Burundi + 3 more

The emergence of a new order? Resources and war in Eastern Congo

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Analysis
Source
Posted
Originally published


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.

[1] Dr. Koen Vlassenroot is research fellow at the Centre for Third World Studies (University of Ghent), Hans Romkema is a programme officer in eastern Congo for the Swedish Life and Peace Institute

[2] Paul Collier, Economic Causes of Civil Conflict and their Implications for Policy, World Policy Research Paper (Washington: World Bank 2000) p. 3.

[3] Mark Duffield, Global Governance and the New Wars. The Merging of Development and Security (London: Zed Books 2001) p. 190.

[4] Vwakyanakazi Mukohya, Import and Export in the Second Economy in North-Kivu, in: Janet MacGaffey (ed.) The Real Economy of Zaire. The Contribution of Smuggling and Other Unofficial Activities to National Wealth (London: James Currey 1987).

[5] Author's interviews with local civil society-members and small businessmen, Bukavu, May 1998.

[6] Janet MacGaffey, 'Issues and Methods in the Study of African Economics', in Janet MacGaffey (ed.), The Real Economy of Zaire. The Contribution of Smuggling and Other Unofficial Activities to National Wealth (London: James Currey 1987) p. 22.

[7] M. Mwanasali, 'The View from Below', in Mats Berdal and David Malone (eds.), Greed and Grievance (Boulder and London: Lynne Rienner Publishers 2000) p. 140.

[8] Ibid., p. 140.

[9] His real name is Akandwanaho Caleb. According to a Ugandan MP, "When Museveni would be God, then Salim Saleh is Jesus Christ". Author's interview with Norbert Mao, Kampala, March 1999.

[10] Adonia Ayebare, 'Kabila Falls Out with his Allies', EastAfrican Alternatives (Sept.-Oct. 1998) p. 9.

[11] Gerard Prunier, 'L'Ouganda et les guerres Congolais', Politique Africaine 75 (October 1999) pp. 43-59; Erik Kennes, 'Le secteur minier au Congo: "Déconnexion" et descente aux enfers', in Filip Reyntjens and Stefaan Marysse (eds.), L'Afrique des Grands Lacs. Annuaire 1999-2000 (Paris: L'Harmattan 2000) pp. 299-342.

[12] Ibid. p. 17.

[13] Ibid.

[14] NCN, July 10, 1999.

[15] The BCDI and SONEX have partly the same shareholders.

[16] Jean-Christophe Rufin, 'The Economics of War: a New Theory for Armed Conflicts', FORUM (Geneva: ICRC, 2001) p. 24.

[17] Rene Lemarchand, The Democratic Republic of Congo: From Collapse to Potential Reconstruction, Occasional Paper ( Copenhagen: Centre for African Studies

2001) p. 43.

[18] Personal Communication with local merchants, Bukavu, 1998 and 1999.

[19] David Keen, 'The Economic Functions of Violence in Civil Wars', Adelphi Paper, no. 320.

[20] Blaine Harden, 'A Black Mud from Africa Helps Power the New Economy', New York Times Magazine (12 August 2001).

[21] It is interesting to note that these 'temporary' wives could dump one miner in favor of another, yet also only after payment of a kilo of coltan to Mama Doudou.

[22] United Nations, Forms of Wealth of the Democratic Republic of Congo (New York: United Nations Security Council April 2001).

[23] Irin, Rebels open up trade in coltan (Nairobi: IRIN 10 April 2001).

[24] Local miners cited in: Aloys Tegera (ed.), The Coltan Phenomenon. How the Rare Mineral has Changed the Life of the Population in War-Torn North Kivu Province in the East of the Democratic Republic of Congo (Goma: Pole Institute 2002).

[25] Two school children from Matanda; cited in Aloys Tegera (ed.), The Coltan Phenomenon. How the Rare Mineral has Changed the Life of the Population in War-Torn North Kivu Province in the East of the Democratic Republic of Congo (Goma: Pole Institute 2002).

[26] Roger Bashali, communal leader of Bashalo Mokoto, cited in: Aloys Tegera (ed.), The Coltan Phenomenon. How the Rare Mineral has Changed the Life of the Population in War-Torn North Kivu Province in the East of the Democratic Republic of Congo (Goma: Pole Institute 2002).

[27] Bernard Luanda, president of the Bushenge/Hunde mutuelle.

[28] Two anonymous housewives, cited in: Aloys Tegera (ed.), The Coltan Phenomenon. How the Rare Mineral has Changed the Life of the Population in War-Torn North Kivu Province in the East of the Democratic Republic of Congo (Goma: Pole Institute 2002).

[29] Stephen Jackson, 'Our Riches are being looted!': War Economies and Rumour in the Kivus, D.R. Congo, Unpublished Paper (2001).

[30] Ibid.

[31] Promoting Human Security in the Democratic Republic of Congo, Conference jointly presented by the Institute for Human Security (Tufts University), the UN-Bureau for Crisis Prevention and Recovery, and the Feinstein International Famine Center (Tufts University), Boston, 27 February - 1 March 2002.