International Political Science Review (2005), Vol 26, No.

1, 7389

Liberalization and Conflict

DAVID KEEN

ABSTRACT. Externally encouraged policies of liberalization in Sierra Leone in the 1970s and 1980s fed into civil war in the 1990s; yet such policies are now being revived. This article analyzes the impact of liberalization on the war in Sierra Leone, suggesting that it affected the conflict in four ways: first, by encouraging inflation, extreme devaluation, and private oligopolies; second, by reducing key state services such as education and health; third, by fueling corruption as real state salaries were cut; and fourth, by taking attention away from soldiers abuses under the military government of 199296, a government that was praised and rewarded for its liberalization agenda. Keywords: Conflict and war Liberalization Privatization Sierra Leone

Introduction
While conceding relatively recently that there is some role for the state in creating an optimum environment for markets to operate, international financial institutions such as the World Bank and the International Monetary Fund (IMF) have tended to proceed on the assumption (central to the so-called Washington Consensus) that free markets facilitate not only growth, but also democracy and peace. One can certainly point to many western countries with relatively free markets where democracy is well established and where the risk of war (or at least internal war) seems minimal. However, an apparent correlation between (relatively) free markets, democracy, and peace within developed countries tells us little about how less fortunate countries might best arrive at this enviable state of affairs. This article looks in some detail at the case of Sierra Leone, highlighting major drawbacks in international financial institution (IFI) interventions.1 A free market solution for the countrys ills was repeatedly proposed in the 1970s, 1980s, and 1990s, and such a solution is currently being reinvented as Sierra Leoneans try to consolidate their fragile peace. But this ostensible solution has already proved
DOI: 10.1177/0192512105047897 2005 International Political Science Association SAGE Publications (London, Thousand Oaks, CA and New Delhi)

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to be part of the problem not least because of the ill-considered and rushed manner in which it was applied. In Sierra Leone as in much of Africa, IFIs adopted an approach (gathering steam in the 1980s) that was based on correcting the perceived (and often real) drawbacks of a rent-seeking postcolonial state. IFIs put forward a vision of free markets that included privatization, currency floatation, and cutbacks in spending on state services and state employees. A crucial issue ignored by IFIs has been this: how can people be expected to react to the changes proposed and promoted by IFIs, and how will this reaction affect (and perhaps undermine) the anticipated outcome?2 Part of the theoretical underpinning for my approach comes from work by Edward Clay and Bernard Schaffer (1984). These authors stressed the dangers in rigidly divorcing policy from implementation and the need to take into account obstacles to implementation (including what is often labeled lack of political will) in designing policy. Apparent compliance with IFIs has repeatedly disguised not only resistance to IFI agendas, but also the active hijacking of IFI agendas and the abuse of human rights by governments with a good international image in the eyes of the IFIs. A key factor repeatedly ignored in the IFI model, as it has been applied in Sierra Leone, has been violence. I also draw on Patrick Chabal and Jean-Pascal Daloz (1999), whose book Africa Works pointed to what they called the politics of the mirror: whether under colonialism or after independence, elites in poor countries have often proved adept at giving the impression of conforming to metropolitan priorities. Powerful governments in industrialized countries may be placated and may provide economic support when local elites appear to pursue privatization, financial orthodoxy, democracy, or peace, while these elites may simultaneously give priority to private accumulation and to preserving power for themselves sometimes by violent means. Foreign governments and international financial institutions have frequently been content to accept the image or illusion of progress toward these goals, while the reality may be very different. For example, privatization, as we have seen from the work of Mark Duffield (2001) and Manuel Castells (1998), may sometimes be a way of transferring national assets to elite private groups. Russia is a classic (and catastrophic) example (Castells, 1998). Paul Collier (2000), notably, in his capacity as head of research at the World Bank, has tended to stress the overriding importance of greed rather than grievance in causing civil wars; and a number of others had earlier stressed the importance of economic agendas (De Waal, 1997; Duffield, 1994; Keen, 1994, 1998). However, it is very dangerous to minimize the role of grievances or to dismiss (as Collier does) the statements of grievance by rebel groups as necessarily self-serving. Cold War ideological struggles gave prominence to grievances, but they have not disappeared with the Berlin Wall. In this article, I stress the way grievances in Sierra Leonean civil society interacted with grievances within state structures, helping both to cause the war and to shape its (abusive) evolution. Both sets of grievances were directly fed by IFI policies. Sierra Leones civil war began in March 1991 when Liberian rebel Charles Taylor backed an incursion from Liberia by the Revolutionary United Front (RUF). Much of the RUFs recruitment was done through coercion; but the RUF also attracted many youths who found little hope for the future in peacetime Sierra Leone. Sierra Leone is a case that might be expected to fit Colliers framework better than most, given the evidently abusive nature of the rebels and the well-publicized role of diamonds. However, a detailed examination of the

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Sierra Leonean case suggests that grievances were just as important as greed. Moreover, it is in practice very difficult to separate a willingness to use extreme violence for economic accumulation (greed) from the many grievances among Sierra Leonean combatants. Anger and fear (including fear of civilians who have been abused and might seek retribution) fed into escalating abuse and exploitation, and many of the grievances fueling exploitative violence relate to resentments nurtured in the peacetime political economy (Keen, 2002, 2005). A key issue in Sierra Leone has been (and remains) how to support and build up the state. Yet IFIs have generally been predisposed to run down the state both in the sense of denigrating it and in the sense of reducing its size and role. It should hardly be surprising that the problem of constructing a viable state is very difficult to solve with an ideology that pushes rigidly for a free market unencumbered by the state. Significantly, the pattern of structural adjustment in Sierra Leone tended to reinforce the importance of clientelist networks in the single-party system dominated by the All Peoples Congress (APC). A shift to multiparty rule in 199192 was seen as a threat. After war broke out, and a military coup brought the National Provisional Ruling Council (NPRC) to power in 1992, some APC politicians and officers were widely suspected of stirring up disobedience in the army and even of covertly supporting the rebels. Thus, the vested interests which structural adjustment had in many ways reinforced not only helped to fuel anger and insurgency, but also to corrupt the counterinsurgency. In their new political economy analysis, writers such as Anne Krueger (1974) and Robert Bates (1981) stressed that economic policies detrimental to a country as a whole could be functional for particular groups (especially urban groups). This analysis underpinned much IFI criticism of the African state, criticisms that had considerable justification. Sierra Leone in the 1970s exhibited many of the problems Bates was highlighting. Under President Siaka Stevens, the exchange rate was artificially high, and state control over the economy favored elite accumulation at the expense of rural producers. Government marketing boards had in effect been taking income from small farmers and using it for the benefit of urban groups, government employees, and some large farmers (Alie, 1993: 2912). This was a classic rent-seeking economy and the potential advantages of a shift toward a free market should not be dismissed. Nor is it wise to forget that structural adjustment was introduced in the context of a genuine crisis. In the 1980s, prices for most of Sierra Leones exports were falling, and export volumes were falling too. Foreign debts rose dramatically, and a major restructuring of the economy was clearly needed. However, the restructuring actually attempted was deeply damaging. In many ways, the very strength of Batess 1981 analysis should give us pause for thought. In highlighting the powerful constituency behind irrational economic policies, his work also gives us reason to anticipate major political obstacles to any attempt to reform a system built on rent-seeking and urban bias.

Privatization, Inflation, and Devaluation

Privatization was encouraged by the IFIs in Sierra Leone. But it did not work out as planned not least because the project was hijacked by powerful local elites. In practice, privatization fed into the creation of monopolistic and oligopolistic markets, high prices, and associated grievances that fueled the war. While

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neoliberalism is often presented as an alternative to state-based corruption, in Sierra Leone during the 1970s and especially the 1980s, the two tended to interact to the benefit of a small clique around the president and to the detriment of the broad mass of people. William Reno (1995) has referred to the creation of a shadow state, with entrepreneurs and politicians working together to hijack the state for private gain. The World Bank and the IMF encouraged the farming out of state-run trading operations to businessmen (including multinationals and local Lebanese traders) and to their political allies (M.A. Sesay, 1993; Zack-Williams, 1995). Prominent politicians and businessmen often managed successfully to adjust to adjustment, to use the phrase of Chabal and Daloz (1999: 122). In the course of the 1970s and 1980s, the fashion for nationalization gave way to privatization. In the mid-1970s the Government Diamond Office was relieved of its monopoly on exporting diamonds. This was followed in the 1980s by privatization of the importexport trade, fisheries, agricultural marketing, and banking (Reno, 1995: 1412). However, privatization failed to bring about an efficient and competitive market; it also did not create a market that could be effectively taxed by the state. Part of the problem was that, once the Sierra Leone Peoples Party (SLPP) had decided to withdraw from the 1973 elections due to widespread violence instigated by the APC, Sierra Leone effectively became a one-party state under the APC (M.A. Sesay, 1993). President Stevens used government control over import and export licenses and over the allocation of foreign exchange for his own benefit and that of a small group of Lebanese allies with monopolistic private concerns (see, for example, Kpundeh, 1993: 823). Key Lebanese traders acquired significant influence over the political leadership (M.A. Sesay, 1993, 2245). Privatization in the diamond sector increased the control over marketing by Stevenss associates, especially Jamil Said Mohammed. Lebanese diamond traders became more powerful over time, benefiting from their own private security and from the declining power of the national army. World diamond price increases in the late 1970s were not passed on to local dealers and diggers in Sierra Leone something that encouraged smuggling to Liberia (Pugh et al., 2004). The late 1970s and 1980s saw a sharp fall in state revenue from diamonds and other exports. Indeed, while many government officials and private companies were benefiting from the informal economy, the treasury was being starved of resources: in real terms, by 198586 domestic revenue collection had plummeted to just 18 percent of 197778 levels (Reno, 1995: 134). In the 1980s, the privatization of agricultural marketing seems to have pushed the sector further outside the formal, taxable economy (Reno, 1995: 139). Prices for farmers remained low. As with mineral production, privileged private companies with powerful political allies were able to avoid taxation, while smuggling escalated (Bradbury, 1995: 22; Koroma, 1996: 73). Falling revenues in turn speeded the deterioration in public services and infrastructure such as roads, giving further impetus to smuggling (Bradbury, 1995: 22). Until the mid-1980s, generous external credit helped the government to continue to use state resources in order to win political support (and to limit domestic borrowing and inflation) even as the state was surrendering revenue sources into private hands (Reno, 1995: 140). Part of this external credit came from the IMF and World Bank, and there seemed to be an assumption in the upper echelons of the Sierra Leonean government that generous foreign credit would not, in practice, need to be repaid. President Stevens was using his own

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private access to finance to build highly personalized networks of support that were outside the state system (Reno, 1995). Inflation gathered pace through the 1980s, however, fueled not least by the monopolistic profits for those holding import licenses and hoarding goods. Atkinson et al. (1991: 2) noted:
Since the import, wholesale and retailing markets in many products are controlled mainly by Lebanese businessmen, the price increases have been regarded by many as reflecting monopolistic profit-seeking, rather than genuine cost increases.

Inflation was exacerbated by the IMF-encouraged devaluation. Repeated devaluations decimated the middle class as salaries fell behind inflation (Kandeh, 1999: 352) and devaluations damaged poor farmers whose input prices skyrocketed (Alie, 1993: 296; Weeks, 1992: 50). Richer producers reaped most of the gains from expanded exports (Weeks, 1992: 7980). The devaluation also encouraged a spate of damaging currency speculation. In 1987, faced with a major economic crisis and anxious to prevent the total collapse of the leone, Momohs government declared a state of emergency and stipulated that all foreign exchange be deposited with the Bank of Sierra Leone while requiring all economic activity to be conducted in leones. In addition, the Government Gold and Diamond Office was given a monopoly on diamond export pricing, creating a clear incentive for the expansion of smuggling.

Reduction in State Services

In the face of a major debt crisis and drastically falling export values in the 1980s, the state seemed to lack the will, the resources, and the international encouragement to embark on a far-reaching program of public investment in transport, agriculture, education, and health (Weeks, 1992). As the economic crisis deepened in 1987, President Momoh approved harsh austerity measures to attract further IMF support. These were something that his predecessor Stevens (with a strong instinct for staying in power) had always tried to avoid. They included a drastic reduction in petrol and food subsidies (Reno, 1995: 161; Zack-Williams and Riley, 1993: 92), reductions that exacerbated the inflationary effects of devaluation. The political importance of cheap food was underlined when the cutbacks prompted an unsuccessful attempt to oust Momoh by means of a coup (M.A. Sesay, 1995: 174). Ever-larger groups of people were forced to rely on an inflationary free market, notably for the staple food, rice. All this stoked a considerable fire of resentment. Sesay observed, As a result of the reform measures in the 1980s, a family on an average wage will have at first slowly, and then rapidly, slipped into poverty. Those who were already poor faced outright hunger (M.A. Sesay, 1995: 176; see also Davies, 1996: 12). One woman in Freetown, a peace campaigner, later recalled: People became very poor and couldnt access basic needs. They couldnt pay their childrens schooling, and parents couldnt provide the things they used to provide for their children. So people were barely surviving, and gritting their teeth. Inflation reached three digits by 1991. At this point, a typical monthly salary was close to the price of a bag of rice (Atkinson et al., 1991: 2). Upcountry, hardship was also intense. From her research in Kono District, Kris Hardin (1993: 132) noted that the farmers were on the edge of survival. Whereas structural adjustment in Ghana had seen a major inflow of donor

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funding, in Sierra Leone there was little to cushion the blow. Part of the problem, as Pugh et al. (2004: 113) noted, was that the [Momoh] governments continued accumulation of arrears led to a temporary break with the IMF and World Bank, which meant that most of the funding for a public investment program that was supposed to accompany structural adjustment did not arrive. Rapid inflation at the same time reinforced dependence, for the lucky insiders, on presidential patronage. This in turn reinforced behind-the-scenes opposition to democracy. One way of staving off democracy was through stoking the war whether by assisting rebels or encouraging indiscipline in the army. On top of rapid inflation, those left out of the cozy patronage system of the ruling APC faced cuts in government spending on health and education. In the financial year 198687, Sierra Leone was spending more on servicing its debt than on its combined budget for health, education, and other social services (Bank of Sierra Leone, 1988: Table 14). At the outset of the war in 1991, social spending was just 15 percent of the level a decade previously. Revenue collections had fallen from 30 percent of GNP in 1982 to 20 percent in 1992, and the countrys GNP had declined (Reno, 1996: 11). Contributing to the decline in state services was widespread moonlighting, with civil servants often spending much of their time on private business (Zack-Williams, 1995: 62). In rural areas, government was often seen as something alien (Ferme, 1998: 564) a perception that was clearly related to the low level of social services the state was usually providing. When these services declined further, some found it intolerable. Bangura (1997: 133) went so far as to suggest that the contraction of the state had been humiliating for those lacking personal networks and connections. The health service had deteriorated considerably (Department of Health, 1994: 10; Fyle, 1993: 17). Government hospitals were declining while at the same time having to deal with a rapidly expanding urban population (Koroma, 1996: 834). One man, a chemist, told me he fondly remembered the 1960s and 1970s, when people went to hospital for a cure, not to die. Drugs in the state sector were often diverted to the private sector by corrupt officials, and state hospitals came to be permanently short of drugs that were available in private clinics and drugstores; many of these clinics and stores were owned by politicians and senior health officials (Zack-Williams, 1995: 58). The story with education was no better. In the mid-1960s, Sierra Leones educational system had had a good reputation, and the country became known for exporting professionals to many parts of Africa. However, the education sector went into decline from around the late 1960s, leading to growing discontent in schools and campuses over poor conditions (Koroma, 1996: 878), as well as growing numbers not attending school. While education was highly prized (Hardin, 1993: 801), by 1987 less than 30 percent of children of secondary school age were enrolled (Beckley, 1993: 68). Education was hit by inflation, as well as by falling social spending. Many teachers started supplementing their incomes by charging pupils for exam tuition, something only richer families could afford (Hirsch, 2001: 30). Paying for books and exams in secondary education was often prohibitively expensive, while scholarships frequently required a bribe. The decline in educational services was important not only in generating resentment, but also in creating an expanding group of youths who were either wholly or partly outside the school system. Those dropping out of school could be disowned by their parents, adding to the danger of falling in with a bad crowd, as one source put it. An experienced worker with the aid agency Children Associated

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with the War reported relatives reaction when boy fighters (whether government soldiers or rebels) returned home:
Often, [the families] said the children had got out of hand even before the war, and it was difficult to control them. The children had sometimes taken to the life of war drugs, looting before the war. . . . Around 60 per cent have not been to school, about 40 per cent dropped out. . . . When the rebel war came, most felt it was at least an opportunity to get a base other than their parents.

In these circumstances, there was increasing resentment of those who did have access to a good education normally in private schools (Davies, 1996: 13) or through private lessons (Zack-Williams, 1995: 63) or abroad. Some who lacked funds to pursue their education turned to the rebels (Traub, 2000: 62). Student protests often grew into more general urban protest as students formed alliances with disenchanted youth beyond the campus (Rashid, 1999: 7984).3 Rashid (1999: 83) noted that, between 1977 and 1984, against the background of deteriorating socioeconomic conditions and political repression, the milieu of student politics had shifted so much that the most radical voices were calling for an end to the system. Even graduates had great difficulty finding jobs. Significantly, educational establishments, including schools and colleges, were specifically targeted in the war (see, for example, Wright, 1997). Some, such as Njala University College, were attacked repeatedly (Skelt, 1997: 27, 43). Those who had done poorly in Sierra Leones universities, or who had been expelled for political protest, appear to have provided significant numbers of recruits for rebel activity.

Cuts in the State Wage Bill Fueled Corruption

Closely related to the cuts in state services were cuts in spending on state employees whether chieftaincy officials, teachers, health workers, police, soldiers, or those working in the civil service. While at one level the 1991 rebel incursion threatened to bring down the government, at another level government in Sierra Leone was already collapsing. Under Momoh, the World Bank pressed for cuts to the bureaucracy in return for a commitment to help with agricultural development (Richards, 1996a: 41). One local United Nations Development Program worker told me: Structural adjustment has never got to grips with the problem of remuneration for government staff. The World Bank is just talking about poverty. By the 1980s, a major resource crisis (fueled by falling export revenues) was severely diminishing the states ability to secure the loyalty not only of peripheral populations and regions, but also of its own officials. IFI analysis had been right to stress that corruption within the state sector was a problem. But in a context of rapid inflation and deep cuts in social services, a drastic reduction in spending on state employees, far from helping to create an efficient free market, fed into increased levels of violence. Many of those discarded by the state refused to go quietly. After a structural adjustment package had been agreed in 1991, drastic cuts ensued: by 1994, in the midst of war, 40 percent of state employees had been dismissed (Pugh et al., 2004: 114). Some sources felt this had fed into covert support for the rebels. Contributing to the problems in the education sector were cuts in teachers real pay. With salaries unable to keep pace with prices, many teachers sought to

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supplement their inadequate income with farming and other activities. Sit-down strikes by teachers were common. Naturally, teachers morale and status fell (Koroma, 1996: 90). By 1989, some teachers had not being paid for 12 months, and many schools went on strike in protest (Hardin, 1993: 28). In addition to disillusionment with educational and employment opportunities, a key set of grievances were those directed at local chieftaincies by Sierra Leonean youths. These included young females as well as males, though the latter were much more prominent in fueling the violence of the 1990s. The aid agency CARE International (2002: 2), which began organizing the expression of grievances in Peace and Rights days in many parts of the country in 2001, reported:
Youths in every Peace and Rights day event levied charges against the chiefs ranging from a long-standing history of the misappropriation of NGO inputs, to complaints of unjustifiable taxes and heavy fines for negligible infractions, a severe lack of justice, marginalisation, and dishonesty, deprivation of rights, favoritism and unfair representation in communities.

A major part of the problem had been the steady erosion of budgets and salaries for local chieftaincy officials, encouraging them to exploit and fine the local population as an alternative source of revenue and income (see, for example, Fanthorpe, 2003). Civil servants official salaries, more generally, declined from the mid-1960s and standards of conduct tended to fall too (Koroma, 1996: 112). Many resorted to corruption and petty extortion just to get by (Atkinson et al., 1991; Bradbury, 1995: 22). With the real pay of civil servants and others falling rapidly, politicians could sell rice (often at close to world prices) or give it to their supporters in effect, they could provide selective exemption from IMFsponsored austerity programs and plummeting salaries (Reno, 1995: 144). There was a brain drain of experienced civil service staff (Pugh et al., 2004: 113). Underpaid and demoralized state officials proved increasingly ineffective in controlling smuggling. Increased smuggling in the 1980s (together with the widespread undervaluing of exports) seriously reduced state revenues from diamonds and other primary products. Official figures for diamond production (reflecting the quantities passing through official hands and the quantities on which revenues could be raised) fell from 418,000 carats in 1977 to just 13,000 in 1990 (Bank of Sierra Leone, 1981, 1992; see also Kpundeh, 1993: 103; Reno, 1995: 1334). By the late 1980s, economists were estimating that 95 percent of Sierra Leones diamond production was being smuggled out of the country (M.A. Sesay, 1993: 2934). Smuggling of gold and a variety of agricultural products was also rife. Another key problem linked to the underfunding of state structures was the poor pay and conditions for government soldiers. This fed into an inability to control the diamond economy. Joseph Momoh, who succeeded Stevens as president in 1985, attempted to use the army against illicit diamond miners in Kono, but soldiers used the operation to set up their own illicit operations (Pugh et al., 2004: 100). Soldiers poor pay and conditions also fed powerfully into the violence of the 1990s. The so-called counterinsurgency quickly collapsed into widespread abuse and exploitation of civilians by government soldiers who often collaborated with the very rebels they were supposed to be suppressing. This was in many ways a modification of earlier processes: peacetime efforts to stamp out smuggling (notably of diamonds) had repeatedly foundered as poorly paid state

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officials were drawn into collaborating with the smugglers they were supposed to be controlling. In the absence of significant external support for the state sector, Sierra Leone was trapped in a vicious circle: the inability to control smuggling was a key cause of the Sierra Leonean states inability to tax its own resources in a way that could promote development and secure adequate salaries for its officials. Meanwhile, underpaid and undertrained soldiers were asked to risk their lives for a state that lacked legitimacy in large part because it had so woefully failed to provide services such as health and good education, notably in rural areas. For much of the 1980s, soldiers loyalty (a government priority) was sustained (M.A. Sesay, 1993: 191; Zack-Williams and Riley, 1993: 92). But by the late 1980s, the governments tried-and-trusted policy of buying off the army with lavish allowances, good accommodation, and other perks was becoming increasingly unaffordable (Zack-Williams and Riley, 1993: 97). While senior commanders continued to benefit from major perks, soldiers salaries were often left unpaid. One human rights activist remembered this period:
There was a serious problem of the military becoming extremely corrupt. Some generals were paid 300 bags of rice a month. Some took junior officers to mine [diamonds], and seized their rice. Nobody respected anybody.

Momohs emergency measures in 1987 (the new regulations banning all private business deals in foreign currency as well as forbidding the hoarding of any currency or commodity) also had an effect on the army (Koroma, 1996). Traditionally assigned to barracks, an increasingly disgruntled army was now sent into rural areas to enforce these emergency measures. It was assigned to stop all smuggling, and was given the power to raid private residences (Chilson, 1988). This seems to have helped foster economic agendas within the army. Policing the borders under Momohs emergency measures became a significant new source of revenue for the army and other state employees (Olukoshi, 1994: 107; ZackWilliams and Riley, 1993: 97). Smugglers even paid army officers to ride in their vehicles to ensure safe passage for smuggled goods (Chilson, 1988; Davies, 1996: 13). Ominously, there were reports that a small army unit in the northeastern part of the diamond-rich Kono District had refused to obey a transfer order to the capital (Chilson, 1988). The 1987 State of Economic Emergency was followed, in April 1990, by Momohs Operation Clean Slate. This saw members of the army and of the Special Security Division (a private security force that was built up as a means of intimidating opponents and as a counter to the regular army) expelling a reported 10,000 diamond miners from the Kono area.4 This move can only have further increased the militarys involvement in the diamond sector. Momoh was aiming to weaken the hold on the diamond sector by the Lebanese, who had employed large numbers of these expelled miners (Kpundeh, 1993: 103). He tried unsuccessfully to concentrate the diamond industry in the hands of a few foreign firms (Reno, 1995: 15576). The initiatives added to the pool of discontented laborers, who some observers felt were easy recruits for rebels the following year (Fithen, 1999: 159; Reno, 1995: 165).

The Cover of Apparent Compliance

A further way in which IFI agendas appear to have fed into conflict in Sierra Leone is through what we might call the human rights opportunity cost that

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comes from giving overriding importance (even in wartime) to the promotion of liberalization. Many of the most severe human rights abuses in Sierra Leones civil war were carried out by government soldiers under the military regime of the NPRC, which ruled from 1992 to 1996. Opportunities for effective pressure undoubtedly existed. Yet foreign governments raised very little protest about these. A key reason seems to have been the NPRCs ability to curry international favor by pushing through structural adjustment policies that made it appear a model government.5 The extent of the NPRCs dependence on external finance and international goodwill was very considerable. The NPRC was reported to have received some US$324 million from western donors and investors between 1992 and 1995. After soldiers and rebels brought operations at Sieromco and Rutile to a halt in January 1995, foreign aid came to provide more than half the national operating budget. Unlike Zambia and Ghana, for example, the NPRC accepted a structural adjustment program with very little resistance. Toward the end of 1993, the World Bank (1993) concluded with some complacency: The Government of Sierra Leone is carrying out a comprehensive program of economic growth aimed at achieving sustainable growth and reducing poverty. The World Bank and the IMF made it clear they were impressed by the NPRCs success in bringing inflation down sharply in the middle of a civil war (M.A. Sesay, 1995: 1856). War would normally be expected to boost prices sharply through disrupting production and encouraging military spending. Yet in Sierra Leone, inflation actually fell sharply from 115 percent in 1991, the year the war began, to 18 percent in 1993, and was still only 20 percent in 1994 (Bank of Sierra Leone, 1995: 37; M.A. Sesay, 1995: 1856). Rewarding such stability in the midst of a human rights disaster was rather bizarre. This was all the more so since the stability of the economy in Freetown was arguably a symptom of the abusive pattern of warfare under the NPRC: while the NPRCs cutting of imports (Bank of Sierra Leone, 1995: SA23, SA26) and public spending no doubt had some effect on reining in the money supply and bringing down inflation, also significant was waging counterinsurgency on the cheap. Much of the counterinsurgency was funded, in effect, through the toleration of underpaid soldiers looting, extortion, and illegal mining. In 1940, John Maynard Keynes famously published How to Pay for the War, suggesting that taxation could reduce inflation; in Sierra Leone, the problem of how to pay for the war was to a large extent solved in the ravaged towns and villages of upcountry Sierra Leone. Finance Minister John Karimu was soon being hailed as an economic magician, and in August 1993 West Africa magazine referred to the transparency, accountability and probity of the NPRC regime (Butscher, 1999). In January 1995, as abuses by government troops escalated with attacks on Sieromco, Rutile, and Njala, Finance Minister John Karimu thanked Britain, Germany, and Belgium for debt relief granted in the wake of the governments sound financial policies (Allen, 1995; Cole, 1995). By April 1995, Sierra Leones total external debt was in excess of US$1.2 billion, with US$450 million owed to multilateral donors, US$450 million to bilateral donors, and US$350 million to commercial creditors. In theory, debt servicing was around 75 percent of annual exports (Bank of Sierra Leone, 1995: 68). By giving priority to maintaining some level of repayments, the NPRC was earning international favor and securing advantageous repayment terms. By April 1995,

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the Governor of the Bank of Sierra Leone reported with some satisfaction that obligations falling due to these multilateral organisations are being met on a timely and regular basis. Official debt had been discounted and rescheduled, and with help from the European Union and the UK among others, the NPRC was in the process of buying back commercial debt at a very favorable discount (Bank of Sierra Leone, 1995: 6970). Several donor officials portrayed war as an unfortunate interruption in the progress the NPRC was making on other fronts. For example, one senior US humanitarian official said:
The government have cleaned up the city. Sierra Leonean friends say at least theres electricity in Freetown. . . . They have tried to add to the countrys attractiveness. Its just the war that has got in the way.6

Significantly, a perceived international bias toward the government may well have deepened RUF intransigence. When the NPRC rejected the RUFs May 1992 ceasefire declaration, the RUF said the governments backers abroad were responsible (Sankoh, 1995). As late as February 1996, the well-informed newsletter Focus on Sierra Leone criticized the diplomatic silence that was being maintained in the face of violence by government troops, noting that this was not only increasing the impunity of these troops, but also impeding negotiations with the RUF:
The absence of even-handedness, in apportioning culpability for these atrocities, by the international community Amnesty International being the sole exception is losing it the confidence it needs from all sides if it is to play the roles of facilitation and mediation in this conflict.

Given the rebels apparent bunker mentality and the view that Everything without is untrustworthy or ruined (Richards, 1996b: 6), winning the RUFs confidence was a particularly delicate task. Yet, in effect, only one of the abusive parties was being officially blamed and shamed. One senior RUF combatant reported that the UN and Commonwealth Secretariat were seen as antagonistic to the rebels (Hirsch, 2001: 52; Lord, 2000: 91), adding that rebels with experience of the UN in Liberia were particularly inclined to this view. Equally significantly, by not engaging forcefully with government troops abuse of civilians and former RUF members and captives, the international community inadvertently helped the RUF in securing (and keeping) its recruits. From the point of view of donors, it was not until 1995 (and particularly the January 1995 attacks on the bauxite mines of Sieromco and the rutile mines of Sierra Rutile) that the shine began to come off Sierra Leones economic miracle. The efficacy of donor pressure, when it was applied, underlined the failure to use it earlier. In late 1995 and early 1996, NPRC leader Valentine Strasser came under pressure to democratize, both from Economic Community of West African States (ECOWAS) countries (such as Nigeria, Ghana, and Gambia) and, further afield, from Britain and other bilateral and multilateral donors, who made aid conditional on the governments acquiring legitimacy through elections (Africa Confidential, 1995: 67; L.J. Sesay, 1995). Together with growing and organized civil protest against the NPRC and the army, such external pressures helped propel the democratic process (Abraham, 1996: 29; Shearer, 1997; 1). However, concerted international pressure had in many ways come too late: not only had a devastating set of human rights violations gone undeterred and

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virtually unremarked, but also the genie of rebelsoldier collaboration was now out of the bottle. The rebelarmy unholy alliance had been allowed to fester and grow, and the rift between civilians and government soldiers had become very wide. Sustaining international attention was to prove very difficult, and the alliance was soon to bring its grievances and abuses to the seat of government in what was effectively a joint military coup in May 1997.

Reinventing the Problem?

Sierra Leones war, which began in 1991, was formally ended on January 18, 2002 with a joint declaration by the government and the RUF. There were some signs that donors were now better aware of the importance of a functioning state. Most notably, the British governments Department for International Development (DFID) had evolved a significant good governance program, including a major effort to reform the army by improving training, pay, and conditions. The World Bank, apparently relenting from its earlier demonization of the state, announced plans to focus on institutional reform and capacity building, including district councils, legal and judicial reform, strengthening the legal and accounting professions, and strengthening property rights. It is not clear how far this will go, however, and the World Bank has continued to push a privatization agenda (see, for example, World Bank, 2002: 8), with Tejan Kabbahs Sierra Leone government largely compliant. Pugh et al. (2004: 115) observe:
In a context where an estimated 90 percent of people between ages eighteen and thirty-five are unemployed, and where the rank-and-file civil service earn an average of a dollar a day (equivalent to the UNs definition of absolute poverty), lower taxes and lower inflation still remain central goals.

In 2001, the Sierra Leonean government noted: Government will undertake the divestiture and reform of public enterprises, with the funds raised directed to socioeconomic development (Republic of Sierra Leone, 2001: 31). This raises the question of whether the enterprises to be sold off are currently profitable or not. If they are not, then it may be unlikely that substantial funds will be raised by selling them. If they are profitable, the ability of the state to fund education and health in the medium and long term will not be assisted by getting rid of them. The World Bank states that its priorities include building capacity for agricultural development (World Bank, 2002: 18), but again it is not clear how new remedies will differ from old ones. In 2002, the World Bank blamed the poor performance of agriculture in 197090 in large part on the underpricing of farm output by the Produce Marketing Board, on persistent currency overvaluation, and on subsidies for food imports (World Bank, 2002: 9). This analysis differed little from that in the 1980s. While the World Bank claimed in 2002 that these past policies fed into the conflict (World Bank, 2002: 9), it was actually rapid devaluation and ill-judged privatization that did more to fuel conflict. Now that peace has been declared, low pay for state employees continues to impede attempts to rein in (and tax) Sierra Leones illicit economy. The UNs diamond export certification scheme had a positive impact, with recorded diamond exports rising to US$27.9 million in 2001, compared to US$10.1 million in 2000 and US$1.2 million in 1999 (IMF, 2002: 43).7 A UN ban on diamond exports from Liberia also helped. But poor remuneration for state officials continues to facilitate widespread smuggling. While a DFID-funded study suggested

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that the value of diamond exports could increase to US$180 million by 2006 (Pugh et al., 2004: 118), the World Bank (2002: 3) noted that more than half of all diamond exports remained outside official channels covered by the diamond certification scheme. Traders have continued to bribe underpaid government officials and to smuggle diamonds illegally out of the country. Moreover, the quality of diamonds going through the official system has been lower than average for Sierra Leone, suggesting that better stones are still being smuggled. Some reports said Charles Taylor was still buying Sierra Leonean diamonds (Pugh et al., 2004: 119). Mine monitors, who have often shared the polices fear of powerful illicit miners, were scarcer than before the war and they remain underpaid (Pugh et al., 2004: 120).

Conclusion
The state has been an object of suspicion for both right-wing critics (who tend to see it as inhibiting enterprise) and left-wing critics (who tend to see it as an instrument of elite or class oppression). But the collapse of the Sierra Leonean state reminds us that states may have their uses. Sierra Leones counterinsurgency force was largely self-funded (from looting and illegal mining), and in the course of becoming self-funded, it rapidly ceased to be effective in its counterinsurgency role. Although international donors did not foresee such developments in the Sierra Leonean military, this trend was, in some sense, consistent with international pressure for state-funded activities to become self-supporting. Significantly, the failure of counterinsurgency in Sierra Leone has been part of a broader international phenomenon: a range of countries, from the USA and the nations of eastern Europe to Liberia and Cambodia, have found that underpaid and undermotivated state officials (whether police or soldiers) can often be bought off by those participating in illegal activities that are linked with international markets (for example, drugsmuggling, prostitution, and the illegal depletion of timber resources). The market may be stronger than the state, and there is nothing in the nature of a market that confines transactions to those that are socially desirable. Despite the frequent emphasis on what we might call the res of postwar interventions (resettlement, reconstruction, reintegration, and so on), there are grave dangers in trying to reinvent the political economy that gave rise to war in the first place. In Sierra Leone, neoliberalism (like the chieftaincy system and endemic corruption) is in danger of being reinvented. Yet a key lesson of the war is that Sierra Leone needs a political economy that provides alternative livelihoods to those that have been offered by armed bands, as well as alternative systems of protection and belonging. This implies, among other things, a need for creative thinking to produce livelihoods in line with young peoples hopes and expectations. It is not clear that liberalization has provided the answers to these problems in the past; nor that it will in the future. It should hardly need stating that disarmament, demobilization, and reintegration (DDR) will never be more than a short-term band-aid if the underlying reasons for the war are not tackled. Reforming an army as demoralized and abusive as that in Sierra Leone will demand long-term involvement.8 Without this and without adequate political reforms (including civilian control over the military), the British effort to retrain and re-equip the Sierra Leonean army runs the risk of equipping future rebels with deadlier skills and weaponry. Whether improvements in the security sector

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will be sustainable once foreign troops leave the country is particularly uncertain. Pugh et al. (2004: 111) note that peace might not survive the departure of the United Nations Mission in Sierra Leone (UNAMSIL). Donors are likely to have an unusual degree of bargaining power when countries are weakened by war an argument made by Pastor and Boyce (2000) in relation to postwar El Salvador in particular, and one suggesting that the World Bank and IMF need to prioritize equity issues in post-conflict situations so as to tackle the root causes of civil wars.

Notes
1. Reference is made throughout to field interviews conducted during 1995 and 2001, though for obvious reasons these remain anonymous. 2. Alongside the promotion of free markets, the post-Cold War period has seen foreign governments showing increasing concern with promoting democracy: indeed, democracy and free markets have formed two key pillars in the so-called Washington Consensus. While democracy is certainly a desirable state of affairs, attempts to move a country in this direction may meet with a number of problems that are in some ways similar to problems arising from attempts to promote a free market. In particular, it is important to ask the following. Which groups have an interest in resisting, hijacking, or derailing this project? What steps have they taken (and are they likely to take) to these ends, and how can their actions be taken into consideration in advance by those who favor a peaceful transition to democracy? Compare African Rights (1994); Ignatieff (2001); Keen (1998); Snyder and Mansfield (1995). 3. Studenttown alliances helped to provide a groundswell of youth support for the NPRC in its early days, although far less for the RUF (Abdullah, 1999: 77). 4. Some put the figure as high as 30,000 (Pugh et al., 2004). 5. Also feeding into donors inaction was a sense that the country could be plunged into total chaos and a degree of pessimism about whether troops abuses could be reined in, given the apparent weakness in the lines of command. International creditors may also have been anxious to prevent a default on international debt: particularly since defaults in countries of minor economic importance are sometimes seen as encouraging defaults by bigger players. Compare Brown (1992) on Sudan. 6. Compare Edkins (1996) on famine discourses that marginalize violence. 7. Some of the improvement may have come from extension of government authority across the country, rather than the certification scheme (Pugh et al., 2004: 119). 8. News that the British deployment was being scaled down was greeted with dismay in Freetown in 2001.

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Biographical Note
DAVID KEEN is Reader in Complex Emergencies at the London School of Economics. He is author of The Benefits of Famine (Princeton, 1994), The Economic Functions of Violence (Oxford University Press, International Institute for Strategic Studies, 1998), and The Best of Enemies: Conflict and Collusion in Sierra Leone (James Currey/Palgrave/International Peace Academy, forthcoming). ADDRESS: Development Studies Institute, London School of Economics, Houghton Street, London WC2A 2AE, UK [email: [email protected]].