L'Estelada - the Catalan independentist flag

Substituting the “Statute of Sau” dated from 1979, and after having been democratically approved by the Catalan regional parliament as well as by the Spanish national parliament, Catalonia’s new autonomy statute (the “Estatut”; the Catalan regional constitution) was approved in referendum by the Catalan citizens on 18 June 2006 and enacted two days later by the Head of State, King Juan Carlos I, with the following header: “Know: That the Cortes Generales [Spanish national parliament] have approved, the citizens of Catalonia have ratified in referendum, and I come to sanction the following Organic Law“. But Spain’s main opposition party—the right-wing Popular Party (PP; Partido Popular)—challenged the Estatut’s legitimacy and appealed to Spain’s Constitutional Court arguing that 114 of its 233 articles were unconstitutional and that it would jeopardize the unity of the state.

On Monday, 28 June 2010—more than four years after its enactment by King Juan Carlos I—the Constitutional Court endorsed the vast majority of the Estatut’s articles, declaring 14 of them unconstitutional and changing 23 others. Considering the huge difference between the 114 articles they claimed to be unconstitutional, and the 14 deemed to be so by the Constitutional Court, many commentators see this ruling as a slap in the PP’s face. Nevertheless, Catalan parties don’t see this as a victory for Catalonia. The indignation among the Catalan society is huge, as the 14 articles declared unconsitutional are considered a significant trim in Catalonia’s self-rule aspirations in important areas such as Catalan language, justice and taxation. The president of Catalonia’s regional parliament, Ernest Benach, said that the ruling will lead to a crisis of state, as it ignores the will that the Catalan citizens expressed during the referendum. And considering that there will be elections in Catalonia in fall, the ruling indeed comes in a delicate point in time. Many commentators argue that with the Constitutional Court’s decision of truncating the Estatut, the door for Catalonia’s comfortable existence within Spain was shut, and that there’s only one way ahead—Independence from Spain. The political parties in Catalonia are preparing for the regional elections to be held in fall, and the ruling will certainly influence their campaigns and the results. A rise in independentist and nationalist votes can undoubtably be expected.

Image: © bernatff (found on Flickr.com)

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Max Göldi (L) with Swiss Foreign Minister Micheline Calmy-Rey (C) and Spanish Foreign Minister Miguel Angel Moratinos (R) at their arrival in Switzerland at Zurich Airport on June 14, 2009

In Switzerland, the return of Max Göldi, the head of Libyan operations of the leading Swiss-Swedish engineering company ABB who was detained in Libya for almost two years for allegedly violating visa regulations, puts an end to his and his family’s suffering and uncertainty and draws a line under the diplomatic crisis between Tripoli and Berne, which also threatened to harm the relations between Libya and the EU. The following is a short synopsis of the most important points and events of the crisis:

In July 2008, Hannibal Gaddafi—the youngest son of Libyan leader Muammar Gaddafi—and his pregnant wife Aline were arrested in a hotel in Geneva on charges of mistreating two of their servants. They were released on bail a fews days later and charges against them were dropped in September 2008 after reaching a financial arrangement with the victims. In Libya, but also in Switzerland, the circumstances of the arrest—20 armed policemen forced open the hotel suite and led Hannibal away in handcuffs—were heavily criticized as being disproportionate and degrading, given the fact that he did not resist arrest.

In apparent retailiation for Hannibal’s arrest, two Swiss businessmen—Max Göldi and Rachid Hamdani—were detained in Tripoli and prevented from leaving the country. Libyan authorities denied any connection between the two cases and argued that the businessmen were violating visa regulations.

Between July 2008 and August 2009, there were various visits by Swiss diplomats and the Foreign Minister Micheline Calmy-Rey to Tripoli trying to find an end to the diplomatic crisis.

In August 2009, then Swiss president Hans-Rudolf Merz travelled to Tripoli where he offered an apology for the “unjustfied and unnecessary” arrest of Hannibal and his wife. Although this was widely criticized in Switzerland as being considered a “diplomatic genuflection“, it nevertheless meant an important turning point in the crisis. Why? Because during that visit, Merz got the oral and a few days later also written assurance from the Libyan Prime Minister that Göldi and Hamdani would be released end of August or beginning of September 2009. And in fact, both of them got their passports back before the end of August and they were asked to post a bail of 1 million dinar (aprox. $800,000) in order to proceed with their clearance to leave the country. The money was ready, and everything seemed to be on track for the return of Göldi and Hamdani, expected for September 5th, 2009. But…

…on September 4th, 2009, the Geneva-based newspaper “Tribune de Genève”—putting a spoke in Switzerland’s diplomatic wheel as being considered an unacceptable provocation by Libya—published leaked police photos of Hannibal Gaddafi taken after his arrest in July 2008. The Swiss government’s aircraft, which was already in Tripoli waiting for Göldi’s and Hamdani’s release, returned to Berne without them.

On September 18, 2009, under the pretext that they needed to undergo a medical check-up in order to get permission to leave the country, Libyan authorities seized Hamdani and Göldi in front of their Swiss diplomatic escorts and detained them incommunicado for 53 days.

During Merz’ August 2009 visit, the two countries signed a treaty to normalize their relations. It contained an agreement that, within 60 days from signing it, an independent arbitration tribunal would be established with the goal of looking into the cicumstances surrounding the arrest of Hannibal Gaddafi and his wife. But Libya failed to meet its obligations, and the deadline for the treaty’s terms to be met elapsed on October 20, 2009. As a consequence, the Swiss government suspended the treaty early November 2009 and left the “quite diplomacy” path followed so far by applying visa restrictions for 188 Libyans—including the Gaddafi clan—instead. With hindsight, this turned out to be an important move, as it led to the internationalization of the crisis, now affecting the Schengen zone comprised of 25 European EU and non-EU countries that have abolished mutual border controls.

The Libyan response wasn’t long in coming: On November 30, 2009, Hamdani and Göldi—both sheltered in the Swiss embassy in Tripoli already for months—were sentenced to 16 months in prison and fined for visa violations. While Hamdani was cleared of charges in February and allowed to leave the country, Göldi left the embassy on February 22 to start serving his sentence in jail. Further, Libya stopped issuing visas for citizens of Schengen-zone countries. This action forced the EU to intervene in the Swiss-Libyan crisis, since many of its member countries have close economic ties and vested interests in Libya and could therefore not afford a further escalation of the crisis.

Triggered by Switzerland’s smart and necessary move of internationalizing the row, it is ultimately thanks to the mediation of Spain’s Foreign Minister Miguel Ángel Moratinos, Italian Prime Minister Silvio Berlusconi and a number of high-ranking German and European diplomats—who helped put pressure on Libyan leader Muammar Gaddafi to agree to a positive outcome—that Libya suspended the visa ban it imposed on citizens of Schengen countries, therefore allowing a de-escalation of the diplomatic crisis and Max Göldi’s return after almost two years in Libya.

Main Source: swissinfo – foreign affairs
Image: © SEBASTIAN DERUNGS/AFP/Getty Images

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Dark Clouds and a Glimmer of Hope over Greece

In this post, guest blogger Dimitris Tsiodras discusses the current situation in his home-country Greece. Mr Tsiodras is a political analyst and journalist for the Greek daily newspaper Eleftherotypia. He is the Head of the Political Desk of its Sunday edition.

“Greek tragedy”, “Greek problem”, “Greek statistics” are only a few of the recent headlines about Greece and its economic turmoil. The economic crisis brought to the surface the problems that laid under the carpet for many years. Before analyzing the recent events, it makes sense to have a look at the roots of these problems.

The main problem of the Greek economy is the lack of competitiveness. In a country where the major part of its economic activity is controlled by the state, businessmen found improving their relationship with politicians and acquiring state contracts more profitable than improving the quality of their products. They did make profits but their products were not competitive in global markets. Their main interest was to maintain the status quo since an open market would endanger their enterprises. The public sector suffered from bureaucracy, lack of meritocracy and extensive corruption. There are only two sectors where the Greek economy is (somehow) competitive: tourism (because of history and natural beauty, not because of the prices and the quality of services) and maritime transports.

The high rates of growth of 4-5% during the recent years—a proof of vigorousness of the Greek economy according to our governments in the past—were due to three reasons:

- Inflows from the EU.
- Public spending through the increase of national debt and budget deficit.
- Private spending because of the reduction of interest rates after the introduction of the Euro.

The participation in the Euro-zone made the situation even worse taking into account that Greece didn’t take measures to encourage innovation and foreign investment, to reduce bureaucracy, to fight corruption and tax evasion and to reform the pension system. In times of economic growth nobody wanted to solve these problems because of the political cost and the reaction by vested interests. Now the situation is different. Maybe the country needed to come to a deadlock before starting to change. The government, under the surveillance of the EU and IMF, is obliged to carry out reforms stagnated for decades. Although Greeks are dissatisfied with the austerity measures, they understand that this is the only way to avoid bankruptcy. They are eager to accept austerity because the alternative is much worse. So the demonstrations are not so big as many expected and extremist groups are isolated. For how long is it going to last? What is going to happen if unemployment rises sharply and the recession deepens? Of course the reactions will be stronger.

At the same time, Greece’s political system, especially George Papandreou’s government, tries to clean up some scandals from the past (Siemens briberies being the biggest one) in order to restore its credibility. The way ahead is not easy because the implementation of the Stability Pact is strongly related to the rates of growth. If the austerity measures are not accompanied by investment (especially foreign investment) in many sectors the fulfilment of the Pact is under question. To attract investment means a different mentality by the public sector and local communities. Not an easy job…

Greece’s problems are partly European problems. My country is “the weak point of the Euro-zone”. The crisis serves as a crash-test for the Euro and the same discussion concerns other countries that also face similar problems, such as Spain or Portugal. Many economists agree that the introduction of the Euro, without the implementation of common policies in many areas, left the weakest countries exposed to “asymmetrical shocks”. The EU had a retarded reaction to the situation, due to miscalculation and internal political reasons in Germany. Now the Europeans are also divided about the way to strengthen the common currency. France believes in closer cooperation and thinks that the best way to get out of the crisis is to increase demand, in order to avoid deeper recession. Germany is in favour of biggest fiscal discipline. What is going to happen in Europe is going to affect Greece. The Greek government is determined to implement the appropriate measures. The speculative rumors about bankruptcy, although the implementation of the program is “on track”, are negatively affecting the whole effort. The months ahead are very crucial. It is said that time of crisis is usually time of opportunity as well. For Greece it might be the opportunity to make reforms that were cancelled for many years. Now follows the painful way for these reforms. We hope that the positive results in the future are going to alleviate the current pain.

Image: © Theophilos (found on Flickr.com)

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An association of young students, graduates, and professionals wants to give a fresh impetus to foreign policy decision making and discussions in Switzerland. The new politically independent think tank is called “foraus“, which stands for “Forum Aussenpolitik” (Foreign Policy Forum), and takes a stand for an open, constructive, and pragmatic Swiss foreign policy. The young organization aims at encouraging an informed dialogue on foreign policy challenges. “[It] advocates for a confident, cosmopolitan, and internationally networked Switzerland. We are decidedly against a Switzerland who’s foreign policy stays on the spot“, says foraus founding member and president Nicola Forster.

The organization currently counts around 150 members and is organized into 10 topical work groups, covering the whole foreign policy spectrum, such as development and cooperation, peace and security, migration, international multilateral organizations, or human rights. These working groups elaborate academically grounded analyses, discussion contributions, and position papers.

The forum was founded in October 2009. When asked for the reason why it only went public yesterday (June 8th, 2010), Nicola Forster mentioned that they “wanted to go public with tangible contributions” to specific foreign policy disucssion topics. And they did—so far, the forum has published three papers: one about climate policy, one about Switzerland’s role in the military task of peace promotion, and one on the current discussion in Switzerland on whether treaties should or not be ratified by the people rather than by the federal council and parliament, as happens today. The young think tank, as it looks, will bring new ideas and dynamics to the foreign policy discussions in Switzerland.

Image: © foraus – Forum Aussenpolitik

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Microschools of Opportunity™

The United Nation’s Millennium Development Goals (MDG’s), established at the Millennium Summit in 2000, consist of eight goals related to international development topics such as poverty eradication (#1), promotion of gender equality (#3), global health issues (#6), or environmental sustainability (#7), and to which all UN member states have agreed to accomplish by 2015.

MDG #2—to achieve universal primary education—addresses the importance of literacy for advancing human development and tackling extreme poverty. Nobel Peace Laureate and former UN Secretary-General Kofi Annan, in the foreword of UNICEF’s 1999 “The State of the World’s Children” report, refers to education as “a human right with immense power to transform. On its foundation rest the cornerstones of freedom, democracy and sustainable human development.”

But although considerable progress has been made with respect to MDG #2 since the year 2000, there’s still a long way to go. In Sub-Saharan Africa, for example, around 38 million children of primary school age are still not enrolled in any kind of primary education. In developing countries, the cost for education consumes an enormous amount of a poor family’s income, if it sends its children to school at all. Although public schools often don’t charge tuition fees, sending the children there nevertheless involves other indirect costs such as textbook fees or costs for compulsory uniforms. Further, the school might not be in the immediate neighbourhood of the families, resulting in additional expenses for transportation. At the end, all these indirect costs keep school children out of the classrooms. Microschools run by “social edupreneurs” are therefore a viable alternative to public educational systems.

Opportunity International, a leading non-profit organization founded in 1971 as one of the first microcredit lenders and committed to solving global poverty, is also a pioneer in the area of microschools. In 2007, it launched its Microschools of Opportunity™ program that provides loans to teachers who open schools in poor neighborhoods where children, especially girls, would otherwise be unable to access public education. And that’s also where the name comes from—it refers to the fact that the schools are financed through microcredits, rather than to the actual size of the schools.

Microschools are factually private schools. Nonetheless, many low-income families in developing countries are willing to pay the fees, since the advatages over public schools can be significant. For example, they are often located close to the poor households, be it in rural areas or in urban slums. Further, as decribed above, the total costs (i.e. including the indirect costs) can be notably lower in microschools as compared to public schools. The impact, therefore, is manifold—on one hand, the children can attend school and profit from quality education, and on the other hand it allows the family to spend the already limited funds for other things, e.g. establishing a small business.

In his essay “Private Schools for the Poor“, James Tooley, professor of education policy at the University of Newcastle upon Tyne in England, mentions that “[i]t is a common assumption among development experts that private schools for the poor are worse than public schools.” He deconstructs this myth, based on his research, and concludes that “it is not the case that private schools serving low-income families are inferior to those provided by the state” and that they even “seem to outperform their public counterparts.” He also dismantles another myth, namely the one of the “accepted wisdom [...] that private schools serve the privileged; everyone else, especially the poor, requires public school.” Opportunity’s microschools are a convincing proof of the opposite.

Image: © Opportunity International

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The Spanish case is often referred to as a model of a successful democratic transition. After the civil war of 1936-1939 and the subsequent Franco dictatorship until 1975, the Amnesty Law of 1977 and the new constitution of 1978 contributed to a peaceful transition to democracy. But two developments are causing flaws in it: (1) the politically motivated campaign against Baltasar Garzón, the well-know judge of the Audiencia Nacional (the Spanish high court handling terrorism, genocide, and organized crime), and (2) the crusade against the Catalan autonomy statute.

A special peculiarity of the Spanish judicial system is its principle of universal jurisdiction, which allows the Audiencia Nacional to pursue cases of human rights abuses, drug trafficking, and terrorism outside of Spain. And although the universal jurisdiction has recently been limited to cases in which there are Spanish victims or those charged with crime are in Spain, Garzón achieved considerable international successes. The most noted one is certainly the indictment of former Chilean dictator Augusto Pinochet and his arrest in London in 1998, where he remained under house arrest for more than 500 days before returning to Chile following his release on humanitarian grounds. There, he faced legal action for human rights abuses, but was never convicted. Garzón also forced Argentinean President Néstor Kirchner to end a general amnesty for the military junta after investigating human rights violations committed during the “dirty war” of 1976-1983. In Spain itself, he is highly recognized for his relentless pursuit of ETA, the Basque separatist organization terrorizing the country since the early 1960’s. But today, the General Council of the Judicial Power, Spain’s constitutional body governing all the judiciary of Spain, suspended Garzón from his post at the Audiencia Nacional. He is now facing trial for trying to do in his own country what he has already done in many others – investigating crimes against humanity, namely the disappearance of more than 100,000 people the during the civil war and the early years of Franco’s dictatorship. Since these crimes are covered by the 1977 amnesty law, he is being accused by the right-wing groups “Manos Limpias” and “Falange de las JONS” of abusing his powers by launching Spain’s first-ever investigation into Franco-era abuses and therefore allegedly overstepping his authority. The argument against that, however, is that under international law, amnesties for crimes against humanity are illegal. Principle 24(b) of the UN Commission on Human Rights’ Principles For The Protection And Promotion Of Human Rights Through Action To Combat Impunity says that amnesties shall be without effect with respect to the victims’ right to reparation, “even when intended to establish conditions conducive to a peace agreement or to foster national reconciliation.” While the UN Commission on Human Rights warned Spanish authorities about that fact in several occasions, nothing was done to address this problem. The result is the paradoxical and shameful situation where the first person ever being on the accused bench in relation to Franco-era abuses is the judge who actually wanted to investigate them. The hopes raised among the civil war and dictatorship victims when, in 2008, Garzón announced that he would investigate the crimes were smashed today. After more than 30 years of building and consolidating democracy in Spain, this is a significant backstep.

On a different topic, the controversy about the Catalan autonomy statute (“Estatut”) is still ongoing. More than 3 years have passed since it was first published. It has been democratically approved by the Catalan regional parliament, by the Spanish national parliament, and by the Catalan voters through a referendum. The Estatut is now awaiting the ruling of the Tribunal Constitucional, Spain’s constitutional court. The Spanish right-wing Popular Party (“Partido Popular”) argued that the Estatut was unconstitutional, among other things due to the reference to Catalunya as a “nation” (…but that’s a topic for a separate post…), and that the majority of the Spanish people don’t approve it. Well, in Spain, the people are represented by the parliament, and that one approved the Estatut in it’s original form. Isn’t that how democracy works? In any case, “it will be the first time since the restoration of democracy in 1977 that a tribunal will make a decision on a law that has been fundamentally approved by voters.”…another democratic backstep.

Image Baltasar Garzón: © iasecas (found on Flickr.com)
Image Estatut: © bernatff (found on Flickr.com)

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This paper focuses on the question whether the emergence of democracy in Colombia can be explained based on the assumptions of the ‘sequentialist’ or ‘preconditionist’ theories as suggested, amongst many others, by Fareed Zakaria or Edward Mansfield and Jack Snyder, or if, by contrast, the views of ‘gradualists’ or ‘universalists’ such as Sheri Berman or Thomas Carothers are more indicated to explain and analyze Colombia’s democratic past, present and future.

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Antanas Mockus

At the end of my post Sweet Sour Colombian Democracy from March 23rd I mentioned that Noemí Sanín, the Conservative Party presidential candidate, can “count on a solid popular support and will certainly challenge Santos in May’s elections”. Well, the situation has now changed significantly in the last few days. Since Antanas Mockus, the Green Party’s presidential candidate and a very popular former mayor of Bogotá, joined forces with Sergio Fajardo, his candidacy is gaining ground and has overtaken Sanín, according to the latest polls. Fajardo, a former mayor of Colombia’s second largest city Medellín, was presidential candidate himself, but now agreed to join Mockus as his candidate for vice-presidency after the polls gave him little hope for success. While the “independent ticket” Mockus/Fajardo is very popular in their respective cities, they are rather “unknown” outside of these. If they make it to the second round, mobilizing support outside Bogotá and Medellín will be their major challenge. They can count on considerable support from young people and students, but they need to mobilize also other strata of the population in order to be a serious presidential contender.

Andrés Felipe Arias, the Conservative Party presidential pre-candidate tightly defeated by Sanín in the party’s primaries, recently criticized Mockus by saying that the FARC cannot be fought with mimes, alluding to Mockus’ singular technique of using mimes to control traffic circulation and create a sense of shame among those who committed infractions while he was mayor of Bogotá. Mockus, who is known for his eccentric and unconventional means of “educating” the people, countered that he was lauded by Uribe in 2003 for his achievements with regards to the city’s security situation. In fact, both Mockus’ and Fajardo’s achievements during their respective terms as mayors are considerable. But Bogotá and Medellín alone are not Colombia. There are concerns on a national level which will play an important role in the people’s process of deciding who to vote for. I believe that the main factors will be the positions of the candidates regarding the continuation of Uribe’s democratic security policy, potential negotiations and/or hostage/prisoner exchange with the FARC, and Hugo Chávez and other “21st century socialists”. Juan Manuel Santos and, to a lesser extent, Noemí Sanín could be considered the “natural successors” of Uribe if the aim is to continue along the same lines of the approaches to these factors so far. But it also needs to be considered that the situation today is different from the one 8 years ago. Then, the major concern was the insecurity and the lack of rule of law and state presence in the country’s territory. Uribe has addressed these issues with success—the kidnapping and homicide rates have gone down dramatically since 2002 when he took power. Also, the state’s security forces are now present in all municipalities of the country. These achievements are there, and it is important to maintain them. Not least because of the newly gained sense of security, the economy has profited from growing domestic and foreign direct investments, ultimately contributing to the reduction of poverty and unemployment. But there’s also “new” areas of concern which emerge, such as corruption and impunity. Mockus, with his proposal of building upon them and to move from “democratic security” towards “democratic legality”, could actually hit the nail on the head. Security has largely been established by empowering and professionalizing the state’s security forces–now people feel that it’s time to empower the justice structure in Colombia in order to eradicate impunity and to combat corruption. Whether Mockus’ ideas and discourse are convincing enough to seriously challenge Santos remains to be seen. But it definitely brings a new dynamic into the election campaign.

Image: © ojovisor (found on Flickr.com)

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Khrushchev and Kennedy

Nearly half a century has passed since the events of October/November 1962, today known as the Cuban Missile Crisis. This crisis, arguably the most dangerous one of the Cold War, was unleashed when US reconnaissance flights revealed that the Soviet Union was deploying ballistic missiles, military equipment and personnel to Cuba. President Kennedy, interested in de-escalating the crisis rather than in provoking a war, opted for a well-employed coercive diplomacy as the answer to the observed developments on Cuba. While avoiding to give the Soviets a clear deadline for withdrawing the missiles, he imposed a naval blockade on the island and at the same time mobilized U.S. military forces to a higher readiness degree. This was a clear signal from Kennedy to Soviet Premier Nikita Khrushchev indicating that the United States’ priority was a de-escalation of the crisis.

Obama and Medvedev

The Cuban Missile Crisis marked a “negative milestone”, as it probably was one of the moments of highest tensions during the entire Cold War. Today, almost fifty years later, signing the U.S.-Russia Nuclear Arms Pact can be seen as an important milestone or as a small step: A milestone, because it banishes the ghosts of the Cold War and heralds a new era in U.S.-Russian relations. A small step, because there’s still a long way to go before reaching the goal of “a world without nuclear weapons” as called for by Obama exactly one year ago in Prague—the same place as today’s nevertheless historic event. But the good news is that he is walking the talk. During his Nobel Prize speech, Obama said that he viewed the award as “a call to action” rather than as a recognition of his accomplishments. He has followed that call, and while he received the prize mainly for his discourse, he has now made a further step towards deserving it for his actions.

Image Khrushchev/Kennedy: © RobbertjanR (found on Flickr.com)
Image Obama/Medvedev: © Mika V. Stetsovski (found on Flickr.com)

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Microfinance is nowadays widely recognized as a powerful tool for combating global poverty by giving micro-entrepreneurs access to small loans and other financial services to which they usually would not have access. Investing in grassroots efforts like microfinancial services unfolds an invaluable potential of innovation and empowers the people at the bottom of the pyramid to work out of chronic poverty and to sustainably transform their and their families’ lives. Poverty often is the result of violent conflicts, which disrupt economic activity, severely impact social and political structures, and deteriorate the quality of life of civilians. As such, microfinance can also be considered an effective instrument for post-conflict reconstruction. Extensive research has been done on these topics, and there is a huge variety of literature.

However, there’s an area which I regard as interesting but where I have not found much information, namely whether there is a potential for microfinance as a conflict prevention instrument. This is obviously a hard question to answer, since it is difficult to analyze whether specific pre-conflict settings would actually have led to a conflict situation, had there not been microfinancial activities. Further, in order to analyze this question in more detail, many aspects would have to be considered, such as the type of the potential conflict (i.e. is it likely to be an ethnic conflict, a “social grievance” conflict, etc.) or the risks for microfinance institutions (MFI’s) to operate in such pre-conflict environments. For the purpose of this post, however, I will concentrate on some brief reflections on a rather general level, i.e. looking at the economic causes of civil conflict as defined by Paul Collier[1], and how microfinance could potentially address these issues before the violent conflict breaks out.

In his paper “Economic Causes of Civil Conflict and their Implications for Policy”, Collier states that there are two ways of looking at the causes of civil conflict. On one hand, there is what he calls the “popular perceptions of the causes of conflict”, which see rebellion as a fight against injustice, hence motivated by grievance. On the other hand—and this is the point of view he defends—there is the economic theory of conflict. It argues that the factors which ultimately determine whether a country will experience civil war are not related to grievance, but rather depend on the potential for a rebel organization to sustain itself financially.

Collier lists a series of risk factors which, as he argues, determine the likelihood of a civil war to break out. Here’s a short summary of these factors:

Natural Resources: Countries with a substantial share of their income coming from the export of primary commodities bear a higher risk for civil conflict.
Geography: It is more difficult to control a highly dispersed population than one in a small area.
History: If a country recently had a civil war, the risk of further war is very high (40% chance of further war).
Diaspora: Countries with large diasporas in wealthy countries bear a higher risk than countries with small diasporas (36% vs. 6%). Diasporas harbor rather romanticized attachments to their group of origin, they are much richer than the people in their country of origin and can therefore afford to finance vengeance, and they do not suffer any of the awful consequences of renewed conflict as they don’t live in the origin country.
Economic opportunities: i.e. the higher the education level, the lower the risk; the higher the population growth, the higher the risk; the higher economic decline, the higher the risk.
Ethnic and religious composition: Risk of conflict doubles if one dominant ethnic group constitutes between 45% and 90% of population. By contrast, ethnic and religious diversity makes a society much safer.

Microfinance can certainly not influence on geographic conditions and the recent war history of a country, on the size of its diaspora, or on the ethnic and religious composition of its society. Where it actually could have a positive impact is on the economic opportunities and maybe, to a lesser extent, on a country’s primary commodity export dependency. Access to microfinancial services can certainly contribute to a deceleration of economic decline and to economic growth. Further, the influence microfinance can have on the level of education is not be underestimated. On one hand, it gives families a higher financial independence and allows them to send their children to school rather than to force them to child-labor in order to help sustain the family. On the other hand, many MFI’s do not only provide microfinance services, but also transformational training covering topics such as basic business skills, budgeting, leadership, communication, and civic responsibility. And if fostering social entrepreneurship leads to economic diversification, this could even result in a shift in the GDP, lowering the share of primary commodities exports.

Based on the above reflections, microfinance is certainly not the instrument for preventing civil war. But it can be considered a helpful contribution to positively impact some of the risk factors outlined by Collier. I admit, this is a rather superficial analysis. But it’s certainly an aspect which deserves more attention by researchers and academics.

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Footnotes:
[1] Paul Collier is Professor of Economics at Oxford University and the former Director of the World Bank’s Development Research Group (1998-2003). In 2000, he published a paper called “Economic Causes of Civil Conflict and their Implications for Policy”, upon which this post is based.

Image: © Antonio Olmos/HelpAge International 2008

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