Trading for Peace: Latest Research by DFID and USAID

For the past several years, AFJN has been working on issues relating to the African Great Lakes Region, particularly the efforts to restore peace in the Democratic Republic of Congo and in Northern Uganda. It was in consideration of the importance of peace as a tool for the development of the African Great Lakes Region that the United States Agency for International Development (USAID) and Department of International Development (DFID) commissioned research to explore how trade could provide an opportunity for the development of peace in the region rather than being an instrument for conflict. At a recent conference on ‘Trading for Peace’ in Washington DC, the researchers –  Nick Bates, a policy analyst in the East and Central Africa Unit (ECAU) of the London-based Department of International Development (DFID); Ruth Buckley of the Technical Resource Unit of USAID Africa Bureau; and Jaidev Singh, a former senior regional conflict, democracy and governance adviser at USAID’s regional mission in Nairobi – presented their findings. The research looked at how natural resource exploitation affects peace and security in the Great Lakes Region.

The study commenced in 2003 with staff from the Common Market for Eastern and Southern Africa (COMESA) and was developed in 2005 with the support of USAID and DFID. The focal countries were the Democratic Republic of Congo, Uganda, Rwanda, Burundi, and Zambia. The goal of the research was to prove that natural resource extraction can contribute to poverty reduction through strengthened and more equitable trade.

This research is a departure from most studies conducted by other international organsations such as Global Witness, Human Right Watch, and Global Exchange which have confirmed the role of natural resources in fueling conflict and corruption around the world through the establishment of entrenched patterns of illicit activities with government and security officials.

Trade is extremely important in DRC and accounts for a very high proportion of the country’s Gross Domestic Product (GDP), in part because the country has a very resilient open economy. Minerals, timber, and coffee are exported while other agricultural and consumer goods are imported. Decades of bad governance and war have resulted in heavily destroyed agriculture, with all basic foods imported; therefore, open trade routes are vital. Trade also has become necessary to realize the value of natural resources in poverty reduction.

Considering the current instability in the region, one could be tempted to question the results of the findings. Among the many unanswered concerns is the weak data availability for things such as corruption, low capacity/incentives, and the actual value of exports. Well over 60 percent of exports from DRC are not formally recorded. Trading patterns are profoundly corrupt and consciously fraudulent resulting in under-declaration by officials and traders as well as collusion on tax evasion. All of these indicators support previous research and therefore contradict the conclusions of this recent study. The most notable missing piece is that because of corruption, trading chains are highly vulnerable to control by elites and militias.

However, while the study espouses trade as a means of growth for DRC, it does recognize that serious reforms are needed. Trade processes are linked to deep corruption and therefore, formal structures or a method of enforcement is needed. There is also a need to improve working conditions and to support sustainable extraction of natural resources. If these things are done, key windows of opportunity may be opened to allow for relative peace and prosperity.

The region is now awaiting the presentation of the research to stakeholders at a conference of trade ministers in Zambia to identify issues that could be implemented to improve trade and peace in the sub-region.

Having spent so much energy advocating for peace in the Great Lakes, AFJN sees this research as a potential breakthrough in preventing future armed conflict. It is our hope that the US will take fair trade into greater consideration as foreign policy legislation is formed.
By Joseph Effiong

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