Economic tools are key to tackling civil wars

The international community should try prevention rather than military or political intervention in addressing problems caused…

The international community should try prevention rather than military or political intervention in addressing problems caused by civil wars, writes Paul Collier.

A billion people - one out of six on the planet - live in a country that is mired in civil war or at high risk of falling into such a war. Women and children and other non-combatants in the war zones are the primary victims. The damage extends to rich countries, too, through hard drugs, disease, and terrorism. Yet civil wars can be prevented. International actions already proposed or under way could greatly reduce the number and length of these horrific yet avoidable conflicts.

The key characteristics of a country at high risk for war are neither political nor social, but economic. Democracy doesn't make such countries safer, and - despite all the fuss - ethnic diversity doesn't usually make them more dangerous. Countries are at high risk if they combine low income with economic stagnation and dependence on primary commodity exports. Even if they have maintained peace for a long time these countries can slip quickly into conflict, witness Cote d'Ivoire and Nepal.

Rebel leaders have it easy - recruitment is cheap, resources can be plundered, and governments are often incompetent. Once a country stumbles into war the economy deteriorates further and so does the balance of interests: entrepreneurs of violence do well out of war. Even if peace is restored, suspicion and these malign interests often tip the society back into war. There is a conflict trap - half of civil wars are now repeats.

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Why not leave them to fight it out among themselves? Ostrich look up! Civil wars have already fuelled three big global scourges. Illegal narcotics: civil wars account for 95 per cent of production. Producers need territory outside government control - a lucrative by-product of rebellion. AIDS: some epidemiologists trace the pandemic to an African civil war. A by-product of rebellion is rape and flight - ideal conditions for spreading infections. Al-Qaeda: it located in Afghanistan although its leaders weren't Afghani. Large-scale international terrorism needs the safe haven of unrecognised territory.

Civil wars also mess-up their regions. Refugees - millions of them - pick up diseases as they flee and carry them into neighbouring countries. On average, a thousand refugees increase malaria cases in countries of refuge by 1,400. The wars also have regional economic spillovers, partly because neighbours boost military spending in miniature arms races.

Rebel leaders style themselves as heroically fighting to usher in an era of liberty and prosperity. It seldom works out that way. Civil wars typically last for around seven years and leave a legacy of economic, social, and political ruin, much of which is highly persistent. The most likely prospect is of further conflict. The handful of leaders who determine these wars are not mindful of the true costs. Unless the international community intervenes, civil war will continue to be common.

What can the international community do? Until the end of the Cold War international action was a non-starter - each superpower supported its rebels. Since then the usual intervention has been military or political firefighting. This is expensive and risky. It is time to try prevention, and the key instruments are economic.

Here's one: rich natural resources are an opportunity (diamonds helped transform Botswana into one of the world's fastest growing economies) but they are also a risk (blood diamonds in Sierra Leone). We need to make the Botswana outcome more likely. Recent resource discoveries in several small, poor countries make action urgent. Effective intervention requires a three-part package: First, increase pressure for revenues to be well-used. Governments of resource-rich countries can be encouraged to report revenue and expenditures in a transparent manner.

The Chad-Cameroon pipeline initiative, which established local institutions to scrutinize prospective revenue, is a useful precedent.

Second, make it harder for rebel groups to plunder. The new Kimberley process for tracking diamonds is an example that could be replicated in timber. Curbing the extortion rackets common in oil will need a different approach.

Third, cushion price shocks. Commodity price crashes trigger severe recessions in exporting countries. Aid responds to earthquakes and droughts but not to commodity crashes, even though they can be a catalyst for war. We can use aid to insure poor, commodity-dependent countries against these price shocks.

This package - transparency and scrutiny of revenues; curbs on rebel finance; aid-insurance against shocks - already has wide support. Transparency is being urged by British Prime Minister Tony Blair, and scrutiny by the US; curbs on rebel finance appeal to the governments of developing countries rich in resources; and French President Jacques Chirac and the G24 have been urging action on commodity shocks. There is scope for much more but action around these promising initiatives would be a good place to start.

Paul Collier is a former Director of Development Research for the World Bank and the lead author of Breaking the Conflict Trap (Oxford University Press for the World Bank, May, 2003). He is currently Director of the Centre for the Study of African Economies at Oxford University and an advisor to the World Bank. This article first appeared in the International Herald Tribune.