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War, Poverty and Growth in Africa
Lessons from Sierra Leone
Victor A. B. Davies
Paper prepared for Centre for the Study of African Economies (CSAE) 5th Annual Conference
Understanding Poverty and Growth in Africa, St Catherine’s College, Oxford University,
March 18-19, 2002.
Abstract
Civil war, poverty and poor growth afflicts or threatens much of Africa. The paper
analyses common factors driving the three phenomena in Sierra Leone. The paper
examines the existing econometric evidence for Sierra Leone and political economy
models for insights. Subsequently the paper articulates four political economy drivers
of the three phenomena in Sierra Leone: a diamond curse, kleptocracy and political
repression from 1968-92, ethno-regional divisions, and an urban bias in government
policy. The paper assesses the consequences of the 1991-2001 civil war in relation to
these factors, discusses the conditions that facilitated peace and highlights postconflict challenges.
1.
INTRODUCTION
Civil war, poverty and poor growth afflicts or threatens much of Africa. Of the ten
countries ranking lowest on the UNDP 2001 Human Development Index - Mali,
Central African Republic, Chad, Guinea-Bissau, Mozambique, Ethiopia, Burkina
Faso, Burundi, Niger and Sierra Leone - all are from Africa and only Burkina Faso
has escaped civil conflict since independence. Many other African countries –
Rwanda, Liberia, Somalia, DRC, etc, have also been experiencing civil conflict,
widespread poverty and poor growth while others where growth has been poor and
poverty increasing also face the risk of civil conflict1.
This paper analyses factors accounting for the conjunction of civil war, poverty and
poor growth in Sierra Leone, one of the most dramatic cases of development failure in
Africa. At independence in 1961 Sierra Leone’s development prospects looked
encouraging. The country had a renowned educational system; a rich and diversified
natural resource base comprising diamonds and other minerals, and abundant
agricultural and marine resources; tourist attractions; and a seemingly stable
democracy. However after a moderate rate of 2.5% in the 1960s, per capita GDP
growth declined to 0.06% in the 1970s, turned negative –0.9% in the 1980s and
deteriorated further to –8% in the 1990s. Table 1 shows that by 1989 over 80% of the
population lived below the poverty line of 1US$ a day2; while the country ranked
bottom on the UNDP Human Development Index for 1991. Civil war broke out in
1991, raging till 2001 and claiming 25000-75000 lives while displacing nearly half of
the country’s population.
Table 1: War, Poverty and Growth Statistics
Population in poverty (1989)
81%
Average PCI growth
(1960-97)
-1%
War Displacement
(% of population)
40%
HDI Rank
(1991)
160/160
Sources: Population in Poverty: National Human Development Report for Sierra Leone 1996;
Average PCI growth: author’s calculation from Global Development Network (GDN) data; HDI rank:
Human Development Report 1991 (UNDP 1991);
The paper examines the existing econometric evidence for Sierra Leone and the
political economy literature for insights on the causes of civil war, poverty and poor
growth in Sierra Leone. Subsequently the paper articulates four political economy
drivers of the three phenomena: a diamond curse, kleptocracy and political repression
from 1968-92, ethno-regional divisions, and an urban bias in government policy. The
paper assesses the consequences of the civil war in relation to these factors, discusses
the conditions that facilitated peace and highlights post-conflict challenges.
1
We adopt the now standard Singer and Small’s (1982, 1994) definition of civil war as an internal
(intra-state) conflict fought by one or more identifiable rebel organizations against a government
resulting in at least 1000 battle-related deaths per year and with each side sustaining at least five
percent of the total casualties.
2
There are no comparable data on the incidence of poverty for earlier or subsequent periods.
2
2
HISTORICAL BACKGROUND
Sierra Leone became Africa’s first modern state when freed slaves from America,
Britain and elsewhere in Africa were resettled in the present day Freetown peninsular
from 1787 to the early nineteenth century by British philanthropists envisioning a
“Province of Freedom” serving as a beacon of Western civilization and Christianity in
Africa. By that time most of the country’s sixteen other “indigenous” ethnic groups
had already arrived from elsewhere in West Africa and occupied the hinterland. The
resettled freed slaves evolved as the Creole ethnic group with an admixture of
European and African culture. Freetown became a British Crown Colony in 1808
while the hinterland was annexed as a British Protectorate in 1896.
Political rivalries broke out between the Creoles accounting for only two percent of
the total population and the indigenous ethnic groups after the British allowed African
participation in colonial governance. However after independence in 1961, majority
rule politically vanquished the Creoles. Rivalries then intensified between the
indigenous ethnic groups initially united against the Creoles.
The Sierra Leone People’s Party (SLPP) ruling since independence came to be
perceived as biased towards the south-eastern regions, home to the Mendes
accounting for 30% of the population, and other smaller ethnic groups. The Northern
regions, home to the Temnes, also accounting for 30% of the population, and other
smaller ethnic groups, rallied round the All People’s Congress (APC) which won the
controversial general elections of 1967. A military coup prevented the APC from
forming a government. However, the military staged another coup in 1968 to instate
Siaka Stevens, leading to Stevens’ personalised, brutal, and corrupt dictatorship from
1968 to 1985 when he handed over to his hand-picked successor, General Joseph
Momoh. By that time the economy was gravitating towards collapse. General
Momoh’s weak administration accelerated the collapse. The Revolutionary United
Front (RUF) launched the rebel war in 1991 with the help of rebels fighting for
Charles Taylor in neighbouring Liberia. In 1992 the military overthrew the APC and
formed the National Provisional Ruling Council (NPRC).
President Tejan Kabbah and his SLPP were elected in 1996; were overthrown by the
military in alliance with the RUF in 1997; and reinstated by Nigerian-led West
African troops in 1998. The power-sharing Lomé Peace Accord was signed in July
1999, according Foday Sankoh, the RUF leader, the status of vice president and de
facto mines minister. The accord was abrogated when the RUF seized 500 UN
peacekeepers, using their weapons to attempt to seize power in May 2000. However,
after these setbacks, peace efforts began to pay off leading to completion of the
disarmament programme and a formal declaration of an end to the war in January
2002.
3
3
ECONOMETRIC EVIDENCE
The existing econometric evidence for Sierra Leone is on growth and civil war
initiation only. It is examined below.
3.1
Growth
The evidence is drawn from predictions generated for the Sierra Leone case study of
the African Economic Research Consortium (AERC)’s collaborative research project:
Explaining African Economic Growth Performance which is part of the Global
Development Network’s Global Growth Project. The predictions which were
generated by O’Connell and Ndulu (2000) using the system GMM and pooled fullspecification regression models and cross-country data, indicate the extent to which
cross-country growth determinants explain Sierra Leone’s 1960-97 growth
performance. It is useful to group the predictions around three growth episodes
discernible in Figure 1 showing per capita GDP growth which declined steadily from
a moderate 2.5% in 1960-70: Episode 1, to –0.5% in 1971-90: Episode 2, and to –8%
in 1991-97: Episode 3.
(a)
System GMM Model
The System GMM model is based on Hoeffler’s (2000) system-GMM estimates of the
augmented Solow model for 85 countries, using half decadal observations. The
dependent variable is growth of real GDP between initial year of current and
subsequent half decade. The independent variables are initial real GDP per capita,
investment/GDP (%) at constant 1985 international prices, population growth
measuring replacement investment, and educational attainment measured by initial
average years of schooling attained by the population aged 15 or older.
(b)
Pooled Full Specification Regression Model (PFSRM)
The PFSRM model contains eleven explanatory variables capturing initial conditions;
external shocks; geography; demography; political instability; and macroeconomic
policy (see Appendix 1). There are also six half-decadal time dummies for 1965-97.
4
Figure 1: Per Capita GDP Growth 1960-97
10
5
0
% growth
1960
1965
1970
1975
1980
1985
1990
-5
-10
-15
-20
-25
Table 2 shows that both models produce poor per capita GDP growth predictions for
Sierra Leone for the overall period 1960-97: System GMM -7.2%, and PFSRM: 2.2%, compared to actual growth of –1%. Both models also under-predict pre-war
growth by 9.9% and 2.5% for 1960-70 (episode 1); and by 6.1% and 2.2% for 197190 (episode 2); and over-predict growth during the war by 1.3% and 3.7% for 1990-97
(episode 3).
The civil war could explain the growth over-prediction for 1990-97. Only the PFSRM
incorporates a measure of political instability - defined as the number of
assassinations, revolutions and strikes – which by itself cannot capture the devastating
effects of the ten-year civil war. The pre-war growth under-prediction deviates from
the tendency for growth regressions to over-predict African growth.
Table 2: Fits and Residuals from Regression Models
Period
1960-69
1970-89
1990-97
Overall
average
1960-97
System GMM Model
Actual
Predicted
growth
growth
4.9
-4.9
-2.3
-8.4
-8.2
-6.9
-1.1
-7.2
Residual
9.9
6.1
-1.3
6.1
Pooled Full Specification Model
Actual
Predicted
Residual
growth
growth
2.1
-0.42
2.5
-0.1
-2.3
2.2
-7.0
-3.2
-3.7
-0.9
-2.2
1.3
1995
5
3.2
Civil War
The econometric evidence is drawn from the pioneering work of Collier and Hoeffler
(2001) who use a data set for 161 countries to attempt to predict, at the beginning of
five-year sub-periods, through a logit regression model the risk that a civil war will
start during the sub-period. The explanatory variables are characteristics at the start of
the sub-period covering: (i) economic variables- GDP per capita, growth rate of per
capita income, secondary school enrolment, the ratio of primary commodity exports
to GDP; (ii) political variables- ethnic and religious fractionalization, ethnic
polarization, a proxy for democracy, and income inequality; (iii) other variables
measuring demographic characteristics, and geography (forest cover, etc). Collier and
Hoeffler find: (i) a significant non-monotonic relationship between primary resource
dependence and the risk of civil war; (ii) an economically and statistically significant
relationship between the level, growth and structure of income and the risk of civil
war onset, with higher income reducing the risk; (iii) a negative relationship between
the risk of conflict and male secondary school enrolment, their second proxy for the
opportunity cost of rebel labour (the first is economic growth). Based on the Collier
and Hoeffler model, the probability of civil war outbreak was calculated for certain
countries for the ongoing World Bank Project: “The Economics of Crime and
Violence”. Table 3 gives the probabilities for Sierra Leone. Model 1uses secondary
school enrolment as the opportunity cost of rebel labour while Model 2 uses GDP
growth rate.
Table 3: The probability of civil war initiation (%)
Year
1970
1975
1980
1985
1990
1995
Probability (Model 1)
0.57
1.33
0.57
0.81
0.68
-
Probability (Model 2)
0.62
1.62
0.87
1.32
1.26
29.91
The Collier and Hoeffler model gives a low probability of 0.68% (Model 1) and
1.26% (Model 2) for the outbreak of war in 1990-94, the sub-period in which civil
war actually broke out-in 1991. Model 2 gives a high prediction of 29.9% for the
outbreak of war in 1995-99, implying that 1995, the first year in the sub-period, was a
year of peace. However, the war is generally regarded as a single continuous one from
1991-2001 with interludes in the fighting.
The above results on growth and civil war initiation in Sierra Leone infer a need to
adopt an alternative perspective to illuminate the two phenomena. We therefore turn
to political economy for insights on the two phenomena and poverty.
6
4.
A POLITICAL ECONOMY PERSPECTIVE
The political economy literature has attributed poor growth performance, poverty and
civil war in developing countries to factors such as a natural resource curse,
unconstrained elite, government manipulation of divisible benefits, government
predation, interest groups and ethnic fractionalisation.
The natural resource curse thesis articulated by Gelb (1988), Auty (1993), Lewis
(1984, 1989), Baran (1957), and others suggests that rather than facilitating
development, natural resources can pose development problems such as the Dutch
disease; unstable domestic demand which retards investment and growth; volatility
and poor price prediction; and pauperisation of labour. Furthermore, natural resources
can induce adoption of anti-developmental policies. In Collier and Hoeffler’s (2001)
empirical model of civil war initiation, natural resource dependence is the most
critical risk factor for rebellion. Two possible explanations are that (i) natural
resources provide the finance for staging rebellion irrespective of the rebellion’s
underlying motivation; (ii) the desire to loot the natural resources motivate rebellion.
Self-seeking unconstrained elite sacrificing public for personal interest, are often
blamed for poor policy (Bates 1981, 1983). Furthermore if the political structure gives
leaders a high discount rate, the elite could actually choose policies leading to
economic stagnation and decline (Olson 1982, Levi 1988, Ndulu and O’Connell
(1999). Relatedly, the divisible benefits perspective views market distortions and
other inefficiencies as part of a strategy by government to remain in power by
manipulating access to the divisible benefits-rents from economic distortions,
corruption, individual exceptions to general rules, etc- to induce and reward loyalty
and weaken and punish political opposition. On the extreme side, the predation thesis
holds that government may deliberately pursue anti-developmental policies if
economic development reduces the government’s hold on power (Robinson 1997a, b).
Ndulu and O’Connell (1999) suggest that this could explain the destructive behaviour
of dictators like Mobutu in Zaire, Idi Amin in Uganda and Sani Abacha in Nigeria.
The interest group hypothesis interprets public policy as government response to
political pressure exerted by organised interest groups. This explanation is consistent
with the urban bias in government policy articulated by Bates (1981). Urban groupstrade unions, businessmen, etc, tend to be organised and are therefore able to
articulate their interests. Rural communities on the other hand, face collective action
problems due to high transactions costs- they are far away from the seat of
government, often lack good communication and transport facilities, and are
themselves living in geographically dispersed communities. Fanon (1965) suggests
that such rural political and economic marginalization could lead to rural rebellion.
There is evidence that ethnic diversity has hurt Africa’s economic growth (Easterly
and Levine 1997, Alesina et al 1999). Ethnic differences can constrain collective
action. Ethnicity and religion can also influence policy choice and the risk of civil
war. Collier and Hoeffler (2001) posit a non-monotonic relationship between ethnic
diversity and civil war. The risk of civil war is high in ethnically polarised societies
such as Rwanda and Burundi where there are two ethnic groups. Politics could
become a winner take all contest which together with a sense of collective ethnic
group destiny, increase the risk of civil war. However in ethnically diverse societies
7
where no single tribe commands a large share of the population, the risk of civil war
would be low due to the difficulty of recruiting across ethnic groups.
With the above insights, we now articulate the following four principal political
economy factors as the main drivers of civil war, poverty, and poor growth in Sierra
Leone: a diamond curse, kleptocracy and political repression from 1968-92, ethnoregional divisions, and an urban-bias in government policy. Furthermore we assess
the consequences of the civil war in relation to the four factors.
The diamond curse
Diamonds were first discovered in Sierra Leone in the eastern Kono District in 1930.
Large-scale production started in 1935 with a mining and prospecting monopoly by
the Sierra Leone Selection Trust (SLST). Mining eventually spread to Tongo Field in
the eastern Kenema District and to parts of the southern Bo District, covering an area
of 19,000 km2, about a quarter of the country. With time the following factors
encouraged widespread illicit mining and smuggling: (i) the deposits were alluvialwhich could be mined using simple implements such as shovels, and were
geographically dispersed, constraining effective monitoring; (ii) diamond-buying
offices in neighbouring Liberia bought smuggled Sierra Leone diamonds; (iii) the
Sierra Leone diamonds were among the finest gemstones in the world, and much
sought after, and therefore had very high values relative to size.
In 1956 the Alluvial Mining Scheme granting individual mining and buying licenses
terminated the SLST monopoly. In 1971 the SLST was nationalised and renamed the
National Diamond Mining Company (NDMC) which was crippled within a few years
by widespread diamond theft, illicit mining and politicisation. During the war from
1991-2001, much of the mining was done by rebels, pro-government combatants and
“junior” mining companies exchanging arms and mercenary services to the
government for mining concessions. Post-war mining policy remains fundamentally
no different from the pre-war “liberal” policy3.
Massive smuggling impairs estimates of Sierra Leone’s diamond production.
Appendix 2 shows that official exports were highest during the 1960s and early
1970s, peaking at 2 million carats in 1960 and 1970. At that time it was believed that
half of the country’s diamond output was exported illegally. More recently, Sierra
Leone’s diamond production was estimated at US$70 million for 1999, of which
US$68.5 million worth of diamonds were exported illegally. (USAID 2001).
Diamonds have played a tremendous role in Sierra Leone’s political economy. On the
positive side, and mainly through the corporate sector, diamonds accounted for 15%
of GDP, 80% of foreign exchange earnings, and considerable tax revenues up to the
early 1970s. On the other hand, diamonds have induced severe economic and social
dislocations, constraining agricultural and overall economic growth; entrenching
poverty; and fostering crime, violence and civil war.
3
The policy is described as liberal because it does not effectively restrict entry into the diamond
industry in terms of industrial size or citizenship. Corruption vitiates the restriction of individual
artisanal mining licenses to Sierra Leoneans.
8
Diamonds have constrained economic growth first by luring rural labour, constraining
agriculture, and turning Sierra Leone from a net exporter to a net importer of rice ever
since the “diamond rush” of the 1950s when within three years (from 1953-56) an
additional 10% of the entire labour force (from 5000 to 75,000) took to illicit diamond
mining in Kono District. Conspiring with economic distortions, diamonds have also
criminalized and informalized economic activity, eroding the tax base and
government control of the economy, and precipitating economic collapse. Exchange
and price controls and exchange rate overvaluation in the 1970s and 80s produced a
lucrative underground trade involving smuggling diamonds to purchase scarce
essential imports for sale in blacks markets with the revenues in turn used to purchase
diamonds for smuggling. Consequently, tax revenues plummeted from 19% of GDP
in 1981 to 6% in 1990. To date the huge rents from the underground trade lure
investment from key growth-promoting sectors such as agriculture and manufacturing
while much of the diamond rents are not consumed or re-invested in the economy4.
Thus Sierra Leone’s investment/GDP ratio of 1.5% for 1961-89 at constant
international prices compared with 9.6% for SSA, has been among the lowest in the
world. Lastly, mining takes a heavy toll on infrastructure and the environment. Roads,
buildings and bridges are sometimes destroyed to dig for diamonds, while pits are left
unfilled, leaving Kono District one of the most underdeveloped regions of Sierra
Leone, despite its diamond wealth.
The “liberal” exploitation policy since the collapse of corporate mining in the early
1970s tends to exploit and pauperise the tens of thousands of Sierra Leoneans in the
industry, estimated at over 10% of the labour force before the war. The production
and marketing hierarchy runs downwards from exporters, to dealers and to diggers.
Dealers engage “gangs” of diggers to dig for diamonds based on a “supporter”tributor relationship rather than wage contract. Financial constraints, lack of external
marketing contacts, and a Lebanese cartel prevent most Sierra Leoneans from
becoming exporters and dealers who collect virtually all the rents. They end up mostly
as diggers practically indentured to their supporter who provides them food and
mining equipment, and pays land use fees.5 In return, the supporter values and “buys”
any diamond the diggers find and also deducts past, normally inflated, expenditures.
Digging for diamonds is a body- and soul-breaking exercise. Diggers dig pits of 30-40
feet in areas suspected of containing diamonds, collecting the gravel in mountainous
heaps which, after days of digging, they painstakingly wash and sieve through for
diamonds. More often than not the diggers do not find anything and get no reward.
They stay on, however, hoping for a diamond find that would one day produce wealth
for life. Worse still, sometimes the gravel heaps collapse into the pit, burying the
diggers. Sometimes also a lucky digger finding a diamond unnoticed will sell it
secretly elsewhere at a huge discount. Certain other factors further pauperise diggers:
widespread year-round unemployment; and seasonal unemployment for all diggersmining takes place during the dry season from November to April as heavy rains
outside this period hinder digging.
4
For instance most of the Lebanese who took over much of the formal and informal exploitation of
Sierra Leone’s diamonds after the collapse of corporate mining in the 1970s sympathized with, and
used some of the diamond rents to finance, one of the factions in the Lebanese civil war.
5
In the diamond mining areas and all other regions outside Freetown, the national capital, land is
communally owned and is under the custody of the Paramount Chief, the traditional ruler who
supervises land allocation on behalf of the community. The Paramount Chief receives some of the
diamond rent through land use fees and normally, a portion of the value of the diamond find.
9
Diamonds played a direct role in the rebel war. The alluvial and geographicallydispersed nature of Sierra Leone’s diamonds, economic distortions and exploitation
policy encouraged crime - illicit mining and smuggling – and violence as a corollary,
resulting in a large body of destitute, desperate and lawless illicit miners known as
san-san boys. Many of them including the RUF field commander, General Mosquito,
joined the rebellion expecting to access the illusory diamonds that had lured them to
the mining areas. Diamonds financed the rebellion. The value of “conflict diamonds”
exported by the RUF was estimated at US$20-70million a year for some years6.
Furthermore, diamonds produced a war-prolonging congruence of interests among the
belligerents who sometimes mined diamonds peaceably side by side, attacking
civilians to keep them off.
Towards the end of the 1990s the international community finally began to take
serious action to curb the trade in “conflict diamonds” fuelling African civil wars. The
UN has imposed a diamond certification scheme for Angola and Sierra Leone, and an
embargo on Liberian diamond exports much of which comes from Sierra Leone and
elsewhere. Sierra Leone appears to have achieved some limited success with the
certification scheme. Official diamond exports increased from US$1.5 million in
1999, to US$10 million in 2000, the year of implementation; although corruption
permitted certification of conflict diamonds as non-conflict under the scheme.
However, with the war ended, conflict diamonds will cease to be an issue for Sierra
Leone. The challenge will be to curb the illicit diamond trade and use the diamond
resources to reduce poverty and promote economic growth.
Other diamond-producing African countries such as Namibia, South Africa and
Botswana have been spared the diamond curse partly because their diamonds come
from kimberlite deposits which require sophisticated mining equipment and
techniques. The high overhead costs create a natural monopoly and preclude illicit
mining. Furthermore, in Botswana which stands in sharp contrast to Sierra Leone as
having achieved one of the highest growth rates in the world, the ethos and political
survival techniques of the governing elite differed from the African norm (Clapham
2001). The governing elite in Botswana, unlike those in Sierra Leone (as shown
below), invested in the state which in turn consolidated support for them.
What should Sierra Leone do to end its diamond curse? Stop exploiting the
diamonds? This would be unfeasible as the policing agents would end up mining and
smuggling the diamonds. The following arguments favour corporate monopolisitic or
oligopolistic exploitation as the first-best option: (i) providing security for, or
monitoring the mining areas is impossible if there is a large number of small
operators; (ii) historically, corporate exploitation under the SLST, unlike noncorporate mining, generated considerable benefits for the economy through taxes,
official foreign currency inflows and wage employment.
Unfortunately some key policy-makers - political leaders - are among those privately
exploiting the diamonds and are therefore likely to continue to undermine any such
6
Much of the RUF diamond revenues were probably not spent on financing the war. Evidence suggests
that President Charles of Liberia (the main ally of the RUF), RUF leader Foday Sankoh and other RUF
top brass pocketed much of the revenues. The RUF also apparently sold its diamonds at a huge
discount. Nevertheless the RUF still had a large resource base to finance the rebellion.
10
first-best reform measures. Fierce resistance is also to be expected from the powerful
Lebanese cartel dominating the industry. Plausible excuses have been found for not
implementing the first-best option: (i) loss of “employment” and (ii) there are no
takers. Regarding the loss of employment argument, in reality, most of the tens of
thousands of Sierra Leoneans in the industry who are mostly diggers, are destitute and
are no better off than in agriculture which they abandoned for diamond mining. The
reform would actually generate wage employment for some. Regarding the no takers
excuse, the war and pre-war state of quasi-anarchy in the industry, understandably,
discouraged credible takers who could emerge in the post-war era if genuinely sought.
Second-best alternatives would also consist in encouraging large-scale exploitation
amidst the plethora of small-scale operators.
Kleptocracy and political repression: 1968-92
Governments seek to remain in power as long as possible. In Africa where
governance institutions are weak and malleable, the government’s ethos and survival
strategy significantly influence a country’s economic and political destiny. In Sierra
Leone, kleptocracy and political repression, Siaka Stevens’ ethos and survival strategy
from 1968-85, damaged growth, entrenched poverty; induced state collapse and civil
war, and the demise of his All People’s Congress (APC) itself.
Stevens practised kleptocracy for self-enrichment and to induce loyalty. He
engineered a perverse attitudinal shift among the populace, institutionalising the selfseeking ethos “oosie dem tie cow nar dae ee go eat”- a cow grazes wherever it is
tethered. Unchecked state-sponsored corruption ensued, practised through a
patrimonial system of rationed favours; public theft; illicit payments and bribes;
administrative allocation of scarce basic commodities; and manipulation of access to
diamond and other natural resources, and rents from economic distortions in foreign
currency, financial and commodity markets (Davies 2000). Through corruption and
violence, Stevens destroyed or vitiated agencies of restraint and institutions that could
pose a challenge - the judiciary, civil society, local government bodies and above all
the military. The populace retreated into a culture of fear, silence and complicity,
culminating in one party rule from 1978.
Stevens paralysed the all-important corporate diamond sector. First he politicised
diamonds in the 1967 general elections. Stevens promised illicit miners his support if
elected and got their votes in return. The APC electoral victory led to an explosion of
illicit mining on the corporate SLST territory and everywhere else. Second Stevens
allegedly looted diamonds. He and his Afro-Lebanese collaborator, Jamil Sahid
Mohamed, allegedly masterminded the theft of the SLST’s November 1969 monthly
diamond haul valued locally at US$3.4 million and resold it for US$10 million in
Europe. Subsequently Stevens nationalised the SLST and encouraged widespread
looting of its diamonds, leading to the collapse of corporate mining in the 1970s.
Stevens’ ethos and survival strategy induced economic and political atrophy.
Kleptocracy and its economic complements-massive market distortions; excessive
seigniorage and unsustainable foreign borrowing, etc – inflicted huge welfare costs.
Manipulation and looting of diamond resources led to the collapse of official diamond
exports and criminalisation of economic activity which in turn eroded the tax base and
government control of the economy, weakening the state and crippling its capacity to
provide basic social services and security (as discussed under the diamond curse
11
above). Growing unemployment and disillusionment among youths, and Stevens’ use
of socially deprived youths motivated with dangerous drugs and often-false promises
of employment to unleash violence, produced the recruitment base for the rebel
movement. Recruitment into the military based on loyalty to Stevens and the APC
eroded morale and discipline which would prolong the rebel war by producing a weak
government military response to it. Political repression radicalised university students,
Steven’s main source of opposition. Some left in 1987 for military training in Libya to
overthrow the APC, leading to the formation of the rebel movement (Abdullah 1997).
The APC itself was one of the casualties of the war. Soldiers despatched to an initially
distant war front were virtually abandoned by the corrupt military high command who
squandered most of the war funds including the soldiers’ salaries. At the same time an
extremely complacent General Joseph Momoh, Stevens’ handpicked successor, had
virtually abandoned state security. When the disillusioned soldiers from the war front
marched to Freetown to protest their neglect, they discovered that security was lax
and easily overthrew the government.
The APC’s self-destructive ethos and survival strategy poses a conundrum: Why
should a rational government do things that ultimately induce its own demise? This
contrasts with the famous Bates (1981) conundrum: “Why should reasonable men
adopt policies that have harmful consequences for the societies they govern”? One
explanation is the inability to attain the optimal level of corruption. Up to a certain
level, corruption reinforces a government’s hold on power by inducing loyalty and
weakening opposition. Beyond that optimal level, however, corruption can engender a
tragedy of the commons, denying the government of the resources to govern, leading
to state collapse. It is easier to target the optimal level if corruption is coordinated. If
it is not, as in the extreme case of kleptocracy such as under Siaka Stevens, the
optimal level of corruption can easily be surpassed as members of the government
adopt self-seeking, rivalrous behaviour. Coordination is more difficult if the
corruption resources come from natural resources that can be looted before the state
collects the rents, as this would induce attempts to do so, as with Sierra Leone’s
alluvial diamonds.
Another explanation is the non-contemporaneity of corruption and its adverse
consequences. The APC complemented corruption with economic measures such as
seigniorage, massive government intervention in the economy, and unsustainable
foreign borrowing whose adverse consequences were passed on, at least partially, to
future generations.
This leads to the third explanation, the government’s time horizon which varies
positively with its life expectancy (as a government) and apparently, as in the case of
the APC, the life expectancy of the head of state. A shorter time horizon would lead to
policies that discount the future and even induce state collapse in favour of short-term
benefits. The APC faced a volatile and uncertain political environment. It came to
power through a narrow election victory based on opportunistic promises to illicit
diamond miners and clever exploitation of ethno-regional divisions, circumstances
which could also lead to its defeat in future elections. Moreover, there was always the
prospect of a coup from the military which had already staged three successful coups
between 1967-68. These factors apparently shortened the APC’s time horizon.
Furthermore, although his true age was never known, Siaka Stevens was believed to
12
be in his late 60s and thus already aging when his government came to power. This
apparently explains why his behaviour did not reflect any concern for the distant
future. Stevens retired in 1985 and died in 1987. Civil war broke out in 1991, and the
APC was overthrown in 1992.
Sierra Leone has come a long way from the days of APC kleptocracy and political
repression, and the subsequent military dictatorship from 1992-96. In 1996 the
country returned to democracy with the election of President Kabbah. The war
obstructed adherence to some of the basic conditions for the conduct of free and fair
elections, leading to considerable controversy over the election results which the RUF
subsequently articulated as one of its grievances. However, democratic institutions are
gradually emerging-vibrant civil society and free speech. General and presidential
elections scheduled for May 2002, to be contested by the RUF, pose a potential risk
for peace. Violence could erupt particularly from former combatants-the RUF or progovernment civil defence militias. On the other hand, free and fair elections could
further consolidate the peace by, among other things, indicating to the RUF and other
parties a peaceful means to access power or influence policy.
Ethno-regional divisions
Ethno-regional divisions have bedevilled Sierra Leone’s recent political history. Predating independence, the first divisions were between the Creoles, constituting 2% of
the population, and living in the colony-the Western Area of Freetown and its
environs; and the other 15 “indigenous” ethnic groups in the Protectorate.
Independence and majority rule politically handicapped the Creoles, diminishing the
significance of the “Creole-Protectorate” divide; and generated a north-southeast
divide with people from each region accounting for roughly half the total population.
The ruling SLPP became associated with the south-eastern regions, home to the
Mendes comprising 30% of the population, and affiliated smaller ethnic groups; and
the APC with the northern regions-home to the Temnes also comprising 30% of the
population, and affiliated smaller ethnic groups.
The ethno-regional divisions generated distributional grievances. The better-educated
Creoles initially constituted the core of the public service and professional elite, to the
discontent of the other ethnic groups. In the location of development projects the APC
apparently discriminated against the southeastern regions, the country’s breadbasket
producing virtually all exports–diamonds, rutile, bauxite, cocoa and coffee. These
regions also bore the brunt of anti-agricultural policy under the APC such as exchange
rate overvaluation, subsidies on food imports, and the dismantling of the railway
which was pivotal to rural agriculture. Northerners often complain about
discrimination with regard to economic opportunities by the current ruling SLPP.
History and colonialism are to blame for the Creole-Protectorate divide. History
teaches that coexistence of settlers and “indigenous” people is naturally difficult. In
neighbouring Liberia the minority Americo-Liberian settlers monopolised power for
over a century, before they were violently overthrown by Samuel Doe in 1980.
Colonialism aggravated the problem in Sierra Leone by keeping the Creoles and
indigenous people well apart for well over a century through direct colonial rule for
the Creoles in the colony, and indirect rule for the Protectorate after its annexation in
1896, and then suddenly creating an environment for political competition between
them-allocation of a limited number of seats to Africans in the colonial legislative
13
council. Furthermore the rivalries were apparently deliberately fuelled by the colonial
administration which sometimes perceived the educated Creoles as a threat to its
authority.
Ethno-regional divisions have engendered poor political leadership and its damaging
consequences-the APC won the 1967 general elections partly because of the ethnoregional divide. The SLPP won most of the seats in the southern and eastern regions,
except for Kono District in the east, home to the Konos and a large immigrant
diamond mining community (including Temnes from the north). The APC won most
of the seats in the northern regions, and the Western Area where the Creoles
supported the APC out of disaffection with their pre-independence rivals - the SLPP.
President Tejan Kabbah’s election in 1996 was also a direct consequence of the
ethno-regional rivalries. A northerner, Kabbah was chosen as the SLPP’s presidential
candidate principally to counter accusations of southeastern dominance and attract
northern votes. However, Sierra Leone has had to pay a price for this. Lacking a
political base in the SLPP, Kabbah is often forced to make costly trade-offs for
political support. Furthermore Kabbah’s frequently criticised leadership ability (see
for instance Clapham 2001, Davies 2000) was not an issue in the elections.
Ethno-regional rivalries engendered political instability before the war. The coup by
Brigadier Lansana, a Mende, in 1967 after the APC electoral victory, was perceived
by northerners as an attempt to prevent power shifting to the north. This led to an
unstable period of high ethno-regional tensions and rumours that Siaka Stevens was
training rebels in neighbouring Guinea. Possible civil war was averted when Siaka
Stevens was instated in 1968.
Although the rebel war was not an ethnic war, ethno-regional undercurrents aided it.
Widespread distributional and political grievances forced many people from the
southeastern regions where the rebellion started to voluntarily enlist in the rebel
movement at the outset. The APC was often accused of complacency in prosecuting
the war in order to dis-enfranchise the anti-APC southeastern regions when the war
was initially confined to those regions. Northerners often viewed the government war
effort under the SLPP with suspicion.
The ethno-regional divisions have outlived the war. Political parties are still largely
defined along ethnic lines. The huge costs and organisational difficulties involved in
the formation of political parties, and deep-seated ethnically based loyalty to the older
parties, have prevented the emergence of strong new parties that would break the
ethno-regional divide. The ruling SLPP, and APC, and their ethno-regional cleavages,
appear set to polarize post-conflict politics in Sierra Leone.
Despite the ethno-regional rivalries, Sierra Leoneans are not deeply divided along
ethnic and regional lines. In urban areas, marriage, and other forms of socialisation
have fostered inter-ethnic integration. However opportunistic politicians often
cleverly arouse ethno-regional sentiments over politics, a ploy facilitated by
widespread illiteracy reflected in an adult illiteracy rate of 65%. In the rural areas the
scope for cross-ethnic social interaction is much more limited. People live in “ethnic
seclusion” - small, ethnically homogenous communities - separated by long distances,
poor roads and absence of modern communications facilities. Creating opportunities
for socialisation – access to education, and improved transport and communication
14
facilities - will facilitate cross-ethnic integration. Increased access to education will
also improve people’s ability to make more informed political decisions.
Urban bias
Government policy has historically been urban-biased. Modern amenities–electricity,
telecommunications facilities, pipe-borne water supply, etc, have been located only in
the urban areas especially Freetown, the national capital, while some 90% of the prewar population lived in rural areas. Prior to the economic liberalization of the early
1990s, the government subsidized the mainly urban-consumed petroleum and rice
imports; while taxing rural agriculture implicitly through exchange rate overvaluation
and price control, and explicitly through export taxes. The dismantling in the early
1970s of the railway, the main mode of transporting rural agricultural produce, and
subsequent failure to develop an alternative rural road transport network, further
marginalized rural Sierra Leone.
The reasons for the urban bias are that first, both the pre- and post- independence elite
were urban-based and had no rural interests. Second is fear of politically volatile
urban groups. For instance, in 1977, students at the University of Sierra Leone’s
Freetown-based Fourah Bay College campus, the seedbed for anti-APC activity,
initiated nationwide anti-Stevens riots which almost toppled the APC. Third, overcentralization of power in Freetown, to the detriment of the rural areas, was part of the
survival strategy of the APC. Thus the APC abolished traditional government
structures such as chiefdom and district councils, and subjugated traditional leaders,
the support base of the opposition SLPP, by arbitrarily appointing and dismissing
them.
The urban bias constrained agriculture and other rural economic activity, undermining
growth and entrenching poverty. Subsidies on rice imports, explicit and implicit
taxation of agriculture, and lack of infrastructure, marginalized rural economic
activity, depressing rural incomes. Consequently the rural population retreated further
into low-income subsistence; migrated to towns and diamond-mining areas; or went
underground, shrinking the formal economy.
The urban bias aided the war. First it encouraged rural-urban migration, increasing
urban unemployment and creating a recruitment base for the rebel movement. Second,
arbitrary dismissal and appointment of traditional leaders led to human rights abuses
by puppet chiefs and widespread grievances, motivating recruitment into the rebel
movement for revenge. Third, apathy towards an initial “rural war” by government
and the influential Freetown community allowed the war to escalate to urban areas.
Fourth, rural isolation provided a pretext or justification for the rebellion and
motivated rural enlistment in the rebel movement.
The war has disproportionately affected the rural areas where much of the fighting
took place and which the rebels held for much longer than the urban areas. The result
has been large-scale displacement towards the urban areas. The population of
Freetown increased from about 500,000 before the war, to 2,000,000. Although most
of the displaced people are unemployed and living in extremely dire conditions, the
urban lure may discourage them from returning to the rural areas. A major postconflict challenge is encouraging such a return.
15
The economic liberalization measures under the structural adjustment programme
since 1989 have removed some of the policy-induced urban bias-exchange rate
overvaluation and explicit subsidies on food and petroleum imports. However,
modern amenities are still available only in the urban areas especially Freetown.
5
FROM WAR TO PEACE
The above four factors fostered poor growth and poverty in Sierra Leone and
generated conditions propitious for civil war: quasi-state collapse and extreme
poverty. The actual initiation of the war owes much to the youth crisis which the
above factors engendered, and external instigation. Youths bore the brunt of the
economic and political atrophy of the 1980s. Youths newly entering the labour market
were those most severely affected by growing unemployment. Perceiving the corrupt
and repressive “system” as the source of their predicament, they became increasingly
rebellious, spearheading anti-government agitations, and resorting increasingly to
crime and drugs. They found inspiration in revolutionary exhortations such as reggae
music (particularly Bob Marley), and Colonel Gaddafi’s Green Book. By the mid
1980s Sierra Leone’s marginalized youths constituted a very large pool of potential
rebels.
External support from Libya galvanised the marginalized youths towards rebellion.
Libya provided training in Libya and finance aimed at overthrowing the APC for
university students and other youths. Foday Sankoh, the RUF leader, and Charles
Taylor of Liberia also received training in Libya. Gaddafi’s motive was to spread
Libyan influence in Africa. Charles Taylor unleashed civil war in Liberia in 1989.
Subsequently he provided a base in Liberia and some Liberian and Burkinabe rebels
to unleash civil war in Sierra Leone in March 1991.
Thus, although economic motives (diamonds) became prominent later on, the
rebellion was seemingly motivated by a desire to overthrow a kleptocratic, repressive
and dysfunctional government and triggered with external support. Collier (1999) has
articulated three “problems” militating against the initiation of politically motivated
rebellion: collective action, time-inconsistency and adding up. External support
obviated these problems in the case of the Sierra Leone civil war. Once ignited the
rebellion degenerated into a looting spree and was largely sustained by diamonds. In
other African countries where economic and political conditions have been as dire as
in Sierra Leone at the onset of war, lack of external support, which activates Collier’s
three problems, could explain war avoidance.
How was peace finally attained? After the failed Abidjan and Lomé Peace Accords of
1996 and 1999, several factors eventually facilitated an end to the war. First was the
weakening of the RUF’s military capability by British government troops in Sierra
Leone; and Guinean troops when the RUF forayed into neighbouring Guinea to
support Guinean rebels. The British also began to restructure the army and police.
Second was a strengthening of the UN peacekeeping force UNAMSIL, after its initial
debacle. UNAMSIL began to respond robustly to RUF attacks. Third was UN
sanctions on Liberia forcing it to reduce its arms-for-diamonds support for the RUF.
The existing arms embargo was extended to include an embargo on diamond exports
and a travel ban for some government officials and political leaders. Fourth was war
16
fatigue. It was widely believed that the rebels were tired of fighting and living in the
bush. Some were believed to have amassed wealth and were looking forward to
returning to civil society to enjoy it. Fifth was the incarceration and apparent
replacement of the intransigent RUF leader, Foday Sankoh. These developments
apparently persuaded the RUF to agree and honour a peace plan. Thus the
disarmament programme was completed in January 2002 and the war was declared
officially over at that time.
6.
CONCLUSION
Four factors largely account for the conjunction of civil war, poverty and poor growth
in Sierra Leone: a diamond curse, kleptocracy and political repression under the APC
from 1968-92, ethno-regional divisions and an urban bias in government policy.
These factors engendered a youth crisis, producing a large pool of potential rebels.
Libya provided training and finance, and Liberia a base to launch the rebellion. The
attainment of peace owes much to British military intervention and the RUF’s
disastrous foray into Guinea which weakened the RUF military capability;
strengthening of the UN peacekeeping force; UN sanctions on Liberia; RUF war
fatigue; and the incarceration of Foday Sankoh, the RUF leader.
Some of the common factors that drove civil war, poverty and poor growth have been
attenuated. Kleptocracy and political repression from 1968-92 have given way to a
fledgling democracy since 1996 which offers prospects for reducing corruption, and
improving human rights and good governance. The liberalisation measures of the
structural adjustment programme launched in 1989 have reduced economic distortions
and the scope for using them for political objectives, and the urban bias in
government policy. However, other common drivers endure-diamonds and ethnoregional divisions.
After a decade of pernicious civil war, Sierra Leone faces enormous post-conflict
challenges. An urgent challenge is to rebuild the state as the first step towards
sustaining the peace, rekindling growth and reducing poverty. Considerable effort has
been made with the help of the international community led by Britain, the former
colonial power. Government authority is being re-established in former rebel zones
while the army, police and other key institutions for good governance are being
rebuilt. Other immediate challenges include national reconciliation, resettlement of
displaced persons and refugees, reconstruction of structures and relaunch of economic
activity.
Proper management of diamonds is crucial for peace, and will provide substantial
resources for reducing poverty and stimulating growth. The end of the war shifts the
focus from conflict diamonds to illicit diamonds. The diamond curse is not yet over
for Sierra Leone, however. Self-seeking political interests are motivating the reestablishment of pre-war exploitation systems that entrenched poverty, constrained
growth, fostered crime and violence, and induced and sustained civil war.
Implementation of first-best corporate monopolistic or oligopolistic exploitation
policy therefore remains unlikely. Diversification away from diamond mining will be
a key element of any long-term development strategy for Sierra Leone.
17
Other challenges include a looming AIDS pandemic due to widespread sexual assault,
large-scale movement of people, and increased poverty forcing recourse to
commercial sex as a coping strategy. Decentralisation will promote rural development
and reduce the risk of conflict by giving the rural population a stake in the state.
Sierra Leone will have to grapple with a youth crisis. Widespread drug abuse, high
unemployment, acculturation to violence, inappropriate educational institutions
emphasising the wrong type of education are the key issues in the youth crisis.
The role of Britain, the former colonial power, in ending the war and rebuilding state
institutions-the army, the police, etc, has led to calls for, or fears about, a
recolonization of Sierra Leone. These far-fetched sentiments underlie the critical role
of the international community in facilitating a successful post-conflict transitionproviding finance and technical assistance, serving as an agency of restraint, and
policing rogue states in the region. Above all the continued presence of the UN
peacekeeping troops will be crucial to sustain the peace.
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19
Appendix 1: Classification of variables in pooled full specification model
Variable
Definition
Dependent Average growth rate of real GDP per
variable
capita
dyn
Conditioning variables
Base variables
ln (ynin)
Log of real GDP per capita in initial
year of halfdecade.
lifx
Life expectancy at birth, interpolated
to the initial year of the half decade.
adep
Age dependency ratio = average ratio
of population between 15 and 65 to
total population
Growth in potential labour force
participation = average difference
between growth rate of population
between 15 and 65 and growth rate of
total population.
Terms of trade shock = initial share of
exports to GDP, multiplied by the
average percentage difference between
the terms of trade in each year of the
half decade and the terms of trade in
the initial year of the halfdecade.
Trading partner growth rate = average
growth rate of real GDP per capita
among trading partners, weighted by
shares in total trade.
Dummy variable equal to 1 for
landlocked countries and zero
otherwise.
dlfp
ttc1
dynt
lloc
Units
percent
Source
World Bank.
(ynin)
chained
real dollars at
1985
international
prices
Years
PWT5.6 as extended in
GDN dataset
percent
percent
Population data from WDI
99.
percent
Export share data from
WDI99. Terms of trade
data from GDN dataset,
extended using data from
S.
Collins
and
B.
Bosworth.
GDN dataset
Percent
GDN dataset.
Political instability
pin
Political instability index = average
number of assassinations, revolutions
and strikes.
GDN dataset;
Policy variables
infl
CPI inflation rate.
Percent
bmpl
Gxbx
Percent
Percent
Black market premium
Government spending exclusive of
defense and education.
GDN
dataset.
Observations
linearly
interpolated to initial year
of half decade.
WDI 99
GDN dataset, extended
using
national
GDP
deflators from IMF’s IFS
GDN dataset.
Barro/Lee 1994, extended
using IMF government
spending data from GDN
dataset.
20
Appendix 2: Official Diamond Exports
Year
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
1973
1972
1971
1970
1969
1968
1967
1966
1965
1964
1963
1962
1961
1960
Official
Output
(‘000
carats)
9.3
8.5
70
272
216
266
174
201
329
150
116
48
339*
361*
349
189
352
303
304
594
190
317
767
1084
1377
2000.0
1935.5
1521.6
1430.0
1455.0
1,486.5
1,488.7
1,408.1
2000
*for July to December of stated year and January to June of previous year.