Sunday, February 19, 2012

Predictions: What Are They Good for?

Over the past few months, I and a few other opponents of DF 1502 have made a number of predictions about the impact DF-1502 will have on the ground in Congo. It occurred to me that it would be worth assembling them in one place, to establish a sort of marker for future reference. Social policy isn't physics, of course. A few correct or incorrect predictions don't prove or disprove a theory. But they can help establish a baseline of credibility. So here are six predictions we made about DF-1502 and some preliminary evaluation of their validity.

1) The conflict minerals campaign would frighten Western firms into quitting the Congo, resulting in a de facto embargo of the minerals.
2) Miners (of the three Ts) would suffer a severe economic set-back as a result of the embargo.
3) The volume and value of the gold trade in e. Congo largely would be unaffected by DF-1502, because there's simply no viable way to control it.
4) The bad actors and militia would find ways to get around the embargo while the legitimate actors and businessmen would be shut down (or shut themselves down).
5) The conflicts in the region would be largely unaffected by the law a) because the "bad" actors would smuggle their product out or find other ways to get around the embargo and b) because there are other sources of financing available to the militia and c) the wars are not fundamentally "about" the minerals. So even if the minerals could be taken out of the equation (which of course they can't be), the wars would go on.
6) Chinese firms would eventually move in to buy up the minerals as Western-oriented firms closed down.

So what does the evidence tell us about these predictions, at least so far?

1) has already been proven right.
2) is a matter of dispute and is in desperate need of serious, objective research from respected social scientists. Advocates say that mineral exports from the Kivus have been cut from 75 to 90 percent, but deny that this has caused artisinal miners any serious difficulties. They say the miners can always go back to farming or move to other areas to mine. I say that's bullshit. You can't wipe out people's livelihoods in one of the poorest countries in the world without causing them severe harm. Nor is it a simple matter to change careers: Let's try giving the advocates a pack of seeds and see how well they do farming. In any case, miners told me during my visits to mining sites in South Kivu last summer that they were hurting--and that they blamed Dodd-Frank for their suffering. Still, I admit my own information was more impressionistic than data-driven, which is why I've repeatedly called on the major advocacy groups and their funders to dispatch a team of competent social scientists to find out what has happened to the miners. Unfortunately--and you can make of this what you will--this is something the advocates and funders have categorically refused to do.
3) So far this one is completely undisputed: the gold trade continues to flourish. (I would add that it seems to me like a bad strategy for the advocates to insist that gold be treated like the other minerals in the SEC regulations, because none except a few boutique jewelry companies is ever going to be able to say with any certainty that their gold products don't include conflict gold. And if every company that uses gold admits that they are unable to certify that their products are conflict-free, that dilutes the power of the rules to shame any one company's reputation.)
4) So far, with Bosco Ntaganda and whats-his-name dominating the mineral trade in North Kivu, this one is looking pretty good.
5) It seems to me that there is little evidence that the conflicts are diminishing because of the embargo. Time will tell, of course, but the fact is that it's been nearly a year since the embargo went into effect and I don't hear any of the advocates claiming that there has been an appreciable diminution in conflict as a result.
6) There is some evidence that this prediction is coming true: There are now three active Chinese comptoirs trading in e. Congolese minerals, up from one a year ago [1]. But I admit I'm surprised this process isn't happening faster than it has, and I'm not sure why it hasn't.  China is said to be in a bit of an economic lull at the moment, and maybe when it picks up speed again we'll see more Chinese jump into the trade. One thing seems clear: Chinese firms are not terribly afraid of Western moral disapproval.

So there they are, my six predictions about DF-1502 and the mineral trade in Congo. Twenty years from now, we'll be able to review the record dispassionately and determine what impact the conflict minerals campaign had. That, of course, is one of the luxuries that belong to us.

[1] I think there was only one, but I haven't been able to verify that yet. So consider this tentative.

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