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News: July/August, 2001 - World Policy Institute - Research Project

ARMS TRADE RESOURCE CENTER

RECENT NEWS COVERAGE: July/August 2001

Dollars and Sense

The Business of War in the Democratic Republic of Congo: Who Benefits?
by Dena Montague and Frida Berrigan

"This is all money," says a Western mining executive, his hand sweeping over a geological map toward the eastern Democratic Republic of Congo (DRC). He is explaining why, in 1997, he and planeloads of other businessmen were flocking to the impoverished country and vying for the attention of then-rebel leader Laurent Kabila. The executive could just as accurately have said, "This is all war."

The interplay among a seemingly endless supply of mineral resources, the greed of multinational corporations desperate to cash in on that wealth, and the provision of arms and military training to political tyrants has helped to produce the spiral of conflicts that have engulfed the continent – what many regard as "Africa’s First World War."

When Westerners reach for their cell phones or pagers, turn on their computers, propose marriage with diamond rings, or board airplanes, few of them make the connection between their ability to use technology or buy luxury goods and a war raging in the DRC, half a world away. In what has been called the richest patch of earth on the planet, the DRC’s wealth has also been its curse. The DRC holds millions of tons of diamonds, copper, cobalt, zinc, manganese, uranium (the atomic bombs dropped on Hiroshima and Nagasaki were built using Congolese uranium), niobium, and tantalum. Tantalum, also referred to as coltan, is a particularly valuable resource – used to make mobile phones, night vision goggles, fiber optics, and capacitors (the component that maintains the electrical charge in computer chips). In fact, a global shortage of coltan caused a wave of parental panic in the United States last Christmas when it resulted in the scarcity of the popular PlayStation 2. The DRC holds 80% of the world’s coltan reserves, more than 60% of the world’s cobalt, and the world’s largest supply of high-grade copper.

These minerals are vital to maintaining U.S. military dominance, economic prosperity, and consumer satisfaction. Because the United States does not have a domestic supply of many essential minerals, the U.S. government identifies sources of strategic minerals, particularly in Third World countries, then encourages U.S. corporations to invest in and facilitate production of the needed materials. Historically, the DRC (formerly Zaire) has been an important source of strategic minerals for the United States. In the mid-1960s, the U.S. government installed the dictatorship of Mobutu Sese Seko, which ensured U.S. access to those minerals for more than 30 years.

Today, the United States claims that it has no interest in the DRC other than a peaceful resolution to the current war. Yet U.S. businessmen and politicians are still going to extreme lengths to gain and preserve sole access to the DRC’s mineral resources. And to protect these economic interests, the U.S. government continues to provide millions of dollars in arms and military training to known human rights abusers and undemocratic regimes. Thus, the DRC’s mineral wealth is both an impetus for war and an impediment to stopping it.

Background to the War

Under colonialism, the Western countries perfected a system of divide-and-rule in Central Africa, callously dividing ancestral lands and orchestrating strife between ethnic groups. The current crisis represents a continuation of these insidious practices.

A flash point for the current war is the 1994 genocide in Rwanda, in which nearly one million people were killed. The U.S. government made every effort to block humanitarian intervention that could have stopped the slaughter of Rwandan Tutsis by the Hutu government, actively lobbying the United Nations to hold off on sending peacekeepers to the region. In the absence of UN forces, Paul Kagame, a U.S.-trained army commander, led the Rwandan Patriotic Front (RPF) in a military action that toppled the Hutu regime. After Kagame became Rwanda’s vice president (a very powerful position) and defense minister, the United States sent $75 million in military aid to the new government. Additionally, U.S. Green Berets began to provide "humanitarian training" to Rwandan troops.

In October 1996, Kagame’s RPF joined with members of Yoweri Museveni’s Ugandan People’s Defense Forces (UPDF) and Laurent Kabila, a Congolese rebel leader, in an invasion of Zaire. In 1997, they succeeded in toppling Mobutu. They also sought to dismantle camps controlled by the Hutu militia responsible for the Rwandan genocide. The coalition, known as the Democratic Forces for the Liberation of Congo-Zaire (AFDL), included U.S.-trained troops. Although Rwandan troops who participated in the AFDL invasion committed gross human rights abuses that a UN report labeled "crimes against humanity," the U.S. government continued to provide military support to the Kagame regime.

During the conflict, U.S. corporations treated rebel-controlled Zaireian territory as open for business, even while Mobutu remained the internationally-recognized leader of Zaire. Once the AFDL took control of Katanga (one of the DRC’s richest mineral patches), Western friends and allies began negotiating with Kabila for access to mineral resources.

Under rebel leadership, the method of exploiting these resources fundamentally changed. During Mobutu’s reign, locally-based Congolese strongmen had controlled the distribution of resources on the government’s behalf, effectively limiting the potential for massive mining deals. But after the AFDL invasion, well-connected Western businessmen were able to secure much larger mining interests than in previous years.

For example, in May 1997, American Mineral Fields (AMF) – whose chair is Mike McMurrough, a personal friend of President Clinton – cut a $1 billion mining deal with Kabila. According to Kabila advisors and news reports, the negotiations began immediately after Kabila captured Goma (a city right across the border with Rwanda) in February 1997, and were handled by Kabila’s U.S.-trained finance commissioner. The deal allowed AMF to perform feasibility studies on reactivating the Kipushi mine, a high-grade zinc and copper deposit. The company also landed exclusive exploration rights to an estimated 1.4 million tons of copper and 270,000 tons of cobalt (about ten times the volume of current world cobalt production). While AMF admits that political problems have slowed the pace of its DRC operations, the company continues to develop plans for the Kipushi mine.

Also in 1997, Bechtel, the engineering and construction company, established a strong relationship with Kabila. Bechtel – whose history of collaboration with the CIA is well-documented in Laton McCartney’s 1989 book, Friends in High Places – drew up a master development plan and inventory of the country’s mineral resources free of charge. Bechtel also commissioned and paid for NASA satellite studies of the country for infrared maps of its mineral potential. Bechtel estimates that the DRC’s mineral ores alone are worth $157 billion.

At the same time, Kabila enjoyed the support of Western military interests. Kabila was in frequent contact with Richard Orth, former deputy of the U.S. Defense Intelligence Agency for Africa. The agency, which operates as an arm of the Pentagon, supplies military intelligence to warfighters and weapons dealers around the world. During the Clinton administration, Orth was appointed U.S. military attaché to Kigali, the Rwandan capital, shortly before Kabila began his march across the DRC. Additionally, former Pentagon officials acted as military advisers to Kabila in Goma, producing a dangerous mix of business, politics and military power.

Renewed War in the East

After Kabila’s rise to power, the desire for mineral wealth helped to escalate conflict between the DRC on the one hand and Rwanda and Uganda on the other. In August 1998, after falling out with Kabila, Kagame of Rwanda and Museveni of Uganda launched a new invasion of the DRC. Both leaders claimed that they entered the DRC to undermine Kabila’s power and protect their borders from rebel groups that threatened to destabilize their countries.

In the name of pursuing peace, Kabila’s former allies have been able to advance their own mineral interests. During the AFDL war, top Rwandan and Ugandan military officials learned first-hand about the lucrative business of mining. Since the 1998 war began, territories controlled by Rwandan- and Ugandan-supported rebel groups have become de facto states where mining companies have openly expressed interest in investing. Rwanda is allied with Congolese Rally for Democracy (RCD-Goma), while the Ugandan government has formed a close relationship with leaders of the Congolese Liberation Front (CLF), a Mobutuist rebel movement. The RCD and the CLF now control the entire eastern region of the DRC, the wealthiest in terms of natural resources.

Both Rwanda and Uganda provide arms and training to their respective rebel allies and have set up extensive links to facilitate the exploitation of mineral resources. Along with their rebel allies, the two countries seized raw materials stockpiled in DRC territory and looted money from DRC banks. Rwanda and Uganda also set up colonial-style systems of governance, appointing local authorities to oversee their territories in the DRC. Meanwhile, high-ranking members of the Rwandan and Uganda military (including relatives of Kagame and Museveni) retain significant control over illegal mineral exploitation. Local Congolese, including children, are forced to work in the mines for little or no pay, under guard of Rwandan and Ugandan troops. Rwanda prisoners also participate in mining. To transport weapons to the rebels in the DRC, and to fly resources out of the DRC to Rwanda and Uganda, the authorities rely on private companies owned or controlled by Kagame’s and Museveni’s friends and relatives. They also utilize international connections made during the AFDL war.

The illegal mining has been a huge windfall for Rwanda and Uganda. The two countries have very few mineral reserves of their own. But since they began extracting the DRC’s resources, their mineral exports have increased dramatically. For example, between 1996 and 1997, the volume of Rwanda’s coltan production doubled, bringing the Rwandans and their rebel allies up to $20 million a month in revenue. Also, the volume of Rwanda’s diamond exports rose from about 166 carats in 1998 to some 30,500 in 2000 – a 184-fold increase! From 1997 to 1998, the annual volume of Uganda’s diamond exports jumped from approximately 1,500 carats to about 11,300, or nearly eight-fold; since 1996, Ugandan gold exports have increased tenfold. The final destination for many of these minerals is the United States.

Western corporations and financial institutions have encouraged the exploitation. For example, in 1999, RCD-Goma’s financial arm – known as SONEX – received $5 million in loans from Citibank New York. Additionally, a member of the U.S. Ambassador to the Congo’s honorary council in Bukavu has been promoting deals between U.S. companies and coltan dealers in the eastern region. He is also acting chair of a group of coltan-exporting companies based in Bukavu. (Bukavu is located in RCD-held territory.)

U.S. military aid has contributed significantly to the crisis. During the Cold War, the U.S. government shipped $400 million in arms and training to Mobutu. After Mobutu was overthrown, the Clinton administration transferred its military allegiance to Rwanda and Uganda, although even the U.S. State Department has accused both countries of widespread corruption and human rights abuses. During his historic visit to Africa in 1998, President Clinton praised Presidents Kagame and Musevini as leaders of the "African Renaissance," just a few months before they launched their deadly invasion of the DRC with U.S. weapons and training. The United States is not the only culprit; many other countries, including France, Serbia, North Korea, China, and Belgium, share responsibility. But the U.S. presence has helped to open networks and supply lines, providing an increased number of arms to the region.

The International Monetary Fund (IMF) and World Bank have knowingly contributed to the war effort. The international lending institutions praised both Rwanda and Uganda for increasing their gross domestic product (GDP), which resulted from the illegal mining of DRC resources. Although the IMF and World Bank were aware that the rise in GDP coincided with the DRC war, and that it was derived from exports of natural resources that neither country normally produced, they nonetheless touted both nations as economic success stories. Although Uganda in particular has made significant strides in improving access to education and reducing the rate of new AIDS infections, debt relief has also allowed it the space to appropriate more money for its military ventures.

Although rebels control half of the DRC’s territory, deals with the Congolese government itself are still attractive. In January 2000, Chevron – the corporation that named an oil tanker after National Security Advisor Condoleezza Rice – announced a three-year, $75 million spending program in the DRC, thus challenging the notion that war discourages foreign investment. In 1999, the company, which has been present in the Congo for 40 years, was producing 17,700 barrels of oil a day. It hopes that, by 2002, production will increase to 21,000 barrels per day. The gamble seems to be paying off. When Joseph Kabila, Laurent Kabila’s son and successor, visited the United States earlier this year, he reassured Chevron officials that stability under his leadership would ensure a safe environment for investment.

Of course, because of war and ongoing political unrest, these deals may not endure. But considering the potential for billions of dollars in profits, many mining corporations believe the investment is worth the risk. As one investor put it, "It is a good moment to come: it is in difficult times that you can get the most advantage."

Prospects for Peace

In August 1999, Uganda, Rwanda, and their rebel allies, among others, signed a cease-fire agreement with the DRC at Lusaka, Zambia. The agreement, which the U.S. government heavily supported, gave the Rwandan- and Ugandan-backed rebels significant power in developing a new Congolese government. It also allowed them to collaborate with the Congolese army in monitoring the withdrawal of foreign troops. If implemented, the Lusaka accord could bring the peace and stability that some Western corporations prefer.

But the demand for mineral resources continues to drive the DRC conflict. In April 2001, a scathing UN report argued that Presidents Kagame and Museveni are "on the verge of becoming the godfathers of the illegal exploitation of natural resources and the continuation of the conflict in the Democratic Republic of Congo." The two leaders, the report alleged, have turned their armies into "armies of business."

In light of these findings, the UN report calls for sweeping restrictions on Uganda, Rwanda and their Congolese-based rebel allies. These would include: embargoing the import or export of strategic minerals; embargoing the supply of weapons; freezing the financial assets of rebel movements and their leaders; and freezing the assets of companies or individuals who continue to illegally exploit the DRC’s natural resources.

These proposals, however, would obstruct Western corporations’ access to strategic minerals. Not surprisingly, the U.S. State Department has indicated that it is unlikely to recommend sanctions against its African allies. According to East African media reports, U.S. diplomats continue to view Rwanda and Uganda as "strategic allies in the Great Lakes region" and "would not want to upset relations with them at this time." Additionally, UN sources say that James Cunningham, the U.S. Ambassador to the UN, has simply asked Uganda to "address in a constructive way" the UN’s findings. The IMF and World Bank have also indicated that their policies toward Rwanda and Uganda will remain unchanged.

Since 1994, close to four million people have perished in Rwanda and the eastern region of Congo. Many of the deaths are due to direct combat and torture by the belligerent parties, but most have been caused by starvation and malnutrition. Health services are practically nonexistent, and even where they do exist, many cannot reach them. Thousands of people hiding in the forest from soldiers have watched their villages burned to the ground and their families tortured. Soldiers have looted their possessions, their crops and their life’s savings. Foreign soldiers have manipulated ethnic tensions and encouraged neighbor killing neighbor. Oblivious to the suffering, many Westerners continue to reap the benefits of the rich Congolese soil.

Despite recent troop withdrawals, the illegal mining and trade continues unabated. The real party fueling the conflict is foreign capital investment by corporations, with the tacit support of their own governments. This war of genocidal proportions cannot end until U.S. and other Western corporations and governments are forced to change their priorities. Amnesty International, Human Rights Watch, and other organizations have helped to raise international awareness about the urgency of the situation in the DRC, through campaigns against "blood diamonds," economic exploitation, and the massive humanitarian crisis the country faces.

But the DRC’s future is in the hands of its youth, the next generation, the students and grassroots organizers who are dedicated to establishing peace and stability in their country. It remains to be seen whether the United States will encourage this hopeful spirit of change and democracy, or continue to enable the exploitation and destruction of the most resource-rich country on the African continent.

[sidebar]
A Short Chronology

October 1996 – AFDL movement begins
May 1997
– Mobutu flees Zaire; Laurent Kabila takes power in DRC
August 1998
– Rwandan and Ugandan troops invade DRC
July 1999
– Cease-fire agreement signed at Lusaka
January 2001
– Laurent Kabila is killed; Joseph Kabila becomes President

[sidebar]
Who’s Who in the DRC Conflict

The Leaders
Mobutu Sese Seko
– President of Zaire, 1966-1997
Paul Kagame
– Vice President and Minister of Defense of Rwanda, 1994-2000; President of Rwanda, 2000-present
Yoweri Musevini
– President of Uganda, 1986-present
Laurent Kabila
– President of the DRC, 1997-2001
Joseph Kabila
(son of Laurent Kabila) – President of the DRC, 2001-present

The Organizations
RPF
– Rwandan Patriotic Front (led by Paul Kagame)
UPDF
– Ugandan People’s Defense Forces (led by Yoweri Museveni)
RCD-Goma
– Congolese Rally for Democracy (DRC rebels allied with Rwanda)
CLF
– Congolese Liberation Front (DRC rebels allied with Uganda)
AFDL
– Democratic Forces for the Liberation of Congo-Zaire (coalition of RPF, UPDF, and Kabila-led Congolese rebels)

Dena Montague and Frida Berrigan are Senior Research Associates at the Arms Trade Resource Center of the World Policy Institute, located in New York City.

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