INSURGENTS EARN BILLIONS SELLING GEMS AND DRUGS, WORLD BANK FINDS

'Diamonds are a guerrilla's best friend'

WASHINGTON - A far-ranging World Bank study on the world's rebel movements
says guerrilla groups earn billions of dollars each year from trafficking in
drugs and diamonds.

"Diamonds are a guerrilla's best friend," said Paul Collier, director of
research for the bank's development economics department, who looked at 47
civil wars over the past 40 years.

The continuing conflict in Sierra Leone is only the latest example of rebels
financing a war by selling diamonds. Insurgent groups in Angola traded gems
for guns, while in the Democratic Republic of Congo and Liberia, governments
are also implicated in diamond trafficking.

"Rebel groups need to meet a payroll without producing anything, so they
prey on an economic activity that won't collapse under the weight of their
predatory activities," he said.

They find plenty to sell in developing nations that produce primary
commodities for export -- legal examples are coffee and diamonds, illegal
ones are cocaine and heroin. "Ordinary developing countries are pretty safe
from internal conflict, while when such exports are substantial, the society
is highly dangerous," he said.

The rebel groups usually prefer countries that are rich in primary products,
rather than manufactured ones, simply because this means they can make money
no matter who is running the country.

"Rebels don't kill off the activity or force it to shift elsewhere as would
happen if manufacturing were the target."

The amounts of money generated this way can be huge.

The World Bank study found that the Angolan rebel group, UNITA, accumulated
more than US$4-billion in assets -- US$2-billion in diamond sales alone --
in its first war against the Angolan government, money that it used to
finance its second war.

The Colombian rebel group Revolutionary Armed Forces of Colombia (FARC)
rakes in more than $700-million a year from illegal drug profits and
kidnapping ransom. FARC was widely suspected of being behind last year's
kidnapping of seven Edmonton pipeline workers in nearby Ecuador. They were
held for 100 days, before being released in December after a ransom of
US$2.5-million was paid.

"Wars from Sierra Leone to Colombia create profitable opportunities for a
minority of people at the same time as they destroy them for the majority,"
said Mr. Collier.

Emigrants are becoming an increasingly important source of funding for civil
wars. The World Bank study shows that a country is six times more likely to
be involved in a civil war if it has a large emigrant population in the
United States.

For example, the border dispute between Ethiopia and Eritrea in the Horn of
Africa is being partially financed by their respective communities in the
United States.

Mr. Collier said it is often difficult to tell which came first in a civil
war -- that "we're a greedy bunch of thugs or a bunch of heroes fighting a
just cause."

But one mistake made by governments under siege is to try to buy off rebels
by making rebel leaders part of the legitimate government. "If it is
profitable for one rebel group to be predatory on primary commodity exports,
once it has been bought off it will probably be profitable for another group
to replace it," he said. Once a country has been through a civil war, there
is a 40% likelihood it will soon go through another.

The international diamond industry is trying to respond by stemming the flow
of conflict or blood diamonds from countries such as Sierra Leone and "going
for the jugular by cutting their revenues."

However, he said the call by human rights groups for a widespread diamond
boycott would hurt countries like Botswana, which has rebuilt its economy
through diamond sales.Instead, the report called on developing countries to
try to reduce their dependency on commodity exports. They should also use
revenues from commodity sales for public health and education programs to
try to make the rebels unpopular.

Civil wars usually affect civilians the most, with nine out of 10 casualties
being non-combatants. Since 1989, four million people have died in civil
wars. Another 35 million have been forced to flee to other countries or to
remote regions for safety.