Tuesday, December 1, 2009

Nitty-Gritty Of Congo - China Reconstruction Deal

One of the more interesting chapters in Paul Collier's thought-provoking work, Wars, Guns, and Votes, discusses the economic effects of armed conflict and the nitty-gritty of post-conflict reconstruction. He talks not about the horrors of rape and the disruption of societal services, but the more mundane but no less disastrous destruction of infrastructure and, perhaps even more importantly, the collapse of industries like construction, which he explains is one of the hardest hit.

Collier points out that while aid agencies rush about setting up conferences on reconciliation and lining up financing for big construction projects in the post-conflict period, they overlook the fact that the civil conflict has most likely decimated the skilled labor force. In a normal economy, the construction industry is a key provider of jobs for unskilled youths who learn from the older workers who have been on the job for a while. When armed conflict disrupts that educational process, the capabilities of the labor force atrophies, creating an impediment to development.

The shortage of skilled labor creates a bottleneck that pushes up construction prices, further undermining government and donor efforts to rebuild the country. Many countries turn to outside contractors like the Chinese to rebuild their infrastructure. As Collier says:

"...the Chinese face no bottlenecks because they routinely bring in absolutely everything, including the entire workforce. But resorting to the Chinese throws out the main short-term benefit from the recovery of the construction sector, which is to generate jobs for young men"
Without those jobs, the young men don't learn the skills necessary to build their country over the long term. The lack of jobs also makes them more inclined to look for employment with rebel groups and armed gangs preying on the civilian population, thus further undermining the possibilities of peace during reconstruction. Collier continues:
"Post-conflict situations need squads of bricklayers, plumbers, welders, and so forth, who set about training young men. Unfortunately, it is too mundane for the development agencies to organize it. We need Bricklayers Without Borders."
Such drawbacks aren't necessarily inherent in development-for-minerals deals with the Chinese like the $6 billion deal the Democratic Republic of Congo is in the process of negotiating. If the deal follows the patterns of other Chinese projects in Africa, however, it is a likely side effect.

That is not to say that there are no advantages to the controversial DRC-China pact. I'll discuss one of the biggest tomorrow.

Dave Donelson, author of Heart of Diamonds a about in the

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