The Political Economy of the Democratic Republic of Congo Integration in the Economic Community of the Great Lakes Countries (CEPGL) Contents LIST OF TABLES...... 3

ABBREVIATIONS AND ACRONYMS...... 4

1. Introduction...... 5

2. The Economic Community of the Great Lakes Region States (CEPGL)...... 6

2.1. The first phase of the CEPGL: from 1976 to 1994...... 6

2.2. Second phase: from 2007 to date...... 7

3. Historical background of regional integration in the CEPGL region...... 8

4. The Politics of DRC integration in CEPGL...... 11

5. The Economics of DRC integration in the CEPGL: An integration from bellow...... 16

6. Conclusion...... 21

7. References...... 22

2 LIST OF TABLES Table 1: CEPGL in Statistics in 2012...... 6

Table 2: Rwandan and Uganda diamond exports, 1997 - October 2000...... 10

Table 3: Intra-CEPGL trade...... 19

Table 4: Estimated of formal and informal trade in food staples in 2009 for Eastern DRC, Kenya, Rwanda and Uganda (in tons)...... 19

3 ABBREVIATIONS AND ACRONYMS

AFDL : Alliance of Democratic Forces for the Liberation of Congo

ASF : African Standby Force

BDGL : Development Bank of Great Lakes Countries CAD : Canadian Dollars

CEEAC : Economic Community of Central African States CEPGL : Economic Community of the Great Lakes Countries. COMESA : Common Market for Eastern and Southern Africa DRC : Democratic Republic of Congo EAC : East Africa Community ECA : Economic Commission for Africa ECCOWAS : Economic Community of West African States EGL : Energy Organization of the Great Lake Countries

GDP : Gross Domestic Product ICRGL : International Conference in the Region of the Great Lakes

IMF : International Monetary Fund

IRAZ : Institute of Agriculture and Livestock Research

OAU : Organization of African Unity

RCD : Rally for Congolese Democracy

REC : Regional Economic Community

RPF : Rwandan Patriotic Front

SADC : South African Development Community SINELAC : International Great Lakes Energy Company UN : United Nations

UNICTAD : United Nations Conferences for Trade and Development

USA : United States of America

WTO : World Trade Organization

4 1. Introduction Reports of different international organizations present the Economic Community of Great Lakes Countries (CEPGL) as the least dynamic regional economic community (REC) in Africa. This REC, which is one of the firsts to be created in Africa, is now left far behind by other RECs from Eastern (EAC and COMESA), Western (ECCOWAS) and Southern Africa (SADC). While these four RECs have interesting achievements with regards to the Abuja Treaty objectives1, the results of the CEPGL are disappointing. The EAC for example has succeeded to launch its customs union and common markets since January 2010 and July 2010 respectively whereas the CEPGL is still at the stage of solving conflicts among its members.

The current lethargy which characterizes the CEPGL is the results of the political instability in the region since the nineties. Countries of the Great Lakes Region have in fact been experiencing violent conflicts which have undermined the regional integration process started in 1976. Many efforts have been undertaken to promote peace and stability in this region but with mitigated results. The Democratic Republic of Congo (DRC) is the country which suffers the most from this instability. According Stevens et al. (2008), factors such as lack of political vision, political will, human and financial capacities did not allow this country to profit from those efforts in order to strengthen its regional position.

The DRC is one of the biggest countries in Africa, located at the heart of this continent. This geographic position explains the country’s membership to four RECs: CEEAC, SADC, COMESA and CEPGL. Given its demographic and economic potential (see Table 1), DRC was expected to be a key player in those different RECs and particularly in the CEPGL. Despite its low GDP per capita,

1 According to the ECA (2012), The African Economic Community should be formed in six phases over 34 years: - First phase (five years): Strengthen existing RECs and create new RECs in regions where they do not exist. - Second phase (eight years): Ensure consolidation within each REC, with a focus on liberalizing tariffs; removing non-tariff barriers (NTBs); harmonizing taxes; and strengthening sector integration regionally and continentally in trade, agriculture, money and finance, transport and communications, industrial development and energy. - Third phase (10 years): Set up in each REC a free trade area (FTA) and customs union (with a common external tariff and a single customs territory). »» Fourth phase (two years): Coordinate and harmonize tariff and non-tariff systems among the RECs with a view to establishing a continental customs union. - Fifth phase (four years): Set up an African common market. - Sixth phase (five years): Establish the AEC, including an African Monetary Union and Pan-African Parliament.

5 the DRC has a huge potential for playing a leading role in the CEPGL region. Beside the important natural resources that the country possesses, its GDP and the size of its population are very important compared to those of Rwanda and Burundi and make it an important country in the region. However, political and economic instability did not allow this country to play such a role.

Table 1: CEPGL in Statistics in 2012 GDP 2012 GDP growth rate GDP per capita Size of the population DRC 17,869,718,210 7,2 272 65,705,093 Rwanda 7,103,000,861 8 620 11,457,801 Burundi 2,471,954,069 4 251 9,849,569 Total 27,444,673,140 87,012,463 Source: World Bank Database

This paper is an attempt to explain the politics and economics of DRC’s integration in the CEPGL. The paper is divided into six major sections: section two presents briefly the CEPGL and its major achievements. Section three gives a historical background of the regional trade in the Great Lakes. Section four analyses the political factors behind DRC’s integration in the CEPGL while section five analyses the economic ones. Section six concludes the paper.

2. The Economic Community of the Great Lakes Region States (CEPGL) Two major phases can be identified in the life of the CEPGL:

- The first phase which runs from its inception in 1976 to 1994

- The second phase from 2007 to date

2.1. The first phase of the CEPGL: from 1976 to 1994 The CEPGL was created on the 20th September 1976 in Gisenyi under the initiative of the former president of Congo (Zaire), Mobutu. It has three countries member: the Democratic Republic of Congo, Rwanda and Burundi. It has its headquarters in Gisenyi, in Rwanda2.

The CEPGL has some concrete achievements, although their impact to the everyday life of the population is negligible:

- The first one is the International Great Lakes Energy Company (SINELAC). The aim of this company is to produce and furnish electricity to members of the CEPGL.

2 For more information, visit the website of the institution: http://www.cepgl-cepgl.org/services.php? category_id=74&lg=fr 6 SINELAC was created on the 17th February 1984 and exploits a hydro dam in the Congolese territory at Mumoshu, in the Southern Kivu province. Between 1991 and 2001, this dam has furnished on average respectively of 45%, 17% and 21% of the national production of electricity of Rwanda, Burundi and Congo. The major problem SINELAC is facing is the incapacity of states member of the CEPGL to pay the electricity bills. As an example, DRC was unable to pay 92% of total value of the energy supplied by SINELAC (Muhinduka, 2004) - The Development Bank of Great Lakes Countries (BDGL): This bank aimed to finance community projects. It was created on the 9th of September 1977 and had its headquarters in Goma (DRC). The bank was operational only from 1984 to 19943 and has financed 31 projects in the DRC, 7 in Rwanda, 7 in Burundi and 1 community project (SINELAC). Its bankruptcy in 1996 was mainly due to the non viability of projects financed in the DRC. As an example, all the 14 projects financed by the bank in the Kivu region (DRC) have bankrupted only few years after their inception (Bwenge, 2006).

- The Institute of Agriculture and Livestock Research (IRAZ): aimed to do research in the domains of agronomy and zootechnics.

- The CEPGL identity card: This enables free movements of people within the community.

- The Energy Organization of the Great Lake Countries (EGL): aims to improve cooperation amongst members in the energy sector.

2.2. Second phase: from 2007 to date

The Economic Community of the Great Lakes Countries collapsed in the mid-1990s, precisely in 1994, due to conflicts within and between the member states. After more than 13 years of lethargy and under the pressure of the international community, the ministries council held in Bujumbura on the 17th April 2007 decided to re-launch the CEPGL activities.

Originally designed as an organization aiming to promote economic cooperation, the CEPGL, in this second phase, has a more explicit mandate with respect to governance and peace

3 For more information, consult the following link : http://www.senate.be/www/? MIval=/publications/viewPubDoc&TID=50347104&LANG=fr 7 building. During the ministries council held in Bujumbura from 25 to 26 July 2011, three priorities were retained on the CEPGL agenda for the next five years (from 2011 to 2016):

- Peace, security and good governance - Energy and infrastructures - Agriculture and food security

3. Historical background of regional integration in the CEPGL region Although the recent economic and political developments in DRC, Burundi and Rwanda have tremendously reshaped the cross border activities among the three countries, in terms of quantity, types of goods traded, categories of actors involved in these activities, it is important to acknowledge that the trade cooperation, particularly the informal one, in this region is not new as such. Yet during the colonial period and even before, the small-scale local economic transactions already existed and connected the market of Goma in DRC to those of Rwanda, Burundi and Uganda. Products such as bananas, sorghum were traded from Goma to markets in Rwanda, Uganda and Burundi.

Burundi, Rwanda and the Eastern DRC have a long history of commercial exchanges. As argued by Bwenge (2003), the Kivu province is, historically and sociologically, turned to the East Africa than to Kinshasa. Similarly, Newbury (1980) demonstrates that commercial relationships between people in the Northern and Southern Kivu have been intense since the pre-colonial period. This pre-colonial cross border trade was completely autonomous, disconnected to the rest of Africa and in particular to the coastal region (Dar-es-Salaam or Mombasa).

Newbury argues that despite the cultural and political differences between populations living across the Congolese-Rwandan border, their long historical interactions have constituted a basis for the development of the trade links between people of Rwanda, Burundi, Uganda and Eastern DRC during the nineteenth century. For example, the Nyanga, Tembo, Nande, Shi and Havu on the Congolese side and Rwandese, in majority Hutu, were involved in the cross border exchanges before even the arrival of colons in that region. Three major commodities characterized the cross border trade in the pre-colonial period: foodstuffs, livestock and the fiber bracelets. Foodstuffs such as beans, beer, bananas and fish were exported to Rwanda mainly through Idwi in DRC while Cattle (goats and sheep) were imported by Congolese

8 from Rwanda. The fiber bracelet was one of the most important products exported to Rwanda by Congolese, in particular the Tembo. The demand of this product was justified by the existence of social stratification in Rwanda where fiber bracelet was considered as a prestige product demonstrating the membership to the high class.

After the colonial period, these activities did not interrupt. The deterioration of economic conditions of the Congolese population since the authoritarian Mobutu era has pushed this population to develop survival strategies outside of the official economy. Tull (2003) argues that, since the Mobutu period, the economic realm in the DRC has been characterized by a systematic pillage of resources and of anarchy, while clandestine trade deprived the state of taxes. This pillage has been exacerbating during the war period. The peace process since 2003 did not allow the state in DRC to build democratic and transparent society. Vlassenroot et al. (2007) demonstrate that this peace process has reconfirmed patrimonial rule and the use of public positions for private gains. Checkpoints, convocations, fines and taxes are still widely used tactics to increase personal revenue. State’s officials are untouchable because of the lack of appropriate mechanics that could make them accountable vis a vis of the society. One of the consequences of the failure of the state during the Mobutu regime is that the borders with its neighbors become porous borders, facilitating the informal cross border trade which has been developed by populations as a survival strategy (Reyntjens, 1999).

Since the beginning of the 1970s, the informal cross border trade at DRC´s borders with its neighbors was one on the most widespread in Africa, leading to very important losses of revenue for the government (Vwakyanakazi, 1991, Vlassenroot et al. 2007). As showed by Vwakyanakazi, during the 1980s, around 60% of local production of coffee was fraudulently exported from Goma, and more than half of the production of papaya and tea was smuggled by small traders through Goma’s international airport. It is then clear that for quite a long period, Goma has occupied a core position is the regional informal trade. This position has been reinforced since the outset of the war in 1996 in the Eastern part of DRC when the city of Goma became a strategic political and economic centre: it was the headquarters of AFDL and RCD rebellions and was and is still used as a trading centre of minerals. Since then, the city has become an important market for minerals but also for imported manufactured products and represents an important link between DRC and Eastern Africa. The Goma- Gisenyi border is considered as the most important one which link Goma to Rwanda markets, but also other regional markets (Uganda, Kenya) and international markets (Dubai, Hong Kong, Guangzhou, etc.). 9 As highlighted above, the cross border economic transactions, in particular the informal ones, have substantially increased since the middle of the nineties. The political instability in the DRC and the incapacity of its government to control its borders on the one hand and the arrival in Rwanda of a new regime with a new political vision and economic perspectives on the other hand have contributed not only to boost the informal cross border transactions but also to reshape these transactions. For example, while before the outset of the war in DRC, only Congolese were involved in the smuggling of minerals, during the war period both Congolese and foreigners smuggled mineral resources from DRC. This could justify why some countries have become exporters of minerals that they do not naturally possess in their soil and they have never exported before.

Table 2: Rwandan and Uganda diamond exports, 1997 - October 2000 Year Rwanda Uganda

Volume (carats) Value (US$) Volume (carats) Value (US$)

1997 13060.39 720425 1511.34 198302

1998 166.07 160606 11303.86 1440000

1999 2500.83 439347 11024.46 1813500

2000 30491.22 1788036 9387.51 1263385

Source: UN (2001), Report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo, New York

During the investigation of the UN Panel of Experts on the Illegal Exploitation of Natural Resources in the DRC, the Rwanda authorities underline the fact that “Rwanda has no production of diamond, cobalt, zinc, manganese, and uranium”. However, figures in the Table above collected by this panel from several organizations such WTO, High Diamond Council and Belgian Statistics, indicate that Rwanda and Uganda have become exporter of Diamonds. Furthermore, statistics show a sudden increase in the Rwandan exports of Cassiterite from 54 tons in 1995 to 224 tons in 1999 and 2000 during the years of war in DRC. Similarly, according to Montague (2002), during the same period Ugandans also involved in the illegal exports of Coltan from DRC repackaging Congolese Coltan as Ugandan Coltan, and export them to the USA.

Many experts of the Great Lakes Region attribute the lack of state stability in the Eastern DRC to the fact that this part of the country posses scare resources for which the international competition is high. This is the case of Coltan4, timber, diamonds, cooper, gold… The

4 Coltan in a mix of Columbium (or Niobium) and the tantalum 10 demand of Coltan for example has experienced a boom in the nineties due to its growing importance in the electronics industry for cellular phones, PCs, and automotive electronics. DRC holds the world’s largest reserves of the Coltan. Four fifths of the world’s tantalum is found in Africa, of which 80 percent is located in the DRC’s Eastern region (Montague, 2002).

The Coltan is one of the mineral products which are the most fraudulently exported from DRC via Rwanda, Burundi and Uganda for use in the electronics industry in Europe, Asia, and the United States. Several reports of the UN have demonstrated that the illegal international trade in scare resources of Eastern DRC, and in particular Coltan, helps to finance rebel movements in the Northern and Southern Kivu. These two provinces are the most affected by the illegal traffic of DRC´s natural resources. In fact, the lack of the government´s control of the Kivu´s mining sector prevents this region to collect sufficient taxes of imports of minerals.

Beside the development of this large-scale smuggling, the small scale informal cross border trade has also become very important since the years of war contributing to a creation of unofficial regional market. The regionalization from below, leading by informal actors, seems then to be a reality in the region where, as stated by Vlassenroot et al. (2007), official agreements through CEPGL failed to create such a dynamic.

In view of the previous elements, it is clear that the regional political dynamic has changed the landscape of the cross border trade in the CEPGL region, and in particular between DRC and Rwanda.

4. The politics of DRC integration in CEPGL Given the major objective of the CEPGL when it was created in 1976, it is normal to consider that the inception of this organization was driven more by political factors rather economic ones. The initial objectives of the CEPGL show clearly that the desire of regional leaders to protect their power was the major driver of the inception of this REC. These objectives are as follows (from the most important to the least important): - First and foremost, insure the security of states member and their population. Make sure that common borders are kept peaceful - Conceive, define and encourage the creation and development of activities of common interest

11 - Encourage and intensify commercial exchanges and the movement of persons and goods - Cooperate in the different domains: social, scientific, cultural, politics, military, financial, technical, touristic, energy, justice, health, transport and communication

However, although security and regional peace seemed to be the priority of the CEPGL, any regional structure or institution was created to prevent potential conflicts or to solve existing ones. Only ministerial councils and periodical meetings of heads of states discussed security issues (Bwenge, 2006). For Bwenge, the lack of such structure in charge of security issues was an evidence that the CEPGL aimed to secure power of leaders and not to promote peace and security of the populations. This could explain for example why the relationships between DRC and Rwanda, which were very good during the period of Mobutu and Habyarimana because of the complicity of the two presidents, Habyarimana considering Mobutu as his “elder brother”, rapidly deteriorated with the arrival of RPF at the power in Rwanda, with new politicians that Mobutu was unable to control and to manipulate.

Many evidences show that the CEPGL was only a tool for politicians to secure their power and nothing was done at the regional level for ensuring regional stability. Violent conflicts in the great lakes region have been a major factor that has hindered the effectiveness of this Regional Economic Community. For example, the war in DRC in which were involved both Burundi and Rwanda (two members of the CEPGL which have signed non aggression and good neighborliness accords with the DRC) has undermined the relationships between the three countries. In a recent study, the Economic Commission for Africa (2007) contends that political instability within African RECs has been a major constraint for economic and political integration in this continent.

Rivalries among CEPGL members led to a mistrust among them and consequently to the closure of the institution in 1994. The resumption of CEPGL activities in 2007 after more than one decade on lethargy was seen by many specialists of the region more as a result of external pressure for ensuring the stabilization of the region rather than a clear will of its members to re-launch the institution (Hammerstad, 2005).

The important implication of the international community in the revival of the CEPGL in 2007 was mainly based on the conviction that recent instability, conflicts among members of the CEPGL and its corollaries the displacement of millions of people, the existence of

12 uncontrolled army factions, the degradation of basic infrastructures, arms trafficking, etc were due to the lethargy of the CEPGL. For the international community, this REC could play an important role in peace building and stabilization of the Great Lakes Region. The logical behind this is that, the violent conflicts in the three countries member of the CEPGL have resulted in permanent cross border instability. As an example, the 1994 war in Rwanda has led to the flight of millions of refugees on the Congolese territory. The presence of these refugees in the DRC has been source of instability in this country justifying for example the regular incursions of the Rwandan army in the DRC. It is therefore normal for countries to be concerned about security risks which could arise from the internal instability of neighboring countries.

With the creation of the Africa Union in 2002, a great consideration was given to security and peace aspects. This was primary due to the permanent crises and violent conflicts experienced by the African continent in the decade 1990. For African leaders, it was urgent to redefine the objectives of African RECs which should contribute not only to promote regional trade but also ensure peace and security. It is in this view that the African Peace and Security Council was created in 2004 which aim is to deal with conflicts and crises on the continent. Furthermore, an African Standby Force (ASF) is expecting to be operational by 20155. This force, presented as an important tool of the African Peace and Security Architecture for the prevention of conflicts, will be in charge of the management and resolution of conflicts on the continent and will rely on five regional standby brigades with headquarters, planning elements and logistic bases in Northern, Western, Eastern, Southern and Central Africa (Mayer, 2008). For Mayer (2008), this is an important change in the regionalization in Africa since the Charta of the Organization of African Unity (OAU) of 1963 was based on the principal of full respect of national sovereignty and non interference into internal affairs. In this perspective, the resumption of the CEPGL in 2007 with the new structure called the Tripartite+1 mechanism in the Great Lakes Region (composed by the DRC, Uganda, Rwanda and Burundi) was mainly responding to the new vision of regionalism in Africa

The revival of CEPGL’s activities was presented as the only most viable way to built peace in the region and to solve regional conflicts (ICRGL, 2006). It was seen as a viable framework for Member States for consensus-building not only on issues of economic, social and regional integration, but also on those touching on the prevention, management and resolution of

5 http://allafrica.com/stories/201112122104.html 13 conflicts. However, recent events in the Great Lakes region (resumption of the war in the north Kivu with M23 movement, the cooling of relationship between DRC and Rwanda, accused of supporting the M23 rebellion) have shown the incapacity of using CEPGL as a tool for peace building in the region. Some interesting achievements of the CEPGL since its resumption in 2007 have been seriously affected by this new war in the region. As an example, the border posts between Goma and Gisenyi which were open 24 hours (until May 2012) in order to facilitate small cross border trade between the two cities, is now open only from 6Am to 6Pm with severe consequences on the movement of goods and persons.

The results of this new orientation (peace and security) of the regionalization of the African RECs, particularly of the CEPGL, are poor given the number of conflicts that the continent has registered during the last ten years. It is therefore reasonable to raise the question of why the CEGPL failed to bring peace and stability in the region.

The response to this question seems to be the lack of political will from regional leaders to promote regional stability through the CEPGL. The revival of this REC, as argued above, was mainly imposed by the international community to its members. In this perspective, the implication of Belgium, South African and the European Union, whose contribution to the budget of the REC is estimated to more than 60%, was crucial. It is clear that without a strong implication of the international community, members of CEPGL, in particular the DRC, had any interest to revitalize the CEPGL. For Congolese officials, the DRC was not ready to re- launch the CEPGL6.

Moreover, the mistrust among members of the CEPGL could not enable this REC to contribute positively to the promotion of economic activities, peace and stability in the region. In fact, Rwanda and Burundi have preferred to get closer to the East African region than to the DRC. This has justified their recent entrance in the East African Community. On the other hand, DRC is reluctant to play an active role in the REC which appears to be more profitable to two countries which involved in the wars in its territory.

Another important issue which has limited the participation of the DRC in the CEPGL is its multiple memberships in several RECs. In the literature on regional integration, multiple memberships are considered as a major constraint to regional integration effectiveness. There is an increasing concern about the overlapping membership issue characterizing many African

6 Interview with the Congolese Coordinator of Regional Integration in July 2011 14 countries. The case of DRC is quite illustrative. In a recent paper, Morisho (2012) provides reasons of the DRC’s multiple membership in African RECs and argues that this could be explained by the country’s big size and the lack of integration among different economic blocs of the country: - The provinces of Katanga and the Eastern and Western Kasai provinces which are well integrated into the southern part of the continent and trade with SADC states. - The provinces of Bandundu, Bas Congo, Equateur and Kinshasa which are integrated into the central part of the continent, hence the country’s association with ECCAS - The provinces of North Kivu, South Kivu, Province Orientale and to some extent Maniema, which are linked to the eastern part of the continent and make CEGPL, COMESA and the East African Community (EAC) natural trading partners.

Many scholars have ascribed the weakness of African RECs to these multiple memberships. Their argument is that, due to the weak financial, human and institutional capacity of many African countries, the overlapping membership reduces the chance of these countries to fulfill their regional commitments. It is however important to add that, the inefficiency of many African RECs, and of the CEPGL in particular, is mainly due to the reluctance of regional leaders to abandon a share of their power to a regional institution. This is particularly understandable in African context where many countries are still too young and still have fresh memories of the colonization for accepting to abandon the control of their power to external or internal forces. Furthermore, the fact that the staff of the secretariats of the CEPGL is appointed by politicians, to whom they are subjugated, reduces their independence vis a vis of the political sphere of the respective countries and limits therefore their capacity to force them to respect their regional commitments. The DRC’s commitments towards different African RECs illustrate well the argument developed above. For instance, DRC did not ratify many cooperation accords of the CEPGL (the community investment code of 31st January 1982; the protocol of trade liberalization of some products originating from the CEPLG of the 1st December 1985, etc) and was unable to implement effectively some accords that it has ratified (for example the agreement on the solidarity among states members of the CEPGL of the 1st December 1985). Furthermore, since the revival of CEPGL´s activities, at least from 2007 for 2011, DRC has never contributed to the budget of the organization. Whereas Rwanda and Burundi, which have not enough resources compared to DRC, are making efforts to respect their financial obligations towards

15 this regional organization, DRC is still reluctant and adopting the strategy of wait and see as it usually does in other regional organizations (Morisho, 2012). Moreover, as argued by Westerkamp et al. (2009), while DRC was a founder and key driver of the CEPLG in its first phase, its current reluctance to play an active role in the CEPGL is mainly due to the perception of its leaders that the REC benefits more to Rwanda and Burundi. For example, electricity from the Ruzizi dams is mainly used by Burundi and Rwanda and primarily benefits the Eastern DRC. Likewise, cross-border trade in the CEPGL region primarily benefits to Rwanda, Burundi and the Kivu region, with any or little benefit for the government in Kinshasa to move beyond a nominal engagement.

5. The Economics of DRC integration in the CEPGL: An integration from bellow Despite the fact that political factors seem to be the key driver of DRC’s regionalism, it is important however to mention that commercial exchanges in the CEPGL region existed since the pre-colonial period. However, as shown later in this section, the CEPGL failed to promote formal exchanges among its members; but by facilitating the movement of persons, it has contributed to the development of a massive informal cross border business which benefits to many households in the region. The cross border exchanges between DRC and other countries member of the CEPGL are mainly conducted on three major corridors:

- Goma/Gisenyi (Nord-Kivu/DRC and /Rwanda): the daily traffic is estimated at 15 000 to 20 000 persons (Musila, 2009). This corridor has three official crossing points (Grande Barrière border post on the Lake Kivu, Petite Barrière border post near Goma airport and Gisenyi market, and Gabiro border post), and numerous paths across the unmarked Rwanda-DRC border. The border between North Kivu's capital Goma and the neighboring town of Gisenyi in Rwanda is a special case, as both towns lie directly on the border (Tegera et al, 2007).

- Bukavu/Cyangugu (Sud-Kivu/DRC and Rwanda): this border separates the city of Bukavu in DRC and Cyangugu in Rwanda and approximately 3 000 to 5 000 people cross the border every day.

16 - Uvira/Bujumbura (Sud-Kivu/DRC and Burundi): Daily traffic at this border is estimated to 6 000 to 10 000 people, including traders, pupils and teachers (Musila, 2009).

The Kivu region trades more with Rwanda, Burundi and Uganda than with other DRC’s provinces. This region is in fact poorly integrated in the DRC’s economy. The lack of appropriate infrastructures which should connect the big cities of Kivu to the rest of the country explains why these cities are more integrated in the economy of neighboring countries than to that of the DRC. As an example, travelers from Bukavu to Uvira, two Congolese cities of the Southern Kivu province, have to pass through Rwanda given the better quality of its roads. Despite many endeavors of the CEPGL, formal economic exchanges remain insignificant. As argued above, the CEPGL region is the least integrated in Africa. As an example, between 2000 and 2007, the intra-CEPGL exports as a share of total exports to Africa represented less than 1% against 33% for SADC and 22% for ECOWAS respectively (ECA, 2010). In the CEPGL region, DRC provides about 66% of the regional exports. However, concerning the imports, Rwanda appears to be the biggest importer in the GEPGL region with more than 75% of the regional imports. Despite the fact that intra-CEPGL trade is still low, it is increasing over time, with an average annual increase rate of 17% from 2000 to 2007.

International organizations (IMF, WTO or UNICTAD) usually underline the low level of intra-African trade in a context where many efforts have been done, in the framework of regional organizations, to dismantle tariffs and no tariffs barriers to cross border trade. As 17 shown by Golub (2010), the problem with the official statistics of intra-African trade is that they capture only recorded cross border trade and do not take into consideration the unrecorded ones. He argues that these official statistics fail to capture statistics related to cross border trade in food grains, animals and the smuggling of the manufactured goods. Failing to record these activities in official statistics substantially reduces the level of the intra-African trade as those activities are of a great importance in the African regional trade. The assessment of the importance of informal cross border trade uses diverse methods which differ according to the availability of data. As acknowledged in the 2010 report of the ECA, it is rare in Africa to find adequate secondary data on informal cross border trade and in countries where they are available they are often incomplete or related to case studies on exports and imports of some commodities (ECA, 2010). However, in its efforts of gathering existing studies of informal trade, the ECA finds out that about 5.6% to 11% of intra-African trade is informal and in some parts of the continents, like at the border between DRC and its neighbors, the level of informal trade exceeds that of the formal one.

Despite their close geographical, historical and cultural links, the formal economic cooperation between Eastern DRC on the one hand and Burundi and Rwanda on the other hand has been minimal over the last 20 years. For example, according to formal statistics, DRC’s exports and imports to the CEGPL represent respectively 11.9% and 2.7% of its total exports and imports.

Table 3: Intra-CEPGL trade Average exports to the CEPGL from Average imports to the CEPGL from 2000 to 2007 2000 to 2007 Burundi 3,3 2,1 DRC 11,9 2,7 Rwanda 2,8 15 Total 18 19,8 Source: Economic Commission for Africa (2010), Assessing Regional Integration in Africa IV, Enhancing Intra- African Trade, Addis Ababa, http://www.uneca.org/aria4/ARIA4Full.pdf

According to these official statistics, the intra-CEPGL trade is negligible. However, the reality on the ground is different from the picture provided by these numbers. Official figures usually give the impression that the key commodities imported by the regional countries, and 18 particularly Rwanda, from DRC are wood, vegetable oils, medicines and perfumes (World Bank, 2011), ignoring products such as paste tomato, loincloths, milk powder, soap, etc which are the most important commodities that DRC exports to Rwanda via the city of Gisenyi. All these products are not mentioned in the official statistics while all other sources, interviews, observation, survey, demonstrate that they are the most demanded and smuggled commodities from DRC to Rwanda (Morisho, 2013). This is a clear indication of how much official statistics are not able to capture the flourishing unofficial cross border trade of agricultural products and “re-export” of manufactured products on African borders.

Berg et al (1985) and Golub et al (2009) argue that the anomalies of African trade statistics are due mostly to smuggling. Official statistics of trade in the CEPGL region are at variance with the reality on the ground. The volume of unofficial trade among Burundi, DRC and Rwanda is large but the only difficulty is the lack of reliable estimates of this trade. For example, a World Bank study (2011) estimates that the volume of informal cross border trade of food staples between DRC and its regional partners is 5 times higher than the formal trade (Table 4). While the share of informal cross-border trade represents more than 80% of DRC’s total regional exchanges, it represents only about 28% for Kenya, 20% for Rwanda and 35% for Uganda.

Table 4: Estimated of formal and informal trade in food staples in 2009 for Eastern DRC, Kenya, Rwanda and Uganda (in tons) Eastern DRC Kenya Rwanda Uganda Formal 3,276 22,728 8,286 205,583 Informal 16,078 9,116 2,177 114,879 Total 19,354 31,844 10,463 320,462 Share of informal trade (in 83.1 28.6 20.1 35.8 %) Source: adapted from the 2011 World Bank report on cross border trade in the Great Lakes Region From what precedes, it is evident that the free circulation of persons in the CEPGL and the closeness of Kivu’s big cities with Rwanda and Burundi have encouraged the development of small cross border business. However, despite its enormous agricultural potential, DRC is currently more an importer of food products than an exporter. This is a direct consequence of the permanent instability in the Eastern DRC’s rural areas.

The prosperity of the informal cross border trade in the Great Lakes Region is not astonishing given that the international trade in many countries in the region is undermined by their inappropriate trade policies which are too restrictive and the high level of corruption of custom agents. However this situation is not an isolated case affecting only the Great Lakes 19 Region; many developing countries are also facing the same situation. As an example, studies on cross-border trade between Mozambique and its neighbors, South Africa and Malawi, suggest that the volume of informal trade exceeds that of formal cross border trade (Peberdy, 2000). Studies on trade between Paraguay on the one hand and Brazil and Argentina on the other hand show that, in the nineties, smuggling accounted for 58% of exports and 31 % of imports from those countries (Connolly et al, 1995). In the same line, a World Bank study in 1999 demonstrated that in the world, about 30% of exported cigarettes are eventually smuggled (World Bank, 1999).

Furthermore, smuggling phenomenon affects also developed countries. Larue et al. (2009) demonstrates that in 2003 the government of Canada experienced a loss of revenue estimated at about CAD 9.6 billion due to cigarettes traffic. They also show that about 67% of cigarettes sold in Quebec before 1994 was smuggled. In their paper on the determinants of non professional smuggling, Paulus et al. (1981) argue that at the border between Canada and the USA about one-half of the border crossers they surveyed took undeclared goods across the international border. These examples illustrate that smuggling appears to be a worldwide phenomenon. However its magnitude and implications may differ from one region to another.

It is important the underline that although this informal cross border business in the CEPGL region reduces the capacity of governments to collect taxes, it has however a great impact on the everyday life of the population and its practitioners. A study of Morisho (2013) shows in fact that revenues generated by this business are significant compared to what civil servants can earn monthly in the region. As an example, at the border between Goma (DRC) and Gisenyi (Rwanda) an informal trader and an middleman can earn respectively up to $175.5$ and $208 monthly while a secondary teacher earns $147 in Rwanda and only $80 in the DRC. For the local population, Morisho’s study demonstrates that prices of goods imported informally are on average 30% lower than what should be their level if goods were imported formally. The capacity of informal cross border business to lower prices generates therefore for local households an average consumer surplus of 6.2% and 3% of their monthly expenditures respectively in Gisenyi and Goma.

6. Conclusion The focus of this study was on the political economy of DRC’s regionalism in the Great Lakes Region. It has examined the political and economic motivations behind DRC’s regional 20 integration in this region. The paper has also examined the history of regionalism in the region and shown that economic exchanges among members of the CEPGL are not recent. However the nature, actors, extent and types of goods involved in these exchanges have tremendously evolved over time.

The paper has demonstrated that the political instability its members have gone through during the last two decades has hindered the effectiveness of the REC and led to its closure in 1994. The revival of the CEPGL in 2007 was based on the conviction that it could aid to stabilize the region and in particular termite the ongoing violent conflicts in the DRC and its cross border effects. However, the recent conflicts in the Eastern DRC, with new rebellion movements (M23 for example) which are assumed to get support from neighboring countries, demonstrate the incapacity of this REC to bring peace and stability in the region.

The paper argues that the major reason explaining the failure of the CEPGL to stabilize the region is the lack of the political will of regional leaders to use CEPGL as a tool to promoting regional stability and peace building. Specialists argue that the revival of this REC was more a result of a pressure from the international community on its members than a real will of the latter to re-launch the institution. Moreover, DRC lacks financial, institutional and human capacity to deal in an efficient way with its integration process. The country is still very fragile and prefers to deal with its internal security issues than dealing with regional integration challenges (Stevens et al., 2008). It is also important to mention that with the new membership of Rwanda and Burundi in the EAC and DRC which is still reluctant to play a key role in the CEPGL due to the distrust towards the two countries involved in different wars in its territory, the chance of success of the CEPGL in the future is minim.

On a positive note, it is however important to mention that the CEPGL has contributed in a significant manner to easy the movement of persons in the region, leading to the development of small cross border business from which thousands of people earn their life. Furthermore, the success of this organization to implement common infrastructures and projects, such as BDGL, IRAZ, SINELAC, etc, should be considered as good examples of regional cooperation and development. 21 7. References

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