CAR does battle with corruption

By Lucy Jones
BBC News Online

The CAR is diamond rich but its people are desperately poor

The Central African Republic is trying to ditch its reputation as a smuggler's den and has taken a key step towards cleaning up its diamond industry.

This week at an international conference in Bangui, CAR joined the Kimberley Process, a global initiative aimed at ending trade in so-called "blood diamonds" by establishing that exported gems have not come from conflict areas.

The move is part of a wider plan to stamp out corruption, the priority announced by CAR's new leader General Francois Bozize when he seized power in a coup in March.

His nephew Sylvain N'doutingai, now the Minister for Mining and Energy, suspended mining and timber exploitation agreements to ensure companies had paid their taxes.

Newly-appointed ministers in the post-coup government were told to list their personal wealth - and warned that they would be monitored.

AFRICA'S TOP CORRUPT NATIONS

Nigeria

Angola

Kenya

Uganda

Cameroon

AFRICA'S LEAST CORRUPT Botswana Namibia South Africa Mauritius Ghana Source: Transparency International

He declared there would be "transparent management" of the diamond sector and that the government would be "fighting against fraud in mining and violations of the rules".

The CAR is a desperately poor former French colony where most people live on less than $1 a day, but it does have a wealth of jewellery-quality diamonds.

'Missing' diamonds

However, with long, unpatrolled borders and political instability, the republic is a haven for smugglers.

Officially, the country exports around 500,000 carats of diamonds annually. The Antwerp diamond exchange records imports into Belgium of usually twice that figure.

To turn a blind eye to corrupt practices is seen as perfectly acceptable Dr Tim Allen, LSE

Fighting corruption in a country where taking bribes and avoiding taxes is seen as the system - especially where civil servants face huge salary arrears - is extremely difficult.

"Authorities are seen by people as rapacious entities who do little to benefit them, so to turn a blind eye to corrupt practices is seen as perfectly acceptable," says Dr Tim Allen from the Development Studies Institute at the London School of Economics.

"There has to be institutional incentives for them not to do this... it also has to be seen as immoral."

Monitoring production

The British-based company Diamcare aims to end corruption in the mining sector at the grassroots level by registering Central African diamond diggers.

Known as the credential system, the middle men - who are seen as benefiting most from the present situation - are required to pay $40 to register each diamond digger which goes towards social welfare projects.

DIAMONDS IN THE CAR Mixed blessing of diamonds in CAR

"You then know exactly how many diamonds are being produced. If that figure drops or rises then you know that something is going on," says Ian Atkins from Diamcare.

"Experts say tax revenue could double in the CAR."

The CAR government has committed to introducing a certificate of origin system for diamonds and to passing a new law regulating the issuing of exploitation licences which were usually granted at the whim of the president.

Representatives from Global Witness, the non-governmental organisation which made its name exposing how the Angolan rebel movement, Unita, financed its war by smuggling diamonds, recently made a trip to the CAR.

High taxes

According to the organisation's Alex Yearsley while the CAR taxes diamonds at 12% and neighbouring Republic of Congo levies a 2.5% tariff, traders are always going to smuggle out their best finds - diamonds over five carats.

"There needs to be better security at the borders, police enforcement and diamond trading needs to be closed down in Congo Brazzaville," he says.

Some analysts maintain that battling with corruption does not necessarily dramatically advance development.

After all, some of the most corrupt countries in sub-Saharan Africa - Kenya, Tanzania and Nigeria - are the richest.

Dr Eigen says corruption is responsible for Africa's misery

"We know that countries develop with very high rates of corruption. The issue is what people do with these resources," says Dr Allen.

"If you have a situation where the elite are creaming off the nation's resources and putting the money into Swiss bank accounts, then spending it in the United States or Britain, then that clearly doesn't benefit the country.

"But if they are spending that money on their own political prestige then it may well have local benefits that may lead to development."

But Dr Peter Eigen chairman of Transparency International says counties which have developed despite corruption would have been even better off if they were not corrupt.

"Corruption is devastating... [it] leads to wrong investments... hundreds of millions of dollars have been lost on useless projects.

"We have to mobilise the civil service into NGOs which can work with the government and private sector to explain it's in everyone's interests to fight corruption," he said.