Could DRC’s resource wealth be the key to ending its conflicts too? – by Keith Slack (Oxfam America – July 10, 2017)

https://politicsofpoverty.oxfamamerica.org/

If there is to be a chance at peace, comprehensive mining reforms are needed to fight poverty and violence in DRC.

Africa watchers will know that the Democratic Republic of Congo (DRC) is once again poised on the verge of violent conflagration. How the country got there and how it might pull itself back from the brink are of keen interest to those of us who work on the “resource curse.”
DRC’s pathways into violence, and likely out of it, are deeply connected to its vast mineral resources. Harnessing those resources for development, rather than empowering those who would rip the country apart, is DRC’s defining development challenge – one that implicates everyone with a stake in the country’s future: donor countries, mining companies, civil society, and of course the country’s citizens and government.

DRC’s current crisis stems from President Joseph Kabila’s defiance of the country’s constitution and failure to leave office at the end of his term last year, and the foregoing of elections to choose his replacement.

In 2002, in an attempt to encourage post-war investment in the mining sector following the devastating Second Congo War – or what has been called “Africa’s First World War” – the country, with the support of the World Bank, adopted a new mining code. The code established generous terms for investors in the sector.

The Kabila government rushed to sign contracts with mining multinationals. The terms of these contracts were sharply questioned by civil society in DRC and internationally. Finally in 2008, the government ordered a review of the contracts that were negotiated under the code.

In hindsight, it’s clear that the terms of the code were overly generous – something even the IMF now admits. Large firms that invested in the country under the new code, like Swiss-based Glencore, were accused of transfer mispricing, a practice that may have robbed DRC tens of millions of dollars it should have received from mining activities.

For the rest of this article: https://politicsofpoverty.oxfamamerica.org/2017/07/could-drcs-resource-wealth-be-the-key-to-ending-its-conflicts-too/

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