Killing for coltan: thoughts on the resource curse


This Christmas, I have been reading the latest report on the conflicts in Eastern DR Congo by Global Witness. It documents how «all the main warring parties are heavily involved in the mineral trade in North and South Kivu», both rebels and the national Congolese army (FARDC). Their involvement includes the use of forced labour, systematic extortion, illegal “taxes” on the civilian population, as well as outright violence. In the Bisie mine in North Kivu, an army brigade operated as rogue feudal landlords for almost three years, reaping huge profits by taxing the miners. Their commander, Colonel Sammy Matumo, has not faced any disciplinary or legal action.

The FARDC and the FDLR (remnants of the old genocidal regime in Rwanda), who are supposed to be enemies, sometimes cooperate on this lucrative business, «carving up territory and mining areas through mutual agreement and sometimes sharing the spoils».

Natural resource rents are keeping the conflict in Eastern Congo alive, providing various armed groups both with a means and a motive to keep fighting. Foreign companies play their part, as do various intermediaries Global Witness, having contacted more than 200 companies doing business in the DRC, reports «a lack of a sense of urgency and limited commitment to applying checks throughout the entire supply chain» of the major electronics companies. Minerals such as coltan, cassiterite and wolframite are used in the manufacture of electronic goods such as telephones and gaming consoles. Watch NRK’s excellent documentary «Connecting people» to learn more (in Norwegian).

The results? A decade of conflict. Millions dead. GDP at below 1975 levels and a HDI of 0.389. In July this year, there were around two million internally displaced people. When I visited the DRC in April this year, an Oxfam aid worker told me that none of the IDPs he had interviewed were on the run for the first time, nor the second. A few for the third time, while most were fleeing from their homes for the fourth or fifth time in a few years.

What is happening in Congo is an example of what economists have dubbed the «resource curse» – a somewhat broad term referring to the observation that countries endowed with natural resources tend to perform worse than others in terms of economic and human development. This is why oil has been dubbet «the Devil’s excrement» – a description which would be just as fitting for Congolese minerals. This happens through various mechanisms – promotion of corruption and clientalism, dutch disease, volatility of prices – and armed conflict. Natural resource reserves are both an attractive prize to claim and a means to fund an army, and therefore work to increase the chance of civil war.

Or do they?

World Bank economist Paul Collier, one of the big shots on this field of research, has found a correlation between resource dependence and war. He is being challenged by Christa Brunnschweiler and Erwin Bulte, who in a recent paper claim that the relation might be just the opposite:

Countries with more abundant natural capital appear to have a lower probability of becoming engaged in civil war. However, civil war tends to disrupt manufacturing and scare investors away, thus leading to increased dependence upon natural resources. The relation appears not to be natural resource dependency -> civil war, but civil war -> natural resource dependency.

(Look to Norway! To Botswana! To the admittedly undemocratic, but nevertheless stable petrostates of the Middle East!)

Why do Collier and Brunnschweiler/Bulte arrive at different conclusions? Basically, because they measure resource dependency differently. Collier looks at resource dependence, measured as natural resource exports as a percentage of GDP. This measure may be problematic. A poor country will be counted as being more resource abundant than a rich country with the same amount of resources. Brunnschweiler and Bulte use resource abundance as a starting point, the net present value in US dollars per capita of the natural resource stock of a country, and derive resource dependence through a more complex equation.

As a consequence, Brunnschweiler and Bulte argues, the label ‘resource curse’ may be misplaced, and common sense as we have leaned to know it could be turned upside down. Maybe. But some of the most conflict-promoting resources, such as diamonds, are not included in their dataset, and the final verdict is yet to be issued on the resource/war link.

To the people dying in the coltan mines of Congo, however, the resource curse is very much a reality. While the results of a generalized statistical regression may point in one direction or another, natural resources clearly has the potential both to fuck up a country (DRC) and make it filthy rich (Norway). As Ragnar Torvik writes, «[t]he most interesting aspect of resource abundant countries is not their average performance, but their huge variation. Resource abundant countries constitute some of the richest and some of the poorest countries in the world». Can we get closer to the answer by looking more closely at different policies and institutions?

I was intrigued enough by this to make it the subject of my term paper in political economy and macroeconomics. You can read it here. This has also been the subject of a recent article in New York Times.

Letter from Latvia

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Stopping for three days in Riga on my way from Oslo, I met up with the Latvian tribe of role-players, who were happy to share their city, their beer and their company with some random Norwegian. One guy even handed me the keys to his appartment and let me stay there, alone, without ever having met me before. His girlfriend spent a whole day showing me around the city. What genuinely hospitable and generous people.

(My only previous connection with the Latvian larpers is two articles written by Agnese Dzervite, edited by me,  in the anthology Larp, the Universe, and Everything, published in conjunction with the Knutepunkt live roleplaying conference in Oslo earlier this year. If you want to know more about Latvian role-playing, check it out.)

Judging by the laid-back, chilled-out ambience in the city, one would not believe that Lativa competes closely with Iceland as the one country that thas been most thoroughly fucked over by the global financial meltdown. But resigned complaints about the SNAFUness of it all were never far away, much like Norwegians complains about the weather.

Here are some numbers for you. In an economy where perpetual growth is concidred ‘normal’, Latvia’s economy shrank 18.7 percent in the second quarter of 2009. Public budgets have been slashed. 68 percent of working people have had their wages cut, and over 67 percent of the private sector has let staff go in Latvia, according to Baltic Times. Unempoyment figures have risen to 17,4 percent. This summer, stories began appearing in Baltic newspapers about patients being turned away from hospitals.

Scandinavian banks cheerfully contributed to driving public debt to unsustainable levels – money which was, by and large, used for blowing hot air into real estate prices rather than for investment. Among the culprits are Swedish SEB and Swedbank and DnB NORD (a joint operation between Norddeutsche Landesbank and DnB NOR, both of them partly government-owned). Foreign-owned financial institutions hold the huge majority of Latvian loans, and Scandinavian banks are sometimes jokingly referred to as the real central bank authorities of the country.

When I arrived, Latvia had just been granted more crisis cash from €7.5bn rescue package of the IMF. This will not save them from making «substantial corrective measures, including additional fiscal consolidation», which is IMF-speak for cuts in wages and public services.

The Latvian government has, in conjunction with the European Union and the IMF, decided to maintain Latvia’s pegged exchange rate with the euro. Critics (such as Paul Krugman, Edward Hugh, Center for Economic and Policy Research et al) allege that thish as made recovery from the crisis all the more difficult. As far as my limited knowledge of the situation allows, I think I agree.

With the currency fixed rate,  the only way  to reduce the country’s current account imbalance is through shrinking the economy, which reduces imports faster than exports and may also reduce real wages. This is similar to the IMF-sponsored policies in the deep Argentine recession of 1998-2002, where a fixed, over-valued  currency worsened  and  prolonged the  downturn  until the  Argentine  currency collapsed in 2002.

(If you to know more about this, you could check out this paper from the CEPR. Or the short version, courtesy of Bloomberg.)

Meanwhile, I hung out in the park in the late summer sunshine with the Latvians. Zhanete showed me the most charming used bookshop you’ll find anywhere. At night, the city came alive with the White Night culture festival, with art exhibitions and performances being held all over the city centre. There were jugglers, puppets, paper cranes, nude men, music and lightshows. It was beautiful.

And then I went home, to Oslo.

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Charyn canyon

Charyn canyon
Just a quick photo update this time, from Charyn canyon, about 200 kilometers east of Almaty and a popular trekking spot. The Charyn River is running through the Valley of the castles, with Grand canyon-style rock sculptures, good climbs and a guardsman with the lamest excuse ever for overcharging us («You see, I was drunk yesterday when I told you didn’t have to pay»).
It also had some surprises in store. I discovered that when I suddenly became stuck on a ledge, with no way to go but four or five meters horizontally downwards and my arm still bandaged.
(Yes, I know. But I wasn’t really climbing, just walking, and it suddenly became very steep. So steep, in fact, that I couldn’t go back.)
As I tore of my bandage, grabbed what holds I could find and tried not to apply to much pressure on the broken parts of my hand, it started raining and everything beame slippery. I was saved only by my own badassery and, perhaps even more important, my steady climbing companion, Christian.
Anyway. Nice canyon. See for yourself.

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Just a quick photo update this time, from Charyn canyon, about 200 kilometers east of Almaty and a popular trekking spot. The Charyn River is running through the Valley of the castles, with Grand canyon-style rock sculptures, good climbs and a guardsman with the lamest excuse ever for overcharging us («You see, I was drunk yesterday when I told you didn’t have to pay»).

It also had some surprises in store. I discovered that when I suddenly became stuck on a ledge, with no way to go but four or five meters horizontally downwards and my arm still bandaged.

(Yes, I know. But I wasn’t really climbing, just walking, and it suddenly became very steep. So steep, in fact, that I couldn’t go back.)

As I tore of my bandage, grabbed what holds I could find and tried not to apply to much pressure on the broken parts of my hand, it started raining and everything beame slippery. I was saved only by my own badassery and, perhaps even more important, my steady climbing companion, Christian.

Anyway. Nice canyon. See for yourself.

(No, I’m still not in Kazakhstan anymore.)

Geeks of the world, unite

Geeks of the world, uniteOn a small spot between massiveSoviet-era monuments comemoratingWWII and the October Revolution inthe Panilov park, a group of youngpeople huddle together under thetrees. They are the Almaty club ofrole-players – not an actual club,but a name for a loose network ofpeople playing live-action roleplaying games. Not long ago theyplayed this year’s big summer event,drawing around 300 players. When Iam meeting them they are preparingfor the Fair of Epochs, a festivalof fighting, dressing in costumesand getting drunk in the mountains.If you know Russian, you can checkout the Almaty gamers’ home page. Ifnot, there wil probably be anarticle in the Norwegian geekmagazine Pegasus sometime soon. I’lllet you know.
On a small spot between massive Soviet-era monuments comemorating WWII and the October Revolution in the Panilov park, a group of young people huddle together under the trees. They are the Almaty club of role-players – not an actual club, but a name for a loose network of people playing live-action role playing games. Not long ago they played this year’s big summer event, a game about vikings(!) drawing around 300 players. When I am meeting them they are preparing for the Fair of Epochs, a festival of fighting, dressing in costumes and getting drunk in the mountains.
The Kazakh larpers have, to us, English-speakers, been surrounded by an aura of mystery ever since this article appeared in The Independent. In 2001, Kazakh authorities apparently cracked down on «tolkienists», described here as «people who dress up as hobbits», as well as people with various other alternative lifestyles. Kazakh fantasy geeks were the subject of a chapter of You Can’t Get There from Here: A Year on the Fringes of a Shrinking World, in which the author travels to «some of the most exotic spots on Earth» in search of «the most colorful characters and communities she can find» in paces «where others fear to tread», according to the blurb. These are the two only references to Kazakh gamer culture I have been able to find on the English part of the web. All the «where others fear to tread» stuff aside, finding them was not so difficult: I asked a few people around campus, and there I was.
If you know Russian, you can check out the Almaty gamers’ home page. If not, there wil probably be an interview with them in the Norwegian geek magazine Pegasus sometime soon. I’ll let you know.

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On a small spot  inthe Panilov park, between two massive Soviet-era monuments comemorating WWII and the October Revolution, a group of young people huddle together under the trees. They are the Almaty club of role-players – not an actual club, but a loose network of people playing live-action roleplaying games – having their weekly meeting. Not long ago they played this year’s big summer event, a Viking(!) larp drawing around 300 players. When I meet them they are preparing for the Fair of Epochs, an upcoming festival of fighting, dressing in costumes and getting drunk in the mountains.

The Kazakh larpers have, to English-speakers, been surrounded by an aura of mystery ever since this article appeared in The Independent. In 2001, Kazakh authorities apparently cracked down on «tolkienists», described here as «people who dress up as hobbits», as well as people with various other alternative lifestyles.

A few years later, Kazakh fantasy geeks were the subject of a chapter in You Can’t Get There from Here: A Year on the Fringes of a Shrinking World, in which the author travels to «some of the most exotic spots on Earth» in search of «the most colorful characters and communities she can find» in places «where others fear to tread. These are the two only references to Kazakh gamer culture I have been able to find on the non-Russian parts of the web.

All the «where others fear to tread» stuff aside: Kazakh gamers are people who like to dress in weird costumes, run around in the wilderness and hit each other with swords, just like you and me. finding them was not so difficult: I asked a few people around campus, and there I was.

There wil probably be an interview with the Kazakh larpers in an upcoming issue of the Norwegian geek magazine Pegasus, so I won’t spoil it by giving away too much here. But if you know Russian, you can check out the Almaty gamers’ home page.

Altyn Emel national park

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Rocky vastness stretcing to the horizon in all directions. Hours of driving through barren landscapes. And still, an amazing variety – and, if you look closely, scattered signs of life. Again, pics speak louder than words.

With its 460.000 hectares, Altyn Emel is the biggest national park in Kazakhstan. Surprisingly, many of the Kazakhs I talked to had not heard about this massive nature reserve, which is located a few hundres kilometers outside of Almaty. Their loss. They’ll miss moments such as this:

Making my way up a massive sand dune, a hundred-meter climb in shifting sand, which gets into your shoes and eyes and everywhere and never lets you find your footing. Gruff from a night of sleeping in a tent and getting up too early to watch animals which never appeared. Fed up with life in general and sand and dust in particuar.

Then, the sand dune sang.

The «singing sand dune» is Altyn Emel’s perhaps best-known feature. As the wind swept over the dune, shifting the sand slightly, it emitted a loud, humming roar, not unlike that of a low-flying propeller plane. Running down the dune, it responded by lazy squeaks when my feet touched the sand. Magic.

Great Almaty lake

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First weekend in Almaty after a week of running around trying to register for courses, settling in my dorm room, taking care of paperwork that I don’t even pretend to understand, going to the first lectures, which are really about nothing else than the lecturer and the students seeing and feeling each other for the first time, just like home, the main difference being the incomprehensible Russian buzzing in and out of my ears like a swarm of mosquitoes. Similiar scenes are probably being played out on campuses worldwide as I write.

Then, a chance to breathe and take a look at the world outside of campus.

The Great Almaty Lake is located a few miles outside of the city, 2500 meters above sea level. Walking there, or climbing, takes a good five or six hours. I could go on about this, but the photos of the ascent and the lake itself speaks louder than words.Above the lake lies the GAISH astronomical observatory – on the surface a collection of unassuming buildings with a few slightly steampunkish antennae and radar installations sticking out. The observatory looks like something from S.T.A.L.K.E.R: Shadow of Chernobyl. Its real miracles, however, only become apparent when you go inside. One of the domed buildings houses a large telescope, operated by an old man looking slightly like Obi-Wan Kenobi. All sorts of wonders are visible through the telescope, such as Jupiter, the Andromeda galaxy, and differently-colored twin stars.