Review of International Political Economy 9:3 August 2002: 415–435
Uganda’s politics of war and debt relief
William Reno
North Western University, USA
A BS T R A C T
The return of interstate war in Africa after the end of the cold war and
global awareness of predatory economic motivations for war raises the
question of whether African states are reviving early modern European
methods of building states. This study of Uganda’s intervention in Congo
reveals that this is not so. Uganda’s peripheral position in the world
economy, coupled with its relations with creditors, gives its leaders unexpected capabilities to plunder a neighbouring country’s resources. Creditors
remain surprisingly willing to tolerate this behaviour, while providing debt
relief. Uganda’s leaders exploit creditor anxieties about growing disorder
among highly indebted countries and fears that chaos will undermine
creditor efforts to manage uncollectable debt. Nonetheless, warfare, plunder
and manipulation of creditor interests does not result in stronger institutions. The predatory behaviour of the Ugandan military resembles that of
their state-building counterparts. But contemporary plunderers form their
own ties to the world economy. Uganda’s leader faces greater obstacles
to consolidating control over violent commerce, and private interests of
plunderers actually weakens existing central political control as Uganda’s
leaders and its creditors become even more tied to new loans to maintain
short-term order.
K E Y WO R D S
Debt; warfare; Uganda; state building; plunder; reform.
Bismarck certainly despised Parliamentary and peaceful struggles,
although from a different angle, we must not be oblivious of their
limitations either… I wish that some militaristic African could knock
together Uganda, Kenya, Tanzania, Zambia, Rwanda, Burundi, etc.
to form one state.
(Yoweri Museveni, 1966: 11)
What interested me most in history was the formation of states in
Europe . . . I was also fascinated by the French Revolution, and
bourgeois opposition to taxes imposed by the feudal order because
Review of International Political Economy
ISSN 0969-2290 print/ISSN 1466-4526 online © 2002 Taylor & Francis Ltd
http://www.tandf.co.uk
DOI: 10.1080/0969229021015067 1
REVIEW OF INTERNA TIONAL POLITICAL ECONOMY
it interfered with trade – which was also the reason that the Prussian
Junkers wanted a uniŽed government.
(Yoweri Museveni, 1997: 14)
Uganda is one of at least 14 sub-Saharan African states that have intervened militarily in neighbouring states since 1990, often drawing claims
from observers that these armies combine war with commerce. States
that have sent combat soldiers beyond their borders include Angola,
Eritrea, Ethiopia, Ghana, Guinea, Nigeria, Rwanda, Zimbabwe and
others. At a conceptual level these wars draw attention to the historical
relation of state formation and markets. Referring to early modern
Europe’s history and evoking Ugandan president Museveni’s words
above, for example, one is reminded of Tilly’s ‘portrait of war makers
and state makers as coercive and self-seeking entrepreneurs’ (Tilly,
1985: 169).
Tilly provides a caveat that contemporary states do not recapitulate
European experience. He explains that the dependence of most post
colonial states upon external patrons and the appearance of global norms
of non-intervention helped many internally weak states maintain separate national existences (1992). Yet the interventions of Uganda and other
states in the conict in Congo shows that at least some post-colonial
African states manage to Želd armies and inuence developments beyond
their borders, even in deŽance of pronouncements of creditors and in
violation of long-standing norms that African states will respect each
other’s borders. How should one understand this use of force in terms
of the evolution of political communities? Does cross-border intervention signal a turn to conditions that Tilly described of early modern
European state building or the nineteenth-century European images
evoked in Museveni’s words above? If such a change has occurred it
would go far to satisfying a condition that Herbst poses as necessary
for building stronger states in Africa: ‘If the boundaries could have
been challenged, rule over the hinterland would have had to have been
stronger’ (2000: 94). If Uganda’s intervention and the political economy
of war in Congo marks a revival of state building then it also revives
competitive international relations where internally weak, patronagebased ‘quasi-state’ regimes (Jackson, 1990) face geo-political pressures
and opportunities that compel rulers to experiment with administrative
innovations, including war, to consolidate their power, control markets,
and manage rivals.
On the face of it Uganda’s military, the Ugandan People’s Defense
Force (UPDF), has shown considerable capacity to control territory
and accumulate resources. Its occupation since 1996 of part of Congo
larger than Uganda itself and involving 10,000 soldiers in 2001 despite
announced withdrawals, (UN, 2001c; 5) should stretch – and thereby
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increase – the capabilities of Uganda’s state administration. (As of mid2001 Ugandan forces had withdrawn from western locations, but
Uganda’s UN representative advised that Uganda ‘would continue to
examine the wisdom of maintaining a presence in Buta and Bunia’ (UN,
2001a: 2). A recent UN report charges that Uganda’s army – along with
those of several other states, especially neighbouring Rwanda, loot
resources and conduct commerce in Congo (UN, 2001b). Could it be
that these economic predations, what some regard as a ‘criminalization’ of the state (Bayart et al., 1999; Strange 1996: 114–16; van Creveld,
1999), is in fact state building? Tilly’s classic description of state building
as a form of organized crime, with kings as godfathers selling protection to cooperative gangs and to merchants, meant to apply to early
modern European conditions, reinforces the relevance of considering
whether the proliferation of violence and organized looting bears some
similarity to patterns that marked the emergence of states in Europe
(Tilly, 1985: 169–91).
T H E D IF F IC U L T Y O F S TA T E B U IL D IN G
I N T H E PE R IP H ER Y
I argue that the appearance of interstate conict does not signal a decisive shift within Uganda toward centralizing and strengthening state
authority. In fact, the UPDF’s conduct of war in Congo undermines the
coherence of the UPDF and thus of the Ugandan state as a whole. It is
notable, however, that international actors and global norms dedicated
to preserving African borders play a surprisingly limited role in hindering Museveni’s ability to use war to strengthen his position vis-à-vis
strongmen in his own country, or discipline predatory gangs or conduct
interstate warfare. Instead, Museveni’s regime Žnds ways to manipulate
outside actors and norms to pursue its regional designs. Uganda’s ofŽcials
exploit anxieties of foreign ofŽcials and of multilateral creditors to limit
political disorder in poor countries and to avoid sudden write-offs of
unpayable sovereign debt. Ugandan ofŽcials and these outsiders engage
in mutual deception designed to preserve a façade of Uganda’s respect
for borders, payment of debts and orderly internal political development.
In fact Uganda is neither a case of state building through centralizing
violent accumulation, nor is it a weak ‘quasi-state’ entirely dependent
on the patronage of strong outside actors to survive. Instead Uganda’s
president (and rulers in other states that intervene in Congo’s war such
as Rwanda and Angola, not included in detail in the scope of this article)
use warfare to refashion their relations with a changing global political
economy and protect their regimes. Their peripheral stance vis-à-vis
global economic and strategic concerns of more powerful states and
institutions still leave them and their state administrations very weak in
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relative terms. But rulers in peripheral states Žnd new opportunities to
manipulate the changing interests of global political actors and exploit
economic niches.
This context also ampliŽes disorderly aspects of combining warfare
and economic predation. Museveni shares with rulers in Rwanda (with
20,000 troops in Congo), Zimbabwe (12,000 in Congo) and Nigeria (3,000
in Sierra Leone) a tendency to lose control over military predations.
Military ofŽcers and some rank-and-Žle soldiers become violent entrepreneurs, organizing their own connections to global commercial networks to take advantage of the unregulated environment of war zones
and the broader deregulatory context of economic reforms. Incumbent
rulers often recognize that predation solves short-term problems of political control by keeping soldiers occupied. But ultimately returning these
soldiers to their home countries further entrenches these violent entrepreneurs in military organizations and aggravates domestic factionalism
as other strongmen position themselves to get a share of the loot. This
element of warfare, a normal component of state building in other places
at other times, instead creates violent entrepreneurs within the military
and government who will resist institutional efforts to control them, and
may defy the ruler’s personal authority to get what they want.
More generally, this political economy of warfare shows that even if
wider interstate competition returns to Africa, warfare will not become
a state building tool in the context of Africa’s position on the margins
of the world economy. This does not contradict views that military
activity will force African regimes to pay more attention to effectively
organizing state agencies (Ayoob, 1998; Herbst, 1996/97). Instead, it
predicts that these efforts will fail, producing more disorder and even
weaker states. Under other conditions, Museveni should have a fair
chance to build a state through conquest in a neighbouring state, especially given that most of the UPDF’s leadership shared the experience
of guerrilla struggle and the creation of a system of local resistance councils to mobilize inhabitants in 1981–6 before taking power in Uganda.
But Tilly notes that state building through war no longer works in peripheral states today (and also failed in many instances in early modern
Europe). Only now, we Žnd that the reason among states on the periphery
of the world political economy is not due to a relative lack of external
pressure on states to organize to fend off external threats. As Africa
shows, weak states now invade one another. Instead, a large part of the
cause of the failure to organize violence as a tool for state building is
found in the nature of commercial linkages of these peripheral regions
to the world economy.
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W A R , P LU N DE R A N D W EA K S TA T ES
I N A G LO B A L C O NT E XT
Cold War superpowers gave diplomatic support and resources to client
regimes that could barely control domestic territory, much less regulate
transactions across their borders or sustain internal administrative hierarchies in a meaningful sense for most citizens. Other forms of assistance
to very weak states have Žlled in where strategic aid has declined, which
has allowed regimes to continue to short-change the interests of citizens
(Uvin, 1999; de Waal, 1997). This observation that external guarantees
of state survival weaken internal incentives to build effective administrations describes the politics of many states. By 1985, for example, Zaire
(now called Congo) had 12,000 miles of motorable roads, down from
88,000 miles at independence in 1960 (Ayoade, 1988: 106). Zaire’s president Mobutu did not have to concern himself with actually controlling
all parts of Zaire. His reliance on foreign patrons, primarily the US and
France, gave him sufŽcient resources to hold onto power.
External support for existing borders outlives the cold war. Since the
end of the colonial era, would-be expansionists have faced global condemnation of conquest, such that even Indonesia coughed up tiny East
Timor in 1999, despite its 1975 invasion of the former Portuguese colony
and suppression of separatists. State building in the mode of conquest
that Museveni notes above could include Iraq’s absorption of Kuwait,
or attempts to unify a Serbian ethnic nation in former Yugoslavia, all of
which faced huge international resistance. Most post-Cold War insurgencies attract broad international condemnation and sanctions (unless
they capture capitals). This reinforces the notion that the sovereignty of
existing states endures, no matter how weak or inept the regime (Jackson
and Rosberg, 1982; Mazrui, 1993; Herbst, 1996/97). Even where regimes
collapse altogether, outsiders refuse to accept the extinction of sovereignty. Somalia persists as a globally recognized state even though its
southern half lacks a central government, while the Somaliland administration in the north that provides order and delivers public services
receives no formal recognition from other states. Would-be state building
insurgents rarely gain much aid and investment from abroad, while those
who inherit existing sovereignty tap a wide array of existing channels
for support. This happens almost no matter how groundless their claim
to exercise authority in the eyes of local people.
Nonetheless, rulers still have to rule, or at least manage their rivals.
International support for African sovereignty offers additional resources
to manage political rivals or would-be rivals by giving rulers the prerogative to decide who has access to the country’s territory. Even if borders are not controlled, global recognition of this right enables rulers to
shield transactions from the eyes of outsiders. This is part of a general
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trend in some African countries toward the personal appropriation of
state institutions and the development of smuggling, the growth of private armies, and the development of an economy of plunder where the
state is used as a vehicle to organize such activity. This reaches an extreme
in Liberia, which had a 1998 ofŽcial budget of about $50 million (IMF,
2000: 30), while clandestine businesses reportedly thrived with ofŽcial
connivance. Investigators even accuse Taylor of using his position as
president of a globally recognized state to shield commercial transactions
with Sierra Leone and Angolan rebels and to do business with Ukrainian
and South African criminal networks for his personal proŽt (UN, 2000).
Since solid external recognition for existing state sovereignty offers
rulers few incentives to bargain with citizens for revenue and loyalty in
exchange for state services, one sees little prospect of ending Africa’s
postcolonial legacy of weak states and its global economic and diplomatic marginality (but not irrelevance as Uganda shows below). But
Uganda’s intervention in Congo and Liberian inuence in Sierra Leone
and Guinea (and interventions of Angola, Zimbabwe, Chad, Rwanda,
Burundi, and Namibia in Congo, Angola’s intervention into CongoBrazzaville, Nigeria’s into Liberia, Sierra Leone and Guinea-Bissau, and
Guinea’s into Sierra Leone) challenge the relationship of regimes in weak
states to war, sovereignty, and external resources.
So if ‘War makes states’, in Tilly’s explanation of early modern European state formation, and ‘Banditry, piracy, gangland rivalry, policing
and war making all belong on the same continuum’ (1985: 170), where
does contemporary violence and plunder in Africa Žt into this relationship of war and state formation? Uganda’s Congo War, with army ofŽcers
in business as diamond and gold traders protected by private military
service companies, bears more than passing resemblance to alliances such
as between northern European monarchs and merchants who together
used violent, predatory means to wrest market shares from Venice and
Genoa (Rapp, 1975). Zimbabwe’s president Robert Mugabe incites supporters to seize the property of white farmers and ignore court orders
to return it, while sending 12,000 troops to Congo to defend mine sites
that he and his generals run with foreign partners for their personal gain.
This is not terribly different from the methods of England’s King Henry
VIII, who urged armed followers to plunder the Catholic Church of a
quarter to a third of the Žxed assets of his kingdom, then encouraged
them to use their fortunes to Žnance violent speculative ventures of
buccaneers who preyed upon the commerce of foreigners (Hoskins, 1970).
Other elements of historical state building experience appear in the
adjunct roles that foreign Žrms play in organizing predation. The Dutch
West India Company, for example, helped Žnance and provision a
Portuguese campaign to retake Brazil, then attempted its own occupation of sugar growing areas (Andrade Arruda, 1991: 380). Likewise, an
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American businessman appeared in eastern Congo in the late 1990s with
offers to set up a private ‘African Union Reserve System’ that would
run the Žnancial affairs of Congo’s insurgents in exchange for exclusive
mining concessions (New Vision, 1 Dec, 1999: 3).
Similar activities need not produce similar outcomes. Europe’s ‘plunderer could become in effect the chief of police as soon as he regularized his “take”, adapted it to the capacity to pay, defend his preserve
against other plunderers, and maintain his territorial monopoly long
enough for custom to make it legitimate’ (Lane, 1958: 403). This transformation required various internal social bargains, such as deals with
urban merchants if they existed in large numbers, alliances with local
notables to help repress rebellious peasants, or other internal deals to
promote an over-arching order. Now bargaining occurs within the
external framework of a global diplomatic and intellectual preoccupation with norms of sovereignty, reinforced in post-Cold War Africa by
outsiders’ anxieties about disorder.
Regardless of historical era, hard-pressed rulers have used theft from
neighbours or helped followers to steal as a key component to consolidate domestic political bargains. Africa has often been a target for violent
accumulation. But even here, plunder has been put to reciprocal, if
unequal advantage. Pre-colonial commercial oligarchies acted as middlemen to European traders at the expense of building indigenous administrative capacity. This relationship emerges in contemporary examples
of rulers deriving rents through skimming humanitarian aid and diverting proŽts from money laundering and illicit trade. Defending regimes
against challengers relies heavily on these deals with outsiders. It is
thus not that, as Ayoob speculates, ‘statemaking and what we now call
‘internal war’ are two sides of the same coin’ (1998: 42). Internal and
regional war occurs in a context of considerable external involvement,
including informal deals between local and international actors, and is
connected to negotiating terms of external dependence.
Despite the difŽculty of managing predatory associates, rulers still Žnd
short-term political gains in Žghting wars in neighbouring states for the
mundane reasons such as gaining new sources of patronage for followers,
just as rulers in other times and regions did in their attempts to solidify
control over strongmen. Here rulers encounter the diplomatic mirror
of the external economic factors that sabotage their efforts to combine
plunder and control in historically more conventional fashions. As noted
above, rulers use sovereignty to shield clandestine transactions, a divergence of practice from ideal that Krasner calls the ‘organized hypocracy’
of sovereignty (1999). Creditor and president each use the other to pursue
interests while maintaining that a particular norm guides their behaviour. Uganda’s president exploits disjunctures between norms, which
exist in the sense that they shape what resources are available and what
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behaviour is rewarded, versus interests, which facilitate Museveni’s tacit
bargains with the same actors who enforce norms so that both can ‘cheat’
on those norms to solve short-term crises that could threaten norms if
norms alone guided action.
Nonetheless, as Uganda shows, control over force and the ability to
use it in foreign lands is only one part of state formation. It becomes
destructive to this project when it is not accompanied by the ruler’s
exclusive ability to control those who plunder. The economic dynamics
of armed gangs may resemble that of states, but durable institutions will
not be built without this control.
T HE U PD F IN C O NG O
Congo’s civil war began in earnest in 1996 in a context where private
economic groups for the most part already operated amidst the collapse
of state institutions and many clandestine operators had important ties
to Uganda businesses and politicians stretching back to the 1960s (Perrot,
1999). Congo’s prewar rulers drew most of their income from exports
of natural resources, not from taxing citizens or businesses. In 1992,
copper made up 58 percent of Congo’s ofŽcial exports (IMF, 1994: 31).
Compact, valuable resources like gold, diamonds and cobalt left the
country through clandestine channels, some of which politicians controlled. In the late 1980s, for example, possibly as much as four tonnes
of gold left Congo through untaxed channels each year (MacGaffey, 1991:
19). Much of the production of these commodities was concentrated in
the eastern parts of the country, within easy reach of Uganda.
By mid-1996, the UPDF was deeply involved in assisting Žghters of
the Alliance des Forces Démocratiques pour la Libération du Congo
(AFDL). Ugandan ofŽcials justiŽed the UPDF’s intervention as a strategy to drive Ugandan insurgents away from Uganda’s western border
(Africa ConŽdential, 1 Aug 1997: 4–5). This arrangement also gave UPDF
ofŽcers, opportunities to proŽt from local trade. Ultimately, this development gradually deprived Uganda’s ruler of control over violence and
posed a growing danger that military factions would Žght each other
for spoils of war. This mirrored the development of non-state clandestine commercial organizations. For example, AFDL head Laurent Kabila
spent many years trading in agricultural and mineral commodities with
East Africa, building up a business network that later facilitated his
connections with foreign Žrms once he became Congo’s president in 1997.
Opportunities for soldiers to proŽt personally appeared in conjunction with the war itself. UPDF forces have controlled large parts of
northeastern Congo since 1997 after they helped Kabila to power. The
UPDF extended their areas of occupation when they backed another
rebel group in August 1998, the Rassemblement pour la Démocratie
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Congolaise, (RDC) to overthrow Kabila after he denounced his former
allies as foreign invaders, failed to impose order, and abandoned commercial deals he made while a rebel leader. The UPDF quickly occupied
Kisangani, a major trading city with river and air transport facilities.
Other towns such as Isoro and Butembo hosted UPDF brigades. After
the UPDF’s falling out with Kabila, these towns, along with Kisangani,
served as points to train and aid forces of another proxy, the Mouvement
pour la Libération du Congo (MLC), along with the RDC.
Ugandan ofŽcials offered credible arguments that anti-government
Ugandan rebels used Congo’s territory to launch attacks on Uganda.
They argued that the UPDF intervention was a last resort, given
Mobutu’s, then Kabila’s inability and unwillingness to restore state control over eastern Congo. There is a lot of merit in this justiŽcation. Congobased Ugandan rebels of the Alliance of Democratic Forces (ADF) had
attacked Ugandan border towns and threatened the security of local
citizens. Ugandan ofŽcials complained that since no Congolese government controlled the border area it was Uganda’s right to defend itself
by occupying potential rebel sanctuaries in Congo (Weiss, 2000). Ugandan
ofŽcials were genuinely concerned about ADF inŽltrations. But this
classic self-help strategy is difŽcult to justify in the context of global
norms that maintain the principle of sanctity of borders. As details below
show, the violation of sovereignty more than the issue of looting irritated Uganda’s creditors and diplomatic backers. More important, the
deployment of UPDF troops 1,000 kilometers west of Uganda’s border
suggests that other motivations came to overshadow borderland security. The behaviour of UPDF ofŽcers shows that personal economic motivations may have proven more attractive than organizational imperatives
of an efŽcient intervention against threats to the Ugandan state, and
shaped the character of the intervention.
For example, a close relative of President Museveni took personal
advantage of commercial opportunities that the war offered, and combined his duties as presidential advisor (and briey, head of the army)
with business ventures. He reportedly maintained gold buying Žrms in
UPDF controlled areas of Congo, an area responsible for an estimated
$60 million in gold exports to Uganda in 1996 (Sebunya, 1997: 32). A
Colonel (later Brigadier and UPDF Chief of Staff) stationed in Congo
ran business ventures of his own. In early 1999 this ofŽcer joined JeanPierre Bemba, the son of former Zairian President Mobutu’s principal
business partner (and later MLC leader), to export coffee and timber
from areas under UPDF control. A UN report accuses high ofŽcers in
the UPDF of using aircraft and military airports to organize this and
other trades, including trafŽcking in stolen vehicles, agricultural products and minerals (UN, 2001b, paras 31–45). This pursuit of personal
wealth is ironic in light of the UPDF’s deep ties to Museveni’s original
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insurgent force, the National Resistance Army (NRA) that captured
Uganda’s capital in January 1986. The NRA was among the Žrst postcolonial African insurgent movements to capture power from incumbent
rulers. Resisting factionalism, and taking great care to discipline Žghters
and prevent looting, the NRA captured a state that had been shattered
under the rule of Idi Amin and Milton Obote over the previous 15 years
and re-established an effective central government (Ngoga, 1998).
These business dealings generated some beneŽts for the state, while
still personally lucrative for individual UPDF ofŽcers and their Congolese
partners. Ugandan ofŽcial Žgures record that gold exports rose from
$12.4 million in 1994–5 to $110 million in 1996–7. ‘According to Žgures
from the Ministry of Natural Resources’, cites an ofŽcial report, ‘gold
production represented only 0.2% of gold exports during 1996/7’
(Government of Uganda, 1998: 46), and ofŽcial statistics reported gold
production in 2000 still at .04 percent of exports (Africa Research Bulletin,
5–6/2001, 14788). By 1999, the IMF acknowledged that gold had become
Uganda’s largest non-coffee ofŽcial export (Staff Team on Uganda [IMF],
1999: 73). There is little evidence that Uganda produces gold in anywhere
near these quantities according to industry specialists (Raw Materials
Group, 1999). Trade between Congo and Uganda likely accounts for
some of this gold. The robbery of a commercial passenger bus (travelling several times a week between Kampala and Congo), for example,
netted for bandits a haul of 120 carats of diamonds and $250,000 in cash
(Interview, Kampala, 13 April, 2000).
A UPDF ofŽcer who is a cousin of the president’s wife ran his own
Congo businesses. He reportedly doled out diamond and cobalt concessions to a Žrm named Victoria, whose key shareholder was a presidential
family member, initially in collaboration with Rwandan military ofŽcers
(Africa Analysis, 30 April, 1999: 1; Indian Ocean Newsletter, 11 Sept, 1999;
5). An exiled UPDF major claimed that military involvement in commerce
‘is an open secret to all Ugandans . . . Even in Bunia there are business
interests owned by a retired and other senior ofŽcers, their relatives are
running others’ and blamed disagreements between UPDF units on arguments over business opportunities (Monitor, 25 April, 2001: 16). Various
ofŽcers reportedly maintain cell phone networks in Congo, and generate
complaints among compatriots for their use of military transport to move
goods. The duty-free import of goods into Uganda from Congo became
severe enough that ofŽcials of the Ugandan Internal Revenue agency
complained to the Ministry of Defense about this revenue loss (UN,
2001b, para 73).
Business–military networks connected Congo’s wartime commerce to
commerce in Uganda. The president’s relative held a 45 percent share in
a private security company that is a subsidiary of a British Žrm with
alleged ties to mercenaries employed in Sierra Leone and Angola in the
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mid 1990s (Chapleau and Missier, 1998: 142). The Ugandan Žrm has two
local subsidiaries, an electronics assembly operation and a small arms
plant. He also reputedly owned stakes in air cargo companies (New Vision,
29 July, 1997: 1; Africa ConŽdential, 17 Jan, 1997: 5–7). Other business networks cater to security concerns. Airscan, an American security Žrm with
contracts in Angola reportedly appeared in Uganda to train and equip
UPDF soldiers (Venter, 1998: 63). This Žrm, however, was unlikely to
have been involved in trading concessions for military assistance since
the Žrm was a contractor for the US-sponsored African Crisis Response
Initiative military training programme. (UPDF participation in this program ended in 1999 because of Kampala’s activities in Congo.) But other
businesses such as air cargo Žrms handle trade from Congo, including
one owned by a presidential relative’s wife (UN, 2001b, para. 74).
R E NE G OT IA T IN G R E LA T IO NS WI TH C R E DI T OR S
There is little doubt that UPDF behaviour in Congo falls within the category of ‘criminalization’ in that state agencies are used to generate private
proŽts in international trade (Perrot, 1999). It is more signiŽcant how
this theft shapes the organization of Uganda’s army and its relation to
state institutional power. Clearly some ofŽcers proŽt personally. Individual aggrandizement and business disputes are cited in mysterious
attempts on the lives of key army commanders – a development not
conducive to the efŽciency of the military’s bureaucratic hierarchy (New
Vision, 19 April, 2000: 20). OfŽcers, including a presidential relative, have
been implicated in shady transactions involving UPDF purchases of overpriced used arms procured through contract Žrms that they own. Personal aggrandizement also appears to have helped lengthen the war.
Even the head of the Ugandan-supported MLC rebels complained: ‘One
of the reasons for the war is the control of resources, especially exclusive control of the diamond market’ (Sunday Monitor, 18 Feb, 2001: 29).
But could theft organized by a state conceivably play a role in supporting both the regime and greater state bureaucratic capacity to carry
out non-military activities? In this case it does so only temporarily. More
important, instead of boosting long-term state capacity directly, it plays
an important political role in managing Uganda’s relations with multilateral creditors. This trade promotes exports of ‘non-traditional’ [often
Congolese] products by violent entrepreneurs that help make Uganda
appear as though it is improving its position as an example of exportled growth and successful economic reform. Deregulation of raw
materials purchasing and export, coupled with lower tariffs gives
exporters of gold, for example, incentives to use ofŽcial channels. Even
if produced elsewhere, entrepreneurs beneŽt from bringing goods to
Uganda for export where they have access to lower cost insurance and
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freight services. Reasonable (or avoidable) taxes are tolerable in relation
to the risk premiums that long-haul air transporters and foreign partners demand in rebel held areas of Congo. Furthermore, businesses based
in rebel zones would not be able to Žnd reputable insurance companies
to indemnify them against risk in deals with non-sovereign insurgents,
they would face scrutiny from NGO and UN investigators concerned
about the connection between commerce with rebels and conict, and
would Žnd greater difŽculty in raising capital. Thus shifting trade to
Uganda captures prerogatives of sovereignty as an asset for managing
commercial risk.
Meanwhile, creditors present Uganda’s export performance as evidence that policies stressing poverty reduction through economic growth
via increased trade and investment really work in very poor countries.
Uganda’s status as an early client of the Heavily Indebted Poor Country
Initiative (HIPC), a joint programme of the World Bank, IMF and Paris
Club bilateral creditor countries to reduce unsustainable levels of debt
service for very poor countries is integral to creditors’ tacit acceptance
of war-related commerce. This initiative is unusual for writing off principal owed by debtors, then requires governments to use savings to pay
for social services and strengthen state bureaucracies.
Private sector war-related commerce also helps Ugandan ofŽcials
addresses creditor concerns about the diversion of state resources away
from debt servicing to war Žghting. IMF ofŽcials in 1999 set 1.9 percent
of Uganda’s GDP as an upper tolerable limit for military spending before
loans were delayed or halted. Creditors worried that military spending
would undermine efforts to balance the country’s budget. The IMF resident representative in Uganda, Zia Ebrahim Zadeh even complained that
‘although the Defense budget was supposed to be 1.9 percent of the
GDP, the IMF team had found that the target had been surpassed to
well over 2.2 percent in the Žrst six months’ (Monitor, 13 March, 1999:
2; see also Monitor, 10 March, 1999: 1–2) in deŽance of a key creditor
condition.
On the other hand, other cases show that not defying creditor’s terms
can damage the interests of regime and creditors. In Sierra Leone IMF
ofŽcials in 1996 pressured the government to end its contract with a
South African mercenary force that was protecting it, due in part to the
budgetary impact of the monthly $1.8 million fee for its services, and,
according to a former US ambassador, to IMF suspicions that IMF funds
deposited in the government’s bank accounts were used to pay the Žrm
(Hirsch, 2001: 40). Meanwhile, creditors promised that Sierra Leone
would receive debt relief (West Africa, 29 July, 1996: 1196). Three months
later, rebels seized the unprotected capital, forced an elected president
into exile, and ended discussions with creditors over addressing the
country’s considerable arrears on debt repayment. Diplomatic moves in
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the UN and in foreign countries to isolate these rebels, notorious for
massive human rights violations, resulted in an embargo that removed
the country’s debt issue from the hands of IMF and World Bank ofŽcials, and left them without globally recognized interlocutors in Sierra
Leone with whom they could organize an orderly way of managing the
country’s building arrears.
Anecdotal evidence suggests that creditors learned from Sierra Leone’s
experience that ignoring a regime’s security threats poses the risk of
destroying interlocutors who are willing and capable of meeting a state’s
international obligations and creating disorder in its stead (Interview,
Kampala, 13 April, 2000). At the very least, conicts involving insolvent
countries such as Congo, Sudan and Somalia, and the potential for conict in places like Nigeria, threaten claims of creditors that debts ultimately are collectable and that treatment of debtors must be uniform.
Greater creditor concern that debtor governments retain enough control
to at least acknowledge debts and make token attempts to pay arrears
gives regimes in debtor countries leverage to fake or conceal sources of
economic performance. Whether the mutually accepted ruse extends
to faking economic data is unclear, though data in the table below show
that creditors tolerate varying reports of Žscal and policy performance.
These anxieties may give debtors enough leverage that they do not
have to fake performance. In 1999 the Ugandan government acknowledged that defense expenditures reached 2.7 percent (Government of
Uganda, 1999: 93) and 2.2 percent in 2000 (Republic of Uganda, 2000:
70). Security spending exceeded the IMF-imposed limit, especially if one
includes informal commercial activity via air cargo companies, military
service Žrms and private arms imports related to the war. Regardless,
creditor ofŽcials in 2001 cited security spending Žgures since 1998/99
as ‘no more than two percent of the forecast GDP’ (World Bank, 2001c:
4). Spending Žgures may have been even higher if one includes aspects
of the war effort related to commercial activities and off-budget Žnancing.
Breaching the 1.9 percent lead to a brief delay of disbursement of an
IMF loan and US and British aid programs were reduced, though without
wholesale reevaluation of relations with Uganda. Nonetheless, the creditor– Uganda relationship resembles what Graham Allison called the
‘Trollope Ploy’ to explain a case of mutually convenient misinterpretation in international relations (Allison, 1971: 227). This term refers to
recurring scenes in the novels of the Victorian writer Anthony Trollope
in which a marriage-hungry maiden takes imprudent gestures such as
a squeeze of the hand as a proposal of matrimony, regardless of actual
intent, in hopes that the object of her desire will play along.
Uganda’s militarized commerce also helps assuage creditor concerns
about performance of Uganda as a debtor country, particularly as a
participant in HIPC. As noted above, HIPC is a part of comprehensive
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multilateral and bilateral debt relief. Uganda, one of the Žrst HIPC clients,
was able to reduce its debt service to the IMF in 1997. Originally scheduled for $175 million in 1998–99, payments fell to $132 million after a
negotiated $650 million decline in Uganda’s overall $3.5 billion foreign
debt. This decline, combined with growing exports, lowered Uganda’s
debt service to export ratio from 23 percent in 1997–8 to 16 percent
in 1998–9 (Africa Economic Digest, 19 April, 1999: 5–6). Negotiations in
February 2000 scheduled Uganda for an overall 40 percent reduction
in multilateral debt, with an estimated total debt service relief of $1.95
billion (World Bank, 2000: 10). Despite the UPDF intervention in Congo,
World Bank and IMF ofŽcials rate Uganda among the top HIPC clients,
a situation that increased exports helped create. Even after the April
2001 UN report that criticized Uganda’s army for alleged commercial
activities, donors pledged $900 million in 2001–02 for development assistance. Uganda also was awarded in 2001 a $150 million ‘poverty
reduction support credit’ beyond initial HIPC provisions (World Bank,
2001b).
Meanwhile, 1998 gold exports – presumably some from Congo –
accounted for 9 percent of all exports by value. The climb in the value
of gold exports from negligible amounts prior to 1997 helped to redress
a 1996 trade deŽcit of about $600 million (Staff Country Report [IMF],
1998: 74). According to Ugandan ofŽcial Žgures, gold exports for 1994
were $224,000, but rose to over $80 million in 1998. The ofŽcial tally of
gold exports fell to almost nil in 1999 (Republic of Uganda 2000: A36)
while the UN reported that 1999 and 2000 exports continued at 1998
levels (UN, 2001b, Table 1). Subsequent Ugandan Ministry of Energy
and Mineral Development reports showed 1999 gold export volumes
rising to over 11 tonnes in 1999 from Žve tonnes in 1998, and falling
slightly to 10.8 tonnes in 2000 (cited in Ankomah, 2001: 32). This steep
increase began in 1996 (Government of Uganda, 1999: 75), the year the
UPDF began its intensive involvement in Congo. Coffee exports from
Congo are harder to tally, though by 1998 Uganda reportedly exported
a considerable amount of Congolese coffee to Indian Ocean ports (New
Vision, 7 Dec, 1999: 15).
Meanwhile, HIPC has provided Uganda with outside loans and debt
relief sufŽcient to Žnance as much as half of its ofŽcial budget and 80
percent of its development expenditures since the mid-1990s. External
assistance has been critical in underwriting increasing state provision of
social services (Table 1).
External budget support for social services also helps the president
tolerate a patronage-based political system that would otherwise risk
wrecking the country’s economy and alienating less favoured citizens.
These patronage-oriented commercial networks incorporate external
and domestic markets in ways that blur distinctions between formal and
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RENO: UGAND A’S POLITICS OF WAR A ND DEBT RELIEF
Table 1
Services as a percentage of public expenditures
Health
Education
Defence
Per capita economic growth
1990–4
1995–7
2.2
6.4
2.5
2.2
3.7
10.71
8.3
3.7
Source: E. Calamitsis, A. Basu and D. Ghura (1999) ‘Adjustment and Growth in Sub-Saharan
Africa’, WP/99/51, Washington, DC: IMF, pp. 31, 32.
informal markets, since proŽt from warfare is clandestine in the sense that
creditors and donors publicly condemn it, but formal in the sense that its
proceeds can appear in ofŽcial statistics as evidence of economic development and deregulation that these same outsiders use to legitimate their
decisions. The statistics themselves reveal exibilities in creditor–debtor
relations. The Žgure for 1995/97 education spending, 10.7 percent in Table
1, is listed at 13.05 percent for the same period in another IMF document
(McDonald et al.: 26). The Ugandan Government reported spending closer
to a quarter of its budget on education in 1997/98 in a document prepared for the World Bank (Republic of Uganda, 2001: 11, 53). Variations
and uncertainties in reported data occur alongside a willingness of all
actors to maintain very exible public stances toward potentially troublesome aspects of their relationships. In this regard, Ugandan ofŽcials and
Uganda’s foreign supporters collaborate in a mutual violation of norms
of creditor-debtor relations. This does not signal that norms always take
a back seat to case-by-case calculations of interests. Instead, creditors bend
in this case to preserve the principle that all poor countries must take
responsibility for all their debts, that HIPC will help them accomplish
debt reduction, and that neo-liberal economic policies work.
Meanwhile, Museveni engages multilateral creditors to get loans and
debt relief to invest in state institutions and infrastructure. This may actually bolster state institutions, much as high earnings from primary commodity exports and state-to-state aid in the 1960s enabled some regimes
to maintain fairly effective state bureaucracies alongside patronage. Evidence of technocratic institutional concerns also appear in the instance
noted above when Ugandan ofŽcials complained that smuggling associated with military activities in Congo deprived the treasury of income.
State institutions are more capable, especially compared to the regimes
of Idi Amin (1971–9) and Milton Obote (1980–5), but they do not become
so through an internal strategy of centralizing violence and using that
control to increase resources in state hands. In fact, UPDF involvement
in the Congo war does the opposite by institutionalizing the private interests of ofŽcers within the military. And when a ruler is forced to choose
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between either gutting state bureaucracies, or telling powerful strongmen that they will no longer receive special favours because the money
is needed for social services, strongmen usually win out. This is true at
least until an autonomous commercial class can assert an interest in economic and bureaucratic efŽciency. Unfortunately for Uganda, many business operators appear to owe their commercial success to positions in a
patronage network.
The internal political consequences of tolerating personal proŽt during war and using state resources for patronage are masked by the mutual
dependence of the Ugandan regime’s relations with its creditors, and
anxieties of both to avoid disorder. Museveni’s regime reaps popular
legitimacy from providing order and creditor-funded services, both
bed-rock issues in Museveni’s successful campaign in the 2001 presidential election. Creditors in turn claim Uganda as a seemingly successful HIPC client that can be used to set a higher performance standard
for other countries included in this programme. ‘If Uganda can do it, no
other government has an excuse’, said an ofŽcial in reference to Uganda’s
achievement of Žscal benchmarks prior to its HIPC approval (Interview,
Kampala, 17 April, 2000). It is also possible that (at least in the shortrun) the increasing capabilities of state institutions and the availability of social services in Uganda are compatible with UPDF intervention
in Congo’s war, alongside Museveni’s management of his relatives and
other strongmen through manipulating patronage so long as creditors
tolerate a façade of successful reform in Uganda. Put differently, it might
be fair to say that creditor resources help make it possible for the UPDF
to remain in Congo while providing political support for Museveni’s
regime.
Mutual deception brings other risks. Intra-military conict shows that
Museveni needs to worry about ofŽcers who pursue interests and powers beyond their ofŽcial positions. Factional divisions in the military
appeared in the 2001 election campaign as many in the UPDF supported
Col Kizza Besigye, Museveni’s main challenger for the presidency. Some
Besigye backers complain about ‘personalization’ of the military through
the interference of the president’s relatives and their control over commercial opportunities related to the war through such instruments as
Victoria. Besigye noted that some in the military were becoming rich:
‘Go to the border points of Uganda and Congo and you will see many
trucks loaded with timber and coffee crossing into Uganda,’ he said
(Monitor, 19 Dec, 2000: 1). He noted that ‘soldiers’ salaries are being stolen
while they contract all sorts of wild tropical diseases’ (Monitor, 26 Dec,
2000: 3). These controversies resonate in the army, leading to the arrest
of some junior ofŽcers, while others went into hiding (Indian Ocean
Newsletter, 17 Feb, 2001: 1). These ofŽcers might agree with Besigye’s
message of reform. Equally likely is a sense among junior ofŽcers and
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RENO: UGAND A’S POLITICS OF WAR A ND DEBT RELIEF
soldiers that senior ofŽcers get rich in Congo and do not share these
opportunities.
Other indications of unauthorized use of violence appear in allegations
and reports that soldiers engage in banditry in Congo, partly to compensate for inadequate salaries and salaries stolen by superiors. Complaints
that this behaviour continues when soldiers are transferred back to
Uganda centre on UPDF units in northern Uganda that are sent to Žght
a local insurgency (Monitor, 21 Jan, 2000: 23). The use of military units
to collect taxes within Uganda further connects violence and accumulation, even when it also increases state revenues, and raises the risks of
military indiscipline (Monitor, 17 March, 2000: 11). A joint Ugandan–
Rwandan report following a 1999 clash of their two armies in Congo
allegedly partly blamed the battle on a business dispute. More alarming
was the June 2001 defection of about Žfty army ofŽcers who vowed to
launch a guerrilla war against Museveni’s regime (Africa Analysis, 13
July, 2001: 6).
Smooth relations with creditors are not guaranteed either. US government ofŽcials criticize Ugandan involvement in Congo’s War while
IMF and World Bank reports express concern about military expenses
and corruption. But as noted above, IMF loan disbursements were merely
delayed over this issue beginning in mid-1999. Meanwhile, Ugandan Žscal institutions have been slow to develop. Income tax collection, a good
measure of individual compliance with laws and of state capacity to
enforce directives, has risen from only 1.3 percent of GDP in 1995–6
to a meagre 1.9 percent in 1999–2000 (calculated from Uganda Bureau of
Statistics, 2000: 124, 149, 151). Overall tax collection as a percentage
of GDP in 1997–98 stood at 11.6 percent and 11.5 percent in 1999–2000
(Republic of Uganda 2000: iii), below the African average of 16.2 percent
(Ghura, 1998: 6).
But if foreign backers enforced rigid conditions on the Ugandan
Government, Museveni’s regime would be exposed to greater risk of
popular rejection as social services declined and disgruntled military
ofŽcers might view the president as politically vulnerable. A coup or
rising social disorder would empower individuals who would probably
use state ofŽce to enrich themselves. Thus Museveni’s outside backers
are trapped: Back away from Museveni’s regime and expect disorder
and a roll-back of reforms, or support him and his patronage politics and
facilitate the UPDF’s continued involvement in Congo. Neither is a strategy for building a state in the image of early modern Europe because
both lack the crucial feature of durable centralized institutional control
over coercion. OfŽcers continue to use ofŽcial positions for personal gain,
and it is not clear that Museveni can control this behaviour. Bringing all
soldiers and ofŽcers back to Uganda will be politically dangerous too,
leaving some to contemplate how they can use electoral politics to get
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better access to private wealth, while others may prey upon Ugandans
as among Congolese, which would undermine the Museveni regime’s
claim of legitimacy and the interests of its foreign backers. This mutual
dependence also reects the duration of creditor backing for Museveni
and his reformist associates in Uganda since the start of creditor monitored programmes in 1987, and the subsequent dependence of Museveni
on creditors to maintain local legitimacy. This mutual vulnerability raises
the cost to creditors of jettisoning a long relationship over incremental
violations of conditions since violent removal of Museveni would damage
creditor credibility elsewhere (de Torrenté, 1999).
C R ED IT O R S A ND T HE IR N EE D F OR O R D ER
I N T H E P ER IP H ER Y
Multilateral creditors also appear willing to deal more selectively with
other highly indebted countries in ways that give regimes more exibility than their desperate Žnancial situations would suggest. Rwanda also
is a HIPC client that deploys several thousand soldiers in Congo to back
a proxy rebel movement. The World Bank advertises that Rwanda will
save $39.6 million in debt service payments under HIPC debt reductions, compared to internal revenues of about $150 million collected in
1999 (World Bank, 2001a, Table 3). This external support occurs despite
UN claims that Rwanda’s military uses income from exports of Congolese diamonds, gold and niobium (a mineral used in cell phones) to
Žnance its intervention in Congo outside Rwanda’s formal budgeted
expenditures (UN, 2001b).
Liberia faces international sanctions under UN Security Council
Resolution 1343 of 7 March 2001 for trading diamonds with Sierra Leone
rebels, which involved Liberian government ofŽcials at the highest levels.
Liberia hosted an IMF team a year earlier, when UN investigators and
foreign ofŽcials already suspected that this trade was worth over $100
million annually. The visitors praised Liberian success in bringing the
country’s tiny $50 million ofŽcial budget in 1998 in closer balance with
ofŽcial revenues, and proposed that monthly payments of $50,000 toward
debt arrears would be sufŽcient to convene a donor’s conference to
discuss Liberia’s qualiŽcation for debt relief (IMF, 2000: 11, 25), an issue
that became subordinate to subsequent international sanctions – another
lesson of the costs to creditors of acknowledging violations of norms.
In fact, regimes in the most volatile regions may be relatively more
immune from creditors’ political conditions than are more assiduous
followers of creditor prescriptions in peaceful areas, since creditors need
to preserve ofŽcial interlocutors who will recognize the state’s sovereign
obligations. These regimes are usually buffered from consequences
of international condemnations of their involvement in local wars, even
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RENO: UGAND A’S POLITICS OF WAR A ND DEBT RELIEF
if individual military ofŽcers and government ofŽcials proŽt personally
from war. Their behaviour need not necessarily weaken the overall global
framework of creditor–debtor norms. In fact, they can play a role in
buttressing them in areas that are economically and strategically marginal
to strong states. After all, Bolivian ofŽcials can hardly complain about
stringent requirements to qualify for HIPC, especially since their counterparts in truly worse-off places like Uganda and Rwanda mastered
these demands. Meanwhile, Chad, with its numerous insurgencies and
violent changes of government, will receive $260 million in debt relief
under a HIPC programme (Africa Research Bulletin, 5/6 2001: 14795–6)
even though the president earlier used oil company contract signing
bonuses to purchase arms in deŽance of creditor conditions. After a brief
dispute over arms purchases, the IMF restored relief. A week later – on
election day (22 May, 2001) – the World Bank added Chad to the HIPC
initiative. Again defying conditions, the president had opposition leaders
arrested soon after the elections.
Thus even if the weakest in the international system are not as weak
as expected, their actual relationships with outsiders do not help build
stronger states. Instead, they may enable rulers to weather less central
control over violence out of short-term expedience, leaving the longterm goal of building a state even more distant. From the point of view
of creditors this relationship may be tolerable in pursuit of the overall
goal of orderly write-downs of debt and justiŽcation for certain policies.
For rulers it offers one of the few tools to simultaneously manage patronage politics and provide social services to citizens while preserving their
own hold on power. The true contours of this relationship between
debtor and creditor are most apparent to citizens in debtor countries,
however. Unsurprisingly, many Chadians accused creditors of taking
the president’s side in the country’s political battles (Africa ConŽdential,
15 June 2001: 5), which is exactly what creditors do when they apply
conditions selectively, whether they intend it or not.
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