Econometric evidence against Dodd-Frank as applied in the DRC

This study is the first to provide econometric evidence of the relationship between conflict and mineral endowments in the DRC. While there are vivid debates and speculations around the motives of armed groups, I find that price shocks lead to armed groups violence, between groups and in order to acquire territory hosting the mineral (not to more pillages). This result is in line with other reports based on qualitative data, such UN (2002). Second, I find that interventions aimed at constraining armed groups ability to collect taxes increase violence against civilians in the short-run. Interventions that attempt to weaken armed groups finances have become dominant among policy circles. In particular, the United States issued the Dodd-Frank legislation in 2012, aimed at constraining purchases of minerals whose trade is a source of finance to armed groups. Governments interested in “cleaning” the mineral chain, thus, may need to protect civilians in the aftermath of these interventions, and provide alternative occupations to combatants who lose access to revenues from taxes as a result of these interventions. 

That is Columbia’s Raul Sanchez de la Sierra in a neat paper on the origins of states. Check it out here (H/T Chris Blattman)

For more on this subject see this over at HuffPost.

Museveni: UN missions stifling state capacity development in Africa

The Daily Nation reports:

Ugandan President Yoweri Museveni has said UN peacekeeping missions [especially in the DRC] are derailing efforts by African governments to end conflicts.

He criticised the UN system of peacekeeping saying: “External support by the UN makes governments lazy and they don’ t focus on internal reconciliation.”

“The mistake is internal actors with no correct vision and the UN which does not focus on internal capacity building but instead focusing on peace keeping all the time. Without the internal solutions, you can’t have peace, ” Mr Museveni said in a statement on Thursday.

Some Congolese and experts on the DRC may disagree with Museveni’s analysis but it has some truth to it. As I pointed out in an African Arguments post several months ago, there is no short cut to fixing the Congo. State capacity development must be THE overriding concern (for more on this see here and here).

Also, The International Crisis Group has a nice piece on the recent takeover of the mining town of Lubumbashi by Mai-Mai fighters. The writer notes:

Since President Joseph Kabila’s controversial election victory in November 2011, government control over DRC territory has been in drastic decline. Beyond the fall of Goma to the M23 rebellion, Kinshasa has failed to repel the activities of various other armed groups: the Mai-Mai Morgan in Province Orientale, the Ituri Resistance Patriotic Front (FRPI) and the Mai-Mai Yakutumba in South Kivu, Rayia Mutomboki in North and South Kivu, as well as the Mai-Mai Gédéon in Katanga. (On the eastern Congo armed groups, see the October 2012 briefing Eastern Congo: Why Stabilisation Failed. On the Katanga armed groups, see the report Katanga: The Congo’s Forgotten Crisis.)

US Africa Policy, A Response

This is a guest post by friend of the blog Matthew Kustenbauder responding to a previous post.

On the question of human rights guiding America’s foreign policy in Africa, I agree with you; it shouldn’t be the first priority. The US needs a more pragmatic development diplomacy strategy, which would help African countries develop just as it would help American businesses thrive.

But I disagree with your characterization of Hillary’s position in this respect. Here’s Secretary Clinton’s own words:
“Last year I laid out America’s economic statecraft agenda in a series of speeches in Washington, Hong Kong, San Francisco, and New York. Since then, we’ve accelerated the process of updating our foreign policy priorities to take economics more into account. And that includes emphasizing the Asia Pacific region and elevating economics in relations with other regions, like in Latin America, for example, the destination for 40 percent of U.S. exports. We have ratified free trade agreements with Colombia and Panama. We are welcoming more of our neighbours, including Canada and Mexico, into the Trans-Pacific Partnership process. And we think it’s imperative that we continue to build an economic relationship that covers the entire hemisphere for the future.” 
“Africa is home to seven of the world’s ten fastest-growing economies. People are often surprised when I say that, but it’s true. And we are approaching Africa as a continent of opportunity and a place for growth, not just a site of endless conflict and crisis. All over the world, we are turning to economic solutions for strategic challenges; for example, using new financial tools to squeeze Iran’s nuclear program. And we’re stepping up commercial diplomacy, what I like to call jobs diplomacy, to boost U.S. exports, open new markets, lower the playing field – level the playing field for our businesses. And we’re building the diplomatic capacity to execute this agenda so that our diplomats are out there every single day promoting our economic agenda.” 

One of the problems, however, is that the pragmatic approach articulated by the Secretary doesn’t trickle down through the bureaucracy. This is especially true, ironically, of the State Department’s primary development diplomacy arm, USAID, which has a deeply entrenched culture of being anti-business. It’s a huge problem, and part of the reason why American foreign policy in Africa has been so slow to adjust to new economic realities.

Security drives US Africa Policy

Security drives US Africa Policy

Academics schooled in all the latest development orthodoxies but lacking the most basic understanding of economic or business history have flocked to USAID, so that the suggestion that American economic interests should guide development policy – making it a win-win for Africa and America – is anathema. It’s also why the Chinese are running all over the US in Africa.

As a prominent economic historian recently remarked in the Telegraph, “While we [Western governments] indulge our Victorian urge to give alms to the Africans, Beijing is pumping black gold.” And this is just it. As long as the US approaches Africa as a beggar needing to be saved and not as a business partner worthy of attention, both sides will continue to lose out.

In this respect, what Africa does not need is another “old Africa hand” steeped in conventional development ideas and old dogmas about what’s wrong with Africa and why the US must atone for the West’s sins. For this reason alone, John Kerry – not Susan Rice – probably stands a better chance, as the next Secretary of State, at putting American foreign policy toward Africa on a more solid footing.

- Matthew Kustenbauder is a PhD candidate in history at Harvard University.

More on the DRC

CFR has a nice interview with Jason Stearns, DRC expert and author of Dancing in the Glory of Monsters. Jason in part notes that:

This crisis has brought about a shift in international donor policy for the region, in particular criticism and financial sanctions against Rwanda, which is something that’s new. However, using aid as leverage only makes sense in the context of a larger political process. Bashing Rwanda just for the sake of bashing Rwanda is not a solution. There needs to be a comprehensive political process into which that kind of pressure can be funneled and channeled. But there is no such process at the moment. What you have are talks mediated by a regional body—the International Conference for the Great Lakes Region (ICGLR)—that has the irony of being presided over by Uganda, which is itself playing a role in the conflict by supporting the M23. These talks have been largely limited to an evaluation of the March 23, 2009 peace deal, and the potential formation of a regional military force to deal with the FDLR and M23. But the causes of the crisis run much deeper and involve the failure of local governance, the weakness of the Congolese army, and the persistent meddling of neighboring countries in Congolese affairs.

This is precisely what informs my contention that there is too much focus on the international dimension of the conflict at the expense of the kinds of reforms that Congo needs in order to improve state capacity in Sub-Saharan Africa’s biggest country.

You can’t do business, implement a human rights regime, or even pretend to have democratic governance in a stateless environment (Unless, of course, you live in a state of nature in which everyone has capacity to defend themselves against aggression by others).

Some, including very serious and influential people, think that the solution to Congo’s weakness is to plea with its neighbors not to prey on it. I disagree. I believe that the best solution ought to be the strengthening of Congo so it can deter its neighbors. The international community just wasted a good opportunity to force a cornered Kabila to agree on a peace deal that is self-enforcing, i.e., that reflects the power balance in eastern Congo.

As things stand the continuation of the power vacuum in the Kivus will continue to attract rebels, foreign-sponsored or not.

More on this here.

Also here is a  glimpse of some of the actions by Kabila and his Kinshasa cabal which make it extremely unlikely that the situation in Congo will improve under his rule.

Governing on the cheap in Africa

What is striking and surprising here is just how easy it can be to take over some African states, or large parts of them.  The post-independence historical record provides numerous examples where dozens or a few hundred armed men have done it.  This is generally just assumed to be the way things are in Africa, but when you think about it it is actually really puzzling.  Being the president in African countries (and many others besides) can be an incredibly lucrative deal.  Why don’t these rulers, in their own self-interest, take some of that money and use it to build crack units, presidential guards, or strong and loyal army divisions that would protect their hold on power against two dozen putchists, or a hundred or a couple thousand rebels armed with rifles and maybe some mortars?

I don’t think we have really good explanations for this in the relevant Pol Sci literatures.  Maybe the most promising hypothesis is that African presidents are so afraid of coups and attacks from inside their regime that they don’t want to support the construction of any organization that would be competent at using force.  Keeping the military weak  may lower their coup risk somewhat, but effectively trades coup risk off against higher risks of rural rebellion, insurgency, and foreign depredations such as we are seeing in Eastern Congo.

That is Jim Fearon writing over at Monkey Cage. More on this here.

Jim’s concern extends beyond security matters. Much of Africa remains under-governed in other regards as well – tax collection, garbage collection, provision of public goods like water and sanitation, roads, etc etc.

One key driver of this phenomenon, I believe, is the manner in which sectional elites (and those that they purportedly represent) are incorporated into the national system.

You see, many African national governments tend to have a president surrounded by a coalition of ethnic/sectional elites representing specific geographic regions or communities. This sort of incorporation of elites and the regions/social groups that they represent allows African central governments to govern on the cheap since as long as ethnic chief from region X can bring his people and sort of make them feel represented in the centre then the government has no reason to establish a strong presence in the chief’s homeland region (unless that region is economically viable).

A keen observer may ask why co-ethnics of these “ethnic chiefs” never demand for more from their supposed representatives at the centre.

The answer lies in the nature of citizenship in most of Africa. In many countries citizenship (and the associated claims on the state) tends to be mediated through one’s ethnic group. Talk of “our people” is common across much of the region. Even educated people have internalized the fact that you can only get jobs if a co-ethnic is in a high position in government. Everyone therefore invests in having a powerful ethnic representative at the centre that can effectively bargain with whoever is president (or in the core of the governing coalition) to get enough jobs for the boys and girls from back home.

But having such a person obviates the need for the central government to establish its presence at the local level since it is much cheaper to give the ethnic chief his own fiefdom in the name of a cabinet ministry. Barriers to entry allow for very long tenures for these ethnic chiefs thus breeding incompetence of the worst possible kind – like the case of Kenyan police officers accepting bribes from al-Shabab operatives to allow for passage of explosives destined for Nairobi.

From the president’s/government’s perspective, all you have to do to prevent an all out rebellion is be on good terms with enough of these ethnic chiefs or make it beneficial for them to live under your rule.

Seen this way, under-government is not just for the sake of coup-proofing but also an unintended consequence of the manner in which the masses and their representative elites are incorporated into the national government/state.

The best book out there that I have read on this subject is Catherine Boone’s Political Topographies of the African State. Boone is best read with Jeffrey Herbst’s States and Power in Africa, although Herbst’s conclusions are too deterministic for my liking.

Give Kagame a break!

I admire Richard Dowden, Director of the Royal African Society. That said, I disagree with the concluding paragraph in his latest post on the Rwandese military’s involvement in eastern Congo over at African Arguments:

“When a similar situation occurred in Sierra Leone, the Special Court for Sierra Leone went after the main supporters and funders of the rebel movement, in particular the President of Liberia, Charles Taylor. He was recently sentenced to 50 years in jail for his part in funding the murder and destruction of Sierra Leone. Yet the evidence of Rwanda’s support for warring groups in Congo is as strong – if not stronger – than the evidence that convicted Taylor. But because of the genocide in Rwanda and because both Uganda and Rwanda have good development programmes that western donors love to fund, they will not be criticised. Eastern Congo will continue to suffer.”

Following the damning UN report on Kigali’s adventures in the Congo and concerted campaigns by human rights activists, a number of donor countries, including the US, UK, Germany and the Netherlands, have (unwisely) stopped sending aid money to Kigali.

I am inclined to believe that there is truth to the claim that Rwanda supports the M23. But that does not necessary lead me to conclude that Rwanda should therefore be ostracized by the international community, for the following reasons:

  • Rwanda faces a real security threat from rebels in eastern Congo. Kagame is a dictator, no doubt about that (He is not your average tin pot dictator, but that’s beside the point for now). But he is also a purveyor of order in this rather volatile region of central Africa. The last thing eastern and central Africa needs is a slow motion civil war as is currently underway in Burundi. As long as Kinshasa’s incompetence continues to provide a safe launching base for rebels aiming to depose Kagame, Kigali will have no option but to (rightly so) intervene in eastern Congo. Let us not pretend otherwise.
  • The insurgencies in eastern Congo are a direct result of Kinshasa’s calculated inability to project power and control. In this instance, I think the Huntongian view that degree of government matters trumps concerns over the type of government. Eastern Congo needs order, period. Attempts at political negotiations with the numerous rebel factions must also be accompanied with strong military action to defeat all the rebel movements that refuse to come to the table. Kinshasa’s continued failure at either attempt leaves Rwanda no option but to step in in light of the observation above.

In a way the campaign to have Rwanda punished for its adventures in the DRC is emblematic of the problems associated with “mono issue activism” (Remember the danger of a single story?)

This is not a defense of Kagame’s human rights record. Everyone knows it is in the toilet. It is also not a blanket endorsement of foreign interventionism. What it is is an acknowledgement of the very complex context in which Kagame acted, and a consideration of the unintended consequences of cutting aid to Rwanda.

Rwanda’s involvement is a symptom of, and not the cause of the mess that is eastern DRC.

To those that want Kigali punished, I ask: What would it mean for Rwanda’s and the wider region’s security? What would it mean for economic growth and development for the 12 million Rwandese? What would it mean for infant and maternal mortality that have been on the decline (more rapidly than in most of the developing world) over the last decade?

Punishing Kagame (and the people of Rwanda) for Kinshasa’s ineptitude will not solve the problems in eastern Congo. That is just a fact.

UPDATE:

Please check out the comments section below for some insightful discussion on this subject. Despite the combativeness of some of the comments, they all raise some important points that I could not have incorporated in a short blog post.

Waiting for Kabila to be Charlemagne

Joseph Kabila was sworn in today as President of the DRC following disputed elections last month. The main opposition has vowed to not recognize him as the legitimate president and are planning street protests. Some analysts believe that there will be blood in the streets of Kinshasa and other major urban centers.

If you think for a moment about the size and diversity of the DRC it becomes clear how hard it will be for the incorrigibly inept enormously challenged Joseph Kabila to be the one to drag the DRC out of its 50 year tailspin.

 

Democratic Republic of Congo

The truth be told, Mr. Kabila would not do any better running a village mboga kiosk. He is not an autocrat in the mold of Kagame, Zenawi, Museveni or even Sankara. He is closer to Samuel Doe, Bokasa and Valentine Strasser, ineffectual at best and outright disastrous at worst.

 

Mining and Voting in the Congo

Elections in the DRC have come to be marked by a fire sale of state assets. A recent report by the UK parliament estimates that the government may have lost up to $5.5 b due to undervaluation of these state assets before sale.

No prizes for guessing where part of the difference in these sales go.

The whole situation is pretty stinky:

The IMF has asked the government to clarify several obscure contracts signed by Gécamines, which suggests that state assets have been sold for absurdly low prices…….. This would put the loss to the state at $870 mn.

The Chief Executive of Gécamines, Albert Yuma Mulimbi, has refused all requests, from the Mines Ministry to the IMF and others, to publish the controversial contracts, claiming that as a private company it is not obliged to, even though the state owns all its shares. The government has instructed Yuma, we understand, not to provide the information.

More on this here and here.

The other dimension of the (origins of) Congolese Conflict

UPDATE: Stay updated on the run-up to the elections in the DRC here.

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In reaction to Dodd-Frank many in the blogosphere, including yours truly, have insisted that the problem in eastern Congo is not a law enforcement problem but a governance problem whose solution must come primarily from Kinshasa.

Often ignored is the regional dimension of the conflict.

The involvement of Rwanda and Uganda in eastern DRC (in the first and second Congo wars) have been excellently documented in Dancing in the Glory of Monsters (the author also blogs at Congo Siasa).

The invading forces may have left, but the geopolitical posturing remains and has consequences for the flow of arms and mushrooming of militias in the region.

Here’s a short documentary on the same.

This is not to simply vilify Uganda and Rwanda – one could argue that the presence of rebels from both countries in the Congo provided legitimate grounds for an invasion.

The point here is that the regional dimension of the conflict should not be ignored even as we insist that attention should shift to Kinshasa in an attempt to provide a lasting end to the conflict in eastern DRC.

The Consequences of Dodd-Frank in the Kivus

The dusty streets of Goma, North Kivu’s capital and a mining hub, illustrate Congo’s ills. Metals dealerships dominated the city’s economy until last year but are mostly padlocked now. Repair shops and bars that relied on mining business are empty. So are most public offices. Local government, financed by mining taxes, is insolvent; salaries have not been paid in full for months.

In the past year Goma has suffered a miserable decline. Hundreds of mines in the surrounding countryside have cut output by as much as 95%. At the Humule coltan mine a few gumbooted miners scramble up a red-earth ravine where last year there were thousands. Most stopped coming because they could no longer find buyers for their nuggets of coltan, a metal used in electronic gadgets. They blame what they call “the American law”.

That is the Economist reporting on the mining sector in the DRC.

Dodd-Frank (found here) is a lesson in the failure of solutions imposed from 30,000 feet. As has been stressed by many DRC experts (see Mvemba, Aronson and Seay, for instance), the problem with eastern DRC is not a law enforcement problem but a weak state problem.

With that in mind, it is sad that Joseph Kabila, the man who has failed to pacify the country, is poised for reelection this November. Good governance, even in relatively peaceful and cohesive states, take a long time to evolve. Once can only imagine how much longer Congolese will have to wait before they can get an effective and accountable state.

For  a slightly different opinion check out AFJN.