Rebels are forever

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Cairo Times, Egypt, 01-02-2001

The world's diamond dealers are not worried about African wars being financed with blood diamonds, but rather with the wars hurting their profits.

In Angola the originally Maoist liberation movement UNITA of Joseph Savimbi, has been waging a guerilla war for over 25 years. The Revolutionary United Front (RUF) of Foday Sankoh, now in jail, has been fighting in Sierra Leone since the end of the 1980s. The RUF has in past years reached infamy by chopping of the hands and feet of small girls and boys in Sierra Leone.

The late Laurent-Désiré Kabila made his diamond rich Democratic Republic of Congo (DRC) the spindle of what is sometimes referred to as the first World War that started in Africa. Rebels supported by Uganda, Rwanda, Burundi and elements of Angola's UNITA are fighting Congo's Kabila. He is in turn backed by the armies of Zimbabwe, Namibia and Angola. All of the parties in these wars rely on financing through diamond deals, and in fact, control over natural riches is the main reason they are fighting.

Already for some years now the arms-for-diamonds trade is the scope of international concern. UN resolution 1173, passed in 1998, puts an embargo on diamonds originating from mines controlled by UNITA. Recent happenings in Sierra Leone, however, brought the blood diamond issue center stage again. RUF youths refused to pass over their control of the mines to UN forces as required in the--originally much hailed--Lomé peace accords from July 1999, instead taking the peace keepers hostage. To save face the diamond industry reacted quickly and last fall passed an agreement to try and stop the dealing in and smuggling of diamonds from Sierra Leone.

Half of the world's diamond production calculated by value comes from South Africa, Namibia and Botswana. A quarter comes from Russia. More than ten percent comes from Angola. Other diamond mining countries as for example Canada, the Central African Republic as well as the different African states in turmoil have only a very small percentage in world production.

According to the World Diamond Council, the illicit trade in conflict diamonds accounts for only four percent of more than US$6 billion total trade a year. In polished condition diamonds go from US$2000-44,000 dollars a carat. But in small arms, this quarter of a billion dollars still translates to some three million AK-47s or 75 million anti-personnel mines.

Industry boycotts and UN-resolutions concentrate on establishing a certification system for mined diamonds. These certificates should declare the country of origin of the diamonds. The problem, however, is that the diamond industry is almost as secretive, shadowy and non-transparent as the arms industry. Gems from different places are routinely mixed as they are most often sold in packages assorted by size or color. Subsequently, according to the diamond dealers, there is no way to establish from which mine the diamonds exactly come without damaging them, a very expensive testing method.

The boycotts are therefore nowhere near fool-proof. Conflict diamonds are most often exported from neighboring countries. UNITA diamonds are as a rule sold through Congo. While over the last two years Sierra Leone's diamond exports have halved, exports from neighboring Liberia--a country that has few diamond fields--have risen significantly. Experts claim forty percent of Sierra Leone's blood diamonds is exported through Burkina Faso, while sixty percent goes through Liberia. According to anti-conflict diamond NGO Partnership Africa-Canada (PAC), Liberia's US$300 million export, is about forty times more as their actual annual production.

It is clear the RUF is not affected by the boycott, as the movement is not short of cash. Shortly after his capture in May 2000, Foday Sankoh's wife, Fatu Sankoh, got herself deported from Pretoria, South Africa, when she went shopping for heavy machine guns, light artillery, claymore mines and long-range mortars. But with a budget of some US$100 million, it is likely she will find less scrupulous suppliers to deal with in Bulgaria, Libya, Lebanon or Israel.

It is not surprising Mrs. Sankoh turned up in South Africa though. The country is home to the famed diamond company De Beers, which controls around eighty percent of the world trade, in addition to the World Diamond Council. Ten times a year De Beers sells diamonds to a very selective audience of around one hundred traders. From the 1930s until recently, they had a policy of buying up all excess diamonds at the world market to keep prices high. They themselves admit that it is not unlikely that some of these diamonds came out of conflict areas.

But diamond dealing is not necessarily a bad thing. South Africa, Botswana and Namibia do very well out of it. De Beers is probably South Africa's biggest taxpayer. The significant economic success of Botswana in recent years is mainly due to the revenue from diamond sales. For these countries, it is essential their trade is not interrupted.

However, De Beers have good reason to keep the image of the diamond clean. They spend US$170 million a year advertising the gem, and were responsible for launching the slogan 'Diamonds are forever' decades ago. They rightfully fear the diamond might become infected by the same plague as fur, which has been suffering under a consumer boycott ever since the tragic images of skinned alive baby seals were aired by environmental action group Greenpeace. To distance themselves a little from their purely African image, last year the company got heavily involved with the new mines in Canada. This country is projected to reach a twelve percent share in total world production within the next few years.

But the issue is a little bit more complicated. De Beers has more to gain than just saving their trade. With a library of some 16,000 different stones from all over Africa, the company has the best ability to certify the origin of its stones traded. A comprehensive boycott would disqualify many less competent competitors. Moreover, due to its policy of buying excess diamonds from the world market, it now has a reserve of some US$5 billion worth of gems. Lessening world supply would eat into these reserves and raise their stock value.

Meanwhile, industry boycotts have been far from effective. The UN hoped to block the most important source of money for UNITA with its 1998 resolution, but for many arms dealers the glittering gems are just too profitable to resist. Though estimates say the value of UNITA's diamond trade has gone down one-third since the resolution was enacted, it merely acted as a temporary speed bump. With slightly less funding, UNITA just changed their operations from static semi-conventional warfare to small mobile bands of guerillas, which in fact can ensure more damage. At the same time the United States buys more oil from the Angolan government than from for example Kuwait, thereby sponsoring their continuing military campaign.

Other parties to the boycott are not impartial activists either. Leading anti conflict-diamond NGO Global Witness is led by American diamond broker Martin Rapaport who, whatever his motives, will profit from rising prices. PAC on the other hand is a NGO from Canada, a country that will according to projections shortly be responsible for a major share of the world diamond production.

Diamonds represent the most concentrated form of wealth. Smuggling therefore almost cannot be stopped. There is also still some question concerning the definition of a conflict diamond. Kabila's government, for example, can hardly be called a legitimate one. The only thing that speaks in Kabila's favor is that he is in Kinshasa, while the opposing rebels are not. Seemingly a fight for the government seat, the war actually concerns the control of resource areas.

While the Ugandan and Rwandan armies are accused of smuggling tropical wood, coffee and diamonds from rebel held territory inside Congo, the Zimbabwean military recently announced a deal with Kabila on the exploitation of diamond mines under their control. Zimbabwe's president Robert Mugabe defended the deal by saying that by funding its own war effort the army would no longer be a burden on the economy of Zimbabwe. Nice excuse, but it basically made his army mercenaries by presidential decree.