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Press briefing transcript

WASHINGTON, June 15, 2000 — New World Bank research suggests that civil wars are more often fuelled by rebel groups competing with national governments for control of diamonds, coffee, and other valuable primary commodities, rather than by political, ethnic, or religious differences.

The new report, Economic Causes of Civil Conflict and their Implications for Policy (92K PDF), looked at 47 civil wars from 1960-1999 and shows that countries which earn around a quarter of their yearly GDP from the export of unprocessed commodities, face a far higher likelihood of civil war than countries with more diversified economies. Without exports of primary commodities such as gemstones or coffee, "ordinary countries are pretty safe from internal conflict, while when such exports are substantial, the society is highly dangerous," the report argues. "Primary commodities are thus a major part of the conflict story."

Since conflict prevention has so far paid little attention to these causes of conflict, there is considerable scope for both domestic and international policy to prevent civil conflict more effectively.

The report says rebel groups in vulnerable countries "loot" primary commodities to stay financially viable. This allows them to pay their large numbers of young, poorly-educated soldiers and to keep their rebellion alive domestically as well as internationally.

"Rebel groups need to meet a payroll without producing anything, so they prey on an economic activity that won't collapse under the weight of their predatory activities," says Paul Collier, the author of the new study and director of research for the World Bank's Development Economics Department. "Primary commodities are the most 'lootable' of national assets because they're tied to a single spot like a diamond mine or a coffee plantation. Once a mine shaft has been sunk, it's worth exploiting even if much of the anticipated profits are lost to the rebels. Once coffee trees have been planted, it's still worth harvesting their crop even if much of the coffee has to be surrendered. Thus, rebels don't kill off the activity or force it to shift elsewhere as would happen if manufacturing were the target."

Collier says the "looting" of such resources explains many current and former civil conflicts. In Sierra Leone, for example, the capture of rich diamond mines by rebels and the subsequent sale abroad, is one of the main reasons for renewed bloodshed in the war-stricken country. In Colombia, the rebel group FARC runs lucrative drugs and kidnapping businesses to finance their war against government forces, prompting Collier's speculation that without such illegal profits, believed to be more than US$700 million a year, the conflict could have been settled some time ago. Also, the Angolan rebel group, UNITA, is reputed to have accumulated more than US$4 billion in financial assets during its first war with government forces, some of which was then later used to start a second round of war. At least half of UNITA's war chest came from diamond mining.

While the most powerful risk factor for civil war is heavy national reliance on exports of primary commodities, other factors such as history, the size of diasporas, economic decline, and the ethnic and religious composition of a country also play a significant role.

Recent history is highly relevant

If a country has recently had a civil war, its risk of further conflict is much higher. Immediately after the end of hostilities there is a 40 percent chance of further conflict. This risk then falls at around one percentage point for each year of peace. However, this depends upon the size of the diaspora abroad and its ability to use large financial resources and publicity to keep one combatant or another active.

According to the report, if a given country has ended a civil war five years ago and wants to assess its chances of peace during the next five years, the size of its population living abroad will be crucial. If the country has an unusually large American diaspora its chances of conflict are 36 percent. If it has an unusually small diaspora its chances of conflict are only 6 percent. So, diasporas appear to make life for those left behind much more dangerous in post-conflict situations.

The report suggests there is little mystery about this effect. Diasporas sometimes harbor romanticized attachments to their group of origin and may nurse grievances as a form of asserting continued belonging. They are much richer than the people in their home country and so can afford to finance conflict. Above all, they do not have to suffer its consequences because they are not living in the country.

Economic Opportunities Also Matter.

Conflict is concentrated in countries with little education. The average country in the report's sample had only 45 percent of its young males in secondary education. A country which has ten percentage points more of its youths in schools - 55 percent instead of 45 percent - cuts its risk of conflict from 14 percent to around 10 percent. Conflict is more likely in countries with fast population growth: each percentage point on the rate of population growth raises the risk of conflict by around 2.5 percentage points. Conflict is also more likely in countries in economic decline. Each percentage point off the growth rate of per capita income raises the risk of conflict by around one percentage point.

The ethnic and religious composition of the country also matters. If there is one dominant ethnic group which constitutes between 45 and 90 percent of the population - enough to give it control, but not enough to make discrimination against a minority pointless - the risk of conflict doubles.

While ethnic dominance is a problem, ethnic and religious diversity does not make a society more dangerous - in fact, it makes it safer. A country which is ethnically and religiously homogenous is surprisingly dangerous - the risk is 23 percent. By comparison, a country with ethnic and religious diversity, equal to the maximum we find in our sample, has a risk of only around 3 percent. Other than in the fairly unusual case of dominance, diversity makes a society much safer.

"Civil wars are far more likely to be caused by economic opportunities than by grievance, and therefore certain rebel groups benefit from the conflict and have a very strong interest in initiating and sustaining it," says Collier. "Such wars from Sierra Leone to Colombia create profitable opportunities for a minority of people at the same time as they destroy them for the majority."

Greed Versus Grievance In Explaining Civil War

Popular perceptions of the causes of civil conflict often take at face value the explanations offered by rebel organizations. Civil war appears as an intense political contest, fueled by grievances which are so severe as to have burst the banks of normal political channels. Rebellions are thus interpreted as the ultimate protest movements, with their cadres struggling against oppression. In fact, most rebellions cannot be like this. When the main grievances - inequality, political repression, and ethnic and religious divisions - are measured objectively, they provide no explanatory power in predicting rebellion.

By contrast, economic characteristics - dependence on primary commodity exports, low average incomes, slow growth, and large diasporas - are all significant and powerful predictors of civil war. These, rather than objective grievances, are the risk factors which conflict prevention must reduce if it is to be successful.

But while objective grievances do not generate violent conflict, violent conflict generates subjective grievances. This is not just a by-product of conflict, but an essential activity of a rebel organization. Rebel military success depends upon motivating its soldiers to kill the enemy, and this requires indoctrination. Hence, by the end of a civil war, there is intense inter-group hatred based upon perceived grievances.

Policies for Conflict Prevention

Given that countries which earn more than a quarter of GDP from exports of natural resources are acutely at risk of civil conflict, the new report suggests five policies that could reduce this risk:

• Diversify the economy away from dependence upon primary commodities.
• Secondly, make looting rebels unpopular by transparently using the revenue from primary commodity exports to fund effective basic services such as primary education and rural health clinics.
• Third, enlisting the international community to make it more difficult for rebel groups to sell diamonds and other commodities which they loot.
• Fourth, generate rapid growth to counter the effects of low income and economic decline.
• Fifth, provide credible guarantees to protect minorities in societies where a single ethnic group dominates by entrenching their rights into a national constitution.

If governments and the international community can defuse the risk from its primary commodity exports, generate rapid growth, and provide credible guarantees to minorities, then the risk of conflict can be radically reduced. Conflict prevention can be achieved through large effort on a few risk factors.

Putting War-Torn Countries Back Together Again - The World Bank's Role

With its capacity for killing and maiming civilians and destroying property, civil war threatens the development prospects of many of the world's poorest countries, in many cases, rolling back decades of progress. More than four million people have been killed since 1989 in mostly internal conflicts. Millions of others have been displaced as refugees, and countless numbers of landmines remain scattered across the world, claiming more than 25,000 casualties a year.

Founded in 1944 to help re-build Europe after World War II, the World Bank has become increasingly involved in post-conflict reconstruction work in developing countries afflicted by war. For example, it is coordinating reconstruction aid for Kosovo, Bosnia, the Democratic Republic of the Congo, and the West Bank and Gaza. The Bank has also supported the re-integration of former combatants in Cambodia, Chad, Djibouti, Mozambique, and Uganda; and the re-integration of refugees and internally displaced people in Azerbaijan, Liberia, Rwanda, and Sierra Leone; and community development in Angola, Colombia, Eritrea, and Rwanda.

Damaged infrastructure has been rebuilt in Azerbaijan, Haiti, and Takjikistan, while de-mining programs have been financed in Azerbaijan, Bosnia, and Croatia, each of these interventions, along with reintegrating refugees and former combatants, have been carried out in partnership with the United Nations, the International Monetary Fund, regional development banks, bilateral donors, and non-governmental organizations.

Overall Bank responsibility for post-conflict reconstruction work lies with its country teams, which include experts in areas such as education, health, and infrastructure. To support its country teams, the Bank created a Post-Conflict Unit, which has seconded skilled staff from the International Committee of the Red Cross and other humanitarian organizations, to form a rapid-reaction group capable of responding quickly once hostilities in a given country cease.

Together with grants totaling US$21 million over the past two years from its Post-Conflict Fund, the Bank's post-conflict staff have shown that offering emergency funding in countries threatened by, or emerging from, conflict is vital to reinforce a fragile peace process, deter resurgent violence, and build a foundation for sustainable development.

"Fostering development in countries besieged by civil war is clearly not business as usual," says Nat Colletta, Manager of the World Bank's Post-Conflict Unit, and a social anthropologist with long ties to post-conflict work in Africa. "Rebuilding their physical assets like hospitals, bridges, and homes, and getting the macro economic framework right, may be necessary but peace needs more than this to survive. Re-knitting the social fabric of war-torn societies is the new critical ingredient for ensuring sustainable peace and development for millions of people who have lived through the hell of civil war."