Blood Diamonds. Bricey Kepnes, Meghan O Neill, Ryan Robinson, and Barry Stormer

Transcription

1 1 Blood Diamonds Bricey Kepnes, Meghan O Neill, Ryan Robinson, and Barry Stormer University of Akron, Department of Economics International Economics Dr. Ghosh December 6, 2013 Abstract: Our group researched the international trade of conflict diamonds and the implications they have on the Democratic Republic of the Congo. The research question we addressed is, How can a change in policy affect the welfare of the Democratic Republic of Congo, and how does this policy change the price of diamonds in the world market? Through economic analysis we concluded that the conflict diamond trade has a negative effect on the social and economic welfare of the Democratic Republic of the Congo. To improve the social and economic welfare of the Democratic Republic of the Congo we recommended that the Congolese authorities adopt a stronger regulation policy, restructure regional trading agreements, and engage in a controlled price fixing policy with their trading partners.

2 2 Introduction In our research paper, we will examine the effects of trading blood diamonds on the domestic diamond producing country, the Democratic Republic of Congo, and on the major importer, the European Commission. We will take a deeper look in to the economic effects of the blood diamond trade and how it impacts the nations involved. Our research will include detailed observation of the domestic producers of diamonds in Africa since two-thirds of the entire world s diamond supply stems from these countries. The domestic producer we are choosing to study is the Democratic Republic of Congo. The domestic country has been endowed with a curse of natural resources, which refers to the notion that although valuable natural resources can be a good thing, they can also lead to violence and chaos due to profit seeking and power hungry individuals in the market. Our research question is how can a change in policy affect the welfare of the Democratic Republic of Congo, and how does this policy change the price of diamonds in the world market. Even though these nations are blessed with valuable commodities, they are still among some of the poorest throughout the world due to criminal activity, unfair and harsh uses of labor, and a lack of government regulation. Our focus in this paper is not only on the economic effects of trading conflict diamonds, but also the ethical issues such as slavery and war that are closely linked to the subject. History of Trade Flows and Policy The Democratic Republic of Congo is a major trade partner in the exporting of diamonds. It is one of their greatest exports along with many precious metals and ores. Previously these precious metals, ores, and stones have been exploited by rebel groups in order to finance civil wars. The Democratic Republic of Congo has a population of 65,710,000 people hungry for change. Luckily, the Democratic Republic of Congo has begun to stop trading these conflict

3 3 diamonds, and has improved their economy through changes in policy and leadership. The minister for mines, Eugene Diomi Ndongala estimated that the Congolese treasury loses around $450 million a year because of diamond smuggling ("Democratic Republic of Congo"). Below we developed a table displaying the change in Imports, Exports, GDP and the Trade Share which our group has calculated from the data. There is no real pattern to the changes in imports and exports on an annual basis, other than over the past 10 years has steadily increased with a few decreased periods. It is also fair to say that GDP has steadily increasing over the past 10 years. Also trade share has been just as volatile as annual Imports and Exports are. DRC in bill $ Imports Exports GDP Trade Share Source: ("World Development Indicators-Google Public Data Explorer"), ("Democratic Republic of the Congo-Imports"), ("Democratic Republic of the Congo-Exports") - Trade Share calculated by group members.

4 4 According to the WTO the average tariff rate in the Democratic Republic of Congo is 12%. Most of their tariffs are ad valorem. Their tariff structure has 3 sections: 5% Equipment goods, raw materials, agricultural and veterinary supplies, unassembled equipment 10% Large consumable food items, industrial inputs, spare parts, and items for social services 20% Other finished products Sources for table: ("World Development Indicators-Google Public Data Explorer"), ("Democratic Republic of the Congo-Imports"), ("Democratic Republic of the Congo-Exports") The Democratic Republic s Offices of Congolese Control charges a 1.5% tax (again ad valorem) on the Cost, Insurance, and Freight value of all imports more than $10,000 and then uses a sliding scale for imports under $10,000. Also, on January 1, 2012 a new VAT tax ratio of 16 percent started to replace the consumption tax that existed before it. It is projected that the VAT could increase fiscal revenues however some worry it could lead to inflation. Wheat, flour, oil, milk, pharmaceuticals, and agricultural inputs are exempt from the VAT. Imported goods also bring in extra taxes for different government agencies. Importers pay between 10% and 40% (United States). The Democratic Republic of Congo is an original member of the World Trade Organization joining on January 1, Although one of the founding members, they are not very involved within the organization. The groups the DRC is involved in include the ACP, African Group, G-90, Least-Developed Countries, and W52 Sponsors. They are not very involved in multilateral trading and only have only communicated with the WTO on 8 occasions between 2004 and 2010.

5 5 In terms of Regional Trade Agreements, they are a part of 5 different RTA s. Part of the problem with participating in numerous agreements is that it can lead to a unclear trade policy. Later in the paper we will propose some ways to remedy this. The African Union (AU) is a regional trading agreement between 54 different nations within Africa. Their main mission is to have an integrated, prosperous and peaceful Africa, driven by it s own citizens and represent a dynamic force in a global arena and to become an efficient and value adding institution driving the African integration and development process in close collaboration with African Union Member States, the Regional Economic Communities and African citizens ("Vision and Mission"). The Economic Community of Central African States (ECCAS) is a regional trading agreement between Angola, Burundi, Cameroon, Centrafrique, Congo, Democratic Republic of Congo, Gabon, Guinea Equatoriale, Sao Tome et Principe, and Tchad. Their vision is they aim to achieve collective autonomy. raise the standard of living of it s populations and maintain economic stability through harmonious cooperation. Their main goal is to create a Central African Common Market ("Regional Economic Communities"). The Common Market for Eastern and Southern Africa (COMESA) is a regional trading agreement of 19 countries in Africa. Their vision is to be a fully integrated, internationally competitive regional economic community with high standards of living for all it s people ready to merge into an African Economic Community ("About COMESA"). Their mission is to Endeavour to achieve sustainable economic and social progress in all Member States through increased co-operation and integration in all fields of development particularly in trade, customs and monetary affairs, transport, communication and information,

6 6 technology, industry and energy, gender, agriculture, environment and natural resources ("About COMESA"). The Southern African Development Community (SADC) is another regional trading agreement of 15 African states. Their vision is to build a region in which there will be a high degree of harmonisation and rationalisation, to enable the pooling of resources to achieve collective self-reliance in order to improve the living standards of the people of the region. Their mission is to is to promote sustainable and equitable economic growth and socio-economic development through efficient, productive systems, deeper co-operation and integration, good governance, and durable peace and security; so that the region emerges as a competitive and effective player in international relations and the world economy ("SADC Mission"). The Economic Community of the Great Lakes Countries (CEPGL) is a regional trading agreement between The Democratic Republic of Congo, Republic of Rwanda, and the Republic of Burundi ("CEPGL"). Current Trade Patterns and Partners In the past, one of the Democratic Republic of Congo s primary trading partners was Belgium. In recent years, DRC has traded with South Africa, China, Zambia, and France (Britannica). The next section the products traded in between partners will be discussed. It will then list and describe the DRC s major trading partners. There will be a summary of trade patterns with China and the European Union. The DRC s GDP is made up of three sectors: agricultural, services, and manufacturing. The DRC s agricultural sector accounts for 44.2% of the DRC s GDP (CIA). Coffee is the

7 7 DRC s primary agricultural export. Much of the coffee produced in the DRC is actually smuggled out of the country and is unaccounted for in the GDP of the country (Britannica). Crude petroleum, cobalt, and copper have also become significant exported goods in the DRC s economy. Production of palm oil, rubber and cotton have become negligible in recent years because of the increased production in coffee and diamonds. The mining or services sector accounts for 33.1% of the DRC s GDP (CIA). Diamonds are the main mineral resource. Most of the country s total exports are from diamonds that account for about half of the country s trade revenue (Britannica). The DRC s hydroelectric resources account for an eighth of the global capacity. The DRC is able to contribute such a substantial amount to the world because of the rapids that run along the Congo system and the thermal energy from the abundant forests, coal and petroleum from the country s landscape (Britannica). The DRC s manufacturing sector does not account for a very large proportion of GDP, only 22.6% (CIA). In 2012, the greatest volume of imports to DRC came from South Africa with 21.4% of total imports. 15.1% of imports came from China, 7.5% from Zambia, and 4.9% from France (CIA). The DRC imported commodities such as foodstuffs, mining and other machinery, transport equipment and fuel. The DRC s closest trading partner, Zambia, exports copper, cobalt, electricity, tobacco, flowers and cotton (CIA). Trade between China and DRC China is the DRC s top trading partner. China s 2012 Purchasing Power Parity, used in place of GDP due to exchange rate fixing in China, was $12.61 trillion. In 2012, the DRC exported 53.4% of its total exports to China (CIA). As seen in the graph below, the DRC s exports to China in 2008 was just under $1,600 million; 48% in The DRC imported

8 8 around $200 million worth of good from China in 2008; 15.1% of imports in 2012 (Jansson; CIA). Source: Jansson. As seen in Figure 5, in 2008 the DRC s top import from China was electrical appliances with 32% of total imports. The DRC also imported vehicles (20%), machinery (12%), textile products (10%), pharmaceutical products, leather, footwear, food stuffs, wax products and paper products (Jansson).

9 9 Source: Jansson. Figure 6 shows the exports from the DRC to China. In 2008, cobalt accounted for 70% of the exports going to China. This was a significant increase in the export of cobalt compared to the previous year. This is because cobalt is used in the production of electronics, one of China s major exports. 28% of exports to China were copper. The remaining 2% was accounted for with the exporting of wood products, diamonds, chemicals, and other ores. In 2012, the DRC exported to China. China has also become involved with DRC s mining infrastructure. China s investment in the mining infrastructure in the DCR was intended for building roads, railways and infrastructure (Jansson).

10 10 Source: Jansson. Trade between the European Union and DRC The European Union is also a major trading partner with the DRC. The following graph shows trade data from the EU to the DRC for The DRC imports machinery and transport equipment (45.7%), food and live animals (20.4%), chemicals and related products (14.4%), manufactured goods (8.1%), and other goods (European Commission). The majority of goods the DRC exports to the EU is manufactured goods classified by materials (77.4%).

11 11 Source: European Commission. The following graph shows the distribution by value and total share of different product grouping for exports and imports between the EU and the DRC. As seen in the graph, the EU imports 58.5% of their fuel and mining products from the DRC. Of that 58.5%, 52.8% of non ferrous metals which include aluminium, copper, cobalt, and precious metals are imported from the DRC. 72.7% of the DRC s imports are from manufactured goods (European Commission).

12 12 Source: European Commission. Current trade policy The Democratic Republic of The Congo is not easy place to do business. The World Bank measure the ease of doing business in countries around the world and ranks each country, this is referred to as their ease of doing business rank (EDBR) (The International Finance Corporation). The DRC s current EDBR is 183 out of 189 countries (The International Finance Corporation). The DRC ranks very low in many critical categories, including dealing with construction permits, registering property, protecting investors, enforcing contracts, resolving in efficiencies, paying taxes, and trade across borders (The International Finance Corporation). Obviously low rankings in dealing with construction permits, registering property, and protecting investors, are all deterrents to foreign investment. However the two of the most concerning rankings relating to trade are paying taxes, and trade across borders. In fact a report by the World

13 13 Bank states that the DRC s official business taxes are some of the highest in the world, and are equivalent to almost 340% of profits (The International Finance Corporation, and The World Bank). Clearly, the DRC s outrageous taxes and lack of governance are impeding their ability to create trade, and draw foreign investment. Over the past few years The Democratic Republic of The Congo has embarked on a number of different initiatives to rebuild their domestic economy and reestablish their presence as an economic power in the central region of Africa. Most recently the Congolese government undertook to an initiative to establish multiple special economic zones. The Congolese authorities worked in conjunction with the International Finance Corporation, a sub-division of the US based World Bank Group, to establish a special economic zone (SEZ) in the Kinsasha region focused on growing agro-industries (The International Finance Corporation). The goals of establishing SEZ s are to, kick start investment that would otherwise not take place. Focus the World Bank Group and other donor efforts around the SEZ Program I. (and to) Circumvent inefficient and often corrupt procedures and practices and provide models for reform (in areas such as private provision of infrastructure services, streamlined administrative measures and a modern labor regime). (The International Finance Corporation). The Congolese government is working to make their country a more attractive place to do business, but they have a long way to go. A major industry of trade for the DRC is the international diamond industry. There have been a number of different international initiatives to reform the diamond industry, and make it more efficient. A big factor of these reforms is reducing the flow of conflict diamonds. In 2003, the United States Congress passed The Clean Diamond Trade Act. This bill outlines the current U.S. policy on rough diamond trade. The Clean Diamond Trade Act places

14 14 import and export bans on all rough diamonds not certified by the Kimberley Process Certification Scheme. The Clean Diamond Trade Act designates the U.S. Bureau of Customs and Border Protection as the import authority and designates the Bureau of the Census as the export authority. The Clean Diamond Trade Act repeatedly references the Kimberley Process Certification Scheme (KPCS). The KPCS is a joint government, industry, and civil society initiative to stem the flow of conflict diamonds (Kimberley). The current KCPS evolved from the Technical Forum on Diamonds, which was held in May 2000, in Kimberley, South Africa (Angola). In November 2002, the Process finalized the Kimberley Process Working Document, as the Kimberley Process Certification Scheme (Cook). The Certification Process is continually amended to accommodate the ever changing trade environment. Dealers in conflict diamonds are always looking for loop-holes and weaknesses in the certification process. With 81 countries participating in the KPCS (Khumalo), the easiest way to get diamonds to major markets is to simply get them Kimberley Certified. The Kimberley process is more effective when more countries participate in the KCPS. The ideal scenario for the KCPS would be to have all countries globally participate. This scenario is unlikely to occur and still would prove to be ineffective in stemming the flow of conflict diamonds. Simply by definition, countries who export conflict diamonds are often consumed with social and political turmoil. Dealing with such issues makes it difficult, if not impossible, for domestic governments in these countries to effectively regulate trade. Though the KPCS is theoretically a viable solution, the real world implementation of the KCPS is largely ineffective. Aside from the issue of domestic regulation, the diamond market itself creates many barriers to regulation. The most obvious of these barriers would be the nature of the black market itself. The

15 15 black market serves the producers and consumers of illicit goods in limited supply. Diamonds are a highly demanded material in the production of a variety of products besides jewelry (i.e. saw blades, tools, lasers). The high demand for diamonds, combined with the limited global supply, provides the perfect environment for the black market of conflict diamonds to thrive. It simply comes down to the fact that there will always be consumer demand for diamonds, and there will always be producers (legitimate and illegitimate) willing to meet that demand. Another huge barrier to effectively regulating the diamond market is the physical size of diamonds themselves. Diamonds are typically small and easy to hide, which makes them very easy to smuggle. The easier something is to smuggle, the more likely it is to reach its market. Producers of conflict diamonds are rebel or opposition groups who have ties to larger global crime syndicates and terrorist organizations. These criminal associations make smuggling conflict diamonds even easier for producers. Having markets for diamonds across the globe, and given the ease of smuggling them, producers of conflict diamonds will likely continue to supply buyers around the world. Policy Evaluation I The economy of the Democratic Republic of the Congo - a nation endowed with vast potential wealth - is slowly recovering from decades of decline (CIA). A weak foundation of government, economic instability, and unstable resource exploitation has left the potentially booming economy of the Democratic Republic of Congo in a state of turmoil and poverty. A closer examination of current trade policy begins to piece together the reasons for the DRC s economic hardships.

16 16 The DRC as a nation relies heavily on imported goods from foreign countries such as South Africa, China and Belgium. These trading partners provide the DRC with a combined 44.4% of all imports (CIA). These imports consist mainly of basic goods such as food stuffs, machinery, fuel (CIA). The Democratic Republic of Congo s GDP consists of 58.5% exports of goods and services which originate from their abundant agricultural and mining resources (CIA). However, under current trading policies the DRC is not reaching its full production possibilities in their mining industry. More specifically the DRC s weak government and trade policy prohibit the country s ability to raise production in their diamond industry. The country was the world s fourth largest producer of industrial diamonds during the 1980s, and diamonds continue to dominate exports, accounting for nearly half of the country s mining exports (US$828 million) in (SADC) However, as opposition groups in the country began to combat the established government, diamond production fell due to a rise in the informal sector, more commonly known as the black market. Although the DRC's formal mining sector declined during the war, output from informal mining increased. Informal mining includes activities without an official government-issued concession-mainly small-scale mining-which are not systematically recorded. According to IMF estimates, informal diamond mining in 2004 reached a record 22.1 million carats, compared to 8.8 million carats produced by formal industrial miners (revenue watch). This black market activity has hindered the country s ability to formally produce diamonds, furthermore, diamond exporting and GDP growth of the DRC are severely crippled under current trade policies that allow informal sector production to occur. Economic analysis suggests that the Democratic Republic of Congo has a comparative advantage in natural resources, however, inefficient regulation and unproductive trade policies in the mining sector prohibit growth in GDP and exports.

17 17 The Hecksher-Ohlin Theory of Factor Endowments states that a country will have a comparative advantage in, and hence export goods that are intensive in its abundant factors of production, and import goods that are intensive in its scarce factors of production (Carbaugh). In 2009 African Business stated that the total mineral wealth of the Democratic Republic of the Congo (DRC) is estimated to be $24 trillion equivalent to the GDP of Europe and the United States combined (web). This statement, as well as existing economic data from the WTO, and CIA provides evidence of the DRC s comparative advantage in natural resources and land. The theory suggests that a country with a factor endowment in one factor of production or the other (land, labor, capital) should engage in international trade with a country who has a different endowment, in order to minimize production costs and maximize consumption and trade gains. By application, this means that the DRC will specialize in the production and trade of goods and services that stem from its abundant natural resources to countries who specialize in the DRC s scarce factors of production such as capital abundant or labor abundant countries. However, after evaluation of the DRC s current policies, the country has not fully specialized in its endowment of land which hinders its comparative advantage in natural resources. The Ricardian Principle of Comparative Advantage suggests that a country should specialize in the good in which it has a comparative advantage and then engage in trade (Carbaugh), but the lack of regulation under current policy in the DRC s diamond and mining industry prevents further specialization to occur. The existence of a black market and warring factions over the country s natural resources prohibits the potential gains that could be made not only for the economy but for the social welfare of the citizens as well. The Hecksher-Ohlin theory suggests that the DRC will trade for goods that it has a comparative disadvantage in. This means the DRC could trade for capital related goods and labor related goods that could help

18 18 improve a country in desperate need of new infrastructure, which would maximize social welfare through improved standards of living. Furthermore, if the DRC invoked mining industry policies that followed the ideas suggested by the Ricardian Principle of Comparative Advantage and the Hecksher-Ohlin Model, they would reap the trade benefits of additional exports and imports moving them to a new higher point of consumption and increased social welfare. A further evaluation of policy, takes a glance at the Democratic Republic of Congo s regional trading agreement strategy. They are currently members of 4 different regional trading agreements, the Common Market for Eastern and Southern Africa, Southern Africa Development Community, Central Africa Customs and Economic Union, and the East Africa Community (WTO). Although regional trading agreements do benefit the DRC, the countries involved still lag in trade compared to other developed countries outside of Central Africa (Europa). Regional Integration is essential to developing a smooth flow of trade between the African nations which will further allow the DRC to expand international trade. Also, to aid in regional integration, the Democratic Republic of the Congo needs to revise its customs policies and government procurement as well (WTO). The poor customs system of the country often slows down the import and export process and hampers the flow of trade. The country would benefit from implementation of a better computerized customs system, which would increase the speed at which trade occurs, furthermore, increasing the volume of trade. Current trade policy has begun to slowly improve over the last decade. Efforts to move into a more regulated diamond industry have shifted funds out of the informal sector and into the formal sector. GDP in the Democratic Republic of Congo has steadily been on the rise has it has increased by around 6% each year since 2005 (WTO). The countries efforts to create transparency in the diamond industry has led to an increase in demand of foreign investors who

19 19 now can visibly see that they are investing in a safe industry that does not endorse war, arms trafficking or human rights abuses (WTO). The bolstered strength of the government has provided hope for economic stability as it continues to make strides by use of economic regulation. The increase in government presence has also led to legislation within the country that positively boosts the overall welfare of the people via economic and structural reforms. Black market trade, smuggling, and war are still major issues that are occurring in the Democratic Republic of Congo s economic system. Until the government can fully stand against corruption and create strong regulatory policies, the volume of trade will be crippled by the inefficient exploitation of resources such as diamonds in the DRC. In regards to our research question, the effect of the diamond trade on the Democratic Republic of Congo is what is known as a resource curse. The DRC is blessed with the valuable commodity of precious minerals, however political corruption and inefficient markets without regulation lead to mass chaos, violence, and illegal activity. The country as a whole has been negatively affected by the diamond trade as continual war prohibits economic sustainability. The country, with the aid of the IMF, UN and World Bank, has begun to take strides in the right direction by creating a stronger government, added business regulations, and transparency within the industry which has led to a more stable economy. The recent moves toward regulation in the country have begun to benefit the economy through increased foreign investment, shifts from the black market back to the country s GDP, and increased social welfare. Recommendations Based upon our findings in the policy evaluation, we believe that the Democratic Republic of Congo would benefit from the use of specific economic policies that will strengthen the country s economy. Increased government regulation, increased commercial monitoring, the

20 20 restructuring of regional trade agreements, and price fixing of diamonds could all be deployed to help create economic stability in the Democratic Republic of Congo. First, the country needs to inhibit strong government leadership that has the ability to regulate industry. Historically, the Democratic Republic of Congo has been bogged down by corruption of government officials, a lack of production potential, war, and social unrest. Unseating the corruption in the political system via means of transparency and legislation will create a strong government unit which can act to regulate the economy in an attempt to prohibit the black market, and increase flows of trade through legislation (WTO). Pro trade legislation will lead to the utilization of the theory of Ricardian Comparative Advantage and further specialization efforts in the agricultural and mining industry (Carbaugh) Increased regulation may slow down production in the short run, however, in the long run the country will benefit from increased stability in the macroeconomy, and the government, which in turn will promote social welfare gains. It is also to be noted that the DRC needs to increase the monitoring of commercial industries involved in the diamond trade. By creating an independent monitoring agency that seeks to regulate, audit and create transparency in the diamond industry, the DRC can will gain GDP and export growth from shifts from the informal sector back to the formal sector. The figure shows that once the black market trade is stopped there will be a sharp increase of the supply in diamonds back to the formal sector. The effects of this can be seen in Appendix A, Figure 1. This increase in supply will be paired with an increase in demand as foreign investors will be attracted to the profitability of a now regulated, legal and stable diamond market. This pairing of the events will lower the overall price of diamonds, however, the DRC will benefit from overall increase in exports of diamonds and an increase in the volume of trade. The DRC

21 21 also stands to benefit from a regulated diamond industry because it will cut down the numbers of wars on natural resources and prohibit human rights abuses which will further increase the country s social welfare. The institution of a strong government presence and economic regulatory policies will create stability in the DRC s domestic market. However, the country can further benefit from restructuring its current trade agreements with other neighboring African nations. The formation of a stronger customs union or common markets will allow the African countries to benefit from regional integration, and free movement of factors of production, which would drastically benefit the DRC s deficient capital resources in machinery (Carbaugh). The dynamic effects of a better regional trading agreement would allow the member African nations long run rates of growth to improve, furthermore befitting the country and the social welfare. Lastly, after government presence established, economic regulation has occurred, and the formation of a stronger African Regional Trading agreement has taken shape, the member nations could invoke a fixed pricing scheme in the diamond market which would allow them to gain from the revenues of diamond exports. The African Union, possibly consisting of nations such as the DRC, Sierra Leone, Angola, Ivory Coast and Liberia could control the flow of diamonds in and out of Africa since they together are the among the world s top diamond exporters (CIA). The price fixing above a point of marginal revenue equal to marginal cost will allow the Union to profit from a monopoly on the now regulated diamond industry which, would result in an increase in revenues on diamond exports. This can be scene in Appendix A, Figure 2. Furthermore, the additional GDP growth funded from the price fixed diamond industry would improve the economic conditions in the member African nations, namely the DRC and result in social welfare gains.

22 22 Conclusion In conclusion, the Democratic Republic of the Congo under its current trade policies are running inefficiently. The country can change its current policy through the institution of a strong government, an economic regulatory system, restructured regional trade agreements, and by implementing a controlled price fixing policy policy for the diamond market, in cooperation with it s trading partners.

23 23 Works Cited "About COMESA." COMESA. COMESA. Web. 6 Dec < 114>. Angola Peace Monitor. "Angola: Conflict Diamonds Being Squeezed." All Africa. All Africa, 05 Oct Web. 22 Nov < African Economic Outlook. Democratic Republic of Congo Web. 20 NOV < Carbaugh, Robert J. International Economics. 13th ed. N.p.: South-Western, Print. "CEPGL." CEPGL. CEPGL. Web. 5 Dec < Central Africa. Europa. European Commission, 19 Nov Web. 6 Dec < CIA Fact Book. The Democratic Republic of the Congo. Web. 20 NOV < Cook, Nicolas. Diamonds and Conflict: Background Policy and Legislation. Rep. no. RL Congressional Research Service, 16 July Web. 22 Nov < "Democratic Republic of Congo." Diamond Empowerment Fund. Diamond Empowerment Fund. Web. 5 Dec < ocratic-republic-of-congo/>.

24 24 "Democratic Republic of the Congo-Exports." IndexMundi. IndexMundi, 1 Jan Web. 5 Dec < "Democratic Republic of the Congo-Imports." IndexMundi. IndexMundi, 1 Jan Web. 5 Dec < The International Finance Corporation. "Economy Rankings." Ranking of Economies - Doing Business - World Bank Group. The World Bank Group, June Web. 04 Dec < The International Finance Corporation, and The World Bank. Doing Business in a More Transparent World. Rep. The International Bank for Reconstruction and Development / The World Bank,2012. Web. 6 Dec < l-reports/english/db12-fullreport.pdf>. Khumalo, Thuso, and Chrispin Mwakideu. "Kimberley Process Seeks to Tighten Flow of Blood Diamonds." DW.DE. Ed. Mark Caldwell. Deutsche Welle, 19 Nov Web. 22 Nov < >. Encyclopedia Britannica. Democratic Republic of Congo. 12 APR Web. 20 NOV < Congo-DRC/40803/Transportation-and-telecommunications>.

25 25 European Commission. 11 July Web. 20 NOV < Jansson, Johanna. Patterns of Chinese Investment, Aid and Trade in Central Africa. World Wide Fund for Nature Web. 20 NOV < august_2009 _2.pdf>. Kimberley Process. "The Kimberley Process (KP)." The Kimberley Process (KP). N.p., n.d. Web. 22 Nov < "Regional Economic Communities." African Union. Economic Community of Central African States. Web. 5 Dec < SADC. South African Development Community. SADC, Web. 6 Dec < member-states/dr-congo/>. "SADC Mission." Southern African Development Community. Southern African Development Committee. Web. 5 Dec < The Democratic Republic of The Congo. Trade Policy Review Body.Trade Policy Review Report. World Trade Organization, Web. <

26 26 United States. United States Trade Representative. Democratic Republic of the Congo Print. < ic_republic_of_the_congo_final.pdf>. "Vision and Mission." African Union. African Union. Web. 5 Dec < "World Development Indicators-Google Public Data Explorer." Google. Google, 8 Sep Web. 5 Dec < cd&hl=en&dl=en&idim=country:zar:zwe:ken World Trade Organization. TRADE POLICY REVIEW Report by the DEMOCRATIC REPUBLIC OF THE CONGO. N.p. World Trade Organization, 20 Oct Print.

27 27 Appendix A Figure 1. Figure 2.