Resources, Greed and the Persistence of Violent Conflict

Tasneem Jamal

Don Hubert

The Ploughshares Monitor June 2000 Volume 21 Issue 2

This paper is based on a presentation at the annual CIDA/DFAIT Peacebuilding Consultations and is a chapter in a forthcoming book entitled Human Security and the New Diplomacy to be released later this year. The views presented are those of the author and do not necessarily represent the views of DFAIT.

Don Hubert is a Senior Policy Advisor in the Peacebuilding and Human Security Division of the Department of Foreign Affairs, currently on leave and living in Dhaka, Bangladesh. He is also a Research Fellow at the Centre for Foreign Policy Studies at Dalhousie University.

To prevent and resolve violent conflict we must understand the sources and logic of war. Two schools of thought currently dominate thinking on the causes of contemporary conflict. The first sees violence as a response to a range of grievances including systematic discrimination and human rights violations, inequalities in wealth and political power, or a scarcity of resources, particularly where these fall along existing social cleavages such as ethnicity or religion. The second characterizes war as irrational either originating in “ancient hatreds,” causing a needless disruption along the normal path to development, or simply as “mindless violence.” These schools recognize that leadership can play an important role in stoking the embers of conflict, but both nevertheless see the principal dynamics of conflict resulting from popular sentiment.

But what if the principal motive behind conflict is greed not grievance? And what if war is eminently rational for its protagonists, particularly their leaders? Profit rather than political power seems to be a growing motivation for violence in civil wars. Whether through diamonds in Sierra Leone and Angola, tropical timber in Liberia and Cambodia, narcotics in Colombia and Afghanistan, or even humanitarian aid in Somalia and the Sudan, the accumulation of wealth seems to be at the heart of many contemporary conflicts. According to one commentator, paraphrasing the famous Clausewitzian dictum, “war has increasingly become the continuation of economics by other means” (Keen 1998, p. 11).

If economic rationales do play a major role in the motivations of the warring factions, this represents a profound challenge to both prevailing schools of thought. For those that view conflict as irrational, a close examination of the economic agendas of belligerents may, ironically, make these conflicts appear less unsettling. If we recognize that the longevity of conflict can be the result not of anarchy but of economic gain, then there may be method to the perceived madness after all. For those that see grievance or a fundamental conflict of interest at the root of violent conflict the challenge is more profound. If economic gain is a prominent motivation for armed conflict, the very basis for the resolution of violent conflict through negotiation is undermined and the search for a political settlement may be futile. The authors of a recent book on conflict resolution pose the question starkly. “If modern conflicts are becoming neo-medieval struggles between warlords, drug barons, mercenaries and militias who benefit from war and have found it their only means of making a living, of what value will be efforts to resolve conflicts between them peacefully?” (Miall, Ramsbotham& Woodhouse 1999, p. 3). Not only will these groups oppose a negotiated settlement; even more challenging to traditional thinking on war and peace, they may not even want to win.

How far this type of analysis can be taken is the matter of debate. Some argue that economic motivations are critical to understanding the causes or origins of violent conflict. Paul Collier (forthcoming), the Director of the Development Research Group at the World Bank, for example argues that greed is a principal cause of contemporary conflict and that warring factions have an economic interest in both initiating and sustaining war. While Collier provides macroeconomic evidence in support of his position, the more widely accepted view is that economic agendas account less for the origins than the longevity or persistence of violent conflict.

What’s new about war economies?

The examples outlined above certainly suggest that economic motivations play an important role in the persistence of violent conflict. But is this really new? The differences between economic-driven warfare that seems to characterize some civil wars in the 1990s and conflicts during the Cold War appear stark, at least on the surface. The difference is not, as is commonly suggested, a shift from wars between states to wars within states. Civil wars already outnumbered inter-state conflicts during the Cold War period. According to one authority, a full three quarters of the conflicts between 1945 and 1995 were conflicts within states (Holsti 1996). Two factors associated with the end of the cold war however do seem particularly significant. First, the loss of superpower patronage in the wake of the Cold War has forced warring factions to seek support from new sources including regional powers, the diaspora, multinational corporations, and criminal activity. Second, the worldwide collapse of communism undermined the ideological rationale for a number of insurgent groups. In many cases where fighting continued, such as Myanmar, Cambodia and Colombia, economic motivations seem to have supplanted ideology.

Rather than a fundamentally new characteristic of warfare, however, the link between conflict and greed may be best understood as the resurgence of a much earlier phenomenon. For as the theorist of war Martin van Creveld has suggested, contemporary wars are medieval in character, lacking differentiation between state and society, soldier and civilian, external and internal transactions across frontiers, and war and organized crime (van Greveld 1991).

Ultimately, the question of novelty however misses the point. For regardless of whether economic motivations have played an important role in motivating armed conflict in the past, if they do so now they deserve our attention. “While the international community stresses the need to halt the disintegration of states and stem the tide of communal violence, the effectiveness of outside powers in both regards is seriously constrained by their inability to examine the incentives and disincentives for violence from the perspective of the belligerents themselves” (King 1997, p. 81). But what are these incentives and disincentives, and how does war create economic opportunities?

Resources for fighting or fighting for resources?

From the outset a distinction needs to be drawn between the search for resources in order to continue fighting and the accumulation of resources for its own sake. There is surely nothing new about armies needing food, supplies, and weapons, and restricting access to these is one way of encouraging warring factions to negotiate peace. More problematic are cases where the rationale for the continuation of armed conflict is the accumulation of wealth. Self-supporting armies are one thing; a self-sustaining economic rationale for war is quite another.

Obviously in practice these distinctions are seldom neat or clearly identifiable, and the motivation for fighting can easily change over the course of the conflict. While the origins or root causes of war may in fact lie in some genuine sense of grievance, over the course of the conflict greed can become a more prominent motivating factor. It is not difficult to envisage the process through which a transition from collective political objectives to elite private objectives occurs. Since all warring factions need resources in order to continue to fight, and in the absence of foreign patrons they must be secured independently, it is surely a relatively small step to use existing methods for new ends.

It is also likely that economic motivations are not evenly distributed among members of a warring faction. Top political leaders often set their sights on political as well as economic power. If UNITA’s Savimbi were only interested in economic gain he would have been better off investing the hundreds of millions made from the trade in diamonds rather than using it to rearm. Similarly, while micro-economic rationales undoubtedly play a role in recruiting common soldiers, it is unlikely that they alone can constitute a “self-sustaining” logic for continued hostilities. The link between economic motivation and the persistence of violent conflict is most clearly evident with middle-level leadership including both paramilitaries and warlords. For example, the notorious paramilitary organization known as Arkan’s Tigers led the Serb advance into Bosnia in exchange for the right to pillage and loot, while regional warlords in Sierra Leone and Myanmar are granted economic autonomy in exchange for a degree of political loyalty.

Having considered the nature of the economic rationale for conflict, and the implications for different members of armed factions, the key remaining question is, how in practice are these economic agendas pursued? What are the methods used for the extraction of wealth in war economies? One option is to steal, extort, or tax. Pillage and plunder are time-honored means for soldiers to supplement wages, while extortion and the disingenuous offer of “protection” for a fee are also common tactics. Due to the severe decline in domestic productivity during war, there are limits to the wealth that can be extracted from the local population and economy. Thus, while local populations invariably suffer most, foreigners are far from immune: mining companies are taxed for access, corporate employees are kidnapped for ransom, and humanitarian relief is diverted from its intended recipients or stolen outright.

The alternative to theft of one sort or another is for warring factions to become profit-seeking enterprises in their own right. By controlling territory, particularly along border regions, they cannot only impose taxes and duties on the import and export of goods, they can monopolize the business. And due to market distortions inherent in a war economy such trade frequently yields unusually high profit margins, particularly where sanctions-busting results in flourishing black markets.

The real fuel for economically driven warfare however comes from natural resources including tropical hardwood, gems, minerals, oil, and the illicit trade in narcotics. Examples abound. Estimates suggest that Charles Taylor managed to extract US$200- to 250-million per year in Liberia in the early 1990s. Key resources in order of importance were diamonds, timber, rubber, and iron ore, each accounting for between US$20- to 40-million annually (Reno 1999, p. 99). In the wake of the peace agreement in Cambodia the Khmer Rouge, with the assistance of the Thai army and Thai businesses, were selling timber and gems worth an estimated $20-million per month (Cortright & Lopez 2000, p. 137). Diamonds have been a particularly lucrative commodity across several conflicts in Africa. Between 1992 and 1998 UNITA, the Angolan rebel groups, received US$3.72-billion from diamond sales, while rebels have controlled an estimated $250-million annual trade in diamonds in Sierra Leone since the mid-1990s (Global Witness 1998, Reno 1999, p. 126).

Without further research it is impossible to know the degree to which these economic dimensions account for the persistence of particular conflicts. But the evidence accumulated to date is sufficient to warrant the attention of those hoping to bring to an end long-standing wars. The challenges for policy makers are stark. For it seems that “war provides a legitimation for various criminal forms of aggrandizement while at the same time these are necessary sources of revenue to sustain the war. The warring parties need more or less permanent conflict both to reproduce their positions of power and for access to resources” (Kaldor 1999, p. 110).

Taking the profit out of war

The challenge is to restructure economic incentives and disincentives to encourage conflict resolution and to ensure that future conflict is managed without recourse to violence. Most attempts to date have focused on trying to increase the incentives towards peace B to “make peace pay.” In some cases this has resulted in the offer of sanctuary (with stolen treasures intact) for deposed dictators, in others an effort to “buy-off” the leadership of insurgent groups as was done most explicitly with RENAMO in Mozambique. Making peace pay is also the dominant logic behind efforts at post-conflict reconstruction though coherence between peacebuilding objectives and macroeconomic policy remains problematic (see Boyce & Pastor 1998) . The central argument of this article however is that securing peace after years of war also requires limiting the benefits that some derive from the continuation of hostilities. In short, effective peacebuilding must make peace pay and take the profit out of war.

Acting on this conclusion requires a reorientation of our peacebuilding efforts. First we must ensure that our external interventions do not have counter-productive consequences, however unintended. For example, negotiations with warring factions may bestow unwarranted legitimacy on warlords and war criminals, while tightening broad-based economic sanctions may strengthen those who control the black market.

Second, the international community must specifically target their interventions to address the economic dimensions of contemporary conflicts. Most peacebuilding activities are, in one way or another, an attempt to strengthen the hand of those that want peace, particularly civil society organizations. These organizations however may not be well placed to assist in reducing the profitability of war. Furthermore, effective interventions often require the imposition of criminal or economic sanctions, and are both difficult and controversial. Close cooperation between police and intelligence services is critical as shadowy networks and complex corporate relationships must be disentangled before any effective responses can be considered.

Ultimately, profiteering in the midst of conflict cannot be stopped entirely. As particular routes and networks are closed new ones are sure to open. What can be done is to routinely disrupt established channels and thereby reduce profits. And it is here that globalization is of direct benefit. For while the global transfer of money and resources creates opportunities for entrepreneurial warlords, it also increases international leverage over them. The question is whether the international community will make use of this leverage and act decisively.

Humanitarian aid

Much has been made in recent years of the tendency for well-intentioned humanitarian relief to “fuel” conflicts. While there are certainly notorious cases where aid has likely done more harm than good B the massive diversion of food aid in Somalia, the rebel control of the refugee camps in eastern Zaire, and perhaps the ongoing humanitarian operation in the Sudan B the available evidence does not support sweeping conclusions. As Shearer claims, “Much of the evidence that aid has distorted or prolonged war has tended to rely on anecdotes from specific situations that are ‘universalised’ more widely to other conflicts” (Shearer forthcoming). Humanitarian relief is not easy to steal or resell and, in comparison to gems, hardwoods, and narcotics, is of relatively little value. Furthermore, while flows of aid wax and wane over the years they do not seem to be closely correlated to the intensity of the fighting. These conclusions are certainly consistent with the more general claim that both the positive and negative influence of external aid have been significantly over-estimated (see Uvin 2000).

There is no doubt that addressing the potentially harmful consequences of humanitarian relief should be a priority for the humanitarian community. For we must ensure that our interventions into war zones result in a net benefit to those suffering the effects of violent conflicts. But with the exception of a few specific cases, humanitarian relief is not a significant dimension of war economies.

Sanctions and embargoes

Economic sanctions and trade embargoes are one of the principal tools at the disposal of the international community for ending conflict and maintaining peace and security. Sanctions however have come under attack in recent years, most notably in the case of Iraq, due to the combination of their political inefficacy and the human suffering they cause (see Weiss 1997). Missing from this debate is the degree to which broad-based economic sanctions encourage the development of black markets and the strengthening of organized criminal organizations. Sanctions are a form of economic warfare and “economic warfare inevitably promotes economic crime” (Naylor 1999, p. 4). While sanctions are designed as a strong disincentive to promote a corresponding change in political behaviour, these same sanctions create incentives for even law-abiding entrepreneurs to become involved in sanctions-busting. Worse still, the strengthening of the criminal underworld has negative repercussions long after the sanctions have been lifted.

Fortunately, three prominent trends evident in the evolution of sanctions policy will also help in addressing the criminal activity that inevitably follows: an emphasis not only on the imposition but also on the enforcement of sanctions; a shift from broad-based sanctions to specifically targeting key leaders; and finally, attention to restricting the actions of non-state actors (see Cortright & Lopez 2000). Attempts to enforce the Security Council’s sanctions regime against the Angolan rebel group UNITA is the best current example of these three trends in practice.

As the distinction between war and organized crime fades, individual criminal sanctions need to supplement broader political sanctions. There has been remarkable progress in holding accountable those who commit crimes against humanity and war crimes. But it has not been accompanied by international efforts to address economic or “white collar” crime. International efforts are required to restrict profiteering during war and to seize ill-gotten assets, and opportunities exist. The recent Convention for the Suppression of the Financing of Terrorism is specifically designed to restrict the often coercive “harvesting” of diaspora communities. Interdiction software designed to identify the assets of narcotics traffickers by filtering financial transactions could be adapted for use against a broader range of war-related criminal activity. Prying open secretive banking practices to recover state resources stolen by the likes of Abacha and Soeharto also set a useful precedent for recovering warlord’s loot squirreled away in tax havens. But much more needs to be done. More than two years ago the UN Secretary-General (1998) recommended in his influential report to the Security Council on conflict in Africa that “combatants be held financially liable to their victims under international law … and that international legal machinery be developed to facilitate efforts to find, attach and seize the assets of transgressing parties and their leaders.”

The private sector

A particular challenge for the international community is addressing the role of the international private sector in war economies. This is obviously a highly contentious area and the degree of complicity that can be laid at the feet of corporations active in war zones is a matter of much debate (see, for example, Harker 2000). Nevertheless, where international trading networks are used by warlords to launder stolen resources, multinational corporations may share some of the responsibility for prolonging civil wars.

Several remedies are currently being pursued to some degree. One is to develop voluntary codes of conduct for companies engaged in commercial activity in war zones, much as they have been developed for labour and environmental practices. While this is certainly an option worth pursuing, these codes tend to follow rather than precede growing public concern. A second option, raising the profile of corporate responsibility in zones of conflict, is likely necessary, including pressure from shareholders and, in extreme cases, consumer boycotts. The public backlash against Shell’s activities in Nigeria and in the North Sea seem to have had a significant effect on corporate behaviour. Although the links between corporate activity and war are far less well known, the possibility of a consumer boycott on diamonds, for example, seems to have done the same (Global Witness 1998).

One particular concern is the link between conflicts, resource companies, and private security. Jakkie Cilliers highlights the emergence of a tripartite relationship which enables “the governing elite to regain control over those areas that provide private and public resources, the mining company is ensured of a captive and malleable government that enables it to exploit its concessions while both benefit from the stability provided by the security companies” (Cilliers 1999, p. 7). Conducted behind a veil of secrecy, security is often purchased by mortgaging future mining profits. Yet in spite of growing recognition of the challenges posed by private security firms and mercenaries, effective policy responses remain elusive. These difficulties again point to the need to address the role of a range of non-state actors in contemporary civil conflicts.


Understanding the economic motivations underlying contemporary conflicts appears increasingly necessary for effective interventions to resolve conflicts and build peace. There is an urgent need to know much more about the dynamics of war economies B particularly where and how private greed inhibits negotiated settlements. We already know enough, however, to be sure that the tools at our disposal for responding effectively are sorely lacking. Slowly evolving international criminal law is only beginning to provide a genuine constraint on the activities of the individuals operating on behalf of criminal organizations. Our aging international security architecture is struggling to come to grips with the challenge of non-state actors and commercial agendas. And in the face of failed and failing states, remedies are lacking to police criminal states that facilitate and even promote the extraction of profit from war.



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