Economics of conflict phần 1 pps

Mark Taylor
Emerging Conclusions
March 2002
Economies of Conflict:
Private Sector Activity in Armed Conflict
Emerging Conclusions
These Emerging Conclusions offer a preliminary analysis of the findings
of four reports from the Economies of Conflict policy research series,
which examines the links between private sector activity and armed
conflict. In addition, the four reports are presented here in electronic
form on an enclosed compact disc. The occasion is the symposium
“Economic Agendas in Armed Conflict: Defining and Developing the
Role of the UN”, co-organized by the International Peace Academy and
Programme for International Co-operation and Conflict Resolution, and
sponsored by the Government of Norway, on 25 March 2002 in New
York.
These and additional forthcoming reports from the series are available
from the PICCR web-site at www.fafo.no/piccr
The Economies of Conflict project is supported by the Government of
Norway.
Institute for Applied Social Science
P.O.Box 2947 Tøyen
N-0608 Oslo
/>Programme for International Co-operation and Conflict Resolution

Mark Taylor
Emerging Conclusions – March 2002
Fafo
Economies of Conflict: Private Sector Activity in Armed Conflict
Programme for International Co-operation and Conflict Resolution
2

© Fafo Institute for Applied Social Science 2002
Cover page: Agneta Kolstad
Printed in Norway by: Centraltrykkeriet AS
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Contents
Preface 5
1 Introduction 7
2 Preliminary Findings 11
2.1 Anarchic Exploitation 12
2.2 Criminalized Transactions 15
2.3 Militarized Production 17
2.4 Conflict Commodities 20
2.5 Rogue Companies 23
2.6 Emerging Conclusions 25
3 Executive Summaries 27
Dirty Diamonds 28
Fuelling Conflict 33
Illicit Finance and Global Conflict 38
The Logs of War 47
About the Authors 53
Appendix: Contents of the Economies of Conflict CD, Version 1 54
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5
Preface
These Emerging Conclusions offer a preliminary analysis of the findings of four re-
ports from the Economies of Conflict policy research series, a project of Fafo’s Pro-
gramme for International Co-operation and Conflict Resolution (PICCR). These
reports are the first to emerge from the series, which examines the links between
certain private sector activity and armed conflict.
The four reports presented here in electronic form on compact disc are being

released for the first time on the occasion of Economic Agendas in Armed Conflict:
Defining and Developing the Role of the UN, a symposium co-organized by the In-
ternational Peace Academy and PICCR, and sponsored by the Government of
Norway, on 25 March 2002 in New York. These reports will be released in printed
format in the coming months.
The Executive Summaries of the reports are reproduced below, as is a table of
contents for the compact disc itself. We have gathered from the authors a number
of related primary and secondary source documents and included these on the com-
pact disc in order to provide background and context to the studies and to give this
version of the compact disc additional utility. Much of what is included on the
compact disc is also available on the Fafo web site at www.fafo.no/piccr, which will
be updated regularly with additional material. Later in 2002, the Economies of Con-
flict series will release additional reports on regulatory options, the private security
sector, small arms, and brokers.
It should be emphasised that Economies of Conflict is an analytical policy-oriented
project, aimed at a better understanding of processes and behaviour as the basis for
suggesting policy options. The reports issued as part of the Economies of Conflict series
do not seek to accuse or shame particular firms or governments. Rather, the studies
approach the private economic dynamics involved in armed conflict from within
each sector, asking the question, How does certain private sector activity help sus-
tain armed conflict and what can be done about it?
In designing the research programme, PICCR opted for an industry perspec-
tive. The industries identified below have been selected based on their identifica-
tion in the literature and through practice (as evidenced by on-going work of non-
governmental organisations, governments, or multilateral institutions). They are by
no means exhaustive of the economic dimensions of war, but they represent some
of the industries that are, perhaps, most relevant to the challenges to international
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peace and security posed by contemporary armed conflicts. Although the studies
do address illicit activities within licit industries, the project has yet to commission

studies related to the specifically criminal activities linked to armed conflict (e.g.
narcotics, trafficking in human beings, etc.).
As with past PICCR projects, we have chosen an inductive approach, seeking
to contribute to these arenas through an analysis of experience and lessons-learned.
PICCR commissioned studies from practitioners and researchers engaged in issues
related to the industry and war, or the industry and corporate social responsibility,
and with a keen sense of what has worked – and what has not worked - in practice.
The Economies of Conflict project was launched in the spring of 2001 and since
that time we have benefited from the input and support of a growing number of
people. Principal among these has been Ambassador Wegger Strømmen at the
Norwegian Permanent Mission to the United Nations, who has watched the project
grow since its inception. Karen Ballentine, Research Coordinator and Program
Associate on the International Peace Academy’s project Economic Agendas in Civil
Wars, has been extremely helpful and, along with the excellent staff at IPA, has made
the Fafo-IPA cooperation on these issues both easy and effective. Our team of re-
searchers deserve special thanks, both for their openness to our approach to the
research task and their willingness to share their knowledge with each other across
the seminar table. My thanks also to Leiv Lunde, an advisor on Economies of Con-
flict and the author of an upcoming report from the project, for his help and per-
spective over the past year, and to Christian Ruge, a PICCR colleague, who has made
an invaluable contribution to the project. I am also grateful to the Government of
Norway, which provided financial support for the project, and to those Norwegian
officials who have contributed their perspectives on policy issues. Of course, none
of the above bears responsibility for any inaccuracies or omissions that might occur
in these reports. The views and recommendations expressed in these reports, includ-
ing this summary of emerging conclusions, are those of the authors alone and do
not necessarily reflect the views of Norway, its Government or officials, or Fafo.
These emerging conclusions present a work in progress. Your comments would
be welcome and should be directed to
Mark Taylor

Programme Director, PICCR
Series Editor, Economies of Conflict
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1 Introduction
Today’s warlords, governments and non-state actors alike, make use of global finan-
cial and commodity markets to transform control over natural resources into war
fighting capacity. Under the cover of secrecy and unaccountability provided by war,
legally or illegally produced commodities are traded on the legitimate, but highly
unregulated, global markets to obtain financial resources, weapons and other ma-
teriel needed to sustain the war.
The economic dimensions of wars are not new. Yet, the horrors of recent wars
seem to have thrown into stark relief the inadequacy of our attempts to end them.
Despite the terrible human cost of the wars of the past decade – millions of lives
lost or ruined, societies irrevocably scarred, and economies destroyed – it has be-
come increasingly clear that recent wars have far outstripped our ability to bring them
to definitive conclusion
1
and that the economies of these conflicts may play a cru-
cial part in sustaining them.
As a priority for international action, the economic dimensions of conflicts have
been catapulted to the top of the international agenda by increasing concerns about
the dark sides of globalization. Since 11 September 2001, the U.S led internation-
al effort to target terrorist financing and logistics has underlined the importance of
global financial and criminal networks to national and regional security. Today, a
common, global infrastructure of financial services is used to facilitate transactions
involving drug money, small arms, diamonds, smuggled timber, the proceeds of
corruption, human trafficking and terrorist finance. The apparent ease with which
licit and illicit economic goods and services are able to move between ‘black’, ‘grey’
2
and ‘white’ markets has forced governments to seek greater financial sector account-

ability. The failures of financial oversight and corporate accountability apparent in
the spectacular bankruptcy of the U.S based Corporation Enron have added to a
1
While the number of armed conflicts has dropped since the early 1990s, of those that continue 66
per cent were more than 5 years old in 1999 and 30 per cent were more than twenty years old. In
addition, many conflicts which were suspended in the 1990s – not least in Europe, the Middle East,
and Central Asia – have not been resolved; see Dan Smith, Trends and Causes of Armed Conflict, Berghof
Handbook for Conflict Transformation (April 2001).
2
The term ‘Grey markets’ is used here in its more generally legal sense, referring to markets which
bridge legal or ‘white markets’ and the trade in illegal ‘black’ market goods.
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growing sense of uncertainty about the transparency and accountability of firms
operating internationally.
Concerns about the economic dimensions of international peace and security
appear to be converging with an evolving agenda for greater corporate accountabil-
ity. Intense activity is underway in several arenas to better understand and respond
to the economic driving forces of violent conflict and war. Governments and mul-
tilateral organisations, non-governmental organisations, multinational corporations
and industry associations, have all in recent years launched or participated in initi-
atives to study or develop policy options for dealing with economies of armed con-
flict. Campaigning NGOs and industry have moved to address private sector links
to conflict through the increasingly significant lens of corporate social responsibil-
ity (CSR). Multilateral institutions, including the World Bank, the OECD, and the
United Nations, have begun to tackle the issue from their own perspectives (mac-
ro-economic analysis, global policy co-ordination, sanctions).

With this convergence
in mind, PICCR’s Economies of Conflict project has been structured to build on the
bodies of work that have emerged from these efforts and to provide input to them.

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Summary: Conflict Commodities and Rogue Companies
With the rise to prominence of ‘conflict diamonds’, and to a lesser extent ‘conflict
timber’, there is a growing sense that goods produced in an economy torn by armed
conflict are, or should be, morally suspect. The tendency to view such goods as ‘con-
flict commodities’ is a direct result of an increase in consumer sensitivity resulting
from successful campaigns on issues related to corporate social responsibility and
human rights, and the increasing concern that such activities run counter to efforts
to maintain international peace and security. It is arguable that an international moral
and political norm is gradually emerging which views private sector activity that
sustains armed conflict as unacceptable.
The notion of conflict commodities possesses inherent dangers. Countries de-
pendent upon a limited number of exports could face serious economic hardship
should the ‘conflict commodity’ label taint their product. Companies with legiti-
mate investments in such countries face the potential for significant losses and height-
ened risk to their reputations. These dangers were recognised early on by
3
For a summary of UN oriented initiatives see, e.g., “Economic Agendas in Armed Conflict: Defi-
ning and Developing the Role of the UN”, Background Paper prepared by The International Peace
Academy and The Fafo Institute for Applied Social Science, on the occasion of a symposium spon-
sored by the Government of Norway, Monday, 25 March 2002, New York. A comprehensive look at
the full spectrum of regulatory options relevant for the private sector is being developed for publica-
tion as part of the Economies of Conflict series in the Spring 2002; see www.fafo.no/piccr.