E-Letter To The Washington Post and Karl Vick Re: Vital Ore Funds Congo's War

Your article, "Vital Ore Funds Congo War" provides a rare look at some of the economic forces that are shaping the war in the Congo. The discovery of the precious mineral tantalum in the Congo, once again, continues the tradition of European powers benefiting from the staggering quality and quantity of precious minerals in Africa. It also perpetuates the stale continuum of Africa's dependence upon the earth for its economic sustenance.

We use the phrase economic sustenance because as your article makes clear, the term "economic development" is too generous to describe what is happening in the Congo.

Because there, you have, what we refer to, as a war economy, which benefits only a handful of well-positioned elites on all sides of the conflict, who use their proximity to vast natural resources as a means to obtain financial benefit for themselves and to fund their military operations.

And as your article points out, this is taking place among all of the parties in the war- among the Namibians, Angolans and Zimbabweans that have backed the Congolese government of Laurent Kabila prior to his assassination and Joseph Kabila afterward; and among the Rwandans and Ugandans which have backed Congolese rebels which have opposed the Kabilas.

And of course these African powers do what they do right alongside numerous Congolese elites. For all of the parties involved the ultimate endgame has been the same - use the natural resources in the Congo to fund short-term interests but never to provide the basis of economic development or growth which would allow the country of 50 million to diversify its economy.

And once the war in the Congo is ended, which appears more of a possibility each day, the larger question becomes how will the economy of the Congo be developed and grown.

Presently, among other things, the Congo is experiencing an over 300% annual rate of inflation, a problem that cannot be solved by a peace agreement.

Already and unfortunately, negative developments have emerged in the effort to address the Congo's shattered economy with Kabila and one of the most prominent political opposition leaders in the Congo, Etienne Tshisekedi, having discussions with the IMF and World Bank regarding the Congo's economy.

This is bad news as the IMF and World Bank do not have the desire nor formula necessary to improve the Congo's economy and will only continue the current trend in the Congo, made worse by the war, of exporting natural resources out of the Congo and into Europe and America. Export-driven economic strategies are the IMF's specialty and standard formula for impoverished countries, but do little to promote the development of a diverse economy, which is in Congo's long-term interests.

Interestingly, the IMF and World Bank are already advising the Congo government's mining company.

If the Congo's economy is to be rebuilt it will be done by the guidance of political and economic leadership in the country which not only is able to organize the Congolese people according to their talents, skills and interests but which also understands the impact that fiscal, monetary, and trade policies have on the Congo from within and without.

As an example, your article revealed that those who have led the way in exporting tantalum out of the Congo and into Europe and the US have done so by moving out of the gold business.

You wrote,

"The first time the world price doubled, Congolese peasants who had been mining gold were instructed to forsake it for col-tan. When the price doubled again -- and then again and again, to more than $200 a pound -- the rebel group that controls the area declared a monopoly on exports."

You may not be aware of this but the motivation to leave gold in favor of tantalum or col-tan would not have been as great had the price of gold not fallen from over $400 an ounce in 1996 to a low of near $250 an ounce in 1999. Currently, gold is trading at around $260 per ounce.

This fall in the price of gold is the direct result of monetary policy decisions made right in the United States of America.

The next leader of the Congo, if he or she is to craft an effective economic program will have to be aware of how such apparently "distant" factors affect the domestic economy of the Congo.

While many may celebrate the recent troop withdrawals from various portions of the Congo in accord with UN disengagement resolutions, real peace and happiness will not be established until the country's economic woes are addressed.

And this simply cannot happen with the old formula of digging mineral resources out of the African earth and shipping them to America and Europe for cash. The Congolese people deserve more and can do more.

Their economy should one day soon reflect that reality.

Sincerely,

Cedric Muhammad

Tuesday, March 20, 2001

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