CAR: Poverty in the Midst of Diamonds
By Staff Writer
A new report by the International Crisis Group (ICG), the Brussels-based think tank chronicles how extreme poverty and armed conflict in the diamond-rich areas of the Central African Republic (CAR) put thousands of lives in danger and demand urgent reform of the mining sector. The report-Dangerous Little Stones: Diamonds in the Central African Republic-- examines how poor governance, poverty and crime in the diamond business feed conflict in mining zones. After decades of misrule and state fragility, the government has neither the will nor means to ensure the country’s precious stones benefit its people. Political motivations undermine good governance of the sector and leave artisanal miners and their families struggling for their livelihoods. High export taxes encourage smuggling that weak mining authorities are powerless to stop.
The few industrial diamond mining companies bold enough to risk working in the CAR have left, partly because of government greed. The mines ministry has devoted little thought, time or money to developing artisanal mining or helping diggers escape the poverty trap. These factors combined– a parasitic state, poverty and largely unchecked crime – move jealous factions to take up arms and create conditions in mining zones that enable armed groups to collect new recruits and use profits from diamonds to perpetuate their fight.
Beyond self-enrichment, the elite need money to fulfil their extended families’ expectations and maintain political loyalty through patronage networks. The government is also in constant need of immediate returns to satisfy its minimal obligations, not least paying civil servant salaries, and Bozizé needs extra cash to ensure that the elections planned for 23 January 2011 go his way.
The report says that despite the state’s efforts to register miners through a licensing system, artisanal mining has remained almost entirely informal, uncontrolled and, in strict terms, illegal. Unlicensed miners try to avoid the authorities for fear of being punished. The informal nature of mining makes it more difficult for miners to appeal to the state for support and for the authorities to intervene on their behalf. It also creates conditions ripe for crime. Smugglers export diamonds illegally and sell at higher prices elsewhere through transnational trade networks. Up against weak state security forces, bandits have also profited in mining zones or on diamond traders’ routes.
“Miners enduring poverty and a parasitic state are quick to join rebel groups”, says Ned Dalby, Crisis Group’s Central Africa Analyst. “Meanwhile unchecked criminal networks enable fighters to profit from mining and selling diamonds illegally and continue to prey on civilians”.
Since President François Bozizé came to power in 2003, industrial diamond mining companies have almost all left, leaving only a huge informal sector. The regime seeks to reap profits by means of a strict legal and fiscal framework and centralised, opaque management, but expensive licences and corrupt mining police make it harder for miners to escape the poverty trap. The government’s closure in 2008 of most diamond exporting companies severely cut investment in the production chain, costing many miners their jobs and thus helping cause a spike in infant malnutrition.
Crisis Group says that the greatest disincentive for mining companies is the government’s demand for a signing bonus, the size of which the mining code does not specify.74 In 2005 one company reportedly agreed to pay $750,000 each year for the first two years of exploration and $500,000 for the following three. In 2008 another reportedly had to pay, in addition to regular fees, 100 million CFA francs ($200,000) plus vehicles and computers for its exploration permit.
“Perhaps more wary of international reproach than his predecessor, Bozizé has not openly entered private enterprise. But, following the example of those who went before, he has put the interests of his ethnic group before the country’s economic development”, the report says.
Rampant smuggling fosters illicit trading networks that deprive the state of much needed revenue, while the government’s refusal to distribute national wealth fairly has led jealous factions to launch rebellions. Profits from mining and selling diamonds illegally enable armed groups to collect new recruits and create a strong incentive not to disarm.
According to Crisis Group, reform of the diamond sector is imperative to improve the living conditions of miners and their families, boost the state’s revenues and help break the cycle of armed conflict. The government needs to institute more democratic control of the sector, a matter mainly of political will, and enhance transparency. International partners should help build the capacity of mining authorities in the capital and mining zones – but only once the government has demonstrated genuine commitment. The reform strategy should prioritise artisanal above industrial mining, which has less direct impact on mining communities, aim to reduce incentives for smuggling and tighten controls to stop armed groups profiting from diamonds.
“It is high time the government and international partners commit to genuine reform of the mining sector”, says Thierry Vircoulon, Crisis Group’s Central Africa Project Director. “If not, peacebuilding will always be an unfinished business in the CAR”