Internal conflict and wars have seriously affected Africa’s development and caused immense suffering to its population. One of the bloodiest wars since World War II took place in the Great Lakes region. The Democratic Republic of the Congo (DRC), the third-largest country in Africa, had the sad privilege to be the main battlefield of the conflicts, which involved seven neighboring countries. This war, which some labeled as the “Third World War,” directly or indirectly affected about 100 million people. However, since early 2001, under the leadership of its new president, Joseph Kabila, the DRC has made remarkable progress in moving from conflict to reconstruction.
The collapse of the expenditure control system and revenue collection, and the resulting monetization of an uncontrolled budgetary deficit, were identified as the primary source of the vicious circle of hyperinflation and falling currency that plagued the Democratic Republic of the Congo (DRC) economy until the end of 2000.
As described in Chapter 2, by late 2000 the Democratic Republic of the Congo (DRC) was facing a situation of widespread conflict and war, which was compounding the negative effects of a decades-long decline in output resulting from economic mismanagement, corruption, and civil strife.1 To reverse that trend, in early 2001 the new government decided to make a U-turn in its economic policies, including by redefining the role of the state from predator to facilitator of private sector–led activity. To achieve its goal, the government designed a well-thought-out road map of comprehensive and far-reaching structural reforms with the help of the International Monetary Fund and the World Bank; the former concentrated on macroeconomic structural measures and the latter on most other areas.2 The IMF supported the government’s measures through a staff-monitored program (SMP) that covered the period June 1, 2001–March 31, 2002 and, since July 2002, through a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF). World Bank support took the form of six credits/projects, as described in Sections III and IV.
This chapter reviews efforts regarding the disarmament, demobilization, and reintegration (DDR) of ex-combatants in the Democratic Republic of the Congo (DRC) between 1997 and 2003. Reflecting the evolving politico-military situation and the shifting priorities in terms of DDR, the chapter contains the following sections. Section I analyzes the period 1997–99, from the takeover of power and the challenge of demobilizing soldiers of the army of the ousted regime to the reorientation of the DDR strategy in response to the signing of the Lusaka cease-fire agreement. Section II covers the period 1999–2001, focusing on small-scale endeavors that kept DDR on the agenda of government and the international community pending the political resolution of the Congolese conflict. Section III examines the period 2001–03 during which the international community, with an unprecedented regional approach to DDR, intensified its efforts to respond to the ever more complex situation until the government finally assumed principal responsibility for DDR in the country. The chapter closes with Section IV, which reflects on lessons learned from this multiyear process for the national DDR program in the DRC, and for similar programs elsewhere.
This paper describes that in developing countries, the moves toward more flexible exchange rate arrangements and liberalization of exchange controls often occurred in the context of comprehensive macroeconomic adjustment programs supported by the IMF. These programs featured a broad range of policy actions, including an increasing emphasis on structural reforms aimed at improving resource allocation and enhancing the supply response of the economy. With respect to restrictive systems, the trend toward liberalization of nontrade current and capital transactions continues, primarily because it is seen as ineffective, even counterproductive, to try to control such financial flows. This trend contrasts with trade where it appears that some major participants have been awaiting the outcome of the Uruguay Round before further reducing restrictions. A single currency peg has been the exchange arrangement most frequently used by developing countries, of which over one third currently have such an arrangement. This type of peg has the merit of being easy to administer and is generally chosen by countries that have a large share of foreign exchange transactions in the currency chosen as the peg.
The Democratic Republic of the Congo (DRC) has made remarkable progress in the past three years to extricate itself from one of the bloodiest wars since World War II. The war had devastating effects on the population, which had already suffered from the plundering of the country’s vast natural resources during the colonial period and under the corrupt regime of President Mobutu. The DRC is rated today as one of the poorest countries in the world, a tragic irony and infamous episode in human history, characterized by the globalization of greed.
The problems affecting countries in conflict have been the focus of increased attention in recent years, with particular emphasis on the impact of civil wars, the incidence of which is now 10 times higher than that of international wars (Collier and Hoeffler, 2002a). The issue has attracted special attention on the African continent, where a majority of civil wars have been occurring, and directly or indirectly affect more than one in three African people. Addressing the issue of conflict has thus become an essential challenge for the leaders of the continent and external partners in the context of the New Partnership for Africa’s Development, as the restoration of stability to countries affected by conflict is increasingly perceived as a pillar of economic development, not only for the countries themselves, but also for neighboring countries and the region as a whole.
We have always maintained that the conflict in Sierra Leone is not about ideological, tribal or regional differences. It has nothing to do with the so-called problem of marginalized youths or, as some political commentators have characterized it, an uprising by rural poor against the urban elite. The root of the conflict is diamonds, diamonds, and diamonds.
Poverty and armed conflict are closely connected, so the poorest countries face the prospect of being caught in a “conflict trap” of poverty and recurring conflict (Collier and others, 2003). One group of countries particularly at risk for conflict are those that have recently emerged from conflict. It is particularly important to help these countries ensure a quick recovery from conflict and a return to sustainable development. This effort requires an understanding of the economic features of the conflict cycle, and this chapter seeks to contribute to this topic. In particular, this chapter looks at the evolution of economic performance and the role of macroeconomic policy and aid in a selection of 24 countries as they passed through civil conflict and through the first few years of postconflict recovery. The chapter offers three main findings leading to three policy implications.
The Democratic Republic of the Congo (DRC),1 with a large and dynamic population of more than 55 million people, is endowed with vast natural resources including perhaps the most extensive network of navigable waterways in Africa. It also has a vast hydroelectric potential that remains largely untapped. Despite its economic potential, economic activity declined drastically during the period 1960–2000. Per capita GDP fell steadily from US$380 in 1960 to US$224 in 1990 and further to US$85 (or US$0.23 a day) in 2000, making the country among the poorest in the world (see Figure 6.1). The dramatic decline in output and income has been the result of inappropriate economic and financial policies, pervasive corruption, and, especially in the past decade, political turmoil, civil strife, and full-fledged war since 1998.