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9.4 Economic Geography 423
Problem Landscape Cleaning up the Dirty Diamonds
"Diamonds are a girl's best friend," sang Marilyn
Monroe. Diamonds Are Forever proclaimed
the title of a James Bond Film. Another film
did not have such an endearing name: Blood
Diamond. This film tells part of a sordid story
about diamonds: as recently as 2004, as much
as 15 percent of the world's annual production
of rough diamonds was made up of dirty
diamonds (also called "conflict diamonds" and
"blood diamonds"), defined by the United Nations
as "rough diamonds used by rebel movements
or their allies to finance conflict aimed at
undermining legitimate governments." Gems of
such questionable origin financed at least three
African wars. But diplomatic, nongovernmental,
and business efforts have largely stemmed the
tide of Africa's dirty diamonds.
In 2002, following four years of negotiations,
45 countries endorsed a UN-backed certification
plan, called the Kimberley Process, designed
to ensure that only legally mined rough dia-
monds, untainted by violence, reach the market.
Rough diamonds must be sent in tamper-proof
containers with a certificate guaranteeing their
origin and contents. The importing countries
(the biggest of which are China and India)
must certify that the shipments have arrived
unopened, and reject any shipments that do
not meet the requirements. Only countries that
subscribe to the Kimberley Process are allowed
to trade in rough diamonds.
Corporate interests and consumer ethics
have cleaned up the diamond trade. Diamond
certification has been spearheaded by the
world's leading diamond company (with about
two-thirds of the market), the South African-
based multinational De Beers. De Beers was
embarrassed by a report that it had bought
$14 million worth of diamonds from Angolan
rebels in a single year. Perceiving that a public re-
lations debacle could lead to a business disaster,
as happened with an organized boycott against
fur products in the 1980s, De Beers seized the
initiative. In the name of Africa's welfare, but
certainly also as a means of increasing demand
and profit, De Beers introduced branded dia-
monds, certified as coming from nonconflict
areas. Other diamond companies followed suit,
especially in an effort to please Americans, who
buy 40 percent of the world's diamonds.
Diamonds are not the only potentially "dirty"
African mining products; "conflict metals" or
"conflict minerals" are discussed on page 439.
And outside the mining sector, there have been
efforts to certify a legal trade in stockpiled and
confiscated ivory, but as we have seen, these
have so far proved unsuccessful.
Surging commodity prices of natural resources do not es- and a high incidence of civil war.19 These deter investment and
tablish a sustainable foundation for development. In fact, de- the kind of economic diversification that ideally should include
pendence on primary commodity exports is associated with manufacturing and services.
three problems that sustain underdevelopment: economic The tide of globalization that swept the world between about
shocks related to volatile commodity prices, poor governance, 1980 and 2000 changed the structure of developing country
exports profoundly. In 1980,
75 percent of LDC exports were
primary commodities, but by
2000, 80 percent were manu-
factured goods. LDCs generally
broke loose of their dependence
on primary commodities—but
not the African countries. Sub-61
Saharan Africa has been the last
world region to be part of this
transformation, and we need to
see whether African countries
can succeed in joining the global
market for manufactures or se-
cure a footing with profitable
service sectors.
Economist Paul Collier did
a statistical analysis of the rela-
tionship between primary com-
modity dependence and the risk
of civil war. He found that in any
given five-year period, countries
not dependent upon primary
. Figure 9.19 The Kiambethu tea farm is just 20 miles from Nairobi in Kenya's beautiful highland country.
Kenya's economy is highly dependent on exports of tea and coffee. Over-reliance on cash crops and other
commodity exports had only a 1
raw materials makes many Sub-Saharan African countries vulnerable to price swings in the global economy.
percent risk of civil war, whereas
ette care
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CHAPTER 9 Sub-Saharan Africa
Insights The Resource Curse
countries in Africa have been described as
ring from the resource curse, also known
e "paradox of plenty." This is a paradox
at a country with a great abundance of a
ble natural resource often experiences
reconomic growth than countries without
an endowment. Nigeria provides a good
Oil-fueled growth does not always create abun-
dant jobs, although oil can account for as much
as 80 percent of a country's revenues, it often
employs fewer than 10 percent of the workforce.
Against this backdrop of economic inequality,
the revenue earned from oil crowds out other
sectors, such as agriculture, manufacturing, and
militaries, and are more likely to get involved in
conflicts, both external and civil.
Is there light at the end of Africa's resource
curse tunnel? Recent developments in some
countries suggest there is. When commodity
prices fall, the typical pattern is that the overall
economy falls with them; for example, during
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