THE POLITICAL ECONOMY OF DEMOCRATIC REPUBLIC OF CONGO AND THE BURDEN OF ODIOUS DEBT

INTRODUCTION

Throughout history, Europeans have often perceived Africa through a lens tinted with mystique and enigma. Labelled as the "dark continent," it was enveloped in taboos and the unknown. This portrayal frequently depicted its inhabitants as possessing singular eyes or peculiar customs, such as purportedly covering their heads with feet. These representations perpetuated dehumanizing stereotypes.  For this reason, exploring the past, present and future African countries like Democratic Republic of Congo (DRC), not through a colonial perspective, holds profound importance. This will help to shatter the existing stereotypes and mend the fractured dignity of the people through empowering and humanising those whose voices have long been marginalised.  Through this article, we will try to demystify the history of DRC through the concept of odious debt. Odious debt is a concept in international law that distinguishes between the debt owed by a country and the debt accumulated by its governing regime. However, repudiating the liabilities of a governing regime is not as easy as it sounds because the distinction between the debt of the regime and sovereign debt is often thin and unclear, leading to ambiguity in interpretation.

HISTORY AND ORIGINS OF THE DEBT CRISIS

The history of the Democratic Republic of Congo (DRC) is rich and multifaceted, spanning from its pre-colonial origins to the tumultuous era of Patrice Lumumba. Understanding this history is essential for comprehending the complex dynamics that have shaped the nation and its people. Pre-colonial Congo was characterised by a diverse array of ethnic groups, each with its own distinct cultural traditions, languages, and social structures. The region was home to powerful kingdoms and chiefdoms, such as the Kongo Kingdom and the Luba and Lunda Empires, which flourished through trade networks and agricultural practices. These societies had sophisticated political systems like hierarchical structures, artistic expressions, and spiritual beliefs that contributed to a vibrant cultural tapestry. Evidence suggests the existence of interconnected communities in Congo prior to European colonisation. Economic systems like tribute collections and ancient forms of taxation underlines the complexity of governance, ranging from stateless systems to monarchies in pre-colonial Congo.  

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However, the arrival of European colonists in the late 19th century marked a profound shift in Congo's trajectory. During this timeline, King Leopold II of Belgium was on a mission to establish power and gain prestige through increasing his colonial acquisitions without fighting with European powers and Congo was the obvious choice. He acquired Congo by employing Henry Morton Stanley to map and seize land through bribery and intimidation of local chiefs, securing their signatures on treaties they did not fully understand. This enabled Leopold to claim Congo as his personal colonial acquisition, and control Congo in the name of civilising it and engaging in free trade by driving away the Arab slavers. He was able to establish his power in Congo through the creation of Congo Free State in the Belgium Conference of 1884-85 with the approval of Germany, the United States, and the other major powers. His exploitation of the Congo Free State from 1885-1908 for personal gain led to widespread atrocities, including forced labour, brutal violence, and mass killings, resulting in the deaths of millions of Congolese people. He even leased land of Congo to private concession companies to maximise their profit. To exploit the Congo's resources, King Leopold II established the Force Publique, a Belgian military force that subjected Congolese to brutal exploitation without their input. Villagers were forced into labour camps to extract wild rubber, making Congo one of the largest suppliers of rubber in the world, with failure to meet quotas resulting in severe punishments, including mutilation and hostage-taking of women. The atrocities, including mass murder and famine, halved the population, causing the death of about 10 million people, leaving the Congo dependent on Belgium for sustenance. King Leopold II of Belgium sought to finance his colonial venture in the Congo through loans, eventually securing one from Belgium itself, with the colony offered as collateral. However, Leopold's financial mismanagement led to unsustainable debt, including a 5 million franc loan that he claimed from the Belgian government. This burdened the Congo with debt, as Leopold essentially borrowed money from the state using fabricated claims, perpetuating the cycle of exploitation and financial instability.  Belgium eventually took over the control of Congo from Leopold in 1908, maintaining oppressive policies and military forces like Force Publique until granting independence in 1960 after suppressing a series of Congolese revolts. By this period colonial rule converted resource rich Congo into a mining economy. The legacy of this dark period continues to haunt Congo's history, leaving deep scars on its collective memory. 

INDEPENDENCE AND THE LUMUMBA ERA (1960-1961)

Amidst this backdrop of colonial oppression and exploitation,  figures like Patrice Lumumba emerged as towering figures in the Congolese nationalist movement, whose leadership and vision embodied the aspirations of a nation yearning for freedom and self-determination. Lumumba, born into a Congo under Belgian rule, rose to prominence as a charismatic and impassioned advocate for Congolese independence. His experiences working for évolué magazines exposed him to the realities of colonial oppression and fueled his commitment to challenging the status quo. Upon founding the Mouvement National Congolais (MNC), Lumumba galvanised support from across ethnic and regional divides, mobilising a grassroots movement for independence. Lumumba's tenure as the first democratically elected Prime Minister of Congo was short-lived but impactful. One of the root causes of conflicts in Congo at this period was the ideological differences between the leaders, the pro-socialist ideologies of Lumumba and the pro-capitalist ideologies of Tshombe. There were also other reasons behind the conflicts in Congo like disagreements among leaders about the configuration of the state, dispute over the control of natural resources and ethnicity related conflicts. He confronted internal divisions and external pressures with courage and conviction, seeking to consolidate national unity and assert Congo's sovereignty on the world stage. However, Lumumba's bold leadership and uncompromising stance against foreign interference, along with his allied ties with the Soviet Union, made him a target of powerful interests both within Congo and abroad. The collusion between Belgian authorities, multinational corporations, and rival political factions culminated in Lumumba's tragic assassination in 1961, marking a dark chapter in Congo's history.

MOBUTU’S REGIME AND ECONOMIC EXPLOITATION  (1965-1997)

Mobutu Sese Seko led a bloodless coup against the nationalist government of Patrice Lumumba, which culminated in a three-decade military dictatorship in DRC. Mobutu's economic policies garnered support from trade unions and other social forces by reducing provincial securities, implementing business transaction taxes, and centralising administration. The establishment of the Mouvement populaire de la révolution (MPR) sought to involve trade unions in economic planning, symbolising a shift towards economic independence. Under his rule, the Planning Commission gained prominence, reducing the influence of expatriate advisers and international agencies. While Mobutu attempted to sell the free enterprise to foreign visitors, his government also emphasised local participation in mining ventures and state control over industries like insurance and credit. Plans for a new Five-Year Plan prioritised developing the internal market and expanding industrial production. Despite modest achievements, rural areas suffered from declining agricultural production, necessitating government efforts to stimulate recovery through improved commercial ties and administrative control. Despite these efforts, Mobutu's economic policies faced challenges, including inflation, currency devaluation, and ongoing rural economic depression. The conflicts of the late 1990s in the Democratic Republic of Congo occurred against the backdrop of an economy severely weakened by decades of mismanagement and kleptocracy under Mobutu Sese Seko's rule. By late 1980, Zaire faced a daunting debt crisis, with payments reaching $550 million, representing 27 percent of its mineral export revenue. Though this crisis was blamed on the sudden reversal of copper prices in 1974-1975 by the Finance Minister Namwisi Ma Koyi, this was essentially triggered by the mismanagement of funds on costly and dubious projects, coupled with overreliance on mineral exports and neglect of agriculture. This worsened the country's financial woes and led to a concentration of decision-making power among a small group around the presidency, ultimately contributing to the economic downturn. The "Zairianization" policies of the mid-1970s, the debt crisis of the 1980s, and the drying up of external financial support in the 1990s had left the economy in shambles. 

Zaire's external debt surged from $311 million in 1970 to $12.3 billion by 1994, with a notable increase in borrowing from official bilateral and multilateral creditors in the 1980s as private creditors reduced exposure with Congo accumulating an external debt of approximately US$14 billion during Mobutu’s regime, and there was a huge increase in his personal wealth. Private long-term debt peaked in 1979 but declined significantly thereafter once bilateral creditors became the major source of credit in Congo. Interest arrears on long-term debt surged in the early 1990s, reaching 20% of total external debt by 1994. Despite mounting arrears, debt service payments remained burdensome, with Zaire experiencing negative net transfers by 1990, paying $201 million more to foreign lenders than it received in 1994.  

CIVIL WARS AND REGIONAL CONFLICTS  (1996-2003)

On the political front, Mobutu faced growing domestic opposition demanding democratic reforms. However, he violently cracked down on dissent, most notoriously in the 1990 Lubumbashi massacre of university students. A key factor undermining Mobutu was the withdrawal of support from his former Western allies after the Cold War ended, as he was now viewed as an embarrassment suppressing democratic aspirations. Beset by internal unrest and abandonment internationally, Mobutu could not stop the rebel uprising by the Alliance of Democratic Forces for the Liberation of Congo (AFDL), led by Laurent-Desire Kabila in 1996-97. A major trigger was the influx of over one million Rwandan Hutu refugees to eastern Congo after the 1994 genocide and ethnic tensions in Rawanda, disturbing the region's ethnic balance. Mobutu stoked tensions by stripping the Banyamulenge ethnic group of citizenship, associating them with Rwandan Tutsis. Kabila's rebel forces exploited this chaos, drawing fighters from marginalised groups like the Banyamulenge and Mai Mai opposed to Mobutu. On August 4, 1992, with the support of almost 2,842 delegates gathered at the Congolese Sovereign National Conference in Kinshasa, Zaire was renamed to Congo once again. Kabila easily toppled the decrepit Mobutu regime in 1997, he quickly turned against his Rwandan and Ugandan allies. This sparked the Second Congo War, also known as the Great War of Africa or Congo War II, from August 2, 1998, to July 18, 2003 as a new anti-Kabila rebellion erupted, necessitating Angolan, Namibian and Zimbabwean intervention to prop up Kabila's crumbling government. It involved multiple armed groups, including government forces, rebel factions, and foreign interventions, and caused widespread devastation and loss of life, with estimates of casualties ranging from several hundred thousand to over five million. The conflict was characterised by ethnic tensions, resource exploitation, and regional power struggles. The war officially ended with the signing of the Sun City Agreement in April 2003 and the transitional government's establishment under the leadership of Jean-Pierre Bemba of the Mouvement de Libération du Congo (MLC), leading to the eventual withdrawal of foreign forces and a fragile peace in the Democratic Republic of the Congo.

TRANSITION TO DEMOCRACY AND CONTINUED CHALLENGES

After the assassination of Laurent Kabila, Joseph Kabila, his son, succeeded him, aiming to develop the country and end the Second Congo War. In 2002, he brokered agreements to withdraw Rwandan forces and establish a Transition Government, leading to a new constitution adopted by referendum in 2005. Violent protests erupted in 2016 against Kabila's extended mandate, with subsequent political manoeuvring resulting in Félix Tshisekedi's presidency in 2019. Tshisekedi aimed to consolidate power, sidelining Kabila's allies and winning a second term in the 2023 election. The semi-presidential system, criticised for fostering political conflicts, continues to shape governance, with ongoing challenges including protests over presidential term limits.

From 2014 to 2017, the Democratic Republic of the Congo experienced a sharp economic downturn due to a commodity price shock and political crisis. Falling copper prices, uncertainty over delayed elections, and halted donor support led to currency depreciation, inflation, and fiscal deficits. However, since 2018, the economy has shown signs of recovery, with GDP growth reaching 5.8% in 2018 supported by commodity price rebounds. Strict fiscal discipline resulted in surpluses, but low international reserves remain a vulnerability. Despite previous debt relief, external debt remains a concern, with efforts underway to resolve outstanding arrears. Overall, the DRC faces ongoing challenges in maintaining economic stability and addressing structural vulnerabilities. Debt relief initiatives such as the Enhanced Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI), with DRC’s external debt significantly decreased from $13.7 billion in 2009 to $6.4 billion by 2018, with the ratio of public and publicly-guaranteed external debt (PPGE) to GDP ratio dropping to 13.6 percent in 2018. 

DEBT AND CAPITAL FLIGHT SITUATION 

The debt crisis in sub-Saharan Africa has been a major impediment to the region's development and economic progress. In 2001, the total debt reached a staggering $209 billion, with the region borrowing $11.4 billion but paying $14.5 billion in debt service, resulting in a negative net transfer of -$3.1 billion. This negative trend continued from the previous decade, diverting crucial resources away from essential sectors like healthcare, with debt servicing amounting to 3.8% of GDP compared to only 2.4% spent on health. Despite international efforts like the Peace, Security, and Cooperation Framework, where the World Bank committed $2.2 billion for infrastructure projects, the region's debt crisis remains a significant obstacle to overcome, requiring sustainable solutions to alleviate the debt burden and promote long-term economic growth and social development. Based on the works of Ndikumana and Boyce, there are major capital outflows from these African countries in the form of illicit capital flight through which assets or capital constantly move out of the country, which is higher than the stock of external debt of these nations, making Africa a net creditor of the world contrary to popular perception. The debt situation of Congo is also similar because when the capital flight of Congo is computed for the years 1968 to 1990, the total nominal capital flight was approximately $7.3 billion. This suggests that Zaire was a net creditor to the rest of the world, exporting more capital than it imported, with accumulated flight capital surpassing the external debt.

CONCLUSION 

The Democratic Republic of Congo's history has been marked by a vicious cycle of exploitation, conflict, and economic mismanagement. From the brutal reign of King Leopold II to the kleptocratic rule of Mobutu Sese Seko and the ensuing civil wars, the Congolese people have endured immense suffering. The staggering levels of capital flight and odious debt accumulated by corrupt regimes have drained the country's resources, perpetuating poverty and underdevelopment. The ongoing cycle of conflict in the DRC stems from the failure of development to uplift the well-being of its people, leading to conflicts that benefit political and traditional elites while draining wealth from the nation to foreign powers, perpetuating political instability and eroding trust in the state. Despite its geological advantages, the DRC continues to face economic and social challenges, including high poverty, low human development index, and unemployment rates, hindering its ability to fully utilise its abundant natural resources and strategic regional location for economic growth. Additionally, factors such as insecurity, population displacement, and infrastructure degradation further impede the development of key sectors like agriculture and industry. Despite these adversities, the Congolese people have persevered to foster regional cooperation and aspire to build a strong nation. Moving forward, the DRC must confront its turbulent past and learn from the mistakes of previous regimes. Building strong democratic institutions, promoting inclusive economic policies, and investing in human capital are crucial steps toward breaking the cycle of conflict and underdevelopment. Furthermore, addressing the issue of capital flight and staggering external debt through robust regulatory frameworks and international cooperation is essential to break the cycle of underdevelopment in Congo.

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BY : DEVIKA VINOD

devikavnd@gmail.com

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