Trade and Development Blog

The New York Times ran a piece Saturday entitled "Congo's Riches Plundered by Renegade troops."   Violence in the Congo may seem senseless to outsiders, but it is far from random.  More often than not violence is for control over valuable resources.  The picture above is of tin mine workers in rebel controlled territory in an area of forest where  Col. Samy Matumo, commander of a renegade brigade of army troops that controls this mineral-rich territory, is the master of every hilltop as far as the eye can see ....On paper, the exploration rights to this mine belong to a consortium of British and South African investors who say they will turn this perilous and exploitative operation into a safe, modern beacon of prosperity for Congo. But in practice, the consortium’s workers cannot even set foot on the mountain. Like a mafia, Colonel Matumo and his men extort, tax and appropriate at will, draining this vast operation, worth as much as $80 million a year ....the ore these ...

    There is no doubt that conflict can lower economic activity by raising insecurity and draining labor and talent out of productive activities and into military/criminal/redistributive activities. Economists have long recognized this possibility and pointed out that the likelihood of conflicts depends, amongst other things, on the relative returns.     Ray Fishman over at Slate summarizes a nice recent research paper by economists Oeindrila Dube and Juan Vargas which looks at the relationship between commodity prices and conflict in Colombia.  Fishman's  post is entitled "Will there be blood? Will falling commodity prices cause civil war?"  There are two opposing forces.  A few excerpts:  ...Poor farmers impoverished by lower crop prices may be eager recruits for rebel groups who can promise a better livelihood from stolen loot than what the soil can provide (not to mention protection from pillaging, since unaligned farmers may be easy prey for either rebels or governm...