has among
its shareholders some key figures of the RPF. Until May 1997, its main function
was the management of the contributions to the war efforts in the DRC. According
to an NCN report, BCDI “was effectively an alternative bank for official
funds that Kabila did not wish to entrust to the state institution in the early
days of his rule”. [14] Since
August 1998, the BCDI has also been used by the RPA to pay its suppliers. The
case of SONEX is even more illuminating. Founded in March 1999 in Goma but
having a sister company in the Rwandan capital, it served as the commercial
and financial arm of the RCD rebel movement. Its objective was to market the
mineral products as well as other commodities available in the RCD/Goma- controlled
zone, for which it could rely on loans from the BCDI. [15] Yet the real purpose was to set in place a network for financial
transfers between the RCD and Kigali and to transfer money to the RPA itself.
Until it was dissolved at the end of 2000, SONEX was managed by the former
head of the RCD-Finance Department, Emmanuel Kamanzi the former head of the
RCD Finance Department, Emmanuel Kamanzi, managed SONEX.

A second element of the Rwandan economic control in eastern Congo is the role
played by Congolese intermediaries or affiliates. It was part of the Rwandan
strategy to replace the key actors in the local parallel networks by persons
loyal to them. During the 1996 rebellion, the role of Rwandan intermediaries
was limited to the import of petrol, cigarettes etc. and the export of mining
products that arrived in the city centres. After the start of the RCD campaign,
however, the RPA tried to eliminate most of the former intermediary structures
through a direct control of the mining centres or through the creation of a
new web of local ‘comptoirs d’achat’ in Bukavu and Goma. A new class
of selected Congolese intermediaries replaced the former Congolese business
community and operates with the protection of the RPA in order to assure that
most of the mining production eventually arrives in Kigali. Because they act
as the privileged intermediaries between the local rebel movement and their
Rwandan patron, they also ensure that Rwandan businessmen can take a considerable
share of the profits of local commercial activities.

The best way to maximise the control of the local exploitation of natural resources
is to directly run the mining centres, a policy that was much less practiced
during the AFDL rebellion than is currently the case. In the first months after
the start of the RCD rebellion, the RPA leadership set up traffic between the
mining districts and Kigali. Through directly buying the mining products where
they are produced, the payment of taxes could be avoided and the influence of
the long chain of intermediaries be reduced. For that last purpose, the RPA
offered the same prices as the comptoirs in Bukavu or Goma. In a second phase,
the RPA tried to put several mining centres under its direct command, in many
cases after harassing the original owners. Several sources indicate that for
the exploitation of coltan, the RPA occasionally replaced Congolese diggers
by moving Rwandan prisoners to the mining sites. Independent Rwandan sources
informed us that the prisoners received a payment of 1000 Rwandan Francs for
each day they work in the Congolese mines. In order to protect its monopoly
position, only a number of private air companies were given permission to fly
into the mining zones.

Most of these companies are closely linked to the RCD or RPF leadership. Yet
this control does not prevent considerable parts of the mining products being
commercialised through informal networks, controlled by small Congolese businessmen.
In most cases, commercial comptoirs in the urban centres make the final link
in this informal chain. As most of these comptoirs are connected to Rwanda through
ownership or representation, this part also eventually finds its way to Kigali.
These comptoirs, before being authorised, need to buy a license and have to
pay taxes on their commercial activities. In addition, the intermediaries involved
in this traffic between the local producers and the market are required to pay
a fee for a license as well as a payment as a deposit. Although these fees
are to be paid to the RCD (it was only after July 2000 that the RCD tried to
increase its control and claimed its share), the institutionalised financial
bridge between the RCD and Kigali guarantees that a considerable portion of
this money eventually arrives at the Congo Desk of the Department of External
Resources, which is the cornerstone of the financial activities of the RPA.

Yet the mining sector is not the only available source of extraction. In addition
to the exploitation of natural resources, the RPA has also tried to get a grip
on local commerce and parallel trading networks of commodities other than the
mineral products. A system has been put in place involving individual intermediaries
close to the Kigali regime and operating with the protection of RPA commanders.
New companies were created for the facilitation of these trading activities
and the already existing (parallel) structures of commerce. The involvement
of Rwandan businessmen in local trading networks, of course, is not a new phenomenon.
During our fieldwork, however, it could be observed that since August 1998
these trading networks underwent a serious shift, which illustrates the reorganisation
of the local economic space. Today, most of the small traders that are selling
their products at the numerous markets in Bukavu, depend for their stocks on
the Cyangugu market just across the border with Rwanda. Most of the consumer
goods and other merchandise sold in Bukavu and the interior originates from
Rwanda or is imported by Rwandan businessmen, who do not have to pay taxes.
In order to intensify these economic transactions, the Kigali regime and the
RCD leadership have resorted a policy of twinning Rwandan and Congolese cities.
This brings us to the last source of income.

In order to extend the control over these commercial transactions, in the RPA-controlled
areas, Rwandan agents have been assigned to all revenue-generating services,
consolidating its total control over the financial resources of the RCD and
the local trading networks. In short, the Rwandan army has deployed a well-organised
and efficiently co-ordinated network that permits a considerable level of rent-seeking
activities by the use of violence. The existence of pre-war parallel trading
networks directed to the east has largely facilitated the organisation of its
war economy. The commercial opportunities that are offered by the present state
of disorder have not only produced a further militarisation of t local commercial
activities, but in the end are also leading to a total change in the organisation
of the economic space. Firstly, networks that were formerly controlled by local
coalitions based on trust or ethnic solidarity, are today serving the interests
of RPA commanders and a new class of businessmen close to the political centre
in Kigali. This puts forward the question whether this new war economy exists
only to generate the resources for the continuance of its military presence,
or whether it also aims at a total control of the Congolese sectors of the rebellion
as well. From our description of the Rwandan war economy, it can be concluded
that the financial autonomy of RCD rebel movement is strongly reduced by the
interference of Rwandan military and civilian actors in the local income-generating
activities. Secondly, economic activities today are fuelling violence. Military-economic
lobbies are profiting from a climate of insecurity to increase their control
over the remaining economic fabric, but in doing so, also cause further tension,
as was repeatedly demonstrated in Kisangani and North Kivu. This privileged
position of the Rwandan-controlled economic networks, of course, is not without
any opposition as they have to deal with alternative economic networks controlled
by a newly emerged class of local war entrepreneurs. This explains why, as Rufin
noticed, “the criminal exploitation of local resources, as well as direct
predation on civilians, makes these conflicts very unstable.” [16] As the war tends to be about carving out zones of influence
to establish militarised control over processes of accumulation, it can be expected
that the established networks will continue to compete.

6. The Role of Local Intermediaries

Even if it becomes part of the Rwandan strategy to expand its control over
the exploitation of natural resources in the RCD Goma-controlled zones, this
will not be possible without the collaboration of some key members of the local
Congolese business community. This is where the role of ‘local facilitators’
becomes important. Since August 1998, a new class of intermediaries that is
closely related to Kigali has replaced the old class of merchants, as well as
their trading patterns. These new actors, “through their close personal relationship
with the leadership of the Congolese rebellions, (…) act as the privileged intermediaries
between the local factions and their external patrons. Many are major shareholders
in the companies created to siphon off mineral and timber resources”.
[17] As a consequence, the existing coalitions between merchants, political
leaders and traditional authorities underwent a serious shift.

As already stated, these new actors came to be a very important element in
the replacement of local parallel networks by new structures of economic control.
For the RCD, the first strategy to eliminate the traditional intermediaries
and businessmen was through the collection of a range of new fees. As most
of the local Congolese merchants could not afford these taxes, only the bigger,
often foreign businesspeople remained active in local commerce. In Bukavu, this
resulted in an increasing importance of some Asian intermediaries or a new group
of Rwandan businessmen. In Uvira, a similar pattern developed.

This is not to say that local trading patterns since the start of the RCD campaign
only changed because of the RCD policies. As most of the traditional trading
routes are beleaguered by violence, most traders today are cut off from their
rural supplies and markets and have abandoned their commercial activities or
have been forced to co-operate with the rebel armies. This last element convinced
an important number of businesspeople to leave the country.

In this sense, it is important to mention the existence of a certain pattern
in the behaviour of local entrepreneurs. Bashi-merchants, who were part of the
former networks or coalitions between politicians and entrepreneurs, in most
cases left the region and relocated their activities to Kinshasa or Nairobi.
Other businessmen, mostly of Bazibaziba origin, showed their abilities to survive
in this volatile political and security situation. As the latter were willing
to co-operate with the RCDrebel movement, they could increase their control
on the local mining produce and petrol market [18] .

7. Adversaries become partners in business

When dealing with the impact of conflict on the local economic space, an additional
issue needs attention. It is not only local merchants in the urban centres
who are benefiting from the current disorder. In the countryside, the shift
to violence gave rise to a new kind of local strongmen, who try to control the
remaining local markets through militarised, informal networks.

Although the RCD and its allies control most of the mining centres, Mayi Mayi
groups, as well as the Interahamwe and FDD also have a considerable share of
Kivu’s richess and are developing their own local war economies. With a view
to the eventual resolution of the conflict in Congo, the actual state of disorder
offers the conditions necessary for the formation of new patterns of local economic
control, and hence for the perpetuation of the conditions that sustain the conflict.
Even at the grassroots level, war is becoming a way of creating an alternative
system of profit, power and protection,
[19] while economic relations are getting highly militarised. There is
of course the well-known and rather ‘traditional’ plundering by diverse militaries.
Grossly underpaid, if paid at all, soldiers survive by looting, harassment,
and robbery. Local commanders, not always included in the economic network that
functions so well for part of the RCD military and the RPA, often orchestrate
episodes of looting and turn into small entrepreneurs themselves.

Most notably, new local strongmen
are developing strategies to gain control over the artisanal production of high-value
goods. Since August 1998, several alternative trading networks between zones
under militia rule and RPA-controlled areas have been created that are helping
both sides in the conflict in financing their military efforts. As part of
the mineral resources controlled by these local strongmen are sold to Congolese
‘négociants’ or intermediaries who in turn sell their products to the
Rwandan controlled comptoirs d’achat in the urban centres, some of the militia-leaders
become indirect partners in business of the Rwandan forces. According to the
UN Panel of Experts, in some cases these adversaries turn into direct bunsiness
associates. An example was provided to us when we visited Kalonge, a village
in the territory of Bunyakiri in South Kivu. The village itself has been controlled
by Rwandan soldiers since the beginning of 1999 while Interhamwe have stayed
all that time on a plantation with a sub-soil rich in coltan, at a distance
of around five kilometres from Kalonge. According to local sources, the RPA
never made a serious attempt to attack the Interhamwe, event hough the latter
are apparently not numerous nor heavily armed. On the contrary, they appear
to be content with this situation as the Interhamwe who mine the coltan found
on the plantation are required to sell their produce via local middlemen to
the RPA commanders. The latter do not have to bother about manual work and the
trade further provides profits to all groups involved.

Even if the warring parties of
the Congolese conflict may have different political agendas, the economic rationale
behind their activities is bringing them closer together. A focus on the economic
interests and agendas provides us with some very useful elements for an understanding
of part of the military tactics of the different parties. It helps to explain
why the conflict is smouldering rather than characterised by constant heavy
figthing. For the RPA, there is not always an interest in fighting the Mayi-Mayi
militias and, as demonstrated above, not even Interhamwe or ALIR troops, at
least as long as they do not become too strong. If the short-term aim is to
make maximal use of the local economic resources, then the structural control
of the different trading networks is in most cases sufficient to get access
to what is produced in the Mayi-Mayi controlled regions. This analysis is not
to simplify the conflict in the DRC to war over resources; instead, by focusing
on the economic links between the different warring factions, the prolongation
on the conflict produced by the enormous economic resources in eastern Congo
becomes apparent.

8. The Example of Colombo-Tantalum

The trade in colombo-tantalum, locally better known as ‘coltan’, offers a unique
example of the extent and local effects of militarised trans-border trade. Although
this ore has always been largely present in Kivu, only recent technological
advances have made its exploitation highly profitable, and a true war economy
nourished by coltan, started developing. As a result of the growing international
demand for coltan, the importance of alternative informal trading networks based
on this ore expanded. It has put forward some unique opportunities for rebel
movements as well as their patrons to finance their military activities and
increase their personal benefits. Although often ignored, it also linked the
rural to the urban centres through new economic networks. At the same time,
the coltan trade produced some new survival strategies for the grassroots population.
As recent research confirmed, however, in the long run this rush for coltan
threatens to have devastating effects on the local social and economic order.
Although in most cases the trading networks are based on the same principles
as those of the former second economy, this coltan business has consolidated
the interconnection of economic activities and violence. Also, it has disrupted
the local agricultural production and, given the strong proliferation of demographic
strategies of temporary migration to the mining sites, even made the social
landscape more fluid than ever before. Once again, the question remains whether
these effects should be considered as by-products of the present context of
war, or as a true shift in the nature of local social and economic relations.

At the end of 2000, worldwide shortages of coltan not only contributed to the
delays in Sony’s delivery of its new version of PlayStation, but also led to
a price increase of this ore by a factor ten on the world market. Even though
most of the Congolese did not have any idea what coltan was used for, this price
increase was the start of a true coltan-rush. Thousands of young farmers left
their homes to walk to the (often illegal) mining sites in a desperate attempt
to escape from marginalisation. Also, a new generation of local commercial
actors soon understood that coltan was their road to paradise and joined the
miners to the local ‘eldorado’, where they became the leaders of this new class
of coltan-diggers, only paying tribute to the owners of the sites and making
lots of money by offering food, beer, manufactured products and women in return
for coltan. As Harden noticed, these “business ventures were part of a squalid
encounter between the global high-tech economy and one the world’s most thoroughly
ruined countries”. [20]
And finally, the RCD rebel leadership and their Rwandan sponsors (as well as
their adversaries and the roving bands of well-equipped predators) started realising
that the transborder trade in coltan was offering them an easy escape from their
grim financial position and began creating the necessary structures for a total
control of the export of this ore. It was the start of a short-lived but highly
profitable phase in the Congolese war.

The first link in the long chain between the mining sites and international
cell-phone producers, is the ‘prospecteur’. As the current context of
disorder gives free reign to private initiative, many youngsters feel attracted
by the increasing profits of the coltan trade and (temporarily) migrate to the
coltan-rich areas, where they start exploring parcels that are supposed to contain
the highly valued ore. Once coltan is found, an exploitation agreement with
the ‘owner’ of the site is settled. The ‘prospecteur’ then composes
a small working team of ‘creuseurs’ (miners) to start digging. The only
things needed are a shovel and a strong back, so everyone can become a miner.
The widely-available trickle-down effects of coltan wealth explain the expanding
success of the coltan exploitation in 1999-2000. Even if most of the interests
are skimmed off by comptoir-owners, warlords and army commanders, the little
money that sifts down to the grassroots level is sufficient to present an alternative
to exclusion. As was experienced in the eighties in the gold mining business,
thousands of marginalised youngsters as well as former militia-members hoped
to find a better living and to make profits in the deep but coltan-rich forests
of eastern Congo.

The result is the appearance of new structures of social and economic organisation.
Even though the quality of work is very egalitarian, in most mining sites coltan
digging has shaped all social relations and has given rise to new power structures.
Most of these ‘creuseurs’ or ‘exploiteurs’ usually spend two or
three weeks in the forest, where they live in semi-permanent villages. A first
level of ‘négociants’ (intermediaries) usually controls these ‘camps’
and only has to turn over part of the fees to the owner of the mine and to the
local traditional authorities as recompense for the environmental destruction
of his parcel. The example of Mama Doudou in Harden’s unequalled description
of the coltan business points at the scope of activities of these local intermediaries.
Because getting into the coltan business requires some financial resources,
only a few can become traders. Mama Doudou perfectly knows how to use her “natural
leadership abilities”. In return for coltan, she offers the ‘creuseurs’
overpriced bread, beer, antibiotics and “negotiated terms of endearment”.
Indeed, if the miners want the company and affection of a prostitute during
their stays in the forest, (at the time of writing) a kilo of coltan was the
price to be paid. [21]

Second-level intermediaries are those travelling between the forest villages
and the urban centres. For these activities, more primary investment is needed,
so the number of those involved is rather limited. First-level intermediaries
usually sell very quickly to these larger traders, in order to avoid any unexpected
rise and fall of the coltan price and to minimise their risks. Second-level
intermediaries are forced to take more risks, yet at the same time are the biggest
earners of the trade.

Several other intermediaries trade the tantalum ore, until it is transported
by ‘petits-porteurs’ from the villages close to the mining sites to the
‘comptoirs d’achat’ in Goma or Bukavu, which form the final link in the
‘coltan chain’. Of note here is that in most cases, the different links between
intermediaries and comptoirs are based on ethnic bonds of trust. In South Kivu,
most of the traders involved in these networks are of Bashi origin. The continuing
importance of prevalent trading mechanisms is adding a new dimension to the
notion of ‘ethnic bonds of trust and protection’. Second, the trickle-down effects
of coltan trade are not limited to the miners and intermediaries. Between the
different levels of the chain, hundreds of ‘porteurs’ (transporters)
are trying to take some benefit as well. In most cases, the transporters are
women. Here, ethnic identity is less relevant, as even Banyamulenge women,
who generally suffer large-scale exclusion, are involved.

The commercial ‘comptoirs d’achat’ in the urban centres are the most visible
part of the local coltan trade. Here, the ore is traded, scrutinised and administered.
In Goma and Bukavu, the RCD administration allowed nineteen comptoirs commercialising
tantalum ore. Even though Congolese or Western traders own most of them, a closer
examination reveals that most, if not all are connected or owned by Rwandan
businessmen or companies. According to the RCD legislation, the title-holders
of comptoirs do not have to hold the Congolese nationality. This explains why
in Goma half of the comptoirs have Rwandan owners, while the others are associated
or protected by Rwandans. There is even an additional dependency from Rwanda.
For the supply of cash needed for the purchase of coltan, most comptoirs are
indebted to Rwandan banks, which are in a position to manipulate the exchange
rates to their own benefit. It is estimated, however, that only one third of
the total coltan production finds its way to the world market through these
comptoirs. RPA elements or Congolese intermediaries on the RPA pay-list often
buy tantalum ore at the mining sites, from where the ore is directly transported
by little aeroplanes to Kigali, without paying any local taxes. Since the publication
of the report of the UN-Panel of Experts, this practice only increased, in order
to prevent any local control.

Until the creation of the ‘Société Minière des Grands Lacs’ (SOMIGL)
by the RCD in November 2000, in the RCD Goma-controlled areas the local coltan
trade was almost entirely dominated by the RPA forces. Even though the RCD had
pointed out a multitude of taxes to be applied on mining products, most of this
generated income was paid directly to the Congo Desk of the Rwandan Department
of External Relations. At the same time, two Rwandan companies (Rwanda Metals
and Grands Lac Metals) had the biggest stakes in the coltan business. In other
words, even if local intermediaries and comptoirs were involved in the commercialisation
of the artisan-extracted coltan, most of this production finally ended up in
Kigali, from where it was exported by Rwanda Metals or individual commercial
actors. [22]

In an attempt to increase its stake in the local coltan business, in November
2000 the RCD instituted the Socitété Minière des Grands Lacs (Somigl), a conglomerate
of four partners which was granted a monopoly over coltan export. According
to Nestor Kiyimbi, the head of the RCD Mining and Land Department, the creation
of Somigl was justified by the under-estimation of the exploited quantity of
coltan (only one of the nineteen comptoirs arrived at a commercialisation of
the minimum of 5.000 kilograms per month), the under-estimation of the commercialised
quality and the fiscal fraud of the comptoirs. In reality, Somigl aimed at
getting full control on the export of coltan and bringing all those involved
in the local coltan business into a very dependent position. As a result, comptoirs
were no longer were allowed to sell their tantalium ore directly to their foreign
businesspartners, but only to Somigl.

Yet things did not work out as expected. Even though in the first months of
its existence, Somigl generated about US$1 million of taxes, the opening of
new coltan mines in Australia, the global slump in the IT sector and the growing
international pressure on private companies to stop using war-related coltan
produced a sudden fall in coltan prices. In March 2001, the RCD rebel movement
decided to end the Somigl monopoly and again open up the coltan trade. As Kiyimbi
stated, “whoever meets the laid down conditions can open a bureau, be they
Ugandans, Rwandans, Americans or Swiss or any other nationals”. [23] As the RCD was forced to seek
alternative means of getting revenue, it started retroactively raising higher
taxes and imposing higher customs tarriffs and even began enforcing customs
duties on humanitarian aid. What had been a promising source of income had very
quickly turned into a nightmare.

By the end of 2001, the so-called ‘Afrique des comptoirs’ was in sharp contrast
to the grassroots economic reality, which at present is reduced to an almost
complete subsistence economy, and a retreat from a market that is governed by
violence. For large parts of the population, coltan trade continues to be one
of the only options left for survival. Even if the coltan trade fianlly ceased
to be the prime instrument for the accumulation of wealth, most Congolese living
in eastern Congo continue searching for access to the highly militarised trading
networks in mining products. As some local miners stated, “We agree that
the coltan mining cannot resolve our everyday difficulties or those around us
in general, but we earn much more money now than before”.
[24] Other miners see no other option than to dig coltan: “It is hard
work but we have no choice because we have to earn money”.
[25] This ‘rush for coltan’ (locally called mangano) was the final
confirmation that, in order to survive, the last asset available to most people
was the mobilisation of their labour.

The long-term effects of the increased local mining business on the grassroots
population threatens to be shattering. Aside from the physical dangers of artisan
mining activities (most miners do not have any experience in the construction
of underground galleries, leading to numerous accidents) and the devastating
impact they have on the environment, they have also led to a further destruction
of the social fabric. The mining business is producing two major social effects.
First, profits gained through violence at the local level are also provoking
further conflict and risks creating new boundaries between communities, as they
have incited renewed competition for access to land. The only difference with
former conflicts is that the objects of dispute are no longer cattle and grazing
lands but coltan-rich mining sites. As a traditional chief stated, “In Masisi,
Kalehe and Rutshuru zones, this mineral can cause new ethnic conflicts while
the old ones remain unresolved. The former source of conflict, pastoral land,
can now be replaced by coltan. (…). Normally people do not cultivate the soil
where mining takes place, so there are boundary problems”.
[26] The president of a Hunde mutuelle points directly at the importance
of ethnic membership for access to the coltan business: “At the moment it
is a high-risk job especially if you are not a Hutu or a Tutsi. Our young Hunde
miners are shot at point-blank range. In the mines, when people talk of armed
groups they are mainly Interahamwe who systematically kill the Hunde but leave
out the Hutu after they have robbed them. The young Hunde who manage to escape
from the Interahamwe are then victims of the Tutsi army on the road”.
[27] Recently, an additional source of conflict has been revealed. Some
of those who made a fortune during the ‘coltan fever’ are now investing their
money in the raising of cattle. Their search for grazing lands in Masisi is
provoking tension, especially when the original owners of these lands are no
longer there.

The second effect of the local coltan mining is its strong impact on social
cohesion. As most coltan miners are male farmers, the rural population is suffering
from the temporary migration of male workers to the mining sites. As two housewives
explained, “Coltan mining is very profitable, but only the husbands profit
from it. Once they have the money, they go away and look for other women in
Goma for whom they even buy houses while our own children suffer and don’t go
to school”. [28] Furthermore,
children are attracted to the new ‘eldorado’, which is exacerbating already
declining school attendance. Migration of the male rural population is also
affecting the available workforce in the agricultural sector and, thus, disrupting
the local agricultural production, while making the social landscape more fluid
than ever before.

9. Conclusions

The major motivation for the continuation of the present conflict in the Kivus
is often said to be the greed of the external patrons of the RCD rebel movement.
Also, it is stated that the local population no longer wants to be part of the
informal trading networks because these are only serving the interests of the
foreign powers actually present in eastern Congo. We believe both assumptions
are wrong. Our inquiry demonstrates that these war economies should be seen
as by-products rather than as causes of conflict, while the scramble for Congo’s
natural resources is only one of the many elements fuelling the conflict. In
addition, the analysis proves that many people are currently trying to escape
from a completely subsistence economy by migrating to mining centres or starting
their own trading activities. This is not to say that the economic imperatives
of the warring parties and the impact of the conflict on the local economic
fabric and local opinion are to be neglected. Rather, these issues have to
be put into the right perspective to protect against drawing any erroneous conclusions.
As this article has demonstrated, the situation on the ground in the Kivus became
one in which “economics fuels the violence, which fuels the economics”.
[29] Moreover, as the present war is pitching existing ethnically embedded
trading networks against each other, ethnic antagonisms are also intensified.
The recent competition for the coltan business once again exemplified how local
businessmen, armed movements, foreign government forces and Western private
business interests are all part of the same informal commercial networks, but
also continuously fuel the present conflict in the two Kivu provinces and beyond.
The result is a remodelling of local and regional modes of economic transaction
and the consolidation of violence as the organising principle.

A grassroots perspective on these war economies brings us to a final issue
of concern. Although often neglected among peacemakers, western civil society
leaders, scholars and diplomats, these networks not only facilitate the rebel
movements to continue their military activities but for large parts of the population,
they are also the sole mechanisms left for coping with the conditions of the
present conflict. Contrary to what some have argued, the present popular discourse
spread by civil society leaders in the urban centres -that these parallel networks
at present are mainly selling the national birthright and therefore should be
obstructed – does not prevent most of the Congolese from searching for access
to these economic networks; many Congolese even depend on them. To a certain
extent, the informalisation of the local extraction of natural resources could
even be explained as a democratisation of the local mining production. The
advantages of mining activities are no longer limited to multinational companies
or national elites, but also spread to the grassroots level and create an alternative
source of income for many households. Placing this activity under international
embargo, as was recently recommended by some European NGOs, might have equally
disastrous effects as the present war. Even when the impact of the price increases
of coltan are not taken into consideration, the question remains whether it
is the current war that is facilitating the coltan rush or the total collapse
of state structures and the absence of economic prospects. As the gold rush
of the eighties suggests, it is highly questionable that there would have been
no search for coltan if there had not been a war. The account of Violette, a
local coltan trader, is instructive: “It’s a pleasure when you make some
profit, to know that you have done this yourself, even if you put your life
in danger always. Even if the war ended and the president tried to put a stop
to this commerce, I would find a way to continue”.
[30] Therefore, during a recent conference in Boston, which aimed at promoting
human security in the DR Congo, it was concluded that not all economic activities
should be considered bad economies and that embargoing the present economies
of eastern Congo risks creating additional violence rather than reducing it
[31] . While this approach integrates the position of the grassroots population
into its analysis, it does not neglect the existing links between war and economic
activities. Its plea for the incorporation of economic security into demobilisation
and disarmament and reintegration programmes points to one of the crucial, although
highly neglected, elements of any successful strategy to bring about peace.

 

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