The confused economy of Zaire today presents two conditions.19 On the one hand, the modern economy--the formal, registered activities acknowledged in the national accounts--has completely collapsed, in part because of its dependency on large predatory state structures and in part because of the dramatic decrease in the purchasing power of the urban population. On the other hand, the informal, secondary, or popular economy--the middle-scale or petty activities that are not registered in any official statistics--now has its own momentum. Nevertheless, the dichotomy between formal and informal sectors does not fully capture the current situation.
In order to understand the economic conditions in Zaire, one must have a sense of the trends over the past twenty-five years. One might divide this era into three periods, the first of which may be labeled the "Zairian miracle," extending from 1962 to 1974 (see figure 2).
ECONOMIC GROWTH, 1962-74
Despite the traumatic accession to independence and the 1963-64 rebellions, Zaire's economic potential was not really damaged. After a radical devaluation of the currency in 1967, economic performance soon approached that of developing countries such as the Ivory Coast and Mexico. Although agriculture lagged, with only a 2-3 percent annual growth, overall economic growth rose to 6 percent annually, mostly due to strong copper and diamond prices and the performance of the manufacturing and mining industries. This period was also characterized by a tremendous expansion of the public sector, as well as by some grandiose industrial and infrastructure projects--for example, Ingadam, the Inga-Shaba power-line, SOSIDER, SOZIR, and COMINGEM.
ECONOMIC SHOCKS, 1975-91
The first postindependence economic shock occurred in 1975, when a confluence of national and international events began to undermine Zaire's position. First, the totally unplanned nationalization in the agro-industrial and trading sectors severely disrupted the economy. Second, copper prices suddenly--but expectedly--collapsed after the 1974 oil crisis. Third, the Benguella railway in Angola, traditionally one of the major export routes for Zaire's mining industries, was closed. The recession was abrupt in character (see figure 2), and Zaire never really recovered. Between 1975 and 1993, gross domestic product per capita (in 1993 dollars) plummeted, from $330 to less than $140.
Initially, the shock did not appear catastrophic. Economic growth remained high, at 6.4 percent a year. Except for the disastrous large industrial and infrastructure projects, the manufacturing sector, still supported by bilateral donors, maintained relatively good performances, though falling to only 30-40 percent of productive capacity.
The textile industry was badly hurt by the explosion of illegal exports, but other industries overcame the crisis by exporting their output, which was largely enhanced by external public aid. The transport sector suffered but succeeded in stabilizing itself from 1978 to 1984. State receipts remained high until 1980, although public expenditures tended increasingly to exceed public revenues.
The first three years (1983-86) of the stabilization program imposed by the International Monetary Fund and the World Bank appeared promising. A new and quite severe devaluation allowed Zaire to again be competitive--at least in theory. The country also appeared to regain some credibility by starting to repay part of the interest on the huge national debt.
But hopes placed in the stabilization program were quickly dashed. Between 1984 and 1989--"the Kengo years," as the period was once known--Zaire entered into a phase of generalized "predation" and extortion perpetrated by those close to the presidency and above all by a large circle of barons and plutocrats. It is estimated that roughly $1 billion was drained from the state treasury during that period.
At the same time, even as state expenditures were maintained at the highest levels, the state budget was collapsing under the high interest rates on the external debt, which Zaire could no longer service--and part of which could not be rescheduled. What is surprising is the amount of external aid conceded to Zaire: $555 million in 1983-89 (compared to $508 million in 1975-82). In 1990 official development aid to Zaire reached a peak of more than $800 million.
ECONOMIC CRASH, 1991
In September 1991 the collapse of one of the richest copper mines of Gécamines (Kamoto) triggered a major economic and financial crash. When the revenue stream from the core mining industry dried up, Zaire virtually ceased to exist as a state.
The currency, a symbol of national sovereignty, was reduced to nothing, while 500,000 to 600,000 public servants went unpaid. A World Bank document from 1994 reveals the withering of the state and the social impact of a crumbled economy:
The overall size of the economy has shrunk to the level of 1958 albeit with a population of 2.9 times larger. . . . Public finances are in disarray. . . . The State is insolvent; most state-owned enterprises and financial institutions are de facto bankrupt. . . . The economy has been demonetized and exchange markets have contracted and serve mostly speculatory purposes. . . . Power and water utilities and the Road Authority are still operational, but Gécamines, Petro-Zaire, and ONPTZ [the postal and telecommunications company] are barely functioning; SNCZ [the railway holding] and most other public enterprises have de facto ceased operating and have in some cases lost or sold their fixed assets.
Enrollment in primary education declined from 95 percent in 1972-73 to 77 percent in 1986-87 and was projected at 50 percent by year 2000, barring massive remedial actions. When open at all, the schools operate in deplorable conditions, without textbooks and teaching materials and with the students often forced to sit on the floor as desks have been looted. . . . Higher education institutions . . . [have seen] their infrastructure crumble: facilities and teaching materials vanish, teachers [are] increasingly underpaid (or not paid at all) and demotivated, and students [are] unable to survive on meager scholarships.
Health standards deteriorated due to inadequate and declining financing. In 1986, the government was financing only 5 percent of the recurrent costs in the health sector, compared to 50 percent or more in most sub-Saharan African countries. . . . The economic and financial crisis has since severely constrained the ability of the population and enterprises to provide basic care, while externally financed health programs have de facto ceased.20
Nonetheless, although fully representative data is lacking, it appears that at the microeconomic level of the economy some sectors did not follow the catastrophic trends just outlined.
For one thing, production of staple foods (mostly cassava and other tubers) continued to rise faster than the rate of population growth. However, as shown in table 3, the growth in the production of staple foods has not matched the growth of the urban population. This means that urban households, whose revenues have been drastically reduced by the recession, must devote a larger part of their income to buy food.
Three factors have played a large part in the performance of the agricultural sector: the collapse of the road infrastructure, the increase in oil prices, and the monetary manipulations of the government. If these problems can be remedied, the agricultural situation in Zaire can probably rapidly recover.
THE PRIMACY OF POPULAR ECONOMIES
To be sure, urban "popular" economic activities have a long history in Zaire, stretching back long before the 1984-90 recession. Some economic indicators suggest that between 1974 and 1978 what were labeled "underground activities" climbed from 9 percent to 19 percent of total productive activities.21
By 1980 large regions had escaped government control and were successfully organizing illegal coffee exports on a large scale through new commercial centers that were not even on the map. Some of these, called "Base," became the gathering point for Zairian, Chadian, Ugandan, and Malian traders who peacefully exchanged luxury goods (cars, radios, spare parts) for coffee, tea, or gold.22
Today, the urban popular economy--whether formal or informal (that is, registered or not)--is a prominent feature of Zairian life. Its economic strength is sometimes reinforced by the support of the powerful network of Catholic missionary posts, historically representing the prime social and economic mediator between civil society and the local authorities. In both the city and the countryside, local churches are often the only place in which trade and bank activities can take place at a popular level. It can also be argued that the proliferation of the popular economy is a major factor inhibiting large-scale violence.
According to Hugues Leclercq, the informal sector occupies three major territorial spaces in Zaire.23
- The urban petty or middle-range economy of Kinshasa and its hinterland, formed by two main regions (Bas-Zaire and Bandundu), has easy communication links with the capital through a relatively fair road infrastructure and river system. To these two trade axes one might add the intense traditional trading activities between Kinshasa and Bas-Zaire, on the one hand, and neighboring Congo-Brazzaville, on the other. According to Eric Tollens, a typically Zairian retail economy has replaced the larger Greek and Portuguese enterprises, which have almost completely withdrawn from that sector.24
- The mining area of the Kasai region, particularly around Tshikapa and Mbujimayi, has an economy that relies essentially on nonindustrial exploitation and marketing of diamonds up to Angola on the Kasai River. In Haut-Zaire and Equateur new diamond deposits have been exploited over the past several years by the local population. Nowadays, diamonds--half of which are illegally exported--are the only available resource for the state (as well as for many Zairian barons); hence the rather ambiguous nature of that popular economy, which is by no means limited to the ordinary diamond craftsmen of the Kasai region.
- The economy of the area encompassing North and South Kivu provinces and part of the former Ituri district relies on the nonindustrial and informal exploitation of gold, the unofficial export of coffee, and the trade of staple foods. For the last three years, this area, involving several regional and local barons, has been linked to the far distant lands of the Middle East, including Dubai, through imports of oil products and manufactured goods.
To these unstructured forms of the Zairian economy, which have become part of the "real" economy, one could add a nonmarket economy organized along the necessities of sheer survival. This equivalent of a social security system provides the poorest segment of the population access to minimal health services and education.
Activities in the nonmarket economy are often seasonal and occasional, yet provide many households various opportunities arising from the erosion of the modern economy. Usually such benefits are not reinvested in productive activities but spent instead on social or "status" exchanges.25 Thus, the popular economy should not be seen as a panacea for the lack of a modern economy.
René Devisch has reported on the predatory--though nonviolent--aspect of the informal sector, particularly among young city dwellers. He identifies the popular illusion sustained by the celebrated ability to scrape by (débrouillardise) within the informal sector:
The imaginary universe of numerous slum-dwellers continues to be haunted, through television and "downtown" scenes, by the lives of ease and extravagance centered around fine clothing, expensive cars, and luxury goods. This mirroring process simply reinforces social disparities and stigmatizes any individual or social space deprived of these goods.26
Despite the visible dynamism of the popular economy in most instances, a large segment of the modern technocratic elite claims that this type of economy cannot produce the needed development. They argue that it represents an individual way to adapt to recession, not a significant means to fight the economic crisis.27
In some cases, the validity of that argument might be contested on empirical grounds. Illegal or not, small-scale or large-scale, the informal economy evidently means (at least in some notorious cases) a "real" economy not only for groups of individuals but also for large collectivities.
Such is, for instance, the case of the Banande of North Kivu, whose impressive entrepreneurial achievements have been studied by Janet MacGaffey (see figure 3). According to MacGaffey, the Banande trading ventures, both legal and illegal, illustrate how the crisis of the last decade has undoubtedly created problems for aspiring entrepreneurs but has also stimulated "potential opportunities for those with initiative, enterprise, and a measure of good fortune."28
CRISIS AND THE GROWTH OF LOCAL INITIATIVES
Since the early 1990s the crisis in Zaire has stimulated embryonic forms of local "good governance" in some areas. In Kivu and Bas-Zaire, certain regional spontaneous agreements have been reached between local army officials, administrative chiefs, NGOs, and traders to ensure a minimum of order, especially in times of extreme tension and uncertainty. In particular, local entrepreneurs, who control most of the economic activities, have paid the salaries of the garrisons in order to avoid being looted by them.
From Kasai come reports of local authorities and businessmen indirectly helping the integration and resettlement of a substantial number of refugees from Shaba, absorbing them either into the informal economy or into the agricultural and transport sectors. This process was obviously facilitated by the relative prosperity of a region controlling the production of diamonds--the main financial resource of the country. Because the "native" population has invested heavily in that sector and thus pulled out of investments in rural development, there are employment opportunities for newcomers. Thus, it was observed by a UN mission in December 1994 that out of 16,000 displaced persons living in a camp eight kilometers from Mbujimayi, 3,400 were able to reintegrate and settle spontaneously on plots of land at the outskirts of the camp.29
It remains obvious, however, that if some parts of the country can function reasonably well when others are in a state of unrest and even anarchy, economic and social development is not the first priority of Zaire. To be sure, the popular or informal economy is still suffering from the general economic deterioration. In this respect it would be tempting, but wrong, to rely exclusively on the capacity of resistance and the imaginative solutions of ordinary citizens to accommodate themselves as best they can.
While the players in the popular economy may have skillfully adapted to the monetary landslide, one thing is clear: economic chaos in the modern sector has paralyzed the national economy, most notably in terms of the circulation of goods, as well as the provision of sanitary and educational services.
Equally clear is that the economic rehabilitation of Zaire will not progress from the top down, that is, through master plans originating from state or international macroeconomic structures--some of which are pretexts for promoting specific foreign or national interests and as such have no relevance for economic development.
The fundamental obstacle to any macroeconomic rehabilitation remains the huge national debt, which is a greater problem for the international financial markets than it is for the country. Without any new, unorthodox proposals, very little can be achieved in tackling the macroeconomic matters conducive to real "development."
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