In particular, the roundtable was looking at Great Lakes economic initiatives and incentive structures – getting at the “peace dividends”, the economically-based drivers of the conflict, and perspectives from the ground and outside voices on how economic solutions could play more of a role in the US response. The belief was that beyond conflict minerals, not much time has been spent examining how economic incentives can impact on progress on governance, security, and regional partnerships.
The roundtable assembled a diverse panel of experts with background from academia, NGOs, the private sector, and the World Bank/UN. Panelist invited for this UN Brainstorm policy were
· Willet Weeks, consultant, DRC/Kivus expert, former USAID
· Dr. Raymond Gilpin, Dean of the Africa Center for Strategic Studies, NDU (Economist, from Sierra Leone)
· Mike Jobbins, Search for Common Ground
· Soraya Aziz Souleymane,(working for a Canadian mining firm in DRC / corporate social responsibility Manager)
· Spyros Demetrios, World Bank, former MONUSCO
My contribution was sent in the form of a 1700 word positioning note that was distributed to the participants.
Abstract.
The Democratic Republic of the Congo (DRC) is experiencing one of the deadliest wars ever. While significant efforts were noticed in the past few years, many observers have flagged the deterioration of the situation since the past elections. In the region, there exists a paradox whereby economy is one of the causes (mineral conflicts) and could potentially be one of the solutions (regional economic projects) to stabilize the country. In this document we respond to four essential questions: How is economy a problem? What to do about it and transform the challenges into opportunities? Where to start the economy-led transformation of the region? And what can the USA and other countries do to help stabilize the Region?
How is economy a problem?
The DRC is a vast landlocked country, located at the center of the African continent. The country is 2,354,000 square km and is divided in 11 provinces and has been going through civil conflicts for the past 20 years, destabilizing the entire Great Lakes Region. One of the principal funding streams of war in the eastern DRC and the regional instability has been identified as mineral conflicts. The DRC is a resource-rich country with a weak government that has been unable to enforce order and authority throughout its territory. The presence of numerous armed groups and interference from neighbouring countries has further complicated the governability of this country the size of Western Europe.
Today, the country is classified as a post conflict zone with pockets of persistent insecurity. One of the consequences of this classification is that the country suffers from an ill reputation when it comes to business opportunities and foreign direct investment. The current government, in power since the controversial elections of 2011, is led by Matata Ponyo (Former minister of Finance and Head of the Central Bank, with experience in working for/and with the world Bank). The government has initiated a series of strong economic reforms aiming at stabilizing the currency and improving the investment climate.
Nothwistanding all informed and pertinent efforts done at the national level, most of the benefits induced by these reforms cannot be perceived in the regions that have suffered the most from the conflict, particularly the Estern Congo. And with an unstable Eastern Congo there is no likelihood for peace to be sustainable in the great Lakes region. The benefits of national reforms could not benefit this region for two main reasons:
- The persistent pockets of insecurities and
- The landlocked nature of the region coupled with security tensions with three of the four eastern neighbouring countries
As mentioned, the problems observed are the results of three main factor. Actions should therefore be directed at correcting these problems in order to facilitate the implementation of regional economic programs. These problems have previously been identified and various institutions have tried to solve them with limited success. The DRC, Rwanda, Burundi, Uganda and Tanzania belong to not less than 5 regional organisations with overlapping goals and competing programs (CPGL, CICRGL, SADC, EAC, COMESA). Alining these institutions to promote economic regional integration is not an easy task, and sustaining the programs until the benefits can be seen is even more challenging in the absence of common economic projects. Some of the challenges in creating such projects are:
- Lack of strong leadership and demonstrated political will
- Limited funds
- Security
Other challenges that can be solved by regular meetings and follow up mechanisms include Bureaucracy and Overlapping/competing programs (among two or more regional institutions).
It is important to understand that Security on its own is part of the problem and that without the necessary security strategies and their implementations, the recommendations of this presentation are not likely to produce the expected results.
1. Lack of strong leadership and demonstrated political will: Because of their domestic problems, most of the countries have focussed on developing internal development programs instead of regional ones, sometimes with funds from the same donors. Recently Tanzania has taken the lead in the security sector by championing the intervention brigade of the UN. Being the only country of this region that has no security conflict with the others and given its geographical position (Entry port of the EAC), Tanzania has the potential to act as the catalyst of economic development in this region.
2. Limited funds: Development partners and international donors should start focussing on economic and infrastructure initiatives in their intervention in the Grrat Lakes Region that would benefits all citizens rather than focussing only on the vulnerable. No country has ever been built only by vulnerable people. The level of unemployment is high and the countries cannot rely solely on domestic sources of income, unless they create the opportunities for households, firms and industries to produce, save and contribute to their budgets in taxes. In addition to the traditional sources of funding, other means of financing infrastructure projects exist. The most common and efficient one would be public private partnerships on a build-operate-transfer model. This model will not necessary benefit to the poorest at first (vast majority of the population), but it is a starting point to attract foreign direct investment because once the transfer happens, the infrastructure exists for the benefit of all. Another way to make the poorest benefit is for the governments to take part of the operation charges in their respective budget.
3. Security: In the last 5 years Rwanda has exported more coltan than they could produce, Burundi has exported more gold than they could produce and Uganda has exported more timber than they could produce. The level of natural resource production activities of these countries was way below their actual production capacity and reports have indicated that the bulk of their export came from conflict zones of the DRC. This has participated in fuelling the war in the region. Most of the enemployed youth of the DRC participate in the plundering of their own nation’s resources. Economic, labour intensive alternatives such as industrial mining or farming, manufactures etc. could provide a sustainable and dignifying activity to this active force. In addition to these national efforts, it is important that the certification and traceability processes of minerals initiated in the DRC are extended to neighbouring countries. Laws such as the Dodd-Frank should have equivalent regionals and domestic laws to magnify its positive impact on the conflict. It is also important that each of the neighbouring countries with rebel groups in the Congolese soil initiate peace talks with its citizens in order to prepare their repatriation.
Where to start?
The task ahead is not easy and one has to start at the most important and urgent points by carefully managing the scarce resources, and progressively encouraging a domino effect in other sectors.
1. Security: it is important that all signatories’ parties to the Adis Abeba Peace Protocol of February 2013 must ensure their strict compliance to their undertakings.
2. Regional integration through economic trade through Infrastructures (Roads and bridges, electricity): John F. Kennedy once said: "It is not wealth that built our roads but roads that built our wealth. In order to boost economic activities, a region needs a good transport network and enough power for industrial and semi industrial activities. There is a correlation between Security and stability on one side and road access on the other side. As a development practitioner I have monitored and evaluated trans-border activities between the South Kivu and the East African Community. Records show that most of goods entering the Dar Es Salaam and Mombasa ports, en route to North Kivu and South Kivu would transit through Uganda and/or Rwanda and Burundi. Other researches have demonstrated a correlation between positive custom/touristic income in these countries and stability in the DRC.
It is encouraging that within each of these countries, including the DRC there are a national program to open up some National Roads but this program is very limited as it comes as a loans, mostly through the World Bank. It is important to create regional projects such as rail ways, highways, ports and hydroelectric plants in the South Kivu and North Kivu province (on the DRC side), to link them to the Mombasa, Dar Es Salaam and Kigoma ports via Rwanda Uganda and Burundi which would also benefit, being landlocked countries.
What can the US and other countries do to help?
1. Strong economic sanctions from the US are likely to discourage the legal plundering of the DRC natural resources. The US and other nations should also give full support to Special Envoy Mary Robinson (UN) and Russ Feingold (US) in the implementation of the Peace Agreement signed in Adis Ababa.
2. Create and promote economic incentives through cooperation with countries aspiring to implement projects likely to benefit more than one country in the region, in terms of economic development projects (Labour intensive businesses, Infrastructures, electricity), by linking them and recommending them to financial institutions or international firms and companies ready to invest in the region.
3. Because the challenges faced by this region are so unique, Encourage researches through local universities, involving local and international experts in questions of security, sustainable peace and regional integration.
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