Is this the beginning of the Third Congo War?

Yesterday Goma fell to the M23, a rebel group in eastern DRC with alleged links to both Rwanda and Uganda. The fall of Goma increases the likelihood of an all out war in eastern Congo that might quickly degenerate into a regional war – just like the Second Congo War was (for more on why peace failed see this ICG report).

I am on record as lacking any sympathies for the Kinshasa regime under Joseph Kabila (see here, here, and here). The horrendous situation in eastern DRC is as much his fault as it is of the alleged meddlers from Kampala and Kigali. The fact that the international community has taken to viewing the conflict as primarily regional is a mistake as it masks Kabila’s own failings in improving governance in the eastern DRC . It also gives him a chance to continue free riding on MONUSCO’s presence in the region.

Sadly, the international community appears set to waste this latest crisis by issuing statements and imposing sanctions which will only tackle the symptoms rather than the real problems behind the conflict. As the ICG argues:

If international donors and African mediators persist in managing the crisis rather than solving it, it will be impossible to avoid such repetitive cycles of rebellions in the Kivus and the risk of large-scale violence will remain. Instead, to finally resolve this conflict, it is essential that Rwanda ends its involvement in Congolese affairs and that the reconstruction plan and the political agreements signed in the Kivus are properly implemented.
For these things to happen Western donors should maintain aid suspension against Rwanda until the release of the next report of the UN group of experts, in addition to issuing a clear warning to the Congolese authorities that they will not provide funding for stabilisation and institutional support until the government improves political dialogue and governance in both the administration and in the army in the east, as recommended by Crisis Group on several previous occasions.
Over at Congo Siasa, the DRC expert Jason Stearns offers some preliminary thoughts on M23’s endgame:
In the past, I have speculated that it will be difficult for the M23 to conquer and hold territory, mostly due to their lack of manpower, which started off at around 400-700 and is probably around 1,500-2,500 now. They have been able to rely on Rwandan (and, to a lesser degree, Ugandan) firepower for operations close to the border (in particular Bunagana and Rutshuru, allegedly also this recent offensive), the farther into the interior they get, they harder it will be to mask outside involvement.
Alliances with other groups­­––Sheka, Raia Mutomboki, FDC, etc.––have acted as force multipliers, but have been very fickle, as the surrender of Col Albert Kahasha last week proved. From this perspective, the M23 strategy could well be more to nettle the government, underscore its ineptitude, and hope that it will collapse from within.
However, the recent offensive on Goma has made me consider another, bolder alternative. If the rebels take Goma, thereby humiliating the UN and the Congolese army, they will present the international community with a fait accompli. Yes, it will shine a sharp light on Rwandan involvement, but Kigali has been undeterred by donor pressure thus far, and has been emboldened by its seat on the Security Council. Also, as the looting by the Congolese army and their distribution of weapons to youths in Goma has shown, the battle for Goma is as much of a PR disaster for Kinshasa as for Kigali.

Kleptocracy and Debt: Vulture Funds to the Rescue?

I am currently working on a project on commodities in SSA and have been amazed both by the region’s mineral wealth and how much of it gets stolen by local elites in cahoots with large MNCs. It is one thing to read about corruption from 30,000 feet. Getting an up-close view is another matter. The examples of the two Congos are instructive…

Congo-Brazzaville is one of the top oil producers in Africa. It is also a dirt poor country, with over 70% of its people living below the poverty line. Like in Equatorial Guinea (and other petro-states in the region), the ruling cabal in Brazzaville has turned the country’s oil wealth into private property – the symbol of which is the president’s son’s extravagant expenditures in European capitals (For more details see below).

These details of the sleaze around oil revenues in Congo were unearthed, by among others, Elliot Associates, a “vulture fund.”

Across the river in the other Congo (Congo-Kinshasa aka DRC) another vulture fund is trying to get Kinshasa to pay up. The vulture fund, FG Hemisphere, paid $3.3m for the debt to a Bosnian state-owned company, and then went ahead and sued for $100m in the courts of Jersey to recover the debt. Recently the Privy Council in the UK, the final appeals court, ruled in favor of Kinshasa. For more on this see the Guardian (here, here and here), which has been following this particularly case closely.

The Democratic Republic of Congo has a mineral wealth estimated to be around $24 trillion. It is also one of the least and poorest governed places on the planet. A recent report indicated that as much as 5 billion dollars in revenue from minerals has disappeared from the state coffers in the recent past.

Should Brazzaville and Kinshasa be forced to pay up?

Opinion over the utility of venture funds is divided. There are those that blame them for going after the poorest countries, asking for taxpayers to pay for their rulers’ (sometimes dead and gone, like Mobutu) largesse. But there area also those who contend that the best way of making rulers less willing to steal is by forcing them to pay up their debts – especially considering that debt forgiveness alone cannot end corruption.

Eric Joyce, writing in the Guardian puts it thus:

Campaigners have always maintained that if FGH is unable to collect the debt then the money will go instead to public works in the DRC. This is simply not true. The doctrine of “sovereign immunity” applies across the world and it is therefore not possible for any creditor, “vulture” or otherwise, to access funds that have a sovereign purpose – that is, public expenditure. Creditors can only target cash being used to trade.

With this in mind, perhaps the do-gooders campaigning for debt cancellation and recovery of stolen monies could team up with vulture funds. The latter have both the expertise and financial incentive to go after monies hidden in foreign bank accounts and shell companies registered in tax havens. Just a thought.

Reason for African Petro-Rulers to be Worried

Africa’s petrorulers (heads of state of Angola, Cameroon, Chad, Congo-Brazzaville, Equatorial Guinea, Gabon, Ghana, Nigeria, South Sudan, and Sudan) may be headed for tough times later this year. According to a piece by (Steve Levine) over at FP, Saudi Arabia – the world’s leading oil producer – is considering flooding the global oil markets with the aim of sticking it to the Russians and Iranians. Saudi action of this nature could lower prices to as low as US $40 a barrel from the current $83.27.

With the exception of Ghana and Cameroon, such a drop in oil prices would almost certainly lead to political unrest in the rest of Africa’s oil producers. Sudan and South Sudan are already facing huge revenue shortfalls due to a dispute over the sharing of oil revenue.

More on “The Coming Oil Crash” here.