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Why war is good and peace bad for diamond dealers

Story by CHARLES ONYANGO-OBBO | What Others Say
Publication Date: 8/30/2007

I AM NOT A FLAME-THROWING nationalist, and my pan-African credentials are generally suspect. Therefore, I am not one to rush into blaming Africa’s problems on “imperialists” and evil schemes by the West – until I see the evidence, that is.

Well, compelling evidence came recently via an article (which we recommend that everyone interested in African affairs must read) that you can find on the Slate website, or the Washington Post/Newsweek interactive site.

The title; “Diamonds are a Guerilla’s Best Friend; Why War Was Good for Angola’s Big Miners” sums up what it is about perfectly.

Angola is one of the poorest countries in the world, but it also has one of its richest deposits of diamonds. After years of a liberation war against Portuguese rule, the country remained in the throes of a brutal and ruinous rebellion led by Jonas Savimbi.

After decades of war, the Angolans were poorer than they had been 30 years earlier upon independence.

Then on February 22, 2002, Savimbi was killed. The citizens of Angola poured into the streets of the capital Luanda to celebrate his demise, for Savimbi’s death promised a new era of prosperity and peace.

However, something unusual happened. When news of Savimbi’s death hit, investors dumped their shares in mining companies all over the world that had operations in Angola. Stock prices of these companies fell by an average 12 per cent within a matter of days. Unusual peace is supposed to be good for business.

Well, that might be so except if you are in the diamond (and arms) business.

The authors of a forthcoming study that the articles are based on argue that the share price of the mining companies who had extracted Angola’s diamonds amid the chaos of war plunged because the fortunes they’d made from its diamond mines relied on the treacherous conditions created by civil war.

Wartime Angola was a very expensive place for diamond miners to operate because of the bombed-out roads, kidnappings, and other hazards of operating in a conflict zone.

Companies employed guns-for-hire to keep their operations safe from rebel attacks. The cost of protecting a mine alone could run as high as $500,000 (Sh34m) a month. And to keep mines safe from government meddling, paying bribes was reportedly the norm.

Very few companies want to do business in such conditions, but the ones that do make massive fortunes.

The death of Savimbi signalled that now the mining industry could be run normally – open the sector to competition. The end of conflict hurt the dominant diamond companies by knocking down barriers to entry.
Indeed, the article reports, the mere presence of potential competitors helped the government to renegotiate its contracts from a position of strength. Previously, Israeli diamantaire Lev Leviev had a monopoly on the marketing of Angolan diamonds. With peace at hand, as many as six other companies reportedly also vied for his contract.

A peacetime Angolan government could afford newfound patience in its negotiations. Before, the government had faced a constant budget crunch, and in its desperation to obtain hard currency to purchase arms, was forced to accept unfavourable terms.

Royalty payments to the government for mining concessions jumped from $37.5 million (Sh2.5 billion) in 2002 to nearly $110 million (Sh7.4 billion) just a year later, despite only a modest increase in the value of the diamonds extracted!

Overall, the Angolan economy has taken off since the war’s end, with income per capita rising by more than 20 per cent between 2003 and 2005.

Because Angola’s wartime diamond miners didn’t have any business incentive to have peace, it would have been in their best interests to prolong the war.

Incentives, incentives. In the northern Italy town of Varallo, the mayor recently came with a novel idea – to literally bribe people who are overweight to cut down.

Participants in the initiative get $67 (Sh4,500) when they reach their ideal weight. If they don’t gain any weight back after five months, they will receive $268 (Sh18,000). If they maintain their ideal weight for a year, they will get $670 (Sh 45,000) more. There has been no shortage of takers. Is City Hall listening?

One man who is famed for being a good listener is former US President Bill Clinton. Sex scandals and all, Clinton is still the most popular former US president of recent decades at home and abroad.

One reason he is popular is that he makes everyone feel that he cares about, and is interested in him or her. Now the formula of his magic is out.

An article in The Times reports that Clinton keeps an information card for every person he has met since university! Remarkable, considering that he graduated in 1968.

Since we started on a high note, we shall end on a very low note with the case of a Thai man who was found dead last week from a heart attack. He was wearing a couple of his wife’s miniskirts and all 15 of her bras. He took the secret of his strange behaviour to the grave.

August 30, 2007 | 1:53 AM Comments  0 comments

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A MUST READ: Thank God Kenyans still have social capital to fall back on
Related to country: Kenya


Story by RASNA WARAH
Publication Date: 8/27/2007

IN RECENT DAYS, I HAVE BEEN inundated with E-mail messages from all corners of the globe responding to my assertion that Kenyans are a greedy lot. Some of the e-mails were quite supportive of my assertion, while others were angry that I had painted Kenyans with a tainted brush and was blind to all the positive developments taking place.

What amazes me about these e-mails is not that Kenyans both at home and abroad bother to write to me at all but that they share such a deep concern about the state of the nation.

Why should a Kenyan sitting in Washington DC, I often wonder, care about what happens to our Constitution or to taxpayers’ money? And why should a Kenyan working in Oslo start a blog to keep fellow Kenyans informed of the goings-on in the country?

I have come to the conclusion that Kenyans – regardless of where they are physically located – love their country deeply and want to be engaged in its affairs. And because we love our country, we remain its biggest critics. We are hard on ourselves because we have set higher standards for ourselves. So we are constantly disappointed when those standards are not met.

This fact was brought home to me by my Tanzanian friend (who I shall call Babu to protect him from himself, and no, I will not reveal his true identity even if you take me to court).

Babu is what you might call a Kenya-phile. When I first met him, he confessed to me that one of his life-long ambitions was to settle in Kenya.

This admission surprised me somewhat, not because I do not believe that people from across the border should not be allowed to live in this country, but because I always believed that Tanzanians generally looked down upon Kenyans, that they saw us as uncouth capitalists out to make a quick buck, and intellectually their inferior.

Babu made an observation that I think rings true for most Kenyans. He told me that the reason he was attracted to Kenya was because there are few Kenyans he has met who do not believe that they can do whatever they set their minds to.

This self-confidence, this in-your-face ambition, is what attracts him most to this country. People here want to excel, even if what they want to excel in is something as crass as making more money.

Over a drink of mojito at a Nairobi pub, Babu admitted that the thing he loved most about Kenyans was that they do not see themselves as victims of their fate, but as drivers of their own destiny.

His sentiments are shared by the Ghanaian economist George B. N. Ayittey, who in his book, Africa Unchained, is all praise for young Kenyan professionals who, he claims, “can see things with acute clarity” and “are not polluted with anti-colonial rhetoric and garbage”.

HE ADDS: “THEY (KENYAN professionals) are not into the blame game. Blaming colonialists and imperialists does not cut it with them. These young Africans do not just sit there, expecting Western colonialists to come and fix Africa’s problems. Nor do they wait for the government to do everything for them.”

Kenyans have learned that if the government fails, you just get on with the business of surviving by finding ways around the system. This explains why even when Kenya was a pariah state and shunned by donors, the country did not descend into a Zimbabwe-like situation.

We survived despite our government. How? Well, by building our own social capital – networks of friends, relatives, colleagues and other contacts – that enabled us to survive. Kenyans abroad sent money home; those at home helped each other out in times of emotional or financial crises.

Many sociologists and anthropologists have found that social capital plays an even more important role than financial capital in the survival of communities. Some studies have also found that communities with high social capital (where trust, sharing and co-operation are dominant values) also have a higher sense of dignity, freedom, responsibility, prosperity and security.

One might argue that in a highly-competitive and individualistic society such as Kenya, social networks and concepts of solidarity cannot work because they smack of socialism.

But as author David Korten has noted, social capital is essential even in market-based economies as “the market itself depends on the bonds of well-developed social capital to maintain the ethical structure, social stability and personal security essential to its function” and that “social bonding without competition leads to stagnation and lack of innovation.”

What I am trying to say is simply this: Kenyans are an enormously resourceful and resilient bunch who are also ambitious and hard-working, and they take an extraordinary interest in how their country is governed.

If the Government could help nurture – rather than destroy – the energy and resourcefulness of the average Kenyan, this country will definitely be on its way to joining the ranks of the Asian Tiger economies that it is trying so hard to emulate.

August 27, 2007 | 6:29 AM Comments  0 comments

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Go to clinics for children's health
Related to country: Kenya


Publication Date: 8/23/2007

Expectant mothers who do not attend clinics are at great risk of contracting diseases. It is important that such clinics are available so that mothers can be taught about the right kind of food to eat during pregnancy.

After giving birth, they need to be reminded about the need to breastfeed their babies unless they is a good reason not to do so.

At clinics, they are educated on weaning time, immunisation and about the need for great care for the infant.

To bring up healthy children, mothers should attend clinics.

This will reduce their chances of contracting diseases and improve health for all.

August 23, 2007 | 3:14 AM Comments  0 comments

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Heed the President's words on media Bills
Related to country: Kenya


Publication Date: 8/23/2007
The media and entire communications industry have double cause for celebrations. President Kibaki yesterday refused to assent to the Media Bill and directed that it be sent back to Parliament for deletion of the offensive clause that sought to compel journalists to name their sources.

At the same time, the Government withdrew the Kenya Communications Act 1998 Amendment Bill that has also caused great disquiet in the industry, particularly in areas which amount to allowing gross Government interference in communications.

The Government, and the President in particular, must be congratulated for listening to voices of reason and refusing to take measures that would have interfered with the constitutional guarantees of free media and free speech.

The President’s words, as he redirected the Media Bill to Parliament, were particularly illuminating and worth repeating here: “The [clause] can be construed to include subjects of a story as well as sources of information. This could act as a great inhibition of press freedom and undermine the democratic strides we have made as a nation.”

That is as unambiguous as it can be. The President was not asking for re-drafting of the contentious clause that was sneaked into the Bill late in the day. He was asking for its complete removal.

It is our hope that those in Government who may have been part of a conspiracy to introduce an oppressive clause without reference to the parties that had arduously negotiated the Bill will get the message.

The President was affirming his support for media freedom, and also signalling his rejection of attempts by anyone in Government to introduce through the backdoor legislation that would roll back the democratic gains Kenya has made in the past.

The same would apply to the equally contentious Kenya Communication Amendment Bill that was withdrawn for redrafting. The Ministry of Information and Communications indicated that the Bill needed to be updated to cover issues such as cyber-crime, and to provide for stiffer penalties for cable thieves.

Cross-media ownership

However, just as important are the myriad concerns which have been raised by the industry. These include provisions that would allow unjustified Government interference in the programming and content management by private broadcasting companies, as well as clauses that might provide legal cover for invasion of broadcasting stations and seizure or disabling of equipment under the guise of national security.

Another issue that needs to be discussed is the proposal restricting cross-media ownership.

All these are issues that must be fully discussed with stakeholders before the Bill is brought back to Parliament. The industry representatives who have expressed great concern about the so-called ICT Bill have raised very valid issues, and cannot simply be dismissed as “busybodies” by the ministry.

Issues to do with media, communication, transmission and receipt of information, all lie at the very core of constitutional guarantees under the Bill of Rights.

It must also be recognised that investing in the media and communications industry does not come cheap. Great capital outlay is required and the returns are slow and uncertain. It therefore would not do to subject investors to situations where ad hoc changes to the legal, administrative and statutory regime can throw all their projections out of the window. No business can operate in such an environment.

Therefore as the two pieces of legislation are prepared for Parliament’s consideration, those responsible must bear in mind that laws, rules and regulations are not made simply for the sake of creating oppressive bureaucratic hazards.

Those preparing the fresh versions must do so with the President’s word ringing in their ears. They must not again subject him to the embarrassment of street protests.

August 23, 2007 | 3:13 AM Comments  0 comments

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MEDIA WINS FINALLY.... President rejects Media Bill
Related to country: Kenya


President rejects Media Bill

Story by PATRICK NZIOKA
Publication Date: 8/23/2007

The media won a major victory yesterday when President Kibaki rejected a clause in the Media Bill that would have forced editors to reveal their confidential sources.

President Kibaki described the clause as “offensive and a threat to democracy” as he returned the Bill to Parliament to delete the clause.

In returning the Bill to the House, the President sided with the tradition of media freedom in Kenya and rejected the wishes of some of his main political backers, including several Cabinet ministers who had voted in favour of the clause on the floor of the House.

The offending clause, introduced by Ol Kalau MP Muriuki Karue, would have removed the protection enjoyed by the media against being forced to reveal confidential sources in courts of law.

The clause reads: “When a story includes unnamed parties who are not disclosed and the same becomes the subject of a legal tussle as to who is meant, then the editor shall be obligated to disclose the identity of the party or parties referred to.”

President Kibaki, who received the Bill from attorney general Amos Wako yesterday, sent it back to Parliament with instructions that the clause be deleted.

He said it was ambiguous and likely to cause problems in its interpretation because the expression “unnamed parties” as used in the clause had not been qualified or restricted.

“The meaning ... can be construed to include subjects of a story as well as sources of information. This could act as a great inhibition of Press freedom and undermine the democratic strides we have made as a nation,” the President said.

After the Bill is taken back to Parliament, MPs can either delete the clause or reject the President’s proposal if 65 per cent (or 145 MPs) vote against it.

Mr Karue introduced the offending clause late into the debate on the floor of the House.

Clause to be deleted

In a statement, the Presidential Press Services said the President had written to the Speaker of the National Assembly, Mr Francis ole Kaparo, giving reasons for his refusal to assent to the Bill. He also advised that clause be deleted because it was “offending”.

Section 46(3) and 4 of the Kenyan Constitution gives the President powers to refuse to assent to any Bill.
This means that Parliament will only deal with the mentioned clause and not any other part of the Bill because Parliamentary standing orders do not allow opening of debate on a matter that has been concluded.

The Bill had been criticised as retrogressive and meant to water down the democratic gains on the freedom of the media.

Critics argued that it would undermine the profession since it struck the core tenet in the media: Protecting sources of confidential information.

The Media Owners Association first raised the red flag on the Bill and called on the minister for Information and Communications, Mr Mutahi Kagwe, to unconditionally withdraw it from Parliament to facilitate dialogue.
The association and the ministry held several meetings and agreed on key issues to be included in the Bill.
But on the final day of debate, about 29 MPs passed the Bill and the controversial clause. The move was greeted with outrage with the Law Society of Kenya (LSK) vowing to go to court.

But several MPs beat them to the tape when they went to court to question the legality of the Bill. However, the case could not go on since the Bill had not become law.

Journalists from numerous media houses later held protest marches in Nairobi and Nakuru urging the President to reject the Bill. The silent demonstration in Nairobi begun at Uhuru Park’s Freedom Corner on Wednesday, August 15.

Yesterday, the LSK praised President Kibaki for refusing to approve the Media Bill.
In a telephone interview with the Nation, LSK chairman Okong’o O’Mogeni said there was an urgent need to review the Standing Orders of Parliament so that MPs are barred from introducing amendments on Bills that have been drafted after consultations with various stakeholders.

This, Mr O’Mogeni said, would ensure that contributions made by key players in the course of drafting the Bills outside Parliament are not disregarded when they are tabled for debate in the House.

August 23, 2007 | 2:53 AM Comments  0 comments

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