Diamonds, Corruption and the Predator State in Sierra Leone

tupac_mural-Teun-Voeten-300x199

Unpublished, Dec 2006

 

“Welcome to Sierra Leone. If you cannot help us, please do not corrupt us”
– billboard outside Lungi International Airport, Freetown (Kallon 2004: xix)

A cursory glance at Transparency International’s Corruption Perception Index (CPI) over the last few years suggests a common pattern among the lowest ranking countries: almost all of sub-Saharan Africa has figured on the hit-list, consequently rendering it the world’s most corrupt region.[1] Yet, in spite of the astronomical levels of endemic poverty and underdevelopment, many of these countries boast enormous reserves of natural resources such as oil and its derivatives, minerals, precious stones, timber and fisheries. Nigeria, Angola, Chad and Equatorial Guinea for instance straddle substantial oil reserves, while countries such as Botswana, Namibia, the Democratic Republic of Congo, Angola and Sierra Leone contain within their geographical boundaries some of the world’s highest concentrations of diamonds. Paradoxically, as we look further on in this article, these same sources of potential wealth have turned into the very sources of civil war, instability and rampant corruption unmatched anywhere else in its intensity.[2] As Robert Williams has observed, corruption is hardly peculiar to tropical Africa, though its specific complexion or combination of phenomena and the severe consequences issuing therefrom are what renders it worthy of careful analysis (1987: 2). In extreme cases, the very relevancy of the state becomes questionable. Indeed, the term ‘criminal’ or ‘failed state’ has never been so enthusiastically applied on so collective a scale to any other region, and in Robert Kaplan’s apocalyptic article The Coming Anarchy, adumbrates an African descent into utter pandemonium as the major post-Cold War challenge.[3]

From this perspective, the case of Sierra Leone is instructive. Despite its rich natural endowment and massive agricultural potential, Sierra Leone’s economy – measured in real GDP, balance of payments, inflation, public deficits, revenue capacity, currency valuation and of course, standard of living – remains a nightmare (Luke & Riley 1989: 136). In 1991-92 it was the world’s poorest nation with average life expectancy peaking at 42 years (Kpundeh 1995: 27-8). When the rebel war came to a halt in 2000, the UN Development Programme singled the country out as the world’s least developed (Tam-Baryoh 2002), and beginning from 2003, Transparency International has consistently ranked it among the most corrupted.[4] Although corruption has characterized every stage of Sierra Leone’s modern political history, twenty-four years under the All People’s Congress (APC) government hastened the consolidation of a thriving shadow state the consequences of which are still palpable today (Ndumbe 2001: 59). Notwithstanding astonishing incidences of the more ‘regular’ type of administrative-bureaucratic corruption,[5] this article focuses on the relationship between diamond spoils and predatory elites and finally, discusses the effect corruption has had in precipitating the collapse of Sierra Leone as a functional and sovereign state.

 

Grand corruption and the ascendancy of the shadow state

Contemporary literature on pervasive state-level corruption often broaches the notion of the ‘shadow state’, an informal but parallel politico-economic structure of control operating alongside the legitimate ‘theatre’ state.[6] In West Africa, the ubiquity and the normalization of corruption are symptomatic, not of different cultural values, but of extremely weak or non-existent political, legal and economic structures constitutive of the state. In a 1992 survey conducted on what Sierra Leoneans considered their country’s worst problems, corruption came in second after the then ongoing rebel war, a response that appears to challenge the cultural relativist argument (Kpundeh 1995: 108). At any rate, the etiology of political corruption, i.e. the use of public office for private gain may be roughly diagnosed in these terms: domestic poverty, untapped natural resources and external trade opportunities (or financial pressures) all ensure that whoever governs the country controls whatever available wealth, creating incentives for the outright privatization of state resources and the development of a class of political entrepreneurs. Accordingly, political office is perceived as a shortcut to wealth (Kpundeh 1995: 50; Smith 1997: 60). In Sierra Leone’s case, the inherited colonial administrative structure, the abundance of diamonds,[7] and the lack of a sense of national civic responsibility and solidarity – leading to sustained levels of social atomization and an everyman-for-himself mentality – offered fertile ground for a kleptocratic regime to thrive. Yet, is is factors such as the consistent international demand for gem diamonds and the foreign exchange revenues involved that allow it to survive thereafter.

In 1967, former trade unionist Siaka Stevens led the APC into power, displacing the erstwhile Sierra Leone People’s Party (SLPP) in bouts of electoral skulduggery and sheer intimidation so that as Kallon notes, “elections became the most violent activity in the country”(2004: 165). Unsurprisingly, from the 1973 elections to the 1978 show referendum, Sierra Leone became first a de facto and then a de jure one-party state. Despite his sobriquet (‘Pa’, or ‘Father of the Nation’) and his hereditary claim to all the major indigenous ethnic groups, Stevens, together with his Limba- and Temne-majority supporters purged most ethnic Mendes from the military and other positions of influence.[8] As events demonstrated afterwards, “ethno-politicization” – to use Kpundeh’s term – would not only rend asunder society and polity but offer the means to solder networks based on patronage and nepotism (1995: 34). Ironically, it was their socialist and appealingly egalitarian platform for which Stevens and the APC were first elected into power. Stevens’ premiership and subsequent presidency promoted the personalization of politics, entrenched his position as gatekeeper of the nation’s vast natural resources and created a pyramidal patronage system wherein political connections and ascriptive relations determined success rather than individual merit (Smith 1997: 59). Although resources constitute “the foundation of political power and influence in Sierra Leone” (Reno 1995: 99), in order to reduce “uncertainty and instability”, the ruler requires “alliances and cooperation” – this he establishes by entering into a patron-client “exchange relationship [albeit] between unequals” (Bøås 2001: 700). As Bøås also reminds us, this neo-patrimonialist logic in the post-colonial African context subjugates politics to economic imperatives and access (2001: 701), rendering it mercantilist by definition. Consequently, regime survival becomes the main determinant of state policy to the detriment of economic development and redistribution (Luke & Riley 1989: 134; Kallon 2004: 165-6). The art and utility of establishing patronage networks are such that the twenty-four years of APC rule (1967-92) were not only characterized by sustained economic regression but also by relative political stability, in contrast to the violent repercussions of economic failure in neighboring Liberia and Burkina Faso (Luke & Riley 1989: 135-6). Economic and institutional-bureaucratic malaise as such bears no certain correlation to political authority (Reno 2000: 446). If anything, the maintenance of weak bureaucracies and state institutions not only benefits private accumulation and corrupt exchange but, in view of chronic and successive military coups throughout the region from the later half of the twentieth century, provides the added assurance that enterprising putschistes will find no ready-made support structure on which to draw. Similarly, constant rotation of ministerial and high administrative positions hobbled policy effectiveness and forced functionaries to depend on Stevens’ presidential favor for advancement (Reno 1995: 133).

As pointed out, the principal coin of Stevens’ shadow realm is diamonds. Since these shards of carbon lacking intrinsic value were discovered in 1930, diamonds have played a tremendously significant role in Sierra Leone’s political and socioeconomic (un)development. Given their unit value and extreme portability,[9] they are widely coveted as an alternative liquid asset to cash. Moreover, easily accessible alluvial deposits and the low risk of being caught render government control even more tricky.[10] Under the colonial government and following independence in 1961, State House found it expedient and even necessary to co-opt the tribal (or “Paramount”) chiefs of diamond-producing districts so as to rationalize administrative costs, maintain revenue levels and satisfy local strongmen’s power proclivities. As Reno reflects though, such arrangements and newfound prerogatives “proved highly vulnerable to appropriation” (2000: 437-8) and indeed prefigured the character of state-society relations under subsequent, autochthonous governments: instead of advancing socioeconomic development, many local leaders pocketed diamond royalties with Freetown’s tacit knowledge (Kallon 2004: 188).

Till the late 1960s, diamonds comprised roughly 70 percent of official export revenues (Gberie 2002: 6; Reno 1995: 133). However, the 2 million carats exported in 1970 plunged to a ridiculous 48,000 carats by 1988, severely diminishing state revenues and incurring huge budget deficits (Kpundeh 1995: 29; Gberie 2002: 2; Reno 1995: 134). Kallon estimates that the cumulative loss in diamond revenues spanning the APC’s tenure attained approximately $441.52 million (2004: 200), figures that could not more clearly implicate political elites in diamond smuggling. During the earlier Margai-led SLPP government, the Sierra Leone Selection Trust (SLST), a subsidiary of De Beers monopolized all legal aspects of diamond exploration, mining and trade.[11] Regional control in Kono later expanded to the entire country, ostensibly to incapacitate illicit diamond mining (IDM) and thus “protect” government revenues. With his ascendancy to power, Stevens sought to undermine foreign domination of the diamond industry by actively encouraging IDM (Kallon 2004: 190). Indeed, the so-called Cooperative Contract Mining (CCM) scheme he introduced in 1973 effectively institutionalized state-pilfering in favor of close associates (Kallon 2004: 189; Reno 2003: 51).[12] In 1971, he acquired 51 percent of the SLST’s shares, henceforth renamed the National Diamond Mining Company (NDMC), and even personally oversaw sales of larger diamonds such as the 970-carat Star of Sierra Leone (Kallon 2004: 190). By 1984, the SLST was forced to sell its remaining 49 percent shares to the Precious Metals Mining Company (PMMC), a company incidentally controlled by Steven’s most prominent Lebanese business associate, Jamil Said Mohammed (Kallon 2004: 191).

As intimated, a key measure toward the aim of privatized accumulation is expansion of the parastatal sector (Smith 1997: 58), to which end another important pillar of the country’s shadow state edifice must be mentioned. Having settled in parts of the region with the disintegration of the Ottoman empire, resourceful Lebanese and Afro-Lebanese merchants – virtually Sierra Leone’s only successful entrepreneurial class – not only dominated trade in basic commodities but in diamonds as well.[13] In addition, they disposed of valuable assets for whoever desired to control the economy: access to direct foreign exchange (in view of the incontrovertible Leone), business networks, and credit facilities in their native Lebanon.[14] To consolidate his power, Stevens assumed control of Kono’s fields and cultivated close ties with what locals perceived as “outsiders”. Despite promises to indigenize the diamond industry, the Ministry of Mines granted private export licenses for 20 percent of the country’s diamonds to five such “outsiders” (Reno 1995: 109). Thanks to the president’s board membership in the newly-created Government Diamond Office (GDO), favored private exporters could in collaboration with State House pocket differences in the purchase of undervalued rocks. Clandestine relations with Lebanese circles allowed him to control the country’s prime resource, defer strengthening state institutions that would generate but a fraction of revenues streaming in from IDM, and at the same time, rest assured that those in proximate control of diamonds harbored no political ambitions, being as they were “outsiders” and hence constitutionally barred from political office (Reno 1995: 111). Nonetheless, “outsiders” like Jamil controlled hefty stakes in the country via joint ownership of parastatals such as the National Trading Company, among many others. When cross private-public encroachments became the object of international concern, Stevens ostensibly “privatized” parastatals, but in reality sold them to the only people who possessed the capital to buy them, his Lebanese partners (Reno 1995: 138). By the mid 1980s, analysts estimated that approximately 70 percent of the country’s trade took place through the untaxed shadow economy (Reno 1995: 151).

With the decline of the mineral economy in the 1980s, soaring budget deficits and diminishing revenues, Stevens (and later, Momoh) were forced to depend, at first, on international donors such as the IMF and the World Bank. When the attached conditionalities threatened to undermine his patronage base on which his regime depended (Luke & Riley 1989: 137),[15] he turned to his Lebanese associates for access to financial resources in order to maintain discretionary spending and the shadow state (Reno 1995: 135). Though Lebanese banks charged exorbitant interest rates, their acceptance of illicit diamonds as collateral and no-strings-attached posture allowed for approximately half the budget deficit to be financed via IMF-created Special Drawing Rights (SDRs) by the late 1970s, as Reno notes (1995: 135). Economic dependency on the Lebanese soon evolved into a situation where indigenous politicians became guarantors for more ambitious commercial activities.

After a staged transfer of power to military chief Major-General Joseph Saidu Momoh, prospects for anti-corruption looked especially promising with his pronouncements of a “new order” and “constructive nationalism”.[16] The looming problem remained that of the informal economy and the links between Stevens’ cronies and the Lebanese business clique, and the question was how to “force accumulation back under the president’s control and undercut rivals in the informal economy” (Reno 1995: 159). This was rendered all the more complicated by the severely ailing economy inherited from Stevens. Incidentally, temporary solutions arrived in the form of Israeli businessmen such as Shaptai Kalmanowitch and later Nir Guaz who, although they demanded a stake in the country’s diamonds in exchange for resources, nevertheless helped to disrupt and displace the Lebanese from the trade.[17] Additionally, introducing more foreign investors would encourage greater state revenue capacity yet reduce the risk of shadow state collaboration, the rise of autonomous actors, as well as the need for institution-rebuilding and a strong state (Reno 1995: 158). ‘Hardcore’ political graft and misappropriation may not have typified his regime the way it did Stevens’, yet Momoh remained notoriously beholden to the patronage edifice comprising Ekutay Limba supporters and sycophants from Binkolo, his native village, thus perpetuating the ethno-political dimensions of corruption.[18]

The aggregate effect of long-term corrupt behavior, resource predation and social exploitation was thrown into extremely sharp relief with the onset of civil war in 1991. Citing these very same reasons, the Revolutionary United Front (RUF) – disaffected and unschooled lumpenproletarian youth – led by Libyan-trained ex-army corporal Foday Sankoh invaded the eastern diamond-rich provinces from across Liberia in March 1991, thus threatening the lifeblood of Momoh’s formal and shadow economies. Already cash-strapped, RUF appropriation of diamond production would only stall further foreign investment needed – patronage networks aside – to finance a regular army that would in turn deter disruptive elements from the region. Concurrently, protests against the corruption-induced inability of the state to pay the armed forces accidentally put the government to flight, making army captain Valentine Strasser the continent’s youngest ever leader at 27. Both Strasser and his nemesis Sankoh appealed against corruption to gain popular support, yet both returned to familiar patterns observed from the APC years, even if minimum semblances of a public-private distinction no longer held by then. As anarchy erupted,[19] diamonds financed light arms acquisitions on both sides, RUF-destined drugs and other supplies from warlord Charles Taylor’s Liberia (where the shadow state evolved even more fully), and private military companies (PMCs) that assisted Strasser’s National Provisional Ruling Council (NPRC) in expunging the rebels.[20] Despite UN resolutions conflict or ‘blood’ diamonds consistently resurfaced in neighboring Liberia, the Gambia, Guinea and Côte d’Ivoire, states lacking actual diamond production (Campbell 2004: 124), and indeed comprised an estimated 4 to 15 percent of the world market with annual trade revenues of $7.5 billion (Gberie 2005: 184) – a clear indicator that the boundaries of the shadow state often supersede those of its legal counterpart. Again, what is interesting in this regard is the degree of continuity stemming from a deeply-entrenched culture of corruption and violence. Despite everything, the RUF’s operating procedure – as raggle-taggle as it was – mirrored the APC’s and particularly Siaka Stevens’ compulsive patterns of resource predation and uninhibited recourse to violence.[21] Similarly, allegations of NPRC soldiers turning rogue fueled speculation that the RUF were not the only ones with an economic interest in perpetuating the war, [22] supporting Lansana Gberie’s observation that the aimless ‘civil’ war was in truth motivated by a warlord-type economy (2002: 3).

 

Conclusion

While corruption in African states generally appear linked to personality politics and individual self-enrichment, it is all too often a consequence of wider and deeper structural pathologies (Kpundeh 1995: 48). As the Sierra Leonean case indicates, moribund institutions, declining public services and an atrophying bureaucracy incapable of even paying civil servants ensure that the average starving citizen engages, willy-nilly, in informal economic activity simply in order to stay alive (Kpundeh 1995: 48). Conversely, the highest paid government officials have proven to be the most corrupt, favoring discretionary spending amid distortionary economic mismanagement (Chege 2002: 152), near-absolute and opaque power invested in the executive (Williams 1987: 54) – not to say a one-party state – and heavy reliance on high unit-value extractable resources (Treisman 2000: 406; Rose-Ackerman & Coolidge 1997: 25). The bugbears associated with dealing diamonds via official channels – elusive mining and export licences, arbitrary and additional rent-extraction, relatively high tax rates, mandatory central bank reinvestments, all this with the hyperinflated Leone – effectively ensured that more diamonds were smuggled into neighboring Monrovia where the US dollar presided than sold locally, whether by state functionaries or ordinary citizens. Accordingly, linkages of causality often run in both directions.

As the 1990s have shown, corruption abetted by illegal diamond mining and smuggling has not only maimed good governance but precipitated state (of the Weberian type) collapse. Since the civil war began, more than fifty thousand people have been killed, two thirds the infrastructure destroyed, and approximately half the population of 4.7 million displaced, not to mention the number of amputees. “If there was one element in the country’s endowment that marked it out for destruction,” noted Clapham, “this was, paradoxically, its major source of wealth” (2001: 4). Yet, enmeshed in a vicious circle of state venality, diamonds and both state and non-state violence, the tolls of the decade-long rebel war all too starkly point to the most unsustainable of all resources – Sierra Leoneans themselves.

 

Notes

[1] Since its début CPI appearance in 2003, Sierra Leone’s position has been 116 out of 133 countries in 2003, 118 out of 145 in 2004, and 129 out of 158 just last year.

[2] For an analysis of a similar situation obtaining in Angola, see Jake H. Sherman, ‘Profit vs. Peace: The Clandestine Diamond Economy of Angola’, Journal of International Affairs 53.2 (Spring 2000): 699-719.

[3] Robert D. Kaplan, ‘The Coming Anarchy: How Scarcity, Crime, Overpopulation, Tribalism, and Disease Are Rapidly Destroying the Social Fabric of Our Planet’, Atlantic Monthly 273.2 (February 1994): 46.

[4] Though the Corruption Perceptions Index is hardly the only useful measure of corruption, the point here is that Sierra Leone has consistently belonged to the bottom percentile of surveyed countries.

[5] The infamous Vouchergate (1982), Squandergate (1984) and Milliongate (1987) episodes during the APC years are indicative of the depth and extent of this type of corruption; more recently, Anti-Corruption Commission (ACC) inquiries uncovered massive ministerial fraud involving such figures as Momoh Pujeh, Lawrence Kamara, Dr. Harry Will, Soluku Bockarie and others.

[6] Or in Reno’s formulation, “one that is constructed behind the façade 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”, 2000: 434.

[7] Sierra Leone is the world’s fourth largest producer of gem-grade diamonds, Kpundeh 1995: 29.

[8] Although a great number of ethnic groups inhabit the country, almost 70 percent of the entire population consists of only three: the Mendes in the south and some parts of the east, the Temnes in the north and in the capital, and the Limbas who inhabit the northern central regions.

[9] Indeed, they are the “most portable form of wealth known to man” in Campbell’s estimation, 2004: xxiii.

[10] Diamonds are normally found in two forms: as diamondiferous kimberlite, a type of volcanic rock that pipes deep into the earth and that requires sophisticated machinery to unearth, and more commonly on the surface as alluvial deposits washed out from exposed volcanic rock. The easy availability of the latter to just about anyone with basic mining tools made it virtually impossible for the government to regulate.

[11] The original 1932 agreement provided for a ninety-nine-year SLST monopoly on diamond mining and exploration in return for a constant 27.5 percent net profit tax, see Reno 1995: 47.

[12] In principle, the scheme’s objective was to “increase the living standards of our citizens through further Africanisation of our economy”, yet in reality, it turned out to be a distribution apparatus of state property (plot assignments) in exchange for loyalty to Pa Siakie, Reno 1995: 105-6.

[13] One former government company, the National Trading Company whose major shareholder was, again, Jamil, owned exclusive import rights for 87 commodities, see Kpundeh 1995: 24.

[14] Lebanon-based banks that agreed to supply Freetown with credit in exchange for diamonds as collateral included Beirut’s Byblos and Intra Banks, Jammal Bank, Bank of Credit and Commerce International and in 1984, the International Bank of Trade and Industry owned by Jamil himself, Reno 1995: 132.

[15] This was especially acute in light of the 1980 Organisation for African Unity (OAU) conference that Stevens was planning to host and to lavish $200m on, all the more significant in terms of its symbolic leadership prestige. Though Sierra Leone badly needed debt rescheduling as well as access to concessionary loans, multilateral creditor austerity programs largely involving privatization of parastatals threatened to bridle his control of state resources, see Reno 1995: 136-7.

[16] By “constructive nationalism”, Momoh meant “putting the country ahead of their [Sierra Leoneans’] own selfish interests”, Kpundeh, 1995: 25.

[17] Against the wider backdrop of the Arab-Israeli conflict, the cooptation of Israeli connections such as Kalmanowitch’s LIAT Construction and Finance Company and Guaz’s N. R. SCIPA Group seemed a politically apt choice for an anti-Lebanese bulwark.

[18] During the 1992 Beccles-Davies inquiry, a former cabinet Minister of Momoh’s reported that Momoh’s government had been “drenched in sectionalism, tribalism, favoritism, nepotism, incompetence, ineptitude, treachery, indolence, wining, dining and womanizing”, cited in Smith 1997: 60.

[19] The emergence of local-area civil defence forces (CDF) called kamajors attended the anarchy ensuing from the loss of government monopoly over military force and basic civilian security. The kamajoisia (pl.) constituted the third major element in the war alongside official government soldiers and the RUF rebels. Kaplan has perceptively observed that when a government loses its monopoly on armed force, the line separating war and crime disappears, 1994: 74.

[20] Indeed, an analysis of corruption involving the South-African Executive Outcomes during Strasser’s regime and the UK-based Sandline International during Kabbah’s political exile in Guinea would require a separate study elsewhere.

[21] Apart from recruiting illegal miners and disaffected youth in terror campaigns against political opponents, Stevens created a ten-thousand-men paramilitary force, the Internal Security Unit (“ISU” or popularly known as “I Shoot You”, later renamed the State Security Division) loyal to him only. This stood in stark contrast to the two-thousand-strong Sierra Leone Army, an institution Stevens preferred to keep emasculated in case of a military coup.

[22] Such were the “sobels”, i.e. soldiers by day, rebels by night.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s