The Ploughshares Monitor Autumn 2002 Volume 23 Issue 3
Neil Cooper is Principal Lecturer in International Relations at the University of Plymouth in the United Kingdom. This article was originally published in the Aug-Sept 2002 issue of CAAT news.
Partly as a consequence of globalisation and partly as a result of the decline of superpower military aid, actors in contemporary conflicts are increasingly utilising connections to the local and global economy to generate wealth and fund arms acquisitions and military campaigns. In response, an international control agenda is now emerging around the issue of ‘conflict trade’, such as the trade in conflict diamonds. To date, however, policy on conflict trade has been similar to that on the arms trade – partial, half-hearted, and replete with contradictions.
Much of the policy and media debate on this issue has focussed on the way exports of conflict diamonds or drugs have funded war in places such as Sierra Leone, Angola, Colombia, and Afghanistan. However, conflict trade encompasses a much wider variety of goods and trading strategies. For instance imports of goods may be just as crucial to maintaining a war economy – as in the conflict in Somalia where, for example, Ali Mahdi, a financial supporter of one faction, reportedly earned $128,000 a day from imports of khat, a narcotic stimulant. Conflict trade may even take place outside a war zone with supporters or members of a diaspora simply repatriating the profits from extra-territorial trade. For example, one US fundraising cell for Hizbollah smuggled cigarettes from North Carolina to Michigan where they are taxed at a much higher rate. This operation produced profits of around $3,000 per truckload, which were passed back to Hizbollah in Lebanon.
The scale of resources such trade can provide for warring factions varies from conflict to conflict but can be substantial. UNITA’s (Unino Nacional para a IndependLncia Total de Angola) trade in diamonds earned it an estimated $4.1 billion between 1992 and 2000, whilst Liberian leader Charles Taylor’s operations during the country’s civil war were estimated to earn him some $400 million per year. The influence such sums can have on regional conflict can be illustrated by comparing them with the national defence budgets of developing states in conflict. For instance, in an 18-month period between 1999 and 2000, the Rwandan army earned $250 million by trading coltan (a metallic ore used in mobile phones, laptops, etc.) looted from the Democratic Republic of the Congo (DRC). This contrasts with an official Rwandan defence budget of $70 million. Similarly, the estimated $30-125 million a year the RUF (Revolutionary United Front) rebels in Sierra Leone earned from its trade in diamonds bears comparison with the government’s budget of $38 million for security-related operations in 2000.
The role that conflict trade plays in perpetuating wars has led to calls for international action to restrict the trade. Such action, properly implemented, certainly has the potential to influence the war and peace decisions of actors in conflict as well as to re-direct export earnings to legitimate governments. Indeed, conflict trade often relies on regional and global networks – licit and illicit – that are acutely sensitive to changes in market conditions. In some respects this represents an asset, as in the DRC when actors on all sides of the conflict swiftly moved from mining gold to mining coltan when the price of the latter began to rise exponentially on world markets. In other respects, however, it represents a vulnerability that can be exploited. International action to restrict UNITA’s diamond trade does seem to have been relatively successful in limiting the supply of funds to the organisation (from $700 million in 1996 to $100 million in 2002), and may even have contributed to its recent defeat.
Similarly, action against the diamond exports of the RUF in Sierra Leone, coupled with the introduction of a diamond certification scheme by the government, has meant official diamond sales have risen from just $1.2 million in 1999 to $26 million in 2001, providing a larger tax base for the government. At the same time, however, the control agenda emerging around the issue of conflict trade is currently characterised by a number of risks and flaws.
First, there is a risk that action on conflict trade might become a substitute for action to limit arms sales, and particularly small arms sales. Indeed, it is worth noting that focussing on conflict trade has the added advantage for the major arms exporters of pinning the blame for conflict on avaricious warlords rather than the arms sold by greedy supplier governments. For example, whilst the UK has led action to impose sanctions on Liberia because of its role as a conduit for RUF diamonds, it has notably failed to take action against the UK company Air Foyle for its role in shipping arms to Sierra Leone via Burkino Faso. Indeed, the company subsequently received an MoD (Ministry of Defence) contract to deliver helicopters to South Africa. This contrasts sharply with the position of the UN panel of experts on Angola which argued for the forfeiture of any planes caught sanctions-busting.
Second, there has been a tendency to define conflict trade in very narrow terms – with the focus being on the trade-conducted by rebel organisations or ‘pariah’ states such as Liberia. This has been most striking in the case of initiatives to control the trade in conflict diamonds. For instance, the putative global certification scheme aimed at preventing the trade defines them as “rough diamonds used by rebel movements or their allies to finance conflict … as described in relevant UN Security Council resolutions.” Thus, even if the conflicts in Angola and Sierra Leone were still ongoing, diamonds sold by the governments of these countries would not be classed as conflict diamonds, whilst those sold by UNITA or the RUF would. This has meant that, as in the DRC, for instance, organised resource predation by neighbouring governments has not met with the same response as that visited on groups such as UNITA. Even the focus on the conflict trade of rebel groups has been inconsistent. Whilst the Taliban was demonised for its role in a heroin trade – a trade it had managed to virtually eliminate by the time of US action in Afghanistan – the Northern Alliance’s involvement in the same trade was studiously overlooked.
The extent and nature of action on conflict goods has also been constrained by the economic and political concerns of the major powers. For instance, timber was exempted from the list of sanctions imposed on Liberia after pressure from France and China, the largest importers of Liberian timber. This is despite the fact that revenue from the timber trade plays a far more important role than diamonds in sustaining Charles Taylor and despite the fact that income from the trade has financed arms, training, and logistical support for the RUF in Sierra Leone. Action on conflict diamonds has similarly been constrained by state and industry interests, with the result that the forthcoming global certification scheme is likely to lack teeth. Monitoring and enforcement of the system are by self-regulation and some elements of the system are merely recommended or subject to voluntary participation. This has led the US General Accounting Office to note that the scheme may simply “provide the appearance of control, whilst still allowing conflict diamonds to enter the legitimate trade.” Moreover, the current scheme only applies to rough diamonds and may simply encourage warring factions to set up their own cutting and polishing centres so as to evade controls.
The control agenda on conflict goods has also tended to be focussed on specific goods (most notably drugs and diamonds), rather than being driven by an intrinsic concern to address the link between conflict trade and war more generally. This is problematic, as it ignores the fact that many conflicts are characterised by actors who trade a variety of goods to obtain funding for arms. For instance, the RCD-Goma (Rassemblement congolais pour la democratie), one of the warring factions in the DRC, trades a variety of products including gold, diamonds, and coltan.
Even conflicts supposedly dominated by trade in one particular product are often more complex in reality. For instance, over 50 per cent of the income of the FARC (Revolutionary Armed Forces of Colombia) in Colombia comes from economic activities other than the drugs trade. Similarly, even at the height of the opium trade in Afghanistan, an estimated 60-70 per cent of the Taliban’s $100 million war budget was actually derived from revenue earned through the smuggling of fuel and consumer goods rather than drugs.
In sum then, whilst the control of conflict trade certainly has great potential to influence the war and peace decisions of actors in conflicts, policy on this issue is currently being hobbled by a ‘drugs and thugs’ control agenda which is not only partial in terms of who it targets and how, but which also tends to obscure the broader complicity of Western economies and companies in facilitating conflict trade.