Clandestine Economies, Violence and States in Africa.

• Author: RENO, WILLIAM

"... rulers have intervened in local economies in informal ways that diminish overall economic well-being and undermine the bureaucracies that are critical to sustaining economic growth."

Africa attracts attention for its reputation for disorder. One in very 150 Africans is a refugee, the highest proportion of any continent.(1) Two major regional wars have affected the continent in the last decade: one centered on the Democratic Republic of Congo which involves ten countries, the other on an axis from southern Senegal to Liberia's borders, which involves five more. This disorder, coupled with weak government administration in many countries, offers opportunities for entrepreneurs to conceal illicit transactions and avoid regulations. Nigerians, for example, reportedly carry 40 percent of the heroin that reaches the United States.(2) Pirates appear off the coasts of Somalia and Sierra Leone and government soldiers are accused of attacking foreign ships.(3) The Angolan insurgency, UNITA (Unio Nacional para a Independencia Total do Angola), has reportedly earned as much as US$600 million annually from illicit sales of diamonds.(4) Liberia's president, popularly known as "Superglue" for his personal habit of keeping anything he touches, hosts various former South African intelligence operatives. Ukrainian arms merchants and American "missionaries" set up their own bank in Monrovia. These activities demonstrate the extent to which formally recognized governments can be involved in what officials in other countries consider illicit commerce. A central feature of regimes such as the one in Liberia is the extent to which its officials engage in what most outsiders--and most Liberians--consider to be clandestine commerce, which is a critically important way for these regimes to stay in power. As I will show below, this commerce accompanies armed conflict, and plays an important role in provoking and prolonging much of the warfare in Africa.

In this article, I develop a model of clandestine economies as they operate in parts of contemporary Africa. The model will explain how clandestine economies contribute to the strengthening of political authority in seemingly chaotic parts of Africa. It shows how a range of activities that are commonly defined as corruption and evasion of government authority, or as consequences of incompetent administration and bad policies, actually grows out of the purposeful strategies of rulers. I will identify an archetypical Shadow State as one that is constructed behind the facade of laws and government institutions. The Shadow State is a form of personal rule; that is, an authority that is based upon the decisions and interests of an individual, not a set of written laws and procedures, even though these formal aspects of government may exist. The Shadow State is founded on rulers' abilities to manipulate external actors' access to markets, both formal and clandestine, in such a way as to enhance their power. This alternative manner of rule permits rulers to undermine the formal institutions of government itself. As I explain below, some rulers fear that these formal institutions may acquire interests and powers at odds with their efforts to retain power.(5)

This article also addresses how this formally clandestine but dominant economy and system of political control is managed. In particular, Shadow State rulers recruit and arm youths to help intimidate opponents in economic markets and politics, and aspiring politicians recruit youths to attack their rivals. Free-lancing among these politicians, and among youths themselves, however, complicates Shadow State rulers' efforts to hold together their non-bureaucratic regimes.

The next section will explore how Shadow State rulers address this internal dilemma. These rulers attempt to address the contradictions that beset the ensuing political structure by seeking out foreign partners. They use these foreign commercial partners, who often shun legal markets elsewhere, to partially replace their internal associates. For example, an American citizen heading the "First International Bank of Grenada" proposed to Congolese authorities a scheme to set up a privately owned central bank and monetary system tied to the value of Congo's mineral resources in return for a 35 percent commission from sales of minerals. Earlier, the American had been accused by Grenadan officials of money laundering, and had been involved in a scheme to set up a "Dominion of Melchizedek" as an Internet-based "virtual state" that would sell banking permits.(6) Together, partners of this sort manipulate the facade of the Shadow State's globally recognized sovereignty for mutual commercial gain. This strategy may include abandoning attempts to control territory within formally recognized frontiers. At the same time, rulers devote considerable attention to influencing and controlling business partners in distant places like Caribbean tax havens. Paradoxically, rulers who attempt to maintain control in their own countries through reliance on these external commercial actors depend on their own claim to statehood to legitimate these actions. These external commercial actors take advantage of clandestine opportunities that partnerships with Shadow State rulers provide, ostensibly treating these officials as members of law-abiding governments.

SHADOW STATES AND AFRICA'S CLANDESTINE ECONOMIES

The Shadow State model of clandestine commerce in chaotic parts of Africa recalls historians' observations that most builders of states at one time or another relied heavily on what would today be considered violent, clandestine commerce to accumulate resources. "If protection rackets represent organized crime at its smoothest," wrote Charles Tilly, "then war making and state making--quintessential protection rackets with the advantage of legitimacy--qualify as our largest examples of organized crime."(7) In this context, one can point to the role of buccaneers as "official pirates," the theft of Church property in the 17th century to provide revenues to Tudor English kings, the Venetian Navy s service to favored merchants and the organized banditry that was integral to the centralization of Ottoman authority as earlier examples of this phenomenon,s This view holds that "dysfunctional" arrangements like violent commerce, use of state office for personal profit, and the undermining of international norms of economic behavior can all be relevant to establishing and consolidating state authority over contending societal groups.

A contesting view holds that the development of disordered clandestine economies in Africa grew as a response to radical changes in the global economy, the proliferation of small arms, and Africa's marginal global diplomatic and economic position. "One of the consequences of this particular conjuncture of factors," wrote Bayart, Ellis and Hibou in their essay on kleptocracy in Africa, "is an erosion of the very foundations of political regimes ... of states themselves."(9)

These contrasting analyses of disorder, along with clandestine economies and their relationship to political authority, point to an ambiguity surrounding the notion of "clandestine" economies. Trade in human beings, for example, was once recognized as legitimate, but is now included in the category of clandestine, illegal trade. Lending money at interest, now widely accepted, was once condemned as usury. Defining "clandestine" as deviation from the laws of a state and from the norms and practices of the international community says little about the nature of transactions themselves. This is especially true if transactions are in violation of a state's laws when those who make and enforce those laws spend much of their energies engaged in transactions that they themselves have labeled as illegal.

A closer examination of systems of personal rule in Africa illuminates a relationship between political authority and clandestine economies that exhibits a clear political strategy; rather than inflated corruption and bureaucratic decay. First, the relative lack of popular acceptance of specific regimes in certain countries tends to render rule through bureaucracies unattractive to high officials. Some rulers even jettison the pretenses of seeking legitimacy, or of building bureaucratic agencies to supply services to citizens. Instead, they manipulate markets and the laws regulating them to enhance their own power and wealth, and to control others. This creates informal, commercially oriented networks--Shadow States--that operate alongside remaining government bureaucracies. Second, such rulers rely upon the willingness of outsiders to recognize the facade of formal sovereignty. This allows rulers to use government power as a tool to ensure their own private enrichment, and to control economic markets to increase their own power and control over people's access to resources. Shadow Slates incorporate other external actors as well, since markets in which rulers operate often extend beyond the formal frontiers of their countries. Global recognition of sovereignty also helps create entrepreneurial opportunities that rulers can exploit for personal profit and for the benefit of favored associates.

This corrupt behavior results from the difficulties that colonial administrators faced when trying to generate revenues and enforce official directives, and the consequences of their efforts to manage these difficulties. Most colonial governments in Africa relied heavily on cooperation from local strongmen. The essence of imperialism was, as Ronald Robinson noted, the incorporation of elites into administrative structures.(10) In some cases, elite groups managed to transform the administrative positions they occupied into their own private patrimony, in the sense that they could personally determine how those positions would be used and who would occupy them. In Sierra Leone, to take an example of British...