Geopolitics

How Diamond Smuggling Drives Central African Religious War

Muslim Seleka and Christian anti-Balaka militiamen have squared off for the Central African Republic's so-called blood diamonds. Some call the wartorn nation a 'gemocracy'.

Displaced victims of the war near Bangui airport last spring.
Cyril Bensimon

BANGUI — Not a single stone. Not a single carat.

Since May 23, 2013, and the suspension of the Kimberley Process — the certification scheme for the origin of rough diamonds — the Central African Republic (CAR) has officially exported none of the many diamonds that lie in its rivers. It's a massive loss of income for this bankrupted state. In 2012, even though most of the stones were already fraudulently exported, almost 372,000 carats were transported out of the country legally for a value equal to around 45 million euros.

Today, the French embassy in Bangui is calling for the sanctions to be lifted. The aim of the embargo decreed two months after the Muslim Séléka rebels took over power was to prevent armed groups from financing themselves by trading stones, but this measure led to a boom in smuggling. And it was enough to worry the World Diamond Council (WDC), which, on June 30, threatened to punish all those who violate this prohibitive measure. The WDC declaration followed a search carried out two weeks earlier in Antwerp, in Kardiam Diamond Tools" facilities.

Investigations are still ongoing to determine whether Central African stones were in "mixed lots" from Dubai. Several sources well-informed on this trafficking racket explain that one of the techniques used to "clear" the gems exported from the countries under embargo consists of mixing them with stones of other origins.

A decade-long campaign against "blood diamonds" has forced the industry to try to polish its nefarious image. The introduction of the Kimberley Process fulfilled this ambition, but its full implementation remains difficult in an environment where secret is a precious tradition.

Business no longer booming

Whether it is in Bangui or in provincial mining areas, all the collectors and the trading agencies are looking glum. According to the people involved in this field, business has slowed down and construction projects are not being launched due to insecurity and lack of funding.

"We fiddle around. I sell to a few friends but I don’t keep anything in stock. Last week, three white people flew over but they were wasting their time," a collector from Bria, in the east of the country, said a few days ago. In Bangui, the main trading agencies adopted different strategies after the suspension.

According to the group of experts nominated by the United Nations Sanctions Committee, the Diamond Marketing Organization (Sodiam) is still proceeding with its purchases in diamantiferous regions and is hoarding its rough stones (more than 40,000 carats worth more than 6 million euros), waiting for the embargo to be lifted.

In the diamond sector, this raises hard questions. Once the ban on exports is lifted, will these stones be considered as clean? How does a company manage to freeze such sums of money for an undetermined period?

Badica, the second most important trading office, has no reserves, but according to several sources, this company has not stopped its purchases in eastern regions (Bria and Sam-Ouandja) controlled by the former Séléka. Both companies were pillaged when the Séléka took power in March 2013. Sodiam even saw Oumar Younous, one of its former buyers who became a rebel general, raid its offices.

A merchant's coup

At the time, some had called the putsch the "coup of the diamond merchants." The main stakeholders of the sector are Muslim traders and many had not come to terms with the Operation Closing Gate, led in 2008 by President François Bozizé and his nephew, who at the time was the Minister for Mining, when, in one single day, all their goods were confiscated. The maneuver aimed to take over this easily exchanged wealth, but that was enough to push the disadvantaged traders to support rebel movements, of which the main officers, Zacaria Damane, Abdoulaye Hissène or Mahamat Saleh, had all previously worked in the stone trade.

After operating in their area of origin in the north of the CAR, the 2013 takeover of the western mining zones was violent. In October, more than 50 people were killed in the locality of Garga, as the International Crisis Group (ICG) says in its report called The Central African Crisis: From Predation to Stabilisation, "some miners joined the anti-balaka to seek revenge for the atrocities and extortion committed by the Séléka."

Since the Séléka were removed from power in January, there has been a sort of "social revolution" in the west of the Central African Republic. The landscape was remodeled in blood when some 40 Muslims were massacred in Guenn where the miners — who represent the main part of the anti-balaka battalions — drove out the Muslim collectors and took control of the activity.

According to Aurélien Llorca, the coordinator of the UN expert group, "the satellite images in this area show an expansion of the number of mining sites and the two anti-balaka leaders there have been able to resume relations with the collectors from Sodiam and Badica."

Tel Aviv to Mumbai

Several operators of the trade say offices have opened on the Cameroonian side of the border to sell off goods. In the east of the country, where former Séléka rebels have withdrawn, the sites are usually not directly controlled by former rebels, but their superiors extort the collectors and the road taken by the smugglers leads to Sudan and Chad.

Searching for diamonds in Sierra Leone (USAID Guinea)

Finally, a last route goes through the border with the Democratic Republic of Congo through Lebanese networks, mainly Shia Muslims. According to another well-informed source, all these illegal export trades, which benefit from the complicity of the authorities of the different countries, lead mainly to Dubai, where the stones easily receive the Kimberley Process certification before being sent to Antwerp, Tel Aviv or Mumbai.

For Llorca, "the main obstacle for the peacekeepers when they are deployed on Sep. 15 at the earliest will be to regain control of the diamond trade." For years, the CAR has been a "gemocracy," the ICG says. From Emperor Bokassa and Ange-Félix Patassé to François Bozizé and Michel Djotodia, all tried to take over the gem trade when they rose to power.

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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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