Profit vs. Peace: The Clandestine Diamond Economy of Angola.

• Author: SHERMAN, JAKE H.

"Diamonds are UNITA's life blood. Without them UNITA wouldn't be able to maintain its options. We need to have choices, anal as you see what the government is doing now, UNITA needs to maintain military reserves so that the government doesn't destroy us. This is the reality."--Former UNITA chief of staff General Arlindo Pean "Ben Ben"(1)

Throughout Africa, warring parties routinely use natural resources to fund destructive wars. As conflict alters and disrupts pre-existing economies, war economies are created, establishing new systems of supply, demand, profit and control. Rebel groups in Angola, Sierra Leone,(2) Democratic Republic of Congo (DRC) and elsewhere enrich themselves through the sale or exchange of diamonds, and use the funds from the diamond trade to purchase arms and other supplies necessary for waging war. As these resources become an integral part of the ability to wage war, they also become an objective of war. Each side fights to maintain or gain access to crucial diamond reserves. Individual short- or long- term economic interests not only shape the conflict, but, if the economic advantage of fighting outweighs that of peace, perpetuate it as well. Natural resources have been a curse for these states, bringing conflict and exacerbating poverty.

The post-Cold War transformation of the war in Angola demonstrates the growing impact of black markets, particularly in valuable natural resources, on conflict. In response to changing geopolitical events, the National Union for the Total Liberation of Angola (UNITA) has developed an international trade network that allows it to secure weapons, petroleum and other supplies on the black market in contravention of UN sanctions and international condemnation. UNITA thus illustrates the ability of non-state actors to manipulate the darker side of globalization: the black markets and informal economies that have proliferated in states destabilized by economic and political transition, conflict and social upheaval. Profiting from illicit trade, organizations such as UNITA navigate their way around sanctions, customs and other barriers in the incessant pursuit of weapons and material. The end result is the prolongation of violence.

This paper examines the impact of the clandestine diamond economy on the civil war in Angola, with a specific focus on UNITA's efforts to fund its operations through the diamond trade. The role of the Angolan Government as well as of major private actors such as the DeBeers diamond cartel and private military and/or security companies is also considered. Further, the paper examines the recent military success of the Angolan Armed Forces (FAA) against UNITA strongholds. Finally, it discusses the efforts by the international community to halt UNITA's diamond trading through the extension of the United Nations embargo on diamonds and the suspension of Angolan diamond sales by the DeBeers diamond cartel.

Thirty Years of Civil War

The thirty year civil war between the Movement for the Popular Liberation of Angola (MPLA), now the ruling party of Angola, and UNITA has been characterized by guerilla tactics, gross violations of human rights and economic destruction. Out of a population of 11 million people, one million Angolans have been killed,(3) 1.6 million are internally displaced,(4) and 300,000 are refugees in the neighboring DRC and Zambia. Two million Angolans live a "precarious existence, in need of or dependent on aid."(5) Angola has one of the highest rates of landmine casualties in the world.(6) Overall, thirty years of civil war have brought immense human suffering to Angola. Yet, one of the sources of this tragic situation is Angola's natural wealth: illicit sales of diamonds by UNITA have prolonged the war and enriched rebel leaders. The Angolan Government has responded by using revenues from official diamond and oil sales to fight UNITA, impoverishing the country even further.

Angola has experienced civil war intermittently since 1961. Even before Portugal abruptly granted independence to, and pulled out of, Angola in 1975, three national liberation groups--MPLA, UNITA, and the National Front for the Liberation of Angola (FNLA)--began fighting one another for control of the capital, Luanda, as well as for the rest of the country. During the Cold War, ideology divided the groups and determined their external support. The Marxist MPLA was supported by the Soviet Union and Cuba, while the anti-Marxist UNITA was actively supported by South Africa, China(7) and the United States.(8) Zaire, and to a lesser extent the United States, supported the FNLA against the MPLA. With the assistance it gained from its ideological allies, the MPLA was able to gain control of the capital and establish a single-party socialist government, which was recognized by most countries, although not by the United States or South Africa.(9) In response, UNITA and FNLA (which ceased to be an active participant in the conflict after the late 1980s) joined forces to wage a guerilla war against the MPLA government.

Improved US-USSR relations and a desire by the USSR and Cuba to reduce their foreign commitments created a new situation. The superpowers were able to jointly pressure the warring parties to negotiate an end to the fighting. This was in part due to the perception by the parties within Angola that, with the thaw in US-USSR relations, continued struggle offered less significant benefits.(10) Six rounds of talks between 1990 and 1991 resulted in the signing of the Bicesse Accords of 1991. Under the Accords, UNITA forces were to be integrated into the unified national army (the FAA), and national elections were to be held, with the MPLA remaining the interim government. The UN Angola Verification Mission (UNAVEM) was to monitor the interim period. Finally, both sides would be prohibited from purchasing new arms supplies.(11)

Elections were held in September 1992, with MPLA winning both the presidential and the parliamentary contests.(12) The election results were rejected by UNITA before the run-off election. UNITA re-mobilized its forces, returning the country to what would be its third war. By 1993, UNITA controlled 70 percent of Angola but failed to capture either Luanda or the oil-rich Cabinda enclave. By maintaining control of Luanda and Cabinda, the government was able to generate enough revenue to rearm and re-train its forces, and consequently push UNITA out of strongholds in the eastern part of the country. UNITA, facing low supplies of military spare parts and fuel as well as being confronted with mounting international criticism for having resumed the civil war, re-entered negotiations in 1994. The result of the negotiations was the UN-brokered Lusaka Peace Agreement of 22 November 1994.

Both the military leadership of the MPLA and UNITA opposed the demobilization mandated by the Lusaka Peace Agreement, fearing it would undermine their position and status vis-a-vis the other side.(13) Jonas Savimbi of UNITA failed to attend the signing of the protocol and alluded to the possible continuation of the war.(14) Although Savimbi declared in 1995 that UNITA's struggle against the MPLA was over, tension continued to increase up to 1998. In December 1998, following four years of fragile peace, the Angolan Government and UNITA returned to war for the fourth time since independence.

The 1994 Lusaka Peace Agreement unraveled primarily due to the lack of confidence in the viability of a lasting settlement. Peace was threatened by the uncontrolled arms flows that were funded by illegal diamond sales. In a situation reminiscent of the state of affairs under the Bicesse Accord, the intermittent peace of the Lusaka Agreement enabled UNITA to focus its efforts on diamond mining. UNITA then used the revenue from diamond sales to re-arm and re-supply itself for a renewed round of conflict, using the same trafficking routes used to bring oil and weapons into the country. This all took place in defiance of UN sanctions. Human Rights Watch reports that during the Lusaka Peace Process alone, UNITA-held diamond areas produced approximately US$1.72 billion worth of diamonds, which was used for obtaining military supplies, petroleum products, food and medicine.(15)

Angola's prolonged civil war is a conflict motivated by profit. Conflict that has an economic or profit-based motive is usually sustained by several factors, such as 1) a weak state unable to impose administrative control or rule of law over the whole of its territory; 2) the presence of lucrative natural resources; 3) an absence of strong external financial or military support for either of the sides; and 4) corruption made possible by these circumstances.(16) As will be examined below, Angola has met these characteristics to a varying extent over the course of the war.

Lack of Extensive Centralized State Control

Although military successes by the FAA in late 1999 presented the opportunity to impose what may have been the most extensive centralization of state administration by Luanda since independence,(17) Angola has historically been divided between UNITA and MPLA zones of influence and control. UNITA has maintained outright control of three of Angola's 18 provinces (Lunda Norte and Lunda Sul, which account for over half of Angola's diamond production, and Huambo), while controlling all but the provincial capitals of another six. These are predominantly rural, inland provinces. The MPLA territory has been confined to the coastal strip and the interior provincial capitals not under UNITA control.(18) Upon the resumption of state control of formerly-held UNITA territory, civil servants and police have been provided neither with adequate supplies nor with sufficient salaries. Therefore, they often resort to predatory extraction of resources from the local community. Predictably, this leads to hostility between the governors and the governed.(19)

Post-Cold War Absence of External Support...