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.

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4 thoughts on “The Consequences of Dodd-Frank in the Kivus

  1. Pingback: The other dimension of the (origins of) Congolese Conflict « Opalo's weblog

  2. Our company works with Congolese tribes to help them export without a dime going to conflict groups. Dodd-Frank has been disastrous for them.

    There are (at least) six Congo regions from which Dodd-Frank minerals are mined, and only one of them has ever had anything to do with conflict. Dodd-Frank has put them all out of business before it is even enacted.

    I’m in Tanzania to help a chief export his coltan using a visible, well-documented process that ensures not a dime goes to conflict. That chief and his people will go hungry because the smelters, citing Dodd-Frank, have vanished.

    The issue with Dodd-Frank is that it is a nuclear option. To destroy the militia, Dodd-Frank is willing to take down every innocent man, woman, and child in the Congo who live off mining. Such massive collateral damage is not acceptable under any circumstance.

    I can bring a Congo chief involved in mining to any debate and/or the SEC panel in DC – likely no one wants them there. We prefer talking about this problem without the input of those actually affected.

    Like

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