The Belgian Congo as a Developmental State: Revisiting Colonialism 9781032254302, 9781032254319, 9781003283133

Table of contents :
Cover
Half Title
Series Information
Title Page
Copyright Page
Table of Contents
Figures
Tables
Abbreviations
1 An Overview of the Argument
A Brief Historical Overview From the CFS to the Postcolonial State
A Critical Assessment of the Belgian Congo Developmental State
Political Constraints and Economic Development
Plan of the Book
Notes
References
2 The Leopoldian State and Economy of Plunder
Political Order and Rule of Law in an Absolute Monarchy
The Army Or Force Publique (FP)
European Administration, Traditional Authorities, and the Catholic Church
State–business Linkage and Political Order
Recapitulation
Delivery of Basic Infrastructure
Supply of Physical Infrastructure
Social Infrastructure
From Communal Property Rights to State Monopoly
Revenue Collection and State Goals
Tax Collection
Nontax Revenue
Taxation, State Building, and Economy
Summary
Notes
References
3 Political Order and Rule of Law in the Belgian Congo
Christian Missionaries
Army and Police
Colonial Administration and Rule of Law
Summary
Notes
References
4 Belgian Congo and Basic Infrastructure for Economic Development
Flexible Economic Planning and Delivery of Infrastructure
Transportation and Economic Development
Import Substitution and Metallurgical Mining Industrialization
Supply and Consumption of Energy in the Development Process
Social Infrastructure and Economic Development
Summary
Notes
References
5 Property Rights and Economic Development
Property Rights in the Agricultural Sector
Property Rights in the Mining Sector
Toward Independence and the Passing of State Financial Portfolio Holdings
Summary
References
6 Revenue Imperative, State Building, and Economic Development
Revenue Structure and State Capacity
Direct Taxes and State Building
A Brief Overview of Indirect Taxes
Non-tax Revenue
Tax Regime and the IS Process
Summary
References
7 From Mobutu to Mobutu and Hubris Syndrome
The Fragile First Republic (1960–1965)
Political Order and Rule of Law
The Army and the New Administration
Traditional Authorities and the Catholic Church
State–business Interactions
Physical and Social Infrastructure
Property Rights Under the First Republic
Revenue Imperative and State Capacity
Direct and Indirect Taxes
Non-tax Revenue
Mobutu and the Hubris Syndrome Against Economic Development
Political Order and Rule of Law
Party-state, Bureaucracy, Chieftaincy, and the Catholic Church
Decaying Basic Infrastructure, State Collapse, and Underdevelopment
Major Causes of Decaying Basic Infrastructure
Mobutu Against Foreign Private Ownership
Round II of the Belgian-Congolese Contentieux and the UMHK
Social Justice Or Theft of Foreign Private Assets
Revenue Scarcity, State Failure, and Economic Collapse
Taxes and Non-Tax Revenue
Summary
Notes
References
8 From an Anarchic to a Criminal State
Political Order and Rule of Law
The UN, the Military, and the Administration
Traditional Authorities and the Catholic Church
Impact of Political Instability On Economic Development
Decayed Infrastructure and Economic Collapse
Physical Infrastructure and Evidence
Human Capital and Health
Failure to Supply Basic Infrastructure in the Third Republic
Property Rights in a Criminal State
Artisanal and Small-Scale Mining
SOEs and the Mining Sector
Revenue Imperative and State-Building
Summary
Notes
References
9 The Belgian Congo State in Comparative Perspective
Better Institutions and Economic Development
Supply of Political Order and Rule of Law
Basic Infrastructure for Economic Development
Physical Infrastructure
Human Capital and Healthcare
Property Rights
Mining, Manufacturing, and Economic Development
Revenue Imperative, State Building, and Economic Development
Notes
References
Conclusion
Notes
Index

Citation preview

The Belgian Congo as a Developmental State

This book challenges assumptions that poor post-​colonial economic performance is always a direct product of colonialism by reconsidering the Belgian Congo (1908–​1959) as a developmental state. The book demonstrates that despite the colonial system’s economic exploitation and extraction, brutality, excessive taxation, and inequities, the Belgian Congo achieved successes in developing the economy in a short period of time. The Belgian Congo was able to achieve this by investing its higher rates of fiscal revenue in political stability, physical infrastructure, education, and healthcare. By reconsidering the Belgian colonial state as a developmental state, this book encourages scholars to adopt a more nuanced analysis of African history. Considering state capacity and state autonomy as key features of a developmental state, the book demonstrates that colonial state managers in the Belgian Congo were able to supply these public goods that sustained economic growth for decades. Whilst by no means glorifying colonialism or the atrocities that were conducted during the Belgian occupation, the book nonetheless outlines how different forms of capitalism were deployed to further economic development in the country. In contrast, predatory state managers of the Congo Free State (1885–​1908) and post-​colonial kleptocrats (1960–​2018) have squandered Congo’s natural resources with disastrous economic and social consequences. Contrasting the Belgian Congo with colonies of settlement and other colonies of extraction, this book encourages researchers and students to reconsider the dominant narratives within colonial history, development, and African Studies. Emizet François Kisangani is Professor in the Department of Political Science  and the Graduate Program in Security Studies, Kansas State University, USA.

Routledge Studies in the Modern History of Africa

This series includes in-​depth research on aspects of economic, political, cultural and social history of individual countries as well as broad-​reaching analyses of regional issues. Themes include social and economic change, colonial experiences, independence movements, post-​independence governments, globalisation in Africa, nationalism, gender histories, conflict, the Atlantic Slave trade, the environment, health and medicine, ethnicity, urbanisation, and neo-​colonialism and aid. Forthcoming titles: Women’s Lived Landscapes of War and Liberation in Mozambique Bodily Memory and the Gendered Aesthetics of Belonging Jonna Katto Rethinking White Societies in Southern Africa 1930s–​1990s Duncan Money and Danelle Van Zyl-​Hermann Colonialism, Ethnicity and War in Angola Vasco Martins Anti-​Colonial Resistance in South Africa and Israel/​Palestine Identity, Nationalism, and Race Ran Greenstein The Belgian Congo as a Developmental State Revisiting Colonialism Emizet François Kisangani For a full list of available titles please visit: www.routle​dge.com/​Routle​dge-​Stud​ies-​in-​the-​Mod​ern-​Hist​ory-​of-​Afr​ica/​ book-​ser​ies/​MHA

The Belgian Congo as a Developmental State Revisiting Colonialism Emizet François Kisangani

First published 2023 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 Emizet François Kisangani The right of Emizet François Kisangani to be identified as author of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-​in-​Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-​in-​Publication Data A catalog record has been requested for this book ISBN: 978-1-032-25430-2 (hbk) ISBN: 978-1-032-25431-9 (pbk) ISBN: 978-1-003-28313-3 (ebk) DOI: 10.4324/​b23045 Typeset in Bembo by Newgen Publishing UK

Contents

List of figures  List of tables  List of abbreviations  1 An overview of the argument 

vi vii ix 1

2 The Leopoldian state and economy of plunder 

36

3 Political order and rule of law in the Belgian Congo 

62

4 Belgian Congo and basic infrastructure for economic development 

89

5 Property rights and economic development 

131

6 Revenue imperative, state building, and economic development 

152

7 From Mobutu to Mobutu and hubris syndrome 

169

8 From an anarchic to a criminal state 

205

9 The Belgian Congo state in comparative perspective 

227

Conclusion 

254

Index 

260

Figures

1 .1 GDP per capita of Congo and Indonesia, 1960–​2019  1.2 Earnings from a dominant resource as a percentage of total exports  1.3 GDP per capita in PPP  1.4 Economic growth, 1920–​2015  1.5 Real wage of the average worker, 1920–​2015 (1960=​100)  1.6 Agricultural and mining export earnings as a percentage of total exports  1.7 Evolution of the manufacturing industry (1970=​100)  2.1 Evolution of military personnel from the CFS to Congo  3.1 Number of relegations, 1920–​1960  3.2 Cumulative FDI in millions of BF  3.3 Net FDI in millions of BF  4.1 Evolution of copper production in metric tons  7.1 Foreign debt as a percentage of GDP  8.1 Investments and savings as percentages of GDP  8.2 Evolution of employment in the public sector  8.3 Net ODA in millions of current US dollars  8.4 Evolution of the government and its size  9.1 Production and exports of palm oil in metric tons  9.2 Production of cassava per capita  9.3 Index of Congolese currency with respect to the BF (1950–​1960=​100) 

2 8 11 12 12 13 14 39 66 80 81 110 199 209 214 215 216 241 242 248

Tables

1.1 1.2 2 .1 2.2 2 .3 2.4 2.5 3.1 3.2 4.1 4.2 4 .3 4.4 4.5 4 .6 4.7 4 .8 4.9 4.10 4 .11 4.12 4 .13 4.14

Accumulated profits of selected companies operating in the Belgian Congo  16 Indigenous enterprises and monetary income (millions in 2015 US dollars)  19 Supply of political order and implementation of law  38 Initial distribution of shares in the UMHK in 1906 (000 gold francs)  45 Spending on public goods as a percentage of total outlays  47 Evolution of physical infrastructure, 1890–​2012  49 Ordinary revenue of the CFS, 1895–​1907  55 From military and police operations to maximum public order  70 Personnel in the public sector by categories in 1959  78 Operational domestic railway networks in 1958 (current names of towns)  92 Economic plan in 1950–​1959, distribution of funding in $2015 million  95 Operational navigable waterway networks in 1958  96 Operational road networks, 1958  96 Annual salaries of public servants in Belgium and the Belgian Congo in 1955  99 Selected cases of internalized corruption in the Belgian Congo 101 Transport cost of selected products, Stanleyville –​Antwerp (1936 CF per ton)  102 Transport costs and price disparities among major towns  103 Evolution of tonnage of major transportation companies (metric tons)  105 Origins of selected industrial sectors in the two poles of development  107 Effects of selected manufacturing sectors in Leopoldville  108 Origins of supply of manufacturing sector in $2015 million, 1950–​1958  109 Selected impacts of the UMHK in the Belgian Congo  111 Selected imports covered by local production and competition 113

viii  List of tables 4.15 Spending in healthcare by selected companies in CF, 1926–​1932  121 4.16 Major European hospitals in the Belgian Congo in 1958 (current names)  123 4.17 Deaths of outpatient and hospitalized Africans, 1933–​1952  124 5.1 Value of shares in the Brussels’ stock exchange in millions of BF  135 5.2 Credit using land as collateral in millions of CF  140 5.3 Value of state portfolio according two accounting systems in 1959 (000 BF)  145 5.4 Voting rights in the UMHK  148 6.1 Progressive nature of direct tax on singles  158 6.2 Structure of state revenue, 1920–​1958  159 6.3 Effects of industrialization on selected goods locally produced  165 6.4 Export taxes on selected manufactured exports in percentage  165 7.1 Selected accounts of the UMHK’s balance sheet (millions BF)  176 7.2 State revenue in millions of CF  181 7.3 Evolution of income tax, 1958–​1965, in percentage (1958=​100)  182 7.4 Agreed investments in the context of 1969 code (000 zaires)  193 7.5 Structure of revenue in percentage of total  200 8.1 Financing of government deficits under the Third Republic in billions of CF  223 9.1 Production in selected manufacturing sectors in Africa in 1959–​1960  228 9.2 State of national road ring, 1958 and 2012  235 9.3 Selected road networks and proximity gap in km  236 9.4 Transportation of people  237 9.5 Selected manufacturing sectors and products in 1958 and 2010  239 9.6 Importance of four levels of education  240 9.7 Number of health facilities in 1957 and 1974  243 9.8 Number of private companies employing at least 100 workers  246 9.9 Ordinary revenue and expenditure in Congo, 1885–​2018 (million)  248 9.10 Evolution of official exchange rate, 1950–​2018  249 9.11 Summary of revenue in percentage of total  250

Abbreviations

ABIR ADFL AGI AIA ANC Anversoise ARB ASM BCK CCC CCCI CEOs CFK CFL CFA CFS CFU CIA CMZ CNKi Cotonco CRISP CSK CSM DDR DRC DSP EITI ENA ESU FAO

Anglo-​Belgian Indian Rubber and Exploring Alliance of Democratic Forces for the Liberation of Congo Acte Global et Inclusif sur la Transition en Démocratique République du Congo Association Internationale Africaine Armée Nationale Congolaise (National Congolese Army) Compagnie Anversoise du Coomerce au Congo Africa Research Bulletin Artisanal and small mining Chemin de Fer Bas-​Congo au Katanga Comptoir Commercial Congolais Compagnie du Congo pour le Commerce et l’Industrie Chief Executive Officers Compagnie du Chemin de Fer du Katanga Compagnie des Chemins de Fer du Congo Supérieur aux Grands Lacs Africains Commuanuté Financière Africaine Congo Free State Office de Chemin de Fer des Uélé Central Intelligence Agency Compagnie Maritime Zaïroise Comité National du Kivu Compagnie Cotonnière du Congo Centre de Recherche et d’Information Socio-​Politiques Comité Special du Katanga Conseil Supérieur de la Magistrature Disarmament, Demobilization, and Reintegration Democratic Republic of Congo Division Spéciale Présidentielle Extraction industries transparency initiative Ecole Nationale d’Administration Enseignement Supérieur et Universitaire Food Agriculture Organization

x  List of abbreviations FBI FNLC FOMULAC FOREAMI Forminière FPA GDP Gécamines HIPC IAC IDA IMF IRSAC KDL MIBA MPR MW NCOs NPV NZ OBMA OCN OCS ODA OKIMO ONATRA OTP OTRACO PRGF PSC REGIDESO RPA RPF SAMI SARM SDR SFE SIBEKA SIZARAIL SMTF SNCZ SNIP SNL SOBAKI SODIMIZA

Fonds du Bien-​Etre Indigène Front for the National Liberation of Congo Fondation Médicale de l’Université de Louvain au Congo Fonds Reine Elisabeth pour l’Assistance Médicale Indigène Société Internationale Forestière et Minière du Congo Formation Professionnelle Accélérée Gross Domestic Product Générale des Carrières et des Mines Heavily Indebted Poor Countries International Association of Congo International Development Association International Monetary Fund Institut de Recherches Scientifiques en Afrique Centrale Chemin de Fer du Katanga-​Dilolo-​Léopoldville Minière de Bakwanga Mouvement Populaire de la Révolution Mega watts Noncommissioned Officers Net present value New zaire Office des Biens Mal Acquis Office des Chantiers Navales Office des Chemins de Fer du Sud Official development assistance Office des Mines de Kilo Moto Office National de Transport Office des Transports et des Ports Office des Transports Coloniaux Poverty Reduction and Growth Facility Parti Socialiste Chrétien Régie de Distribution d’Eau et d’Electricité Rwandan Patriotic Army Rwandan Patriotic Front Service d’Assistance Médicale aux Indigènes Service d’Action et des Rensignements Militaires Special Drawing Rights Société de Chemin de Fer de l’Est Société d’Entreprise et d’Investissement du Bécéka Socitété Interregionale Zaïroise de Rail Société Minière Tenke-​Fungurume Société Nationale de Chemins de Fer Zaïois Service National d’Intelligence et de Protection Société Nationale d’Electricité Société Belgo-​Africaine du Kivu Société de Développement Industriel et des Mines

newgenprepdf

List of abbreviations  xi SOGEFOR SOZACOM UMHK UN UNATRA UNIKIN UNITA VAT VICICONGO

Société Générale des Forces Hydroélectriques du Katanga Société Zaïroise pour la Commercialisation des Minerais Union Minière du Haut Katanga United Nations Union Nationale des Transports Fluviaux Université de Kinshasa União Nacional para a Independência Total de Angola Value added tax Société des Chemins de Fer Vicinaux du Congo

1  An overview of the argument

Non-​renewable natural resources are extremely valuable in the world economy. Standard economic theory postulates that no country owning them should be worse off. An overwhelming number of studies since the 1990s show a strange paradox. The dominance of one or a few natural resources in the economy tends to generate some degree of poverty, inequality, kleptocracy, tyranny, and insecurity rather than economic prosperity, shared growth, good governance, political openness, and social peace.This is the resource curse hypothesis, which seems to fit most African countries.1 However, economic history of the Democratic Republic of Congo (DRC or Congo) provides a different account than articulated by the advocates of this hypothesis.The curse never occurred during the entire colonial rule, from 1908 to 1960, when Congo was known as the Belgian Congo. Unlike the Congo Free State (CFS) ruled by King Leopold II of Belgium from 1885 to 1908 and the postcolonial state since late June 1960, the Belgian Congo was heralded as a “model colony” (Lauro 2011: 97) and an “investor’s paradise” (Solow 1952: 102). In 2015, Congo was ranked among the seven poorest economies in the overall index of “Ease of Doing Business” and second from the bottom in the human development index. How did the status of Congo change from “an investor’s paradise” to an investor’s hell? How did Congo become among the least economically attractive countries in the business world? The purpose of this book is to answer these questions by relying on the developmental state paradigm. A related goal is to assess the complicated historical origins of Congo’s difficulties that have hampered its economic development. The main argument is that the Belgian Congo was a developmental state that sustained high economic growth rates and industrialized the colony in a short period of time, but “the postcolonial state has pushed back the clock of economic prosperity by more than 50 years” (World Bank 2004: 9). Booth (2013) illustrates Congo’s predicament in her comparative analysis with Indonesia by arguing that President Mohammad Suharto was able to balance the competing demands of the state and private sectors by managing Indonesian oil boom of the 1970s quite well, but President Mobutu Sese Seko could not do the same with copper’s booms. She explains economic DOI: 10.4324/b23045-1

2  An overview of the argument divergence between the two countries as the result of their leaders following different paths, although they were both autocrats who shared a number of similar characteristics. Figure 1.1 illustrates the trajectory of both countries’ real gross domestic product (GDP) in purchasing power parity or PPP (Freenstra, Inklaar, and Timmer 2015). While the GDP per capita of Indonesia averaged $1,307 a year before 1970 and that of Zaire was $2,726, President Suharto was able to implement appropriate policies after 1970 to surpass economic performance of Zaire. In the 1990s, the annual GDP per capita of Indonesia averaged $4,165 and that of Zaire was $942. From 2010 to 2019, the average annual GDP per capita of Indonesia was $10,317 and that of Congo declined to $899. According to Booth (2013: 83), Suharto “seems to have been able to draw on positive aspects of the Dutch colonial legacy to a greater extent than Mobutu.” In other words, some colonial policies are worth contemplating and even implementing if postcolonial African leaders would like to develop the continent. So far, relatively few attempts have used colonial economic policies as building blocks for developmental reflection or spelled out how these policies can better inform policymakers to manage abundant natural resources and to achieve economic prosperity. The main reason is perhaps the stigma attached to colonialism. This book moves beyond it and intends to fill a gap in extant literature using the developmental state paradigm to explain economic development, which refers to “high rates of accumulation, industrialization”

Figure 1.1 GDP per capita of Congo and Indonesia, 1960–​2019

An overview of the argument  3 (Mkandawire 2001: 290), the steady “high rapid rates of economic growth and structural change in the productive system, both domestically and in its relationship to the international economy” (Castells 1992: 55). This definition avoids confusing economic development with economic equality. However, it includes the view that some improvements in economic life of an average citizen tend to occur over time as a result of structural changes in the productive system. Johnson (1982) developed the concept of developmental state to explain the rise of Japan. He contrasts it with “regulatory states” such as the United States of America (USA) whose actors for economic development are private enterprises (Johnson 1982: 10). Johnson (1982) provides four indicators to describe the Japanese developmental state. First, the bureaucracy carried out the tasks of planning, constructing, and supervising industry. Second, Japan developed a political system that supported the bureaucracy. Third, when the government intervened in the market, it allowed plenty of scope for activities of private enterprises. Lastly, the Ministry of International Trade and Industry had specific functions to direct the economy and to quickly industrialize the country. In her analysis of South Korea as a late industrializer, Amsden (1989) highlights two key characteristics of the country as a developmental state. First, “the state intervened with subsidies deliberately to distort relative prices in order to stimulate economic activities”; second, “in exchange for subsidies, the state imposed performance standards on private firms” (Amsden 1989: 8).These two features were made possible by an institutional factor, namely a strong state.Thus, “industrialization was late in coming to backward countries because they were too weak to mobilize forces to inaugurate economic development” (Amsden 1989: 12). As a result, the state’s role became crucial to start the industrialization process. Wade’s (1990) view of Taiwan is almost similar. The role of its government was to “govern the market” rather than laizzez faire. Castells (1992: 56) defines Asian tigers as developmental when they establish as their “principle of legitimacy” the “ability to promote and sustain economic development.” Ashton et al. (1999: 140–​142) identify four attributes to describe East Asian developmental states. First was the ruling elites’ commitment to develop the economy in a specific direction by establishing an insulated state. Second, the political leadership instituted mechanisms ensuring that the economy played a central role in determining the output of the education and training systems. Third, governments established strong controls over the institutions responsible for education and training so that they could deliver the appropriate skills to the workplace. Finally, governments constantly steered the system by adjusting the outputs from the education and training systems to meet the existing and future demands (Ashton et al. 1999: 141). As these cases illustrate, there is no single agreed definition of a developmental state since norms about the scope of the public sector change over the course of history. However, most scholars agree that among many attributes of

4  An overview of the argument developmental states, their infrastructural power and relative autonomy remain the two most important features that help them to implement policies capable of developing the economy in a short period of time. Infrastructural power refers to “the capacity of the state to actually penetrate society and to logistically implement political decisions throughout its realm” (Mann 1984: 189). It connotes the state’s ability to intervene in socioeconomic life and the flexibility to withdraw from it. The state is thus “a set of organizations and rules invested with the authority to make binding decisions for people and organizations juridically located in a particular territory and to implement these decisions using, if necessary, force” (Rueschemeyer and Evans 1985: 46–​47). State capacity captures state authority to maintain order and enforce the law. It also reflects its administrative authority to develop, to fund, and to implement its policies. State capacity is a necessary condition to sustain economic development because it provides rulers incentives to implement policies that supply public goods, which represent the building blocks to start the process of economic development. If state capacity is a necessary condition to develop the economy, it is not sufficient because political leaders are limited in their ability to gather and process information (Aoki, Murdock, and Okuno-​Fujiwan 1997). Most leaders are also not neutral agents of the greater public interest. They are part of social fabrics and may also reflect particularistic interests (Hanson 2014). Great administrative capability can mitigate these constraints, but it cannot eliminate them. Bureaucrats with some autonomy are needed to make highly technical decisions in the face of considerable uncertainty and with large consequences for efficiency (Hanson 2014: 382). As a result, most proponents of the developmental state approach also contend that some degree of autonomy vis-​à-​vis societal actors is another feature of such a state (Howell 2006). State autonomy implies that the officials who staff state bureaucracies not only have preferences which are more than simple reflections of the preferences of powerful societal groups, but they also have the capacity, in terms of organizational cohesion, expertise, extractive, and coercive ability, to carry out decisions based on their own preferences. (Geddes 1990: 317)

If infrastructural power and some degree of autonomy tend to give state managers the power to provide the right incentive to stimulate and guide the various economic actors to achieve economic development in a short period, then a developmental state also needs a bureaucracy that develops close and productive relations with business groups to formulate and implement effective industrial and developmental policies. This relationship has been variously defined in the literature as “embedded” (Evans 1995), “governed interdependence” (Weiss 1995), “governed market” (Wade 1990), “dependent development” (Gold 1986), and “risk socializer” (Woo 1991).

An overview of the argument  5 This type of bureaucracy possesses most Weberian features including the fact that employees are recruited and promoted based on merit, have competitive salaries, possess career stability, and make decisions grounded on codified rules (Weber 1978).The formation of strong ties among bureaucrats should also reinforce the adherence to these codified rules of behavior, and “ideally,” a sense of commitment to corporate goals and “esprit de corps” (Rauch and Evans 2000: 52). This esprit de corps is an important ingredient to bureaucratic professionalization since it isolates bureaucrats from politicians to the extent that politicians’ interests can differ from bureaucrats’ interests; these distinct incentive systems make politicians accountable to their supporters and bureaucrats accountable to professional peers (Dahlström and Lapuente 2017). From the perspective of political economy, a developmental state tends to reflect some aspects of a regulatory state since regulations constitute public policies explicitly designed to govern economic activities. Theoretically, regulatory states emerge from normative and positive perspectives (Majone 1997). Normatively, regulations are implemented because of market failures and externalities to promote public interest rather than efficient allocation of resources. Positive theory contends that governments implement regulations to satisfy the demands from industries that have vested interests (Yandle 1988). Thus, regulatory agencies and regulators are often influenced and even captured by the interest they are supposed to regulate.Viewed this way, a regulatory state seems different from a developmental state (see Johnson 1982). The question is whether regulations can be useful in promoting economic development? Levi-​Faur (2005) maintains that states can prioritize development via regulation and they can also prioritize other goals that may constrain development.The demand for “regulation-​for-​development” depends on the state’s development role and private institutions at the global and national levels; the more effective regulation is in promoting economic development, the stronger the demand for regulation is (ibid.: 8). The relation between the regulatory state and the developmental state is thus not mutually antagonistic as long as the latter remains autonomous from private interests. In other words, “the history of economic development is the history of regulation” (ibid.: 14). The colonial state provides an excellent example of this symbiosis when the Belgian parliament established the ministry of colonies in late 1908 as an autonomous body to administer the Belgian Congo. The ministry started as a regulatory body to carry out reforms by moving away from King Leopold’s state monopoly. As pointed out by Jewsiewicki (1986: 463), the first Minister of Colonies Jules Renkin decided to prepare the colony from the Leopoldian “robber economy to one of capitalist development.” Renkin stated that “as progress in Congo becomes more clearly defined, state intervention must give way to private enterprise” (Brion and Moreau 1998: 303). He embraced the view that economic life based on the pursuit of profit should enable the influx of private capital in the colony, while state role had to be restricted to an effective system of law and order, the protection of private property, and the rights of owners over the proceeds of production.The new concept of minimal state role

6  An overview of the argument in the economy was continually reaffirmed during the entire colonial period (Bézy 1957). Renkin’s early form of a minimalist state can be termed peripheral capitalism because it was exclusively based on raw materials until the early 1920s when the manufacturing industry and new technologies in refining copper and other minerals started operating as developed later in Chapter 4.This early peripheral capitalism had three basic features: the drive to amass capital, the emergence of free trade and a market economy, and a dominant economic force to ensure the social influence of capital holders. The second step taken by Minister Renkin was to establish a mutually beneficial state–​business alliance whereby the state implemented a series of incentives and rewards to persuade the Belgian private capital to undertake investments in the colony.The official state–​business relation began on 2 March 1917 when he promised to the powerful business group, the Association of Belgian Colonial Interests (ABCI), that in the future, he would submit to the association’s scrutiny all important questions concerning trade and industry of the Belgian Congo. In the words of Brion and Moreau (1998: 303), “the ABCI became, in some sort, the colony’s chamber of commerce in Europe.” In subsequent years, it played a determining role in the development of the colony’s legislation and economy. The collaboration between the state and the private sector was “often quite unprecedented in its manner” (Brion and Moreau 1998: 305). This “unprecedented bond” dominated the entire colonial period. Despite this bond, the minister of colonies and the big business did not always have the same vision because the minister was also autonomous from private interests. In fact, “some disagreements were the focus of often tenacious struggles” (Vanthemsche 2012: 44). Unlike regulatory states, the colonial state was thus not captured by business interests in Belgium. One of its major functions was to set up long-​term goals of structural changes by managing the colonial economy without the approval of major societal players in order “to ease conflicts inevitable during the process of such change… and engage in institutional adaptation and innovation to achieve these goals” (Chang 1999: 192). The ministry of colonies also served as a coordinating hand and a signaling device to achieve complementary investments in the colony and to move the economy from a “low-​equilibrium to high-​equilibrium state” (Chang 1999: 193–​194). A very good example is the second Minister of Colonies Louis Franck who initiated the policy of “Grands Travaux” (Great Works) in the 1920s to build most physical infrastructure at the cost of 2.15 billion Congolese/​Belgian francs (CF/​BF) or $2.16 billion in 2015 prices (see Chapter 4). This “entrepreneur vision” (Chang 1999: 194) helped to attract massive foreign direct investments (FDI) and pave the way to the early industrialization of the Belgian Congo. The relative autonomy of the ministry of colonies became even pronounced after the Second World War when it formulated and implemented the first ten-​year plan of economic development in the 1950s that cost 51 billion BF or $8.31 billion (2015=​100) despite a strong opposition from the private sector

An overview of the argument  7 (see Chapter 4). The plan took the form of “a welfare state similar to what was being developed in Belgium” (Vellut 1982: 315). The program of “Great Works” and the ten-​year plan accomplished their goals in supplying the colony with more and better public goods so vital for economic development because they were implemented with minimal level of corruption by technocrats who possessed all Weberian features. Their technical skills and managerial capacity helped guide the colonial economy. The ministry of colonies also had “a vision based on the theory that the Belgian Congo could develop and eventually be transformed from a backward and underdeveloped country dependent upon the colonial power to a fully industrialized modern state capable of running its own affairs” (Hoskyns 1962: 8). It achieved this transformation quickly by its policy of import substitution (IS) industrialization. The IS refers to a process by which the proportion of imports of a large number of consumer goods over imports and exports declines over time as the economy replaces foreign goods by domestically manufactured consumer products. The first wave of IS started in the early 1920s under Minister Franck. The second wave began in the early days of the Second World War after the occupation of Belgium by Germany in May 1940 that completely delinked the colonial economy from the metropole. Ten years after the war, the Belgian Congo had more than 2,567 manufacturing companies employing at least 100 workers in agriculture (tea plants, palm oil plants, tobacco plants, rice-​mills, etc.), food industries, breweries, mechanical sector (ship-​building, automobile assembly plants, kitchen utensil plants, etc.), construction (cement plants and others), textile industries, chemical industries (fertilizers, explosives, soaps, pharmaceutical companies, etc.), and many others (Belgium 1959: 213–​214). In the Belgian Congo, the governor-​general headed the colonial bureaucracy. He represented the Belgian king as a legislator and was also the administrative hand of the minister of colonies. However, the governor-​general remained relatively autonomous from Brussels and also vis-​à-​vis powerful non-​state actors in the colony. He could pass ordinances that had the force of law even against Brussels’ policies because he was insulated from political vested interests and even sheltered from direct political pressures. One good example developed in Chapter 3 was Governor-​general Pierre Ryckmans who sided with London when Germany occupied Belgium in May 1940 and opposed the big business and King Leopold III. In brief, the administration in the Belgian Congo had a real functional autonomy. The governor-​ general and his representatives exercised their autonomy through their control of traditional authorities, labor mobilization, and army recruitment. The colonial bureaucracy was also staffed by an alien administrative machinery that strongly believed in its principal goal to promote good governance and provide public goods. It achieved its developmental goals through a number of mechanisms. First, it increased predictability by establishing political order and the rule of law (Chapter 3). Second, it improved competence among bureaucrats in their job to deliver public goods so critical for economic

8  An overview of the argument development (Chapter 4). Third, it enforced contracts and protected property rights that sustained high economic growth rates (Chapter 5). Fourth, it built state capacity through the collection of taxes to achieve state goals and economic development (Chapter 6). The rest of this introductory chapter proceeds in four sections. The first provides a brief economic and political history of Congo. Section two assesses the Belgian Congo’s features as a developmental state in the light of colonial critics. The third section develops a few additional working hypotheses by relying on the ideas of veto players and winning coalitions as constraints on rulers so critical to implement policies that foster economic development. The last section outlines the book’s remaining chapters.

A brief historical overview from the CFS to the postcolonial state Congo emerged on 1 July 1885 as the CFS and a personal property of King Leopold II of Belgium. Legally and politically, Belgium had no relation with this new African political entity. After its official insertion in the global markets in mid-​1885, the CFS relied upon the export of one or a few wild goods. According to Figure 1.2, wild rubber was the dominant export in the early years of state building. It increased from 6 percent of export earnings

Figure 1.2 Earnings from a dominant resource as a percentage of total exports

An overview of the argument  9 in 1888 to 51 percent ten years later. King Leopold was among the first few European monarchs to enjoy the beginning of the rubber boom after John Dunlop invented the first pneumatic tire with air in 1888. From 1900 to 1908, rubber averaged 81.5 percent of export earnings a year, with a record high of 94.8 percent in 1902. King Leopold never invested his rubber bonanza in the CFS. The CFS was simply an “economy of plunder” labelled raubwirtschaft (see Chapter 2). On 15 November 1908, the CFS became the Belgian Congo under the ministry of colonies. The Belgian parliament was the sole supreme legislative authority of both Belgium and the colony. It passed the Colonial Charter stating clearly that Belgium and the Belgian Congo were fiscally two separate legal entities. One priority of the ministry of colonies enshrined in this charter was fiscal autonomy and discipline. The Belgian thesis on this matter was theoretically clear. The colony must be managed without profit or loss for Belgium and the Belgian state should not use resources from the colony to its own ends (Stengers 1957). In return, the colony should not expect any financial assistance from Belgium to cover its spending. In brief, the colony should be self-​financing. A few years after the annexation of the CFS to Belgium, Minister Renkin confronted the entry of new rubber competitors from East Asia and a decline of rubber’s demand following the 1912–​1914 world recession.The result was a dip in rubber’s prices in the global markets. This implied low export earnings from rubber and a decline in state revenue. Fortunately, the discovery of copper ores in Katanga in the early 1900s provided the colony new economic opportunities. Copper exports began in 1911 by the Union Minière du Haut-​Katanga (UMHK). Copper exports outpaced rubber in 1914 (see Figure 1.2). Unlike rubber, annual export proceeds of copper averaged only 30.2 percent from 1909 to 1960, with a record high of 52 percent in 1917. The role of copper declined over the years because the Belgian Congo became a diversified economy by the late 1920s as a result of its early industrialization and considerable public investments in physical infrastructure. The colonial administration also began a massive program of primary and professional education in the early 1920s to respond to economic needs of the private sector. This investment in human capital was made possible by subsidies to Catholic missions. By the late 1930s, the schooling rate of children between six and 14 years old was close to 13 percent, the highest in tropical Africa (see Chapter 4). Also, mining and manufacturing companies implemented their own programs of job trainings to increase labor productivity. One major crippling weakness of the Belgian education system was to make no effort to develop secondary school to serve as a pathway to tertiary or university formation. A complete secondary education system began only in 1931. The colonial motto was to avoid educating an elite group that could challenge the colonial system: “pas d’élites, pas d’ennuis” (Stengers 1987: 514) or “no elites, no troubles.” When the Belgian Congo became independent, it had only a

10  An overview of the argument handful of university graduates in social sciences, but it had no medical doctors, engineers, chemists, physicists, or lawyers. Unlike education, the colonial state built “the best healthcare infrastructure in sub-​Saharan Africa (SSA)”2 to the extent that most 110,000 Europeans living in the colony received their medical needs in the Belgian Congo because they had their own hospitals scattered across the colony. This contrasts with postcolonial leaders who fly to Europe for their healthcare needs. In the 1950s, the Belgian Congo also had more than 2,160 dispensaries and 422 well-​equipped hospitals for Africans furnished with 86,599 beds representing an average of 64 beds for 10,000 inhabitants (Belgium 1959). On the political side, however, the emancipation of Congolese was not part of the colonial equation until the end of the Second World War when Governor-​general Ryckmans said in 1946 with both hope and fear in his farewell speech that “the days of colonialism are over… Like integrity in diplomacy, altruism is the best policy in colonization” (Vanderliden 1994: 604). This was not the end of Belgian rule, but it was the beginning of a change in social policy. For the first time, the colonial state allowed the formation of African trade unions. Most importantly, it implemented the ten-​year plan of economic development that created an embryonic welfare state in the 1950s. In brief, the supply of basic infrastructure attracted massive FDI and, consequently, paved the path to economic development in the Belgian Congo. The real GDP per capita represents the best operational definition to assess briefly the importance of basic infrastructure in the process of economic development. According to Figure 1.3, it improved in the late 1940s and kept an increasing trend during the ten-​year plan of economic development in the 1950s. The real GDP per capita reached a peak of $3,067 in 1955 and declined slightly during the 1957 world recession. However, it averaged $2,802 a year in the second half of the 1950s. Figure 1.4 presents economic growth or annual changes in the real GDP as an indicator of economic performance from 1920 to 2015 to illustrate the linkage between basic infrastructure and the economy (World Bank 2019). Reliable data are unavailable before 1920, but it can be speculated that the CFS (1885–​1908) was a period of state building and its sovereign, King Leopold II, aimed to plunder his domain rather than to develop it.This period was followed by the First World War, 1914–​1918. The rate of economic growth averaged 5.6 percent a year from 1920 to 1959: 8.85 percent a year in the 1920s when most physical infrastructures were built; 2.4 percent in the 1930s despite losses of -​8.9 percent in 1931 and of -​ 14.4 percent in 1932 during the Great Depression; and 5.1 percent in the 1940s with minor negative growth rates of -​1.47 in 1939, -​1.6 in 1940, and -​1.6 in 1944 during the Second World War. Economic growth resumed after the war and continued in subsequent years. It was 6.2 percent a year from 1945 to 1959. Sustained high levels of growth rates were based on the export of more than 20 cash crops, more than nine refined minerals, and a gamut of manufactured

An overview of the argument  11

Figure 1.3 GDP per capita in PPP

products. This high economic performance seemed to provide the Belgian Congo more comparative advantages than most colonies. Figure 1.5 presents the real wage of the average worker as another indicator of economic development (Lacroix 1967; Peemans 1975; Young and Turner 1985). It increased during the entire colonial period, except from 1911 during the early period of the colony to 1919 or one year after the war. The real wage increased by an annual average rate of 2.3 percent from 1920 to 1949. It skyrocketed in the 1950s with a rate of 8.7 percent per year. It kept its ascending trend until 1961, then plummeted in 1963. It had since declined to be virtually zero by the early 1980s. The direct consequence was the deterioration of living conditions of the average worker. The development of the Belgian Congo also reflects its economic diversification. In addition to its huge mining sector, the colony was also exporting many cash crops including transformed ones like palm oil. According to Figure 1.6, export earnings from agriculture were catching up with proceeds from the mining sector after the Second World War. In 1950, agricultural exports reached the same level as mineral exports. They averaged more than 40.3 percent of export earnings a year in the 1950s, while the mining sector accounted for 52 percent. The manufacturing sector represented more than 6 percent of exports.

12  An overview of the argument

Figure 1.4 Economic growth, 1920–​2015

Figure 1.5 Real wage of the average worker, 1920–​2015 (1960=​100)

An overview of the argument  13

Figure 1.6 Agricultural and mining export earnings as a percentage of total exports

In brief, the post-​war period brought economic prosperity in the Belgian Congo described by Peemans (1975: 152) “as golden years in the economic history of the colony, especially for workers who experienced a doubling in real wages.” Economic prosperity also meant increasing real income of urban dwellers as prices remained stable throughout the 1950s averaging only 1.08 percent a year (United Nations or UN 1962). Independence occurred on 30 June 1960. Several days later, the army mutinied setting the path to political instability. A drastic decline in the manufacturing sector highlights this situation as illustrated by Figure 1.7, which shows the evolution of industries of consumer and capital/​intermediate goods from 1958 to 2018, given 1970 as the base year (1970=​100). This sector declined by 21.3 percent in 1960 as a result of political instability, but the consumption sector rebounded in 1962 for reasons developed in detail in Chapter 7. The growth of consumer goods remained on average around 4 percent a year from 1962 to 1965. General Mobutu took power through a bloodless military coup on 24 November 1965 during this period of political instability and uncertainty. Like King Leopold II who relied on rubber, Mobutu became highly dependent upon copper as his major source of revenue (see Figure 1.2). Although copper production increased in the second half of the 1980s averaging 488,410 tons a year, unfavorable prices in the world markets provided Zaire only 32 percent of

14  An overview of the argument

Figure 1.7 Evolution of the manufacturing industry (1970=​100)

export earnings. This declining trend of copper’s world prices continued in the 1990s when copper represented only 19 percent of exports a year. However, diamonds replaced copper in the early 1990s as shown in Figure 1.2.Their official earnings increased in 1991 and averaged 57 percent a year from 1991 to the political demise of Mobutu in April 1997. Apparently, economic growth did not follow erratic movements of the mining sector. It improved slightly in the 1980s averaging 1.81 percent a year (see Figure 1.4). This positive trend would not continue, however. Economic growth declined by 8.42 percent in 1991. The average annual growth rate from 1990 to 1996 was -​6.17 with a low of -​13.47 percent in 1993. This was the poorest economic performance ever registered since the Great Depression. Elsewhere in SSA, the annual growth rate was 2.28 percent (World Bank 2019). Laurent Kabila became president on 29 May 1997 after a seven-​month civil war that started in eastern Congo. From 1997 to his assassination in January 2001, he relied on diamonds (see Figure 1.2). Joseph Kabila replaced his father and was also dependent on diamonds from 2001 to 2007. Copper surged again after 2008 and averaged more than 60 percent of export proceeds a year. At the same time, GDP per capita was only $740 a year from 1997 to 2018 (see Figure 1.3). In 2001, it declined to $530, which represented the lowest registered level since the late 1940s. The same declining trend characterizes the

An overview of the argument  15 manufacturing sector (see Figure 1.7). Both consumption and intermediate/​ equipment industries represented only 11.3 percent and 15.1 percent of their 1970 level, respectively. This is an average decline of almost 87 percent in 46 years. Paradoxically, economic growth remained positive from 2000 to 2009 with an annual mean of 4.44 percent. It was 7.58 percent in 2010–​2015 with a high of 8.97 percent in 2014.

A critical assessment of the Belgian Congo developmental state The argument that the Belgian Congo was a developmental state does not absolve it from being an extractive polity. As many critics of the colonial system have argued, most public facilities built before independence intended to extract Belgian Congo’s resources and to drive them out of the colony for the benefit of the metropole (Merlier 1962). These resources were exploited without benefits to the Congolese people because the economy had to respond to the needs of the colonizer (Gardner 2013). Before the First World War, for example, coal was virtually Belgium’s only natural resource. By the late 1930s, it became the world’s leading producer of many minerals and a gamut of tropical cash crops. The Belgian Congo thus served as an exceptionally profitable enterprise and an asset for the Belgian economy from the balance of payments perspective.The soundness of the “little BF,” acclaimed to be “the dollar of Europe” after the Second World War, “was mainly due to the exports of its colony” (Solow 1952: 106). Several Belgian economic historians have, however, questioned this rosy contribution of Congo’s natural resources to the Belgian economy by arguing that economic development of the colony occurred at the expense of Belgium because the metropole spent too much on its African adventure and received almost nothing from its financial sacrifice. For example, Belgium invested 259.66 million gold francs in its colony from 1908 to 1950 but received in return only 24.72 million francs (Stengers 1957: 321–​323). These numbers represent $1,409.3 million and $134.14 million in 2015 prices (2015=​100). This translates into a net loss of $1,275.16 million. Although this argument sounds correct, it overlooks the primary state role in the economy, which is to create an environment that helps the private sector to thrive and society to create wealth. Minister Renkin articulated it quite well in late 1908 when he endorsed an economy based on the pursuit of profits and a minimal state whose primary functions were to provide law and order and to protect private assets from predation. As a result, European firms based in the Belgian Congo became quite profitable earning an average profit of 17.34 percent a year from 1936 to 1958 compared to an average of 8.14 percent returns by firms principally active in Belgium (Joye and Lewin 1961: 57–​58). The colonial economy was a goldmine for Belgian investors and the yields of Congolese mining companies were especially impressive and they ranked among the world’s best financial performers (Vanthemsche 2012).

16  An overview of the argument Table 1.1 Accumulated profits of selected companies operating in the Belgian Congo Activities Mining   UMHK (1914–​1949)      (1950–​ 1959)   Kilo Moto (1920–​1946)   Forminière (1914–​1946)   Société Minière du Bécéka (1920–​1946)   CMGL (1925–​1946) Agriculture   Huilever (1925–​1946)   Cotonco (1921–​1946) Transportation   CFK (1914–​1946)   CFC (1914–​1935) Banks   Banque du Congo (1909–​1946)

1959 BF (millions)

2015 US dollars (millions)

36,459 31,075 2,569 2,377 2,287 1,698

5,939 5,062 418 387 373 276

3,573 1,564

582 254

3,869 2,018

630 328

2,026

330

Note: Forminière (Société Internationale Forestière et Minière du Congo); CGML (Compagnie Minière des Grands Lacs); Cotonco (Compagnie Cotonnière Congolaise); CFK (Compagnie du Chemin de Fer du Katanga); CFC (Chemins de Fer du Congo). Sources of data: see Le Recueil Financier (Brussels: Etablissements Emile Bruylant, 1926, 1936, 1946, 1956, 1959, 1965).

One excellent example is the UMHK. It invested 10 million gold francs in 1906 or $52.2 million (2015=​100) and produced its first 998 tons of copper in 1911. Seven years later, it made an accumulated profit of 121.2 million BF or $657.9 million (2015=​100). In 1950–​1959 alone, its profits were 31 billion BF or $5.06 billion as shown in Table 1.1. From 1914 to 1959, the profits of this single company amounted to $11 billion or 780.1 percent of Belgian public investments of $1.41 billion (2015=​100) in the colony in the same period. In addition to the UMHK,Table 1.1 highlights the profitability of four other big mining companies producing gold (Kilo-​Moto), gem diamond (Forminière), industrial diamond (Minière du Bécéka), and tin (CMGL). These four companies, out of more than 50 other mining companies, made accumulated profits of $1.45 billion between 1914 and 1946. The same profitability occurred in all economic sectors including agriculture, transportation, and banking among others. In sum, Belgium invested $1.41 billion (2015=​100) in its colony, but it received in return more than $50 billion in less than a half century. If the British academic debate about the costs and benefits of the colonial empire is still unsettled (O’Brien 1988; Offer 1993), while the view of the French empire leans toward a burden (Lefeuvre 2006), the balance sheet is clear for “the Belgian Congo and the Netherlands Indies that rank among the most effectively exploited colonies in the modern era” (Frankema and Buelens 2013: 3). Colonial profits that Belgium and The Netherlands managed

An overview of the argument  17 to extract from their colonies outweigh the profits from alternative investment opportunities (Booth 2013). In this process of private capital accumulation, however, the Belgian colonial state used forced cultivation, coercive labor recruitment, land alienation, meager wages, low prices to farmers, excessive taxation, and many other means to extract resources (Merlier 1962; Peemans 1975). These policies relocated labor resources away from subsistence agriculture and deprived African villages of their young or strong men, leaving the elderly, women, and children to till the land. The result was widespread dislocation of people and impoverishment of large rural areas (Buelens and Cassimon 2013). More specifically, the exploitation and subordination of Africans created a gap between a modern European economy and an African backward economy. The result of this dual system was a huge inequality of resource distribution and the structural crisis of the subsistence agriculture (Bézy 1957; Merlier 1962). In addition, people were subject to forced prison and peasant labor for the maintenance of dirt roads. Unpaid work exposed Congolese to exhaustion, diseases, and death. On average, some 13 percent of recruits died every year and these conditions of hardship contributed to the rumor that “the white men’s road work was eating people” (Likaka 2009: 28). Although this tragedy changed in the early 1930s when the colonial administrator signed several laws that separated roads of general interest under government responsibility from roads of local interest under the responsibility of traditional authorities, compulsory labor remained in the countryside to maintain roads of local interest. The main question is whether the colonial physical infrastructure, education system, and health infrastructure used to plunder Congo’s resources benefited the Congolese people directly and/​or indirectly? Colonization was certainly the second worse social experience in Africa after the slave trade. Unlike the slave trade, colonization had some beneficial effects. Many companies operating in the Belgian Congo reinvested some portion of their enormous profits in technology and productive economic activities that sustained economic development. Still, argues a colonial critic, “any reinvestment of profits in the Belgian Congo only enriched the owners of capital” (Depelchin 1992: 117). Of course, however, the reinvestment of profits during the colonial period contrasts with resource extraction under King Leopold and postcolonial state managers. The king transferred his bonanza from plunder to develop real estate in Belgium and postcolonial state managers have also transferred most Congolese wealth into private accounts abroad and invested nothing in public goods to increase productive economic activities. Contrary to the CFS that forced people out of subsistence agriculture to collect wild products without an alternative livelihood, the private sector in the Belgian Congo created thousands of jobs in plantations, mining companies, and manufacturing companies as an alternative livelihood to the subsistence economy. Most workers also received social benefits like healthcare, family cash

18  An overview of the argument allowances, retirement benefits, housing allowances, weekly food allowances, free primary school education for their children, and many other amenities. Most of these jobs and socioeconomic benefits no longer exist since the mid-​ 1970s. The informal economy dominates the labor market employing more than 80 percent of the population with its miserable income that does not help people make ends meet. Informal employment also implies no social benefits like healthcare, retirement benefits, and so forth. The same picture characterizes artisanal and small mining (ASM) that has replaced industrial mining in many corners of the country since the deregulation of the mining sector in the early 1980s. Another beneficial effect of colonization was the expansion of transportation technology that enlarged the market every year. This transformation benefited millions of Congolese traders and travelers. In 1958, for example, more than 2.9 million people or 22 percent of the country’s population used the colonial modern infrastructure (Belgium 1959). Some 315,000 people traveled by roads and more than two million took the train. No less than 290,000 people sailed in luxury ships on the Congo River, the Kasai River, and a few lakes (Belgium 1959). By 2018, only 8,100 people out of a population of 84.1 million traveled using the roads, trains, and waterways because of the sorry state of physical infrastructure. Although the healthcare system built before independence was good for business, it was also good for the Congolese people because it made incredible differences in their survival.The Belgian Congo had many well-​equipped health facilities for Africans scattered across the colony. Each of the 135 territories in the Belgian Congo with 50,000 to 150,000 inhabitants had at least one rural medico-​surgical center, a maternity ward, and a pre-​natal and infant welfare advice center; each medico-​surgical center was served by two white doctors, with one responsible for visiting rural dispensaries scattered across each territory (Brausch 1961: 8). Also, the colonial state emphasized preventive healthcare such as vaccination and the supply of potable water. For example, vaccines helped millions of children survive polio, yellow fever, and other diseases. This colonial healthcare infrastructure has also collapsed in the postcolonial period as developed in more detail in Chapters 7 and 8. Theoretically, Karl Max was among the first scholars to articulate the positive role of physical infrastructure in the process of economic development. He wrote that “the railway system will … become truly the forerunner of modern industry and economic development in southern hemisphere” (Marx 1968: 48). Rosenstein-​Rodan (1943: 208) stated it clearly and succinctly in the following words: “Let us build railways, roads… hydro-​electric power plants, the rest will follow automatically.” The first working hypothesis is: Hypothesis 1: Economic development is unlikely without a minimal supply of public goods; that is, “no public goods, no economic development.” The colonial state provides an excellent illustration. Most FDI occurred when transportation networks were almost completed in the 1920s showing that

An overview of the argument  19 physical capital helped attract FDI to exploit the Belgian Congo’s natural wealth more efficiently and to industrialize the colony quickly. They increased from 3.85 million BF in 1909 to 101.02 billion francs by 1957.3 This capital inflow is equivalent to a staggering increase from $661,689 to $17.36 billion in the 2015 prices (2015=​100). However, FDI from 1921 to 1930 alone were 31.41 billion BF ($5.4 billion) or 31.11 percent of total investments from 1909 to 1957 as a result of the program of “Great Works.” Despite these massive FDI, the countryside, which “was home of the majority of the Congolese in 1955, remained a zone of poverty and forced labor” (Nzongola-​Ntalaja 2002: 73).The rural environment was still dominated by a subsistence economy with low productivity and without any tendency toward social differentiation that could have accompanied the birth of agricultural capitalism (Peemans 1975). As pointed by Peemans (1975), the rural population was a mere instrument to increase agricultural surplus by extending cultivable areas because the colonial state never envisioned any basic technological policy to increase agricultural productivity. Table 1.2 further reinforces this argument. For example, Africans did not enjoy an easy access to modern manufactured goods that averaged 11 percent of gross national product (GNP) in 1958.Their portion of commercial activities was also small or 19 percent. Their wages represented 25 percent of GNP in 1958, although they made up 99 percent of the population. Moreover, Africans’ portion of commercial activities averaged a meager 2 percent of GNP. Another interpretation of the same table is to compare 1950 and 1958 to assess economic evolution of Africans’ economic well-​being. With the exception of the marketed product of indigenous enterprises or (b/​a) that declined from 12 percent in 1950 to 11 percent in 1958, the remaining economic indicators show improvements in Africans’ economic conditions. Marketed product increased by 38 percent and the value of indigenous commercial

Table 1.2 Indigenous enterprises and monetary income (millions in 2015 US dollars)

Gross national product (a) Marketed product of Indigenous Enterprises (b) Value of indigenous commercial activities (c) Monetary income of indigenous populations (d) Wages paid to indigenous population (e) (b/​a)*100 (c/​a)*100 (c/​b)*100 (e/​d)*100 (e/​a)*100 Source: Bézy (1957: 78).

1950

1958

Percentage change

5,995 708 41 1,727 1,019 12% 0.69% 5.85% 59% 17%

9,161 812 197 3,335 2,313 11% 2% 19% 69% 25%

-​ 38% 471% 132% 172% -​ -​ -​ -​

20  An overview of the argument activity improved by 471 percent in eight years (see last column of Table 1.2). Monetary income of indigenous people and wages paid to them also improved by 132 percent and 172 percent, respectively. As discussed in Chapters 7 and 8 on the postcolonial period, the Congolese people have lost all of these small economic gains earned before independence. One major colonial system that has also vanished is the phenomenon of mini-​welfare states associated with big mining companies like the UMHK, Kilo Moto, Forminière, and CMGL, among others. According to Ferguson (2006: 35–​36), “mining investment often brought with it a far-​reaching social investment… Mining towns eventually came to include not only company-​ providing housing, schools, and hospitals, but even social workers, recreational amenities, and domestic-​education programs.”The business of mining “involved not only extraction, but also a broader long-​term social project. Its presence was… socially ‘thick’ ” in contrast with the postcolonial period that he labels “socially thin” (ibid.: 36). Colonial administrators and foreign companies’ managers were certainly not benevolent players. They created these mini-​welfare mining states to minimize labor costs and to extract huge profits. The critics of the colonial system were right to call these social accomplishments colonial paternalism, which treated Africans as children whose moral upbringing required a proper mixture of authority and dedication (Mottoulle 1946). However, postcolonial leaders have failed miserably to provide the same paternalism to their own citizens. Artisanal mining with its wretched conditions has replaced these mini-​welfare mining states with devastating environmental and socioeconomic consequences (see Chapters 7 and 8). Another critic of the colonial economy is that companies’ colossal profits were realized at the expense of Africans whose “meager wages” sustained the embryonic capitalist economy in backward societies (Merlier 1962). Moreover, the European community was determined to maintain low wages paid to Africans and never thought that a more prosperous labor force would result in higher taxes and greater demand for manufactured goods (Ledger 1924). To do justice to the Belgian Congo, all colonial rulers implemented “meager wage” practices and held attitudes that “led to policies which inhibited economic progress among indigenous populations” (Booth 2013: 81). These same policies have survived in the postcolonial period and even got worse. In fact, the Belgian Congo “embryonic capitalist” and “welfare state” disappeared by the mid-​1970s. Regular colonial “meager salaries” with all social benefits vanished after the 1973–​1974 nationalization policies (see Chapter 7). Also, if workers and public servants were regularly paid before independence, they have been enduring salary arrears since 1961. Salary arrears began with primary school teachers and have become the norm in the public sector. Although politicians have never had any salary arrears since July 1960, salary arrears average three to four months in Kinshasa and more than 10 years in the countryside. The result is an unending cycle of strikes and

An overview of the argument  21 work in major cities. In Lubumbashi and Mwene-​Ditu, for example, workers of the largest state-​owned transportation company, the Société Nationale des Chemins de Fer du Congo (SNCC), went on strike in February 2019 claiming wage arrears of 227 months.4 This translates into 19 years. Another negative aspect of the colonial system was that it exhibited massive income inequalities between Congolese workers and Belgians. A skilled Congolese worker earned between one-​tenth and one-​fifteenth of a salary earned by a Belgian doing a comparable job (Peemans 1975). Of course, beneficial effects of economic development in the colony were slow for Congolese. However, the situation was dynamic with some improvements in their socioeconomic life, minimal though these improvements may have been. Joye and Lewin (1961) showed that the disparity between European and Congolese salaries was narrowing in the 1950s. It represented a ratio of 1 to 65 in 1950, 1 to 40 in 1954, but 1 to 33 in 1958 (ibid.: 190). Although these changes were minute, nobody should dispute the fact that they were real social improvements over the years. It is important to point out that the implantation of policies to start the process of economic development does not imply social policies that foster income equality. Usually, income inequality is the first social consequence of economic development. As pointed out by Kuznets (1955), inequality follows an inverted U-​shaped curve, first increasing and then decreasing with economic development. Fritz and Menocal (2007: 533) also contend that “an economic transformation that is positive overall may be accompanied by a range of negative consequences, such as greater social tension or increasing social inequality, which society and the state must address in a subsequent phase.” In other words, socioeconomic inequalities between Europeans and Congolese before independence were initial conditions, which postcolonial leaders had to reverse and thus to improve their compatriots’ living standards. However, they never followed this path despite promises they made to foster income equality during the electoral campaign in early 1960. The following statement made by the Parti Solidaire Africain illustrates these early empty promises: “Salary increases for everybody, improving housing in rural areas, free medical services for all nonwage earners, mechanization of peasant agriculture, indexed prices for peasant crops, and a lifestyle modeled on that of the Belgian rulers” (Weiss 1967: 9, emphasis added). Instead, postcolonial leaders modeled their lifestyle to that of former colonizers by giving themselves huge paychecks in July 1960 ranging from a monthly salary of 25,000 CF ($4,050 in 2015 prices) for each member of the parliament to 70,830 CF ($11,350) for each of the two presidents of parliament’s chambers (Gérard-​Libois and van Lierde 1963: 647). On the government side, salaries ranged between 58,340 CF ($9,350) a month for each minister and 75,000 CF ($12,100) for Minister of Foreign Affairs Justin Bomboko. President Joseph Kasavubu’s monthly salary was 116,670 CF ($18,700), while Prime Minister Patrice Lumumba had 83,340 CF ($13,350). In 1965, these salaries increased by more than 28 percent to cope with inflation.

22  An overview of the argument If former clerks now politicians saw their salaries increase by more than tenfold, wages of regular workers remained almost the same after independence. The minimum nominal daily wage of an average worker only increased from 50.80 CF in December 1960 to 133.00 CF in 1965 (Dupriez 1968: 392–​395). However, the real wage of workers plummeted from 50.80 ($8.14 per day) in 1960 to 31.28 CF ($1.47) in 1965, because their wages were not indexed to inflation. By the late 1970s, the average real wage of workers and the average real salary of public servants were virtually equal to zero compared to their 1959–​1960 level (see Figure 1.5), while politicians have continued to enjoy their huge indexed salaries. Fifty years after independence, the top-​ranking bureaucrat in a ministry, called general secretary and who does most of the work in the department, earned a pitiful monthly salary of $150 in 2009–​2010 despite a university degree and a few decades of administrative experience.At the same time, the average monthly salary of a minister with a university degree but without any experience was “at least $9,600” (Englebert and Mungongo 2016: 21). This is a disparity of 1 to 64. Provincial governors earned an average salary of $8,228 a month in 2009–​2010 with a high of $12,193 for the governor of Oriental province, while each of their ministers received on average “$3,634 a month” (ibid.). In contrast, Congo’s average monthly per capita income in 2009–​2010 was about $25. The relation between this meager per capita income and the average monthly salary of governors is a staggering disparity of 1 to 329, far more alarming than colonial disparities. The saddest part of these postcolonial income inequalities is that state managers in Kinshasa and in the country’s 25 provincial capitals represent a tiny minority group of 2,605 individuals. If the foreign minority of 110,000 Europeans in the Belgian Congo represented “1 percent of the population in 1958 and controlled 45 percent of wage incomes” (Peemans 1975: 181), a miniscule minority of Congolese elite of 2,605 people or 0.003 percent of the population controlled more than 95 percent of salary incomes in 2009–​ 2010. In sum, income inequalities between a minority of power holders and workers that were narrowing in the 1950s have widened to unimaginable and unconceivable proportions after independence. A final critic of the colonial system is its despotic features.The Belgian colonial state was a brutal, racist, and authoritarian actor. It operated within a weak civil society, with poor political rights records and a repressive political system. The colonial state also epitomized two socio-​political and judicial subsystems, black and white. Despite these human rights abuses, differences exist between the three state formations that ruled Congo from 1885 to 2018. As stated by Bueno de Mesquita (2007: 281), “Congo under Mobutu much like the CFS under Leopold II, managed to be a much worse place to live than the rest of post-​independence Africa or colonial Africa.” This quote clearly shows that the colonial state is not comparable to its two counterparts, the CFS and the postcolonial state, in terms of human rights abuses.

An overview of the argument  23 The CFS under King Leopold II was a nightmare for the Congolese people as developed in Chapter 2. President Mobutu was no different and Zaireans were not citizens under his watch. He ensured himself that he never had to worry about freely elected parliaments, opposition parties, a free press, an independent judiciary, and autonomous interest groups. For three decades, the Congolese felt the repressive weight of the state because “extortion, arbitrary arrest, detention without trial, and extrajudicial executions were common, giving birth to a reign of terror” (Schatzberg 1988: 75). Mobutu may have killed or massacred thousands of his own citizens (Kisangani 1997). He also tortured more of his fellow citizens than any other African leader (Bueno de Mesquita 2007: 218). Among post-​1944 leaders, Mobutu ranks fifteenth for his murderous ways, and among post-​war African leaders, he ranks sixth (ibid.). The Belgian colonial state was certainly a repressive state (see Chapter 3). A key feature of most developmental states is that they usually start as autocracies with all the standard practices to muzzle the civil society. As a result, they tend to avoid implementing political reforms when they begin their developmental policies. Over time, however, most of these states end up unwittingly promoting some democratic reforms. The Belgian colonial state was not different when it implemented its timid and limited political reforms in 1957–​ 1958 under domestic pressures, while economic reforms started in the early 1910s with the first Minister of Colonies Renkin. Therefore, African countries need perhaps “developmental dictatorships” (Gregor 1979: 17) because a real “human tragedy of great proportion may be in the making in the continent if a large-​scale action is not taken” (Ergas 1987: 1). However, Skalr (1986: 27) counters this view with an eloquent plea for a “developmental democracy” since democracies make governments accountable to their citizens. If most developmental states have been based on various forms of non-​ democratic regimes, they are also compatible with polities that respect human rights and are democratically governed. Among others, Brazil, India, Indonesia, South Africa, Mauritius, and Botswana are examples attesting that democratization and an increase in the developmental orientation of the state can occur simultaneously (Fritz and Menocal 2007). However, there is no doubt that building developmental states in a democratic context does bring with it particular challenges that the Belgian colonial state and historic success stories of non-​democratic developmental states did not face. These contradictions on the effect of political regime on economic performance are illustrated by Prezeworski and Limongi’s (1993) survey of 21 articles published on the subject between 1966 and 1992: eight articles found that democracies economically grow faster; eight others showed that autocracies grow faster; and five found no relationship between regime types and economic growth. If both democracies and autocracies can implement policies that foster economic development, what domestic political forces tend to compel their leaders to develop the economy in a short period of time and how do these forces emerge?

24  An overview of the argument From the early 1900s to the late 1990s, scholars developed three general approaches to achieve economic prosperity: the bigger pie approach, the fewer folks approach, and the better manner approach.5 The next section builds upon these approaches and provides additional working hypotheses by arguing that political constraints on the ruler may be the exogenous factors that should help to start the process of economic prosperity. The impact of these constraints on economic development is not direct, however, because the role of these constraints is to provide public goods, which in turn, pave the way to economic development.

Political constraints and economic development The literature on economic performance tends to assume that good institutions are given and what is needed is to implement good policies. Institutions refer to rules of the game that structure social interactions. Although these good or better institutions have not been adequately defined in the literature, they seem to represent the “Anglo-​American view” that emphasizes “the maximization of market freedom and the protection of private ownership most strongly” (Chang 2011: 474). However, good or better institutions take years, decades, and even centuries to be consolidated and should not be assumed as givens. Therefore, “history matters” (North 1990: vii) if institutions count. The historical development of institutions in Congo should help to understand why postcolonial leaders have chosen a different economic path than Belgian colonial rulers. The incorporation of historical sensibilities in the analysis of economic development should clarify why some institutions persist while others disappear over time. Since this book is about colonial policies that might foster economic development, historical sensibilities should also help to deconstruct some of the arguments pertaining to the postcolonial African predicament by showing how particular options came to prevail against other choices at key junctures. The argument is based on the idea that institutions are good only when they place political restraints on rulers. In the Congolese context, only the colonial state was historically able to develop good institutions that restrained rulers in both Belgium and the Belgian Congo. The result was the supply of public goods that sustained economic development. Constraints on rulers refer to institutional checks that separate power across a number of actors and restrict rulers’ ability to change policies unilaterally. Operationally, constraints are measured by the number of veto players in the polity. These are individual or collective players whose agreement is necessary to change policy (Tsebelis 1995). Tsebelis (1995) argues that rising the number of veto players tends to increase the level of policy stability. Scholars have identified at least four mechanisms through which constraints establish conditions for economic development by preventing predation or other opportunistic behaviors from rulers. The first is the rule of law, which is a procedure that constrains the behavior of both the ruler and the ruled. It

An overview of the argument  25 is “the degree to which a society is governed by general rules that are applied to all citizens equally” (Johnson and Koyama 2017: 11–​12). The expectation is that polities with many veto players are likely to be governed by the rule of law. Since the rule of law is a procedure that constrains the behavior of rulers more specifically, it increases and reinforces political certainty about the future. Therefore, the rule of law is likely to encourage investors to risk their capital. The second mechanism is from North and Weingast’s (1989) study of seventeenth-​century England. The conditions for economic development arise when rulers create institutional structures that grant power to other actors who can prevent rulers from reneging on their promises. Thus, “increasing the number of veto players implied that a larger set of constituencies could protect themselves against political assault, thus markedly reducing the circumstances under which opportunistic behavior could take place” (ibid.: 829). Third, checks on rulers establish a more stable policy environment that is expected to facilitate investment opportunities and hence sustain economic development. With stability of economic policies comes greater investors’ certainty, easing fears that unexpected changes in policy will render their investments unprofitable (Hanson 2014: 381). Fourth, increasing the number of veto players is likely to inhibit rent-​seeking activities. When polities make it easy to secure returns through political channels, individuals will shift resources from productive economic activities to opportunistic political activities (Olson 2000: 2). As Hanson (2014: 381) emphasizes, “greater numbers of veto players… raise the costs of rent-​seeking because each player must be convinced, perhaps with some type of compensation, to support a particularistic policy change.” These four mechanisms lead to the second working hypothesis: Hypothesis 2: The more veto players are in the polity, the more likely the polity will facilitate investment opportunities that sustain economic development. Of the three polities that ruled Congo from 1885 to 2018, only the Belgian Congo state had many veto players that helped to attract massive investments in the colony so critical for economic development in 1909–​1960. King Leopold was the absolute monarch of the CFS from 1885 to 1908 and no veto players existed during his reign. He was the sole owner of the CFS. The First Republic, 1960–​1965, had some veto players. However, political instability created fear among investors and was thus a real bottleneck to sustain economic development. The rise of Mobutu ushered a period of stability with a group of veto players, mostly military officers with whom he seized power in late 1965. From 1966 to 1974, Zaire under military rule was a quasi-​strong state that attracted foreign investments that sustained economic development. Mobutu’s personal rule under one party-​system from 1974 to 1991 removed any veto player in the polity. The post-​Mobutu period did not fare better despite free and fair elections in 2006, but rigged elections in 2011 and 2018.

26  An overview of the argument Although constraints upon rulers can prevent them from reneging on their promises, increase policy stability, and inhibit rent-​seeking activities, they cannot always be advantageous. There is always a tradeoff between what Cox and McCubbins (2001) describe as “state indecisiveness” and “irresoluteness.” Just as frequent policy changes –​irresoluteness –​can be harmful, so too is gridlock when policy changes are needed (Hanson 2014: 381). Veto players can block efficient policies that are badly needed to restructure the economy in order to achieve Pareto optimality.Veto players can also shift policies toward parochial interests (Cox and McCubbins 2001). Given these motives, Tsebelis (2002) argues that veto player theory does not lead to unambiguous predictions about economic performance. More specifically, the supply of public goods is contingent upon another political constraint, which is based on the idea that the type of policy options chosen by leaders in their quest to retain office is shaped by the relative size of their winning coalitions and selectorates (Bueno de Mesquita et al. 2003). Winning coalitions are groups of people that “control enough . . . instruments of power to keep the leader in office,” while selectorates are individuals who “theoretically can be part of the leadership selection process” (Bueno de Mesquita et al. 2003: 8). The size of leaders’ winning coalitions and their desire to remain in office are crucial to understand policy decisions that foster or hinder economic development. As leaders’ winning coalitions grow larger, the delivery of public goods to that core constituency becomes quite important to their survival in office. They must craft successful policies and deliver public goods to members of their winning coalitions and often to a broad swathe of the country’s population. Leaders who rely on small winning coalitions often oversee disastrous policies like sharp economic downturns without excessive fear of losing office (Bueno de Mesquita et al. 2003). As long as a disproportionate share of the country’s wealth in the form of private goods is channeled to their small winning coalitions, they should remain in office. If winning coalitions are quite large in democracies, their sizes obviously vary across dictatorships because these regimes differ in their leadership either by “a person or a group of persons who arrogate to themselves and monopolize power in the state, exercising it without restraint” (Neumann 1957: 161). Several types of dictatorships or autocracies have existed in Africa depending on the periods. Historically, Africa had colonies of settlement and colonies of extraction. The former contained “a sizeable European community” with the idea of making the colony a prolongation of the metropole. Kilby (1975: 474) defines “a sizeable European community” as one that “is in excess of 50,000.” Acemoglu, Johnson and Robinson (2001) provide ample evidence that colonies of settlement brought with them good institutions that protected property rights and sustained economic growth, while regions with low European settlement developed extractive economies and poor institutions that have persisted over time.

An overview of the argument  27 In the postcolonial period, autocracies include single-​party, military, and personalist regimes. Single-​party polities are regimes in which the party has some influence over policy, controls most access to political power and government jobs, and has functioning local level organizations (Geddes, Wright, and Frantz 2014). Military regimes are governed by “an officer or retired officer, with the support of the military establishment and some routine mechanism for high-​level officers to influence policy choice and appointments (ibid.: 315). Personalist regimes are characterized by leaders who “have consolidated control over policy and recruitment in [their] own hands” (ibid.: 315). Autocrats with comparatively large winning coalitions can be expected to be more concerned about providing public goods than their counterparts with small winning coalitions. The larger an autocrat’s winning coalition, the higher the probability that rivals may emerge within the ruling cadre when policies fail. To retain office, autocrats facing large winning coalitions must deliver public goods by implementing policies that foster economic development. Since autocrats with small winning coalitions can provide ample private goods to satisfy their cronies, they will not have any incentive to deliver good policies that supply public goods. Of the five types of dictatorships described earlier, colonies of settlement and single-​ party regimes should have the largest winning coalitions. The regime in colonies of settlement was highly dependent on its “sizeable” group of European settlers. In single-​party regimes, leaders’ tenure tends to rely upon party elites in one way or another. Selectorates also tend to be larger in both polities and, to a lesser extent, in military regimes than in personalist regimes. This is because white settlers, senior party members, and officers provide a ready pool of potential replacements for disaffected members of the winning coalition. Such replacements may have been lacking in colonies of extraction and in personalist regimes. The expectation is that single-​party regimes, like early colonies of settlement, are likely to supply a much higher quantity and quality of public goods than personalist regimes, with military regimes somewhere in the middle. Personalist regimes tend to have the smallest winning coalitions, usually a tiny cadre of fiercely loyal cronies. Their survival in office does not depend upon delivering public goods but is primarily a function of satisfying their small band of supporters with private goods rather than providing their citizens with successful policies (Bueno de Mesquita et al. 2003). Personalist regimes can also tap their presumably massive public and private accounts to increase the flow of private goods or “rents” to their small winning coalition members and to fund increased repression of elites or public dissidents. Autocrats in military regimes who depend to varying degrees on the military high command often have winning coalitions of mixed sizes. They would not be expected to be as small as those found in personalist regimes or as large as those found in single-​party states (Pickering and Kisangani 2010). Since the size of winning coalitions in military regimes lie somewhere between those of

28  An overview of the argument single-​party and personalist states, leaders in military governments would use blends of the survival tools that personalist and single-​party leaders use, varying them according to the size of the winning coalition (ibid.: 520). The working hypothesis on the winning coalition and the selectorate is thus: Hypothesis 3: The larger the size of the winning coalition, the more public goods will be supplied, and consequently the more likely economic development will follow. Using data from several sources,6 the winning coalition in the CFS was quite small. King Leopold II was the ruler of Belgium and the CFS. He had to respond to a large winning coalition in Belgium, a democracy. However, the CFS was a personalist autocracy with a small winning coalition of friends and a few volunteer officers from the Belgian army. The CFS became the Belgian Congo on 15 November 1908. Although it was a colony of extraction, the Belgian Congo had a “sizeable European community of more than 50,000,” like most colonies of settlement as defined by Kilby (1975: 474). In fact, its European population constituted a large winning coalition of 51,639 people by 1949.7 Ten years later, this population more than doubled to 110,000. Given a Congolese population of 13.54 million people in 1958–​1959, there were at least 812 Europeans for every 100,000 Africans in the Belgian Congo, a colony of extraction.This was the largest group of Europeans in Africa, other than colonies of settlement, and it represented a large winning coalition in the colony, a typical dictatorship. In Belgium, the winning coalition of the minister of colonies was large, a typical democracy. A different picture emerged in the postcolonial period. The winning coalition was quite small in 1960–​1965, made mostly of former teachers and clerks in the colonial administration, now new members of the government, and Congolese gradés in the colonial army promoted to officer rank after independence. Mobutu took power on 24 November 1965 and relied on military officers. He acknowledged that the military coup was a collective decision by the “High Command” (Kisangani 1997: 18). Mobutu’s winning coalition was slightly large during the military rule in 1966–​1974. However, it averaged around 30 percent from 1974 to 1991 during his personalist regime. Then, the coalition became even smaller, averaging no more than 20 percent. When Laurent Kabila became president in May 1997, he also personalized his rule until his death in January 2001. His son, Joseph Kabila, ruled Congo like his two predecessors. However, his winning coalition size jumped to 75 percent after the 2006 free and fair elections but declined after the 2011 rigged elections because he relied upon his presidential majority in the parliament that completely muzzled the opposition. Given these winning coalition sizes, a few remarks follow to understand economic development in Congo. First, since the colonial state had to respond to both a large selectorate and a large winning coalition in Belgium (a democracy) and to a large winning coalition in the Belgian Congo (an autocracy), it should

An overview of the argument  29 have implemented policies that provided public goods so critical to foster economic development. Second, because Leopold II (1885–​1908), Mobutu (1975–​ 1997), and the Kabilas (1997–​ 2018) governed Congo with small winning coalitions, they should have produced fewer or no public goods and, indirectly, policies inimical to economic development. Third, Mobutu under the military regime (1965–​1974) should have some mixed results, including policies that sustained economic development.

Plan of the book The remainder of the book contains eight chapters.The next chapter analyzes the CFS because the Belgian Congo inherited its legacies (see Anstey 1966). Chapter 3 discusses the supply of political order and the rule of law in the Belgian Congo. Political order is the absence of unconstitutional change in the government or any conflict that results in a large number of deaths and displaced people. Political order and the rule of law tend to increase political certainty about the future and encourage investments and hence productive economic activities. In other words, “no society can work satisfactory if it does not have a peaceful order…” (Olson (1993: 567). The Belgian Congo state was the only polity to supply political order and the rule of law for decades. The fourth chapter analyzes the provision of physical capital and human capital (education and healthcare) by arguing that they constitute the backbone of economic development. Both physical and human capitals represent major engines of economic development and their low levels is likely to impede improvement in productivity and competitiveness. The Belgian Congo state built most infrastructure in the colony, while the postcolonial state has failed miserably to maintain the colonial infrastructural stock. Property rights and their protection constitute the fifth chapter. Property rights represent “an owner’s right to use a good, an asset for consumption, income generation or use rights, and the right to transfer the property to another party in the form of a sale, gift, or bequest” (Besley and Ghatak 2009: 3). They include four fundamental rights: 1) usus or right to use an asset; 2) usus fructus or the right to benefit from that asset; 3) abusus or the right to change the form and substance of that asset and to exclude others from using that asset; and 4) transferability, the right to transfer the rights of 1, 2, and 3 to others for a price (Schroeder 1988: 176).The protection of property rights from expropriation is perhaps the most effective way to attract private investments in order to develop un-​bearing land and to benefit a community (Besley and Ghatak 2009). It also shapes state–​business relations because it defines economic freedom to own, to produce, and to freely exchange (Besley and Ghatak 2009). Of the three states that ruled Congo from 1885 to 2018, the Belgian Congo state seemed again to have protected private ownership by inhibiting rulers’ opportunistic and predatory behaviors. This helped to attract massive foreign investments, which sustained economic development in the colony.

30  An overview of the argument The state cannot provide public goods and protect private ownership unless it has enough resources to accomplish these tasks. Chapter 6 analyzes the mobilization of revenue. The state can borrow money or print it to finance its own goals and/​or societal programs. However, collecting taxes, directly and indirectly, is more effective than other methods to finance government spending. Both direct and indirect taxes characterize the state not only as an extractor of resources, but they also make it as a broker that collects resources according to political and economic power of different groups in society. Tax discrimination may increase conflict in society. As a result, states also rely on non-​tax revenue, which includes fees, fines, and administrative receipts as well as foreign aid and natural resource rents, among others. Non-​tax revenue does not imply the same direct correspondence to infrastructural power that taxes do.Thus, taxation remains the most effective way to build state capacity because it implies some consent and compromise with taxpayers (Frankema 2010). It involves reciprocity between citizens and the state where the former understand that public goods are not free and should be paid for (Levi 1988).The way taxes are collected tends to influence the effectiveness of state institutions, the dynamics of the investment climate, and hence the path to economic development. Therefore, taxation remains the most critical condition to build the state and to develop the economy. Unlike the CFS and the postcolonial state, the colonial state was able to collect taxes on a semi-​voluntary basis from domestic players after the Second World War. It used tax policy as a fiscal tool to mobilize resources and as an economic instrument to develop the economy. Chapter 7 assesses the role that President Mobutu played after independence until his political demise in May 1997. He dominated both the First and the Second Republics. The third Republic is the object of Chapter 8. The two chapters follow the same themes discussed in Chapters 3 through to 6 on the Belgian Congo to ease comparison in Chapter 9. A brief conclusion follows. It highlights a few colonial policy issues on economic development of the Belgian Congo that can be generalizable to most African countries. Without denying the impact of external factors in the process of economic development, internal elements constitute perhaps the most critical factors that explain not only the collapse of the Congolese state and many other African countries, but also their poor economic performance.

Notes 1 On resource curse, refer to Lal and Myint (1996) and Sachs and Warner (1997). 2 Communauté Economique Européenne, Rapport sur la Situation Sociale dans les Pays d’Outre–​Mer Associés à la Communauté Economique Européenne, Brussels, 1960. 3 Belgium, Ministère des Colonies, Statistique sur la Formation du Capital au Congo Belge et au Ruanda Urindi de 1886 à 1956, Brussels, 1958. 4 “Lubumbashi: A la SNCC, les agents accusent 227 mois d’arriérés,” Radio Okapi (16 February 2019); “Les agents de la SNCC de Mwene-​Ditu ont entamé une grève pour réclamer 227 mois d’arriérés dont ils disent victims,” Radio Okapi (28 February 2019).

An overview of the argument  31 5 The first framework or bigger pie approach advises leaders to “use technology in order to produce more and alleviate shortage” (Cohen and Bloom 2005: 9). The second perspective advocates less people on the planet by making everything humane available to help achieve this end. The final approach advises to eliminate violence and corruption; improve trade, the operation of markets, and government provision of public goods; reduce the unwanted aftereffects of consumption; and achieve greater social and political equity between young and old, male and female, rich and poor. 6 For the operationalization of the winning coalition and the selectorate, refer to Bueno de Mesquita et al. (2003: 133–​135). 7 Belgium, Ministère des Affaires Économiques et des Classes Moyennes, Institut National de Statistique, Annuaire Statistique de la Belgique et du Congo Belge (Brussels: FR Van Muysewinkel 1950: 435).

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An overview of the argument  35 Stengers, J. (1987) “Une Décolonisation Précipitée: Le Cas du Congo Belge,” Cultures et Développement 10(4): 521–​556. Tsebilis, G. (1995) “Decision Making in Political Systems: Veto Players in Presidentialism, Parliamentarism, Multicameralism and Multipartyism,” British Journal of Political Science 25(3): 289–​325. Tsebilis, G. (2002) Veto Players: How Political Institutions Work, Princeton: Russell Sage Foundation. UN (1962) Survey of African Economies, New York: UN Publications. Vanderlinden, J. (1994) Pierre Ryckmans, 1891–​ 1959: Coloniser dans l’Honneur, Brussels: De Boeck. Vanthemsche, G. (2012) Belgium and the Congo, 1885–​1980, Cambridge: Cambridge University Press. Vellut, J.-​L. (1982) “Hégémonies en Construction: Articulations entre Etat et Entreprises dans le Bloc Colonial Belge (1908–​1960),” Canadian Journal of African Studies 16(2): 313–​330. Wade, R. (1990) Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization, Princeton: Princeton University Press. Weber, M. (1978) Economy and Society, Berkeley: University of California Press. Weiss, H. (1967) Political Protest in the Congo, Princeton: Princeton University Press. Weiss, L. (1995) “Governed Interdependence: Rethinking the Government-​Business Relationship in East Asia,” The Pacific Review 8(4): 589–​616. Woo, J.-​e. (1991) Race to the Swift: State and Finance in Korean Industrialization, New York: Columbia University Press. World Bank (2004) Transitional Support Strategy for the Democratic Republic of the Congo, Washington, D.C.: International Development Association. World Bank (2019) “World Development Indicators,” databank.worlbank.org/​source/​ world-​development-​indicators. Yandle, B. (1988) “Regulators, Legislators, and Budget Manipulation,” Public Choice 56(2): 167–​180. Young, M.C. and Turner, T. (1985) The Rise & Decline of the Zairian State, Madison: The University of Wisconsin Press.

2  The Leopoldian state and economy of plunder

King Leopold II started his campaign to rule the Congo basin on 15 September 1876 when he sponsored the Brussels International Geographical Conference. While he was obscuring his colonial ambitions among major European powers using humanitarian subterfuges, Henry Morton Stanley and other king’s agents were travelling in Central Africa where they secured at least 257 treaties on land ownership with African rulers by mid-​1884 (Denuit-​Somerhausen 1988: 101–​ 127). These treaties were enough for King Leopold to claim a large portion of the Congo basin on behalf of the International Association of Congo (IAC) before the Berlin Conference began on 15 November 1884. Rivalry among major European powers and the game of alliances favored his adventure in Central Africa. From April 1884 to February 1885, most major powers had virtually recognized the IAC through several bilateral treaties. It became unofficially the CFS in late February 1885. Its borders were officially proclaimed on 1 July 1885 after Great Britain had recognized the CFS’s land possession that was not part of the territory effectively occupied by the former IAC through what one diplomat called a “stupid blunder” (Sanderson 1985: 137). On 1 August 1885, the king began notifying all powers that the IAC had become the CFS (Louwers 1905: 5–​6). If King Leopold II was a constitutional monarch without executive power in Belgium, he was an absolute monarch with unlimited powers in the CFS. In 1887, the king signed a decree on 27 July that created the CF linked to gold. In late 1892, he promulgated a decree that created his Congolese subjects (Louwers 1905: 286–​287) and he also established his capital in Boma near the Atlantic Ocean. The king never built any palace in the city and never visited his African empire. Also, the new state was unknown to its citizens and most of Leopold’s internal political rivals had so far not acknowledged the existence of the new ruler. The first challenge facing the king after July 1885 was to assert his authority over these internal rivals because the Berlin Conference had completely eliminated European powers who could have challenged his African adventure. Thus, the process of building the CFS never confronted external players like early state builders in sixteenth-​century Europe. The second challenge was economic (Stengers and Vansina 1985). A resolution of 30 April 1885 adopted by the Belgian parliament recognized Leopold DOI: 10.4324/b23045-2

The Leopoldian state  37 II as the sovereign of the CFS and the king of Belgium on the condition that the relationship between the two states remained exclusively personal. The third challenge in King Leopold’s efforts to build his new state was financial (Stengers and Vansina 1985). The Berlin Act signed by all major European powers on 26 February 1885, which also recognized the CFS, had two objectives. The first was humanitarian and consisted of the suppression of the slave trade. The second was mercantilist and relied upon “the principle of complete freedom of trade and navigation in the Congo basin” (Louwers 1905: 6). Given these challenges, King Leopold had to spend his own fortune given the promise he made to the Belgian parliament that his Congo would be financially self-​sufficient. The new state was thus conceived with optimism, but this early assurance quickly took a severe blow (De Roo 2017: 104). From 1878 to 1885, King Leopold spent 11.5 million gold francs (Stengers 1957: 29) or $65.87 million in 2015 prices. He was on the verge of financial catastrophe and had to turn to the Belgian government for assistance. In 1890, he received a loan of 25 million gold francs from the government of Prime Minister Auguste Beernaert spread over ten years as the result of a convention concluded on 3 July 1890, which gave Belgium the right to annex the CFS in 1901 if the parliament so desired. The king was still in trouble and his budget was, in the words of Stangers (1957: 32), a “real abyss.” In 1895, he received an additional loan of 6.85 million francs that he partly used to pay off his creditors (Stengers and Vansina 1985: 318). The king’s financial troubles continued unabated and he began contemplating ceding the CFS to Belgium in late 1895 pending the approval of the parliament, which never happened because the latter did not want to saddle Belgium with a “doomed colony” (ibid.: 323). Another explanation could be that the parliament had no intention to embarrass the king. Suddenly, the budget of the CFS was balanced in 1896 with huge surpluses in subsequent years. How did King Leopold II manage to transform economic disaster into personal wealth in less than 12 years after the creation of the CFS? Most infant colonies normally imported more than they exported because they had to spend huge financial resources on fixed costs, like building railways and port facilities, which yielded economic opportunities only after many decades. Nonetheless, exports from the CFS exceeded its imports considerably during the early years of state formation. This chapter starts with the supply of political order. The second section analyzes the role of basic infrastructure in King Leopold’s efforts to extract natural wealth in the CFS. The last two sections discuss the state role in shaping property rights and the collection of revenue in a non-​monetized economy during the early years of state building. A summary follows.

Political order and rule of law in an absolute monarchy King Leopold II spent 44.1 percent a year of his ordinary budget on the military from 1891 to 1899 to conquer his domain (see Table 2.1). This amount

38  The Leopoldian state Table 2.1 Supply of political order and implementation of law Years

State

Percentage of total spending

Political order

Rule of law

1891–​1899 1900–​1908 1909–​1919 1920–​1929 1930–​1939 1940–​1949 1950–​1959 1960–​1969 1970–​1979 1980–​1989 1990–​1999 2000–​2010 2011–​2018

CFS

44.1 22.6 17.2 14.2 8.4 9.8 8.3 13.1 11.9 7.6 12.4 7.2 4.7

No Limited Limited Yes Yes Yes Yes No Limited Yes No No No

No No Limited Yes Yes Yes Yes No Limited No No No No

Belgian Congo

Congo

Sources: data on spending in 1890–​1908, see Huybrechts (1970); from 1909 to 1959, refer to Belgium (annual 1910–​ 1959); for 1960–​ 2018, see Leclercq (1968), Zaire, Banque Centrale, Rapport Annuel (Kinshasa-​ Gombe: annual 1972–​ 1996) and DRC, Banque Centrale, Rapport Annuel (Kinshasa-​Gombe: 1966, 2000–​2019).

declined to 22.6 percent a year from 1900 to 1908 as the CFS began controlling the area thanks to a small European administrative personnel supported by its army and many coopted traditional authorities. Despite his massive spending on coercion, King Leopold provided limited political order in the CFS but no rule of law as shown in Table 2.1. Political order and the rule of law became realities only after the annexation of the CFS to Belgium in 1908. The army or Force Publique (FP) The government mentioned the FP or Public Force in a decree signed on 30 October 1885.The task of the army was to assure the occupation of the CFS, to maintain peace and public order, and to prevent any insurrection. On 5 August 1888, the king signed another decree that officially created the FP. In 1888, the FP had 1,131 foreign African mercenaries from western and eastern African coasts and 111 Congolese volunteers (Flament 1952: 510). They all signed a contract for a seven-​year tour of duty in the CFS. Some “648 officers and 1,612 noncommissioned officers (NCOs) from the Belgian army also served as volunteers in the FP up to 1908” (ibid.: 505) because the Belgian constitution “forbade the use of Belgian soldiers in the CFS unless they were volunteers” (Vanthemsche 2012: 55). Since the cost of his army of mercenaries was enormous, the king instructed Governor-​general Theophile Wahis to begin recruiting Congolese in order to lower the bill.Wahis signed a decree on 30 July 1891 that imposed an annual volunteer quota system for each district. The decree also fixed the military service

The Leopoldian state  39 to a seven-​year of duty with a daily pay of 21 cents. Most early Congolese recruits were from the western part of the Congo River. Two factors favored this recruitment. First was the transportation network on the river in the absence of roads and railroads. The second factor was the notion of martial races that Europeans forged in the late 1800s. This creation of an ethnic identity privileged the recruitment of “Bangala.” The process expanded in northeastern Congo in the Uele region among other warlike ethnic groups as described by King Leopold’s agents. As this recruitment proceeded so did the decline of mercenaries from East and West Africa from 1895 onward. Figure 2.1 provides the evolution of the military from its origins to the postcolonial period.1 The number of recruits increased from 100 in 1885 to almost 19,028 in 1897 but declined to 13,936 by the time Belgium annexed the CFS in November 1908. The Leopoldian army averaged some 15,600 soldiers a year. This army performed a dual domestic mission. The first was to conquer the new domain and to enforce authority. Second was to help collect wild products on behalf of King Leopold. As a result, the king’s army waged numerous wars from 1885 to 1908 to establish some semblance of political order in the new state. These wars have been analyzed in more detail elsewhere (Lejeune-​ Choquet 1906; Flament 1952). Suffice it to say that the CFS waged four types of wars.

Figure 2.1 Evolution of military personnel from the CFS to Congo

40  The Leopoldian state The first intended to control hierarchical polities including empires and kingdoms that were still challenging King Leopold’s authority. These polities felt politically and economically threatened by the king’s agents and “had the military capability and capacity to offer prolonged resistance to the Leopoldian army” (Young 1965: 282). The second and perhaps the most challenging mission of the FP was to control the eastern half of the CFS that was dominated by Afro-​Arabs from the Sultanate of Zanzibar. The most important internal rival was Tippo Tip or Hamed bin Muhammed el Murjebi who had built a quasi-​commercial empire in the eastern side of the Lomami River before the arrival of Europeans (Bontinck 1974). However, Tippo Tip would be appointed governor of the Falls district as part of an agreement between King Leopold’s agents and Sultan Barghash bin Said el Busaidi of Zanzibar when the king sought sultan’s cooperation in the Congo basin. Tippo Tip was free to carry out his commercial activities as before. After three years as governor, Tippo Tip returned to Zanzibar. The campaign against the Afro-​Arabs started soon after Tippo Tip. It lasted four years from 1892 to 1895, with a conservative count of 70,000 deaths (Flament 1952: 294). The primary cause of conflict between King Leopold and the Afro-​Arabs was an inevitable territorial rivalry. Both sides were competing over a declining supply of ivory because the king ended the slave trade, which was a major source of revenue in the Swahili trade corridor, to justify the existence of the CFS in the eyes of European humanitarians. The war against the Afro-​Arabs was “disguised as a Christian anti-​slavery crusade by a colonial state whose brutal regime exceeded the worst Arab slavery” (Nzongala-​Ntalaja 2002: 21). The third type of war to establish political order was against a number of acephalous and non-​hierarchical societies labelled wars of red rubber as discussed later in this chapter on concessionary companies. Countless of revolts occurred, but the last important one was the Bua’s wars that took place in the Oriental Province from 1895 to 1910 and ended the golden age of the rubber harvest (Harms 1975). Finally, the FP had to quell its own troops as a result of three mutinies in early July 1895, in mid-​February 1897, and in mid-​April 1900. Flament (1952: 349–​465) provides a detail analysis of these early mutinies and there is no reason to repeat them here. Their causes were diverse including mistreatment of Congolese soldiers by white officers, fatigue, frustration, racism, and low pay, among others. If the last mutiny was the shortest and lasted only two weeks in the capital city of Boma, the first two mutinies ended after 12 and ten years, respectively. In brief, these mutinies almost destroyed King Leopold’s efforts to build the CFS. After these mutinies, the CFS attempted to reform the army by instilling some type of discipline in the ranks through training. However, most reforms failed to bring any esprit de corps within the ranks.The army remained a major instrument of terror plundering food, raping women of all ages, and grabbing almost everything. Army columns were like conquering forces and their disruptive passage constituted an unmistakable but transient demonstration of the

The Leopoldian state  41 emerging state’s power. Soldiers used terror tactics to deter any opposition. Failure to meet rubber quotas was severely punished and the FP even took women as hostages to compel men to abide to the quota system. Punitive expeditions were dispatched routinely to punish offenders ending up massacring people and burning crops and villages. European administration, traditional authorities, and the Catholic Church The first step in King Leopold’s quest for authority over the CFS was the creation of a rudimentary administrative apparatus whose first layer was located in Brussels, called in 1894 the Secretariat of State. He staffed this office with a small group of friends and agents he could trust to accomplish his colonial dream in Africa. The first secretary of state was Baron Edmond van Eetvelde. The link between Brussels and the administration in the CFS was the administrator general and later the governor-​general. The CFS was divided into districts headed by district commissioners and districts into zones. King Leopold appointed Sir Francis de Winton on 22 April 1884 as his first administrator general. De Winton remained in office until early April 1886 when Leopold II replaced him with Camille Janssen when he no longer needed the British support. The king also wanted to have agents he could trust rather than people committed to any humanitarian action of his domain as prescribed by the Berlin Act. The government remained in his control and the “various officials who served under him were nothing but effective instruments of his personal will” (Cattier 1906: 134–​135). Most early administrators were military officers because King Leopold intended to expand the frontiers of the CFS as far as possible to collect copal, ivory, and rubber, among other wild products. The Leopoldian administration was a patrimonial body. All administrators in the CFS depended upon King Leopold for promotions (Gann and Duignan 1979: 86). Their salaries were contingent upon the quantity of wild products collected and delivered to the state. Since the European personnel in the CFS was not enough to control his vast domain, he had to rely upon domestic political rivals through alliances and counter-​alliances to rule the CFS. On 14 May 1886, Governor-​general Janssen promulgated an order-​in-​council that acknowledged African customs and the role of chiefs in administering Africans and their land (Louwers 1905: 404–​405). This early “indirect rule” was thus out of necessity in the early years of state formation. Like its British and French counterparts, the CFS also appointed chiefs in most segmented societies where chiefs never existed in order to rule and collect wild products. During the inauguration of a chief, the king’s agents had to establish a summary census of the people, the name of the village, its exact location, the names of notables, the number of huts, and the amount of tax payments to be made in wild products (Louwers 1905: 404). For the first time, these agents began counting taxpayers and locating them within their chieftaincies. This was the first critical step in the state-​building process. The administration recognized a

42  The Leopoldian state chieftaincy only if its chief received investiture from the district commissioner. The chief exercised authority according to customs “as long as these customs were not contrary to public order and state legislation decided in Brussels” (Louwers 1905: 405).Thus, many real traditional rulers lost their political influence (Slade 1962: 172–​173). Even in areas where real traditional rulers were kept in power, they became mere instruments of King Leopold’s authority since their job was to collect wild products on his behalf. Moreover, King Leopold promulgated a royal decree on 3 June 1906 to institutionalize direct rule by recognizing the chiefs as paid auxiliaries of the administration.The chiefs’ function was to extract as much labor as they could in terms of wild products. This was the first layer of massive abuses in the CFS. The role of the Catholic Church in the state-​building process began in 1887 when the Archbishop of Algiers, Cardinal Charles Lavigerie, interested Pope Leo XIII to evangelize East Africa in order to counter the influence of Islam (Markowitz 1973). He requested the support of King Leopold to sensitize Belgians to the idea.The king approved the project but requested that only Belgian priests should be sent to Congo. A few years later, King Leopold’s brutal rule in the CFS began to be exposed in Europe and the USA in the early 1890s. In 1895, missionaries of the Baptist Missionary Society (BMS) complained to the US State Department about atrocities committed in the CFS and some Swedes working for the BMS sent accounts of atrocities to the European press (Slade 1962). These complaints began the anti-​Leopoldian campaign. Leopold II reacted against the hostile Protestant campaign by signing a Concordat with Pope Pius X on 26 May 1906 that provided state subsidies to Catholic missions. This Concordat was Leopold’s attempt to ensure the support of the Catholic Church and indirectly to force Protestant missions out of the CFS (Markowitz 1973). The result was an increasing number of Catholic priests in the CFS. Their goal was to help King Leopold build his state by spreading an ideology that legitimized the civilizing mission of Belgium. The Catholic Church viewed its main mission in a triple equation: COLONIZE =​CIVILIZE =​EVANGELIZE. The Church gave the king its unconditional support and even remained silent when British citizens and Protestant missionaries revealed to the world the horrors of “red rubber” in the CFS. State–​business linkage and political order The first public–​private relation to establish political order was the Compagnie du Congo pour le Commerce et l’Industrie (CCCI) created on 27 December 1886 by Captain Albert Thys, who was the king’s orderly staff officer. Its initial capital was 1,227,000 gold francs ($7.03 million in 2015 prices) mostly from the Banque d’Outremer and Société Coloniale Anversoise.The CCCI’s mission was quite diverse, including the occupation of the CFS and many undefined industrial, commercial, agricultural, and financial activities. King Leopold conceded to the CCCI some 150,000 hectares of land.

The Leopoldian state  43 The first action of the CCCI was to counter the British threat to occupy Katanga. On 12 March 1891, the CCCI and the CFS reached an agreement to create the Katanga Company (Compagnie du Katanga) to deal with the CCCI’s limited resources and the enormous task of occupying the region. Established on 15 April 1891, the task of the Katanga Company was to conquer Katanga and to organize a police force that would assure political order. The CFS received 10 percent of shares and the right to appoint its representatives to the board of directors of the Katanga Company and its eventual subsidiaries. In return, the CFS granted the company “one-​third of the Katanga territory while the CFS kept two-​thirds” (Joye and Lewin 1961: 25). From 1891 to 1893, the Katanga Company organized three military expeditions to occupy the region (Flament 1952: 168–​178). At the same time, the king’s geological teams led by Jules Cornet revealed large deposits of copper ores of the highest quality in the region, but the king asked them to keep quiet their discoveries. In 1892, the issue of granting land opposed King Leopold and the board of directors of the Katanga Company. The March 1891 land convention between the two parties allocated land in “4,600 checkerboard blocks of approximately 120 km2 each so that two blocks belonging to the CFS alternated with one block of the Katanga Company” (Joye and Lewin 1961: 211). This land partition created serious difficulties because the Katanga Company had to determine in each case which blocks of land belonged to the CFS and which ones it possessed before granting land to a third party. The two sides could not reach a compromise for seven years until they felt threatened by the progressive move of the British-​Rhodesian Company toward southern Katanga. The CFS and the Katanga Company finally reached a quick agreement to create a joint company called the Comité Spécial du Katanga (CSK) on 19 June 1900 as the first chartered company in the CFS.The agreement gave King Leopold or the CFS two-​thirds in the capital of the CSK and one third to the Katanga Company. It had extensive powers of administration and possessed large land concessions. A royal decree of 6 December 1900 gave “the CSK the power to create a police force in order to establish political order in the region” (Louwers 1905: 426). This police force was not part of the FP and remained autonomous. By 1904, it had a well-​equipped battalion of 1,075 men (Joye and Lewin 1961: 213). The CSK was also in charge of collecting taxes, which were paid in rubber, ivory, or porterage. It became a quasi-​sovereign entity within the CFS with its own laws and regulations. The second state-​business connection occurred in 1897 when the CFS signed several agreements with the Empain Group. In 1902, the group received a concession of four million hectares of land in northeastern Congo and the Great Lakes region. It created the second chartered company, the Compagnie des Chemins de Fer du Congo Supérieur aux Grands Lacs Africains (CFL).The state received 25 percent of profits (Joye and Lewin 1961: 31). The CFL was responsible to develop a technical and administrative infrastructure as well as to build and operate a railway system to reach Sudan.

44  The Leopoldian state King Leopold also established six concessionary companies in 1892–​1906. Their mission was “to attract private capital to a region that was yet little known to financiers” (Gann and Duignan 1979: 125). These companies were semi-​ public enterprises in which the state had 50 percent shares and profits. King Leopold’s concessionary companies included the Compagnie Anversoise du Commerce au Congo or Anversoise (created on 2 August 1892), the Anglo-​ Belgian Indian Rubber and Exploring Company, known as ABIR (6 August 1892), the Lomami Company (5 July 1898), the Kasai Company (24 December 1901), the Comptoir Commercial Congolais (11 July 1904), and the American Congo Company (5 November 1906). All these concessionary companies relied on the army to force people to collect the King’s natural resources.Their mandate was also to establish political order. Many revolts occurred in mostly rubber areas that necessitated constant military operations against Congolese who were reluctant to pay taxes. These operations were among the deadliest confrontations with unknown number of human casualties. Africans who used spears, bows and arrows suffered more casualties than the army. Under pressures from Great Britain and Belgium, King Leopold reluctantly appointed a commission of inquiry made of three eminent attorneys from Belgium, Switzerland, and Italy to investigate the reports of atrocities committed in the CFS. He fully expected that they would whitewash these atrocities. However, the commission submitted a scornful report that was made public in November 1905. Since King Leopold owned the CFS, he could have fixed what was wrong in his house to make his rule more humane than before. Instead, he decided in 1906 to muzzle his critics by rallying to his cause the private sector in Belgium, Great Britain, France, and the USA. In Belgium, the king reached an agreement with the Société Générale (SG), which was “the strongest financial force in Belgium” (Brion and Moreau 1998: 214). After several months of negotiations, a royal decree signed on 28 October 1906 established the UMHK. Table 2.2 provides the distribution of its shares. Two Belgian private companies, the SG and the Thys Group, obtained 20.05 percent.The king also interested his British critics in the UMHK and the Tanganyika Concessions Limited (TCL) received 44 percent of the company’s shares. Dividend shares were also issued and awarded to company’s founders as “Founders’ shares” as a result of the 19 June 1900 convention that gave the CFS two-​thirds of capital in the CSK. The UMHK received the right to mine and develop all copper deposits on a concession of 20,000 km2 and all tin deposits found within a separate area of 14,000 km2. The CSK was also authorized to exploit other useful minerals and even to use river waterfalls to generate hydroelectric power within its concessions. The Compagnie du Chemin de Fer du Bas-​Congo au Katanga (BCK) was established on 31 October 1906 and was the second enterprise intended to mollify the king’s French critics. The purpose of this transportation company was to finance, survey, and build the railway licensed to the Compagnie du

The Leopoldian state  45 Table 2.2 Initial distribution of shares in the UMHK in 1906 (000 gold francs) Shareholders TCL (British Group) Société Générale Thys Group* CSK (CFS) Miscellaneous Total

Ordinary shares in cash 50,000 20,000 20,100 9,900 100,000

Founders’ shares 38,000 57,000 5,000 100,000

Total

%

88,000 20,000 20,100 57,000 14,900 200,000

44.00 10.00 10.05 28.50 7.45 100.00

*The Thys Group included the CCCI (Katanga Company) and Banque d’Outremer. Source: Le Recueil Financier (1926), op. cit.

Chemin de Fer du Katanga and a line between Katanga and lower Congo River. Its initial capital was two million francs divided equally between the SG and the French Banque de l’Union Parisienne. The third company was the Forminière that targeted US critics of King Leopold’s African adventure. This company had a broad purpose including agro-​forestry and diamond mining. The capital of this Belgo–​American joint company of 3.5 million francs was divided as follows: the CFS (50 percent), Group Thomas Ryan-​Daniel Guggenheim (25 percent), and SG (25 percent) (Joye and Lewin 1961: 227). However, the CFS gave the right to manage it to the SG despite its majority shares in the company. Immediately after their establishment, the “three 1906 companies” initiated several political aggressive programs of actions to bolster the king’s image abroad. On the economic side, however, they had to confront daunting technical and financial difficulties. The Forminière embarked on intense but “fruitless geological surveys for five years until a break appeared when the company’s engineers found a tiny colorless crystal in 1911, the very first diamond from the Kasai region” (Brion and Moreau 1998: 216). The UMHK also had to overcome enormous technical difficulties. First, its mineral deposits were more than 1,700 km away from the Congolese coast. Second, Katanga was a desolate area and labor to work the mine was scarce. Third, the Katanga ores, though exceptionally rich, “were not lent themselves to the metallurgical processes practiced at the time” (ibid.: 217). These difficulties had a negative impact on the UMHK’s initial results. Since the business world lost confidence in the company, the SG was left almost alone in providing funds to keep the business afloat. It almost gave up, but the upturn of copper’s prices in the world markets in the early 1910s changed everything. Recapitulation The state-​building process in the CFS relied on raw force.The increasing number of revolts resulted in an unending cycle of military expeditions, massacres, and

46  The Leopoldian state revolts. The government passed a decree on 3 June 1906 to institutionalize police and military operations throughout the CFS. Police operations intended to prevent any attempt to flout public order and to facilitate the execution of laws. The army employed intimidation to show its force, sending troops to occupy specific areas suspected of disturbances for a certain period time. However, when a rebellion broke out and made it impossible to collect wild products, the role of the army was to repress it by all means. Such operations were called military operations because they presumed a condition of civil war. Thus, the king’s ultimate goal was economic exploitation by using raw force. His soldiers killed people, torched villages, destroyed fields, raped women of all ages, and ravaged the countryside to collect wild products (Roos 2010). Although the number of people who lost their lives under King Leopold remains unknown, estimates vary between five and ten million (Hochschild 1998), making him one of the most murderous rulers in the world history. A few scholars even call Leopold’s atrocities in the CFS as genocide (Hochschild 1998) or holocaust (Weisbord 2003). However, some Belgian historians question these labels and claim that the range between five and ten million deaths is just conjectural because “no one knows the exact figure of the population of Central Africa at the end of the nineteenth century” (Vanthemsche 2012: 24). However, de Saint Moulin (2011: 6) estimated the population of CFS to be “between 16 and 20 million in 1885.” This population declined to ten million when Belgium annexed the CFS in November 1908 (ibid.: 6). This provides a decline between six and ten million. This range is not far from Hochschild’s (1998) estimate. As pointed out by a former magistrate in the CFS, “King Leopold can be praised for his initiative, he was the creator, but in certain respects he was a bad administrator… The horrors of the rubber business are not a legend; I experienced them; it is one of the darkest stories of all colonial history, which in itself is already very dark…”2 The king also “corrupted journalists and launched propaganda campaigns aimed at manipulating national and international public opinion… He manipulated official texts, and even lied to his own government and to foreign authorities” (Vanthemsche 2012: 19). When the king’s details of his horrific and extractive activities were discreetly mentioned, they were justified “by the fact that the king always acted for the ‘good of Belgium’, and only wanted to endow his ‘beloved homeland’ with a colony” (Vanthemsche 2012: 19). In the end, this gift to his beloved country “had to be ripped from him in a fierce battle that plunged the political class and Belgian society into turmoil” (Vanthemsche 2012: 19). In 1907, a treaty of cession was presented to the Belgian legislature where it met with much controversy. On 20 August 1908, the Belgian lower house passed a law annexing the CFS to Belgium. The presence of a number of veto players in Belgium with a large winning coalition as a democracy forced the king to relinquish the CFS. By the time the CFS became a Belgian colony in November 1908, some semblance of public order was already established in most western parts of the CFS, while France was still struggling to achieve the same goal in its African empire.

The Leopoldian state  47

Delivery of basic infrastructure Henry Stanley seemed to have said “Without railways, Congo was not worth a penny” (Camus 1962: 1008). The popular economic wisdom is to assign to states the task of building basic infrastructure because of its exorbitant fixed costs. Table 2.3 highlights government spending apportioned to the supply of physical and social infrastructure from the CFS to the postcolonial state. Spending on physical infrastructure averaged 25 percent a year from 1891 to 1899. It declined to 13.2 percent in the last decade of the CFS. King Leopold spent almost nothing to social infrastructure. Government expenditure on healthcare averaged 1.05 percent a year from 1891 to 1908, while education received a tiny 0.35 percent. Stanley’s voyage from east to west on the Congo River before the Berlin Conference revealed an important network of navigable waterways in the Congo basin. The advantage of this basin is that the Congo River extends both south and north of the equator and hence benefits from rain all year long. The only major shortcoming of the river is its discontinuity along its course to the Atlantic Ocean as a result of three natural falls: Mayombe Mountains Falls between Matadi and Leopoldville (300 km); Stanley Falls between Stanleyville and Ponthierville (125 km); and the third between Kindu and Kongolo (355 km). King Leopold had no choice but to build railways in order to connect the Congo River to the Atlantic coast. Supply of physical infrastructure In the early years of state building, King Leopold’s agents had to rely on people and the Congo River navigable networks to transport wild products and other Table 2.3 Spending on public goods as a percentage of total outlays Decade

1891–​1899 1900–​1908 1909–​1919 1920–​1929 1930–​1939 1940–​1949 1950–​1959 1960–​1969 1970–​1979 1980–​1989 1990–​1999 2000–​2010 2011–​2018

State

CFS Belgian Congo

Congo

Physical infrastructure

25.0 13.2 11.4 11.4 11.8 15.8 17.6 2.6 4.1 3.0 0.8 0.2 0.1

Social infrastructure Health

Education

0.2 1.9 3.7 10.1 10.3 8.9 10.5 2.2 3.5 1.6 0.3 0.4 0.6

0.1 0.6 1.7 2.4 2.9 4.2 11.2 13.7 21.3 9.1 0.6 0.6 0.4

Source: Huybrechts (1970); Zaire, Banque Centrale, op. cit; and DRC, Banque Centrale, op. cit.

48  The Leopoldian state goods. A man had to carry a maximum load of 30 kg on his head; a boy had to carry a maximum load of ten kg (Lopasik 1971: 171). The enormous cost in human effort was represented by the total quantity of exports, amounting to 2,730,533 man-​loads over 12 years, from 1887 to 1898 before the first railway was completed (Samarin 1989: 123).These loads accounted only for the downriver traffic from Leopoldville to Matadi located some 368 to 400 km from each other. The Kongo people had to cover this distance in 15 to 20 days in an “impossible caravan path … obstructed by huge boulders and over which were scattered small, sharp pebbles” (Guinness 1890: 57). Porterage tested the mettle of the strongest men, many of whom died on the path, leaving “thousands of skeletons” along the way (Samarin 1989: 126). While men and boys were dying as a result of porterage, girls “were managing hormones of Europeans.”3 Porterage was, however, inefficient for building the state. The state-​building process required physical infrastructure to lower the cost of transportation and to integrate the hinterland to the Atlantic coast. The construction of the first railway between Matadi and Leopoldville had to accomplish this goal and to overcome the Mayombe Falls. Since King Leopold had no sufficient financial resources to build it, he called upon the CCCI for help. On 31 July 1889, the CCCI established the CFC as a subsidiary with the mission to build the first railway. The CCCI also created the Compagnie des Produits du Congo to feed the builders of this company. The CFC began the construction of the first 388 km railway in November 1889 and completed it in July 1898. More than 1,850 Africans and 132 Europeans lost their lives (Samarin 1989: 127). The construction of the second railway between Boma and Tshela of 140 km or the Chemin de Fer du Mayombe started in 1893 and ended in 1913 with less human losses because it was in a more hospitable area. King Leopold also decided to build another railway in the northeastern part of the CFS to expand his territory toward Sudan. As pointed out earlier in this chapter, the CFS signed an agreement with the Empain Group in 1897 that created the second charter company, the CFL in 1902. The CFL built a 125 km railway between Stanleyville and Ponthierville that was completed in 1906 to overcome the second falls on the Congo River. The construction of the third railway along the last falls between Kindu and Kongolo began on 2 January 1903 but was completed in 1910. Just like other European possessions in Africa, tropical Africa moved straight from head porterage to the railway and the motor lorry in a short period of time (Wrigley 1986: 79). This transfer of technology was critical in the state-​building process by opening the Congo basin to international trade. Table 2.4 provides the evolution of physical infrastructure from the CFS to the postcolonial period. The main issue facing King Leopold after the discovery of mineral wealth in Katanga was how to transport it efficiently to the nearest port. He entrusted his railway project to Jean Jadot, who was involved in the construction of railways in China. Jadot established the BCK as one of the three 1906 companies. The goal was to connect Bukama in southeastern Congo to Port Francqui on the

The Leopoldian state  49 Table 2.4 Evolution of physical infrastructure, 1890–​2012 Year

State

Roads (km)

Operational Railway (km)

Operational Waterways (km)

1890 1900 1907 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2012

CFS

50 250 2,100 2,200 2,550 29,908 77,347 114,355 145,213 148,025 58,000 50,097 44,394 34,591 30,788

0 388 690 1,269 2,058 4,215 5,158 5,178 5,625 5,636 4,807 3,665 2,507 1,415 700

1,500 2,065 3,630 7,696 8,401 11,975 11,862 11,762 14,518 13,986 10,180 7,910 5,841 3,673 2,560

Belgian Congo

Congo

Sources: From 1890 to 1960, refer to Huybrechts (1970); after 1960 see Congo, DRC, and Zaire, Banque Centrale, op. cit.

Kasai River in the western side. The 600 km BCK line was completed in 1910, a year before the UMHK produced its first ton of copper. An alliance between the CFS and the private sector helped to open the Congo basin through transportation networks that the state alone could not afford. The concession of large tracts of land to private enterprises was the method adopted by Leopold II to obtain the capital necessary to finance railway development. According to Table 2.4, the Leopoldian state built 690 km of railway and more than 2,000 km of roads while managing 3,630 km of navigable waterways before 1908.The CFS also managed several ports on the Congo River. Private capital invested in the transportation system represented an accumulated amount of 3.85 billion francs or $627.2 (2015=​100) over a total of $887.79 million. This was equivalent to 70.6 percent of total accumulated private investments in the CFS for this transfer of technology, which lowered the cost of transportation quite drastically, especially in porterage or human cost. Social infrastructure King Leopold was not interested in developing healthcare and education in the early days of state formation. Perhaps the small number of European administrators in the CFS never required major investments in healthcare. The CFS spent only 1.05 percent of its annual budget to healthcare from 1885 to 1908, but this spending averaged 1.93 percent a year in 1900–​1908 (see Table 2.1). The rudimentary healthcare system in the late nineteenth century explains a high mortality rate among Europeans that averaged more than 86 per

50  The Leopoldian state 1000 between 1889 and 1895 (Kivits 1992). The poor healthcare system was mostly the result of unknown tropical diseases and lack of preventive healthcare. The supply of education was also minimal and the Catholic Church was its sole provider. The CFS gave the first subsidy to Catholic missionaries in 1888. The goal of the church was to gain an influence on many children through catechetical process because the first missionaries expected to achieve a total reform of Africans. As far as the church was concerned, the African adult was incapable of learning (Yates 1971). School colonies (colonies scolaires) were the first school system in the CFS. Created by a decree on 12 July 1890, they were located in Boma, Moanda, and Nouvelle Anvers (Louwers 1905: 415).Their goal was to provide a rudimentary education. In brief, King Leopold clearly saw the missions’ work as an extension of his goal to occupy and exploit the CFS. The government established schools in the modern sense in 1906 by a decree of 28 February of the governor-​general. The first school was that of clerk candidates in Boma and was reserved for graduates of school colonies. Then a decree of 3 June 1906 created two-​year professional schools in Boma, Leopoldville, and Stanleyville. Most students were between 12 and 20 years old and received a salary. The intended goal was to fill low paying jobs in the private sector and the administration. Until the annexation of the CFS to Belgium in 1908, government efforts in education were quite minimal. Also, Africans never welcomed the establishment of schools. However, when the CFS became a colony in late 1908, Western education was widely accepted in many parts of the colony because of “a growing awareness of the relationship between education and individual economic benefit” (Yates 1971: 161).

From communal property rights to state monopoly King Leopold’s first act was a decree signed on 1 July 1885 by his administrator general, Sir Francis de Winton (Louwers 1905). This law established the state right to own all lands, which were not effectively occupied by Africans. The decree fenced the land by dividing it into three categories: land occupied by native populations over which they had rights of first occupation, registered land or private property, and vacant land representing any piece of land that Africans neither inhabited nor cultivated. Article 1 of the decree states that “No one has the right to occupy without a title all vacant lands, nor to dispossess the natives of the land they already occupy: vacant lands must be considered as belonging to the state” (Louwers 1905: 631). Although King Leopold recognized ownership rights of Africans as the first occupants, his economic interests took precedence over Africans’ interests. The July 1885 decree and the view of ownerless unoccupied land showed the gravest misunderstanding of African communal land tenure. The European view of land rested upon the assumption that vacant lands belonged to nobody and could be claimed as state property. In pre-​colonial Africa, the acreage required to maintain an economic equilibrium in lineage-​type societies always

The Leopoldian state  51 exceeded many times the acreage under cultivation to help people hunt and gather vegetables and fruits (Peemans 1975). The king’s act seems to contradict the market view that property rights emerge in response to scarcity and the need to “internalize externalities when the gain from internalization becomes larger than its cost” (Demsetz 1967: 350). Land was plentiful in the CFS because much of the area was sparsely populated. Most of its people were shifting cultivators, though hunting, fishing, and gathering of wild produce were as important as agriculture and required access to extensive land space. Customary land rights were dynamic since most communities were semi-​nomadic and usually let land remain idle to rejuvenate for years, even for decades, given these groups’ system of shifting cultivation. King Leopold’s legislation created a monopoly over natural resources. He changed land ownership rights by the stroke of a pen despite land abundance. This exogenous change created land scarcity. However, legislation on property rights was not the only thing that changed land tenure in the CFS.The enforcement of the law by the FP and traditional authorities was also important. The state promulgated several other decrees to monopolize both ivory and rubber collection in the so-​called vacant lands. In late 1892, the king signed other laws excluding economic competitors from the CFS in violation of the Berlin Act. One important legislation was a decree signed on 30 October 1892 that prohibited the exploitation of rubber in most of the central shallow waters of the Congo basin and along major river basins (Louwers 1905: 645–​647). The main purpose was to exclude Belgian private companies from the region known to be rich in elephants and thus ivory. King Leopold also signed another decree on 17 August 1889 that classified land into native land, registered land, and domainal land (Louwers 1905). Native land or land effectively occupied by Africans was under customary or unwritten law, whereas registered land was under written law. The domainal land was divided into public land and private land. The public domain was allotted for public usage including roads, rivers, and lake shores. The private domain of the state (domaine privé de l’état) covered land unoccupied by Congolese and land over which individuals had no rights, thus the state could, by law, lease or give it away. The private domain became the national domain by a decree of 3 June 1906. It included all land and mines administered by the state, to which were added non-​conceded mining areas (Stengers 1953). Two decrees promulgated on 8 March 1896 and on 23 December 1901 added another land division by the creation of the Crown Domain (Louwers 1905: 644). It included vast territories that remained unexplored by the King’s agents. The new domain had a legal personality and King Leopold appointed a three-​member committee to manage it. In 1906, the Crown domain became the Crown Foundation (Fondation de la couronne), which covered almost 28 percent of the rubber zone or 289,375 km2 over 1,026,875 km2 (Cattier 1906: 215). Its goal was to generate life-​annuity for the royal family (see article 6 of December 1901 decree). From 1896 to 1907, it provided Leopold II a colossal profit ranging from 99.4 million gold francs to 135.6 million (Cattier 1906: 44). This

52  The Leopoldian state translates into a net wealth between $569.4 million and $776.7 million (2015=​ 100) in a non-​monetized economy. Both state control and monopoly eliminated not only most foreign trading firms and their African intermediaries, but also removed any economic incentives from entrepreneurs to invest. State control subordinated hierarchical traditional authorities to the state and used them as its instruments of primitive capital accumulation. King Leopold gave himself the right of land transferability by defining and assigning land rights as he pleased. He also adjudicated disputes over land and hence distorted all incentives related to land ownership and control. Paradoxically, King Leopold also relied on the private foreign sector to collect resources in the CFS. As a result, the relationship between the king and the private sector was not always harmonious.The principal feature of this relationship was that the state had to grant important economic advantages to the private sector as warranties, such as shares in semi-​public companies, but let the private sector manage them. This active support given by the state helped maintain the profitability of investments despite economic fluctuations (Peemans 1997: 76). The bond between King Leopold and the private sector hardly meant that he was a benevolent ruler. He often excluded competitors from exploiting natural resources in the CFS by restricting their access to specific areas of the CFS. He also unilaterally and constantly reneged most contractual arrangements that were incompatible with his economic interests. In a sense, the CFS institutionalized a regime of land tenure that was equivalent to expropriation. Citizens could not invest in productive activities. Although the CFS laid down clearly defined rules of property rights, Africans had no idea of these rules and could not determine their actions accordingly. They were thus acting according to their own communal land tenure. Moreover, state monopoly neither financed state projects nor encouraged foreign capital. It slowed down and even eliminated the activities of petty trade. The CFS was associated with the heavy hand of the monarch. This control resulted in inefficient resource allocation inimical to economic development. Although no data exist to assess this claim, the increasing number of revolts against the repressive nature of the CFS means less economic growth given the linkage between economic performance and political instability. Leopold II created bad institutions in the CFS because he had no desire to have either Africans or the European private sector exploit his domain alone and without his involvement. In the end, all of the king’s decrees gave rise to the red rubber’s extraction that turned the tide from initial massive losses into huge unimaginable profits on his behalf.

Revenue collection and state goals The adventure of King Leopold in Central Africa did not happen in a fiscal vacuum. Many polities existed in the area including kingdoms, empires, and the Afro-​Arabs’ commercial empire. They all had some fiscal base. Thus, when

The Leopoldian state  53 King Leopold began his adventure in the area, many parts of the Congo basin were beyond pure subsistence economy since most rulers and economic agents were already gaining their income from existing local markets, interregional commerce, and limited international trade. In brief, there was a non-​negligible taxable base in Central Africa when King Leopold started building his state. Tax collection King Leopold’s agents viewed taxes on Africans as their contribution to the cost of building the state and a cost reduction mechanism to his personal finances. A decree of 5 December 1892 instructed the secretary of state to “take whatever steps he may deem necessary or practical to assure the exploitation of the private domain” (Louwers 1905: 647). This decree legalized the duty of the African male adult population to collect wild products and to bring them to state agents. The king had to rely on direct taxes, export taxes, and non-​tax revenue to start building his state because the Berlin Act prohibited the imposition of any import duties. Europeans improperly called early direct taxes “indigenous taxes” or head taxes (Leclerq 1966). It was not an income tax in the modern sense of a monetized economy. In its fundamental conception, the term “tax” implies essentially a monetary deduction from private and individual revenues. However, the CFS was able to extract enormous amounts of revenue from Africans in a non-​monetized economy by excessive coercion that could be termed camouflage slavery. As shown in Table 2.5, the CFS collected 45.6 percent of its total revenue from 1895 to 1907 from Africans within a traditional and subsistence economy or from rural masses without any job in the modern economic sense. In monetary terms, King Leopold II collected more than $1.5 billion (2015=​ 100) from African subsistence farmers. The collection of enormous amounts of revenue in a non-​ monetized economy and an inexperienced administration was certainly possible given repressive measures that the CFS used to accomplish the task. It was also inconceivable to imagine such enormous tax collections from populations with extremely low income without the collaboration of many hereditary and appointed chiefs who behaved like despots in their own right. The CFS had only 190 European officials in 1891, 684 in 1897, and 1424 in 1904 (Buell 1928: 419–​420). It was impossible for one European administrator to cover 3,061 km2 to collect taxes from 1891 to 1904 in a physical environment without roads in the modern sense. Thus, European officials were backed by more than 5,000 chiefs whose support paved the path to the state-​building process. Finally, extraction of revenue from Africans without a job in the modern sense required a continuous presence of coercive means. The army consumed more than 35 percent of ordinary budget because it had to be relocated frequently from region to region to suppress revolts and rebellions against tax collections. Military expeditions to force Africans to pay the required taxes were widespread. Flogging with the chicotte on the buttocks and lower back were officially common disciplinary measures. The most complete arbitrary

54  The Leopoldian state system dominated the CFS until 1903. Thus, violence was the most excessive between 1892 and 1903. Two factors further helped to maximize pressure on Africans (Peemans 1997: 64–​ 65). First, the government gave directives to its agents that tax collections must increase by all means. Second, these agents were interested in increasing the collection of wild products because they received bonuses. Their effectiveness in this collection was one of the principal criteria for administrative career advancement (Stengers 1969: 267). In 1903, the system of forced labor to collect wild products had reached its physical limits and could no longer increase collections. The best policy was to concentrate state efforts on the regions already occupied.The king promulgated a royal decree on 18 November 1903 according to which “[E]‌very adult native in good health is subject to performance that consists of labor for the state. This work is to be remunerated; the total amount cannot exceed during any one month 40 hours of actual labor” (Louwers 1905: 531).The state never requested natives’ labor, but it required the quantity of produce equivalent to 40 hours of work as a tax.This taxation intended to allocate labor to state’s goal by increasing the costs of subsistence agriculture to force people into the emerging economy. In addition to indigenous tax, the king signed a decree on 27 July 1887 that institutionalized the regime of shareholding companies by granted them a legal personality to diversify his direct tax base. A decree of 16 July 1890 further established tax on their revenue based upon their level of activities (Louwers 1905: 113–​114).Their expansion and profitability incited state managers always in quest of resources to establish in December 1897 a direct tax of 2 percent on profits of limited liability companies (Louwers 1905). This tax was easy to administer and provided a practical way in a rudimentary monetary economy to collect directly some revenue gained locally by foreign enterprises. The second major source of tax revenue included indirect taxes. Several months after the creation of the CFS, King Leopold signed a decree on 15 December 1885 that established tax on exports of agricultural products and ivory (Louwers 1905: 478). This tax was particularly high for ivory and rubber to the extent that the deduction could reach as much as 25 percent of franco on board (fob) value for ivory and 10 percent for rubber. Tax on other agricultural products were lower. The state also established a differential tax system according to the origin of exports in order to occupy effectively the countryside. For example, it exempted from export taxes all products harvested far away from the coast. A decree of 19 February 1891 required that ivory from remote regions be taxed at 10 percent instead of the usual 25 percent (Louwers 1905: 545). These incentives showed the willingness of King Leopold to allow those merchants who dared to penetrate unknown areas of the CFS to pay low taxes in order to help in the state-​building process. In sum, export taxes remained the second major source of revenue until 1899 averaging 28 percent a year, then started declining. They remained quite low, averaging 11 percent a year from 1900 to 1907 (see Table 2.5).

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Table 2.5 Ordinary revenue of the CFS, 1895–​1907 1895 In percentage Direct taxes (a)   Indigenous tax   Tax on revenue Indirect taxes (b)  Exports  Imports Nontax revenue (c)   State portfolio  Others Total percentage

Percentages   (a)/​(b)   (a)/​(c)   (c)/​(b) Source of data: Leclercq (1966: 99 and 104).

1905

1906

1907

43.5 41.6 1.9 39.8 23.9 15.9 16.7 0.0 16.7

46.9 46.3 0.6 18.0 10.0 8.0 35.1 13.0 22.1

55.2 52.9 2.3 20.9 12.5 8.4 23.9 11.3 12.6

43.4 40.9 2.5 20.2 12.3 7.9 46.4 12.9 23.5

48.5 46.2 2.3 19.8 11.7 8.1 31.7 12.9 18.8

100.0

100.0

100.0

100.0

100.0

3,005.0 120,709.0 21.2

22,637.0 910,130.0 160.1

31,457.0 1,263,620.0 222.4

31,440.0 1,263,304.0 222.3

35,762.0 1,436,998.0 253.0

109.30 260.48 41.96

260.56 133.62 195.00

264.11 230.96 114.35

214.85 93.53 229.70

244.95 153.00 160.10

The Leopoldian state  55

Total (000 current) Total (000 CF 1958 prices) Total (millions of $ in 2015 prices)

1900

56  The Leopoldian state Contrary to export taxes that began in 1885, import duties had to wait until 1892. To collect import duties required an amendment to the Berlin Act that declared the Congo basin as an area of free trade and free navigation for all nations. Leopold II sponsored a conference in Brussels from 18 November 1899 to 2 July 1890 that targeted the slave trade. The result was the draft of the Brussels Act that gave the king an unprecedented opportunity to level off the specter of the Berlin free trade agreement, but he had to wait until 8 April 1892 for the international ratification of the Brussels Act and its practical application. The Brussels Act amended article 4 of the Berlin Act that forbade the imposition of any import duties in the Congo basin. As a result, Leopold II signed a decree on 9 April 1892 setting a 10 percent ad valorem tax on munitions and salt imports (Louwers 1905: 465). According to Table 2.5, import duties increased after the Brussels Conference to reach almost 16 percent of total indirect taxes in 1895, but declined to average 8 percent a year until 1908. Two main reasons explain this outcome. First, natives had to bear the cost of taxes. Second, the state exempted most imports of capital goods and scientific instruments from Belgium. From 1898 onward, taxes on these imports were set to 3 percent or lower by a decree of 5 May 1898 (Louwers 1905: 531).The goal was to encourage the import of equipment materials to build physical infrastructure so critical in the state-​building process. Nontax revenue The second major source of revenue after 1895 came from King Leopold’s domain called vacant lands rather than from fines, fees, and administrative receipts. The exploitation of these lands was made possible by conventions between the CFS and the foreign private sector. By these conventions, the state provided lands, mining concessions, and other land rights to private companies. In return, it received shares and participation in these companies. Half of state shares were from concessionary companies and other shares came from its two charter companies, the CSK and the CFL. This ensured the state a share in the distribution of profits beyond the normal contribution of regular taxation. This policy allowed the CFS to collect an important amount of nontax revenue that averaged 30.75 percent a year with 12.5 percent from state portfolio from 1895 to 1907 (see Table 2.5) In sum, the system of resource mobilization in the CFS had two major contradictions. On the one hand, the direct principle of exploitation of state holdings made the state an entrepreneur by modifying the functioning of the market economy. The domainal principle gave the state a real monopoly. On the other hand, the king had to call in the private foreign capital to exploit his CFS and help build the new state. This strategy presupposed an implicit recognition of non-​intervention of the state in the market. As pointed out earlier, the relationship between Leopold II and foreign private companies was not always harmonious, resulting in many conflicts that almost destroyed the new state capacity to expand its reach in the CFS.

The Leopoldian state  57 At the same time, Brussels also set tax incentives to stimulate Belgian enterprises to penetrate the CFS and help in the state-​building process. For example, a decree of 9 February 1896 gave tax holidays to all foreign business entities willing to create commercial or agricultural ventures within a radius of at least 20 km from any existing company (Louwers 1905: 531). Moreover, companies involved in building transportation infrastructure were under an investment tax credit that allowed them huge deductions from their tax liabilities equivalent to more than half of their expenditure on new additions to physical, research, and capital stock. The state lowered taxes on profits in 1906 to attract more foreign companies to invest in remote eastern areas of the CFS. Taxation, state building, and economy King Leopold’s tax policies helped him to accumulate an enormous amount of revenue in a non-​monetized economy. However, official figures presented in Table 2.5 are conservative and may have been even higher than they look for several reasons (Stengers 1953; Dickerman and Northrup 1982). First, the Secretariat of Finances of the CFS rarely published annual accounts of its finances. Second, a fire in the Royal Palace in 1891 destroyed many financial documents.Third, King Leopold ordered the destruction of financial records in 1894–​1895 when the Belgian parliament threatened to take over his empire. A number of historians have also reported that the king burned some tax records and royal accounts to cover his tracks when Belgium annexed the CFS in 1908. Finally, German soldiers destroyed and scattered what was left of the colonial archives during the First World War when they were quartered in the ministry of colonies. Table 2.5 provides three percentages to assess the degree of control and autonomy of the CFS based on the assumption that state infrastructural power emerges from formal-​bureaucratic and rational-​legal institutions and from less formally institutionalized arrangements. The first number is the percentage of direct taxes over that of indirect taxes (a/​b). This represents infrastructural power. It increased from 109.3 percent to 260.51 percent per year from 1890 to 1900. It remained on average 247.5 percent from 1900 to 1907. The CFS shielded itself against the tribulations of external players. This was penetration without a strong state capacity in the modern voluntary compliance to pay taxes. Tax collections were based on coercion by the FP and support from traditional authorities who had a stake in collaborating with the king’s agents to solidify their own weak power. The relationship between direct taxes to nontax revenue (a/​c) assumes that power is institutionalized in more personalized forms. The lower it is, the more the state is autonomous from domestic actors. It indicates a high degree of state autonomy. This percentage remained on average above 100 percent, except in the mid-​1900s, implying that the state was not autonomous from domestic players during the entire period of the CFS. In a sense, traditional authorities

58  The Leopoldian state were critical during this early period of state formation to collect the bulk of state revenue. The third is nontax revenue to indirect taxes (c/​b) to assess state autonomy vis-​à-​vis external players. It increased from almost 42 percent in 1885 to 195 percent five years later and remained on average 162.9 percent from 1900 to 1907. If the CFS was largely dependent on external players in the early years of state formation, the CFS became less sensitive to any external factor after 1900. The Leopoldian tax regime helped to build an embryonic state through coercion. However, it never established the king’s legitimacy in the region because his regime did not involve any social contract between the rulers and the ruled. As a rent-​seeker par excellence, Leopold II transferred his wealth acquired in the CFS to carry out his policy of Grands Travaux in Belgium (Ranieri 1973). The CFS had just one goal, to amass as much wealth as possible on behalf of its sovereign. In a sense, the CFS represented the highest level of an extractive state. One way to assess this assertion is to compare the level of direct taxes paid by Africans and the level of spending on healthcare and education. The CFS extracted 45.6 percent of its revenue from Africans. However, it spent only 2.8 percent of the budget on African education and healthcare. This tiny amount represents only 6.61 percent of taxes paid by Africans. This is a real indication of an extractive state that never cared about socioeconomic development of its subjects.

Summary The CFS was the creation of King Leopold II who initiated many military campaigns to start the process of state building. His main goal was to establish political order, to penetrate society, and to control the labor market so critical for primitive capital accumulation. Although Christian missions emerged as an instrument that helped King Leopold to build his state, he relied heavily on traditional authorities to count taxpayers because his European administration was quite small in the early days of state formation. The state–​private relationship also helped to integrate African labor in collecting wild products for the world markets at minimal cost. On balance, King Leopold only built a rudimentary state. Financially, he did well, as would any predatory ruler. The CFS relied on an economy of plunder. As king of Belgium, Leopold II was subject to the Belgian democratic institutions. However, he was above the law in his own domain because the CFS had no veto players to curb his predatory and opportunistic behaviors. The CFS was an absolute monarchy in which the sovereign held all powers. The interests of king’s administrators coincided with his interests and agency issues never surfaced. His reliance on a small coalition created a setting that provided no public goods. The Leopoldian system was a patrimonial system par excellence with the exception that it was not anti-​bureaucratic. The CFS system laid the foundation for a public–​private linkage in which the state was itself a major stockbroker and a shareholder. This method helped

The Leopoldian state  59 King Leopold to obtain the capital necessary to build the first few railways and several ports in the CFS. State ownership of land was a tool for exerting rigorous control over the limited economic surplus, which existed in the first phase of European penetration in the Congo basin. King Leopold set a new regime of property rights exogenously based on state ownership and control. The state was far from being an irrational entity rooted in archaic principles. On the contrary, it was decisive in shaping the relationship between foreign capital and land. Exogenous changes of property rights helped King Leopold to capture land in the Congo basin. The literature on state formation in early Europe contends that revenue bargaining process in which the state exchanged influence over public policy with tax revenues from citizens contributed to state building. Economic history of the CFS seems to suggest a similar interpretation with a caveat, however.The state-​building process in the CFS took the form of increasing state penetration to pursue extraction, but public interest was not part of the equation. The CFS apparatus provides evidence of the role of taxation as a predatory instrument to accumulate wealth at the expense of economic development.

Notes 1 The data are from diverse sources. From 1989 to 1914 refer to Flament (1952: 252); from 1915 to 1959 see Belgium (annual 1911–​1929, 1930–​1954, 1955–​1959); and from 1960 to 2014 refer to USA, Department of State (annual 1961–​2015). 2 Octave Louwers cited in Vanthemsche (2012: 27), footnote 35. 3 In 1900, the CFS had 1,100 white men and only 82 white women, but 62 of whom were nuns (Lauro 2005: 78).

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60  The Leopoldian state De Roo, B. (2017) “Taxation in the Congo Free State, An Exceptional Case? (1885–​ 1908),” Economic History of Developing Regions 32(2): 97–​126. De Saint Moulin, L. (2011) Atlas de l’Organisation Administrative de la République du Congo, Kinshasa: CEPAS. Demsetz, H. (1967) “Toward a Theory of Property Rights,” American Economic Review, Papers and Proceedings 57(2): 347–​359. Denuit–​Somerhausen, C. (1988) “Les Traités de Stanley et de Ses Collaborateurs avec les Chefs Africains, 1880–​1885,” in Le Centenaire de l’Etat Indépendant du Congo, Recueil d’Etudes, Brussels: Académie Royale des Sciences d’Outre–​Mer: pp. 101–127. Dickerman, C. and Northrup, D. (1982) “Africanist Archival Research in Brussels,” History in Africa 9: 359–​365. Flament, F. (1952) La Force Publique: De Sa Naissance à 1914, Brussels: Institut Royal Colonial Belge, Section des Sciences Morales et Politiques. Gann, L.H. and Duignan, P. (1979) The Rulers of Belgian Africa, 1884–​ 1914, Princeton: Princeton University Press. Guinness, H.G. (1890) The New World of Central Africa: With a History of the First Christian Mission on the Congo, New York: F. H. Revell. Harms, R. (1975) “The End of Red Rubber: A Reassessment,” The Journal of African History 16(1): 73–​88. Hochschild, A. (1998) King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa, Boston: Houghton Mifflin. Huybrechts, A. (1970) Transports et Structures de Développement au Congo: Etude du Progrès Economique de 1900 à 1970, Paris: Mouton. Joye, P. and Lewin, R. (1961) Les Trusts au Congo, Brussels: Société Populaire d’Editions. Kivits, M. (1992) “Développement des Services de Santé,” in P.G. Janssens, M. Kivits, and J. Vuyleskeke (eds.) Médecine et Hygiène en Afrique Centrale: De 1885 à Nos Jours, Brussels: Fondation Roi Baudouin: pp. 83–160. Lauro, A. (2005) Coloniaux, Ménagères et Prostituéss au Congo Belge, Loverval: Labor. Leclercq, H. (1966) “Un Mode de Mobilisation des Ressources: Le Système Fiscal. Le Cas du Congo pendant la Période Coloniale,” Cahiers Economiques et Sociaux 3(2): 95–​141. Leclercq, H. (1968) “L’Inflation, sa Cause: Le Désordre des Finances Publiques,” in M. Norro and H. Leclercq (eds.) Indépendance, Inflation, Développement. L’Economie Congolaise de 1960 à 1965, Paris: Mouton, pp. 51–177. Lejeune–​Choquet, A. (1906) Histoire Militaire du Congo. Explorations, Expéditions, Opérations de Guerre, Combats et Faits Militaires, Brussels: Maison d’Edition Alfred Castaigne. Lopasik, A. (1971) Commissaire Général Dragutin Lerman 1863–​1918: A Contribution to the History of Central Africa, Tervuren: Musée Royal de l’Afrique Centrale. Louwers, O. (1905) Lois en Vigueur dans l’Etat Indépendant du Congo, Brussels: P. Weinssenbruch, Imprimeur du Roi, Editeur. Markowitz, M.D. (1973) Cross and Sword:The Political Role of Christian Missions in the Belgian Congo, 1908–​1960, Stanford: Hoover Institution Publications. Nzongola-​Ntalaja, G. (2002) The Congo from Leopold to Kabila: A People’s History, London: Zed Books. Peemans, J.-​P. (1975) “Capital Accumulation in The Congo under Colonialism: The Role of the State,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​1960.

The Leopoldian state  61 Volume 4: The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 165–212. Peemans, J.-​P. (1997) Le Congo–​Zaïre au Gré du XXe Siècle: Etat, Economie, Société 1900–​1990, Paris: L’Harmattan. Ranieri, L. (1973) Léopold II, Urbaniste, Brussels: University of Brussels Press. Roos, A. (2010) “Towards a History of Mass Violence in the Etat Indépendant du Congo, 1885–​1908,” South African Historical Journal 62(4): 634–​670. Samarin, W.J. (1989) The Black Man’s Burden: African Colonial Labor on the Congo and Ubangi Rivers, 1880–​1900, Boulder: Westview Press. Sanderson, G.N. (1985) “The European Partition of Africa: Origins and Dynamics,” in R. Oliver and G. N. Sanderson (eds.) The Cambridge History of Africa. Volume 6, c. 1870-​c.1905, Cambridge: Cambridge University Press, pp. 96–158. Slade, R. (1962) King Leopold’s Congo, London: Oxford University Press. Stengers, J. (1953) “Correspondance Léopold II–​ de Cuvelier,” Bulletin IRCB, 24: 824–​837. Stengers, J. (1957) Combien le Congo a–​t–​il Coûté à La Belgique? Brussels: Académie Royale des Sciences Coloniales. Stengers, J. (1969) “The Congo Free State and the Belgian Congo before 1914,” in P. Duignan and L. Gann (eds.) Colonialism in Africa, Cambridge: Cambridge University Press, pp. 261–292. Stengers, J. and Vansina, J. (1985) “King Leopold’s Congo, 1886–​1908,” in R. Oliver and G.N. Sanderson (eds.) The Cambridge History of Africa, Cambridge: Cambridge University Press 315–358. USA, Department of State (1961–​2015, annual) World Military Expenditures and Arms Trade, Washington, D.C.: Government Printing Office. Vanthemsche, G. (2012) Belgium and the Congo, 1885–​1980, Cambridge: Cambridge University Press. Weisbord, R. G. (2003) “The King, the Cardinal and the Pope: Leopold II’s Genocide in the Congo and the Vatican,” Journal of Genocide Research 5(1): 35–​45. Wrigley, C.C. (1986) “Aspects of Economic History,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, 77–139. Yates, B.A. (1971) “African Reaction to Education:The Congolese Case,” Comparative Education Review 15(2): 158–​171. Young, M.C. (1965) Politics in the Congo: Decolonization and Independence, Princeton: Princeton University Press.

3  Political order and rule of law in the Belgian Congo

The CFS became the Belgian Congo on 15 November 1908 with a new administration.The role of this new structure was to carry out reforms to make the colony more humane than the CFS. These reforms, however meritorious, never brought about a complete reversal of policy. Belgian officials continued to emphasize humanitarian ideals that King Leopold II so loudly professed from 1878 to 1908. The simple message taught to Belgian schoolchildren after 1908 was “one of patriotic fervor that their country, in the persons of brave and self-​sacrificing individuals, had brought the light of Christianity and civilization to a savage and heathen continent” (Ewans 2003: 170). Paternalism associated with these ideals implied that the Belgian government could legitimately deny political rights to Africans as long as their social and economic needs were properly met. The first institutional reform was the Colonial Charter to administer and rule the Belgian Congo. A key factor in the charter was that both the king and the parliament would jointly exercise legislative power over the colony. Parliamentary approval became a necessary condition to change any colonial policy. The second reform was the colonial judicial organ, which represented the second veto player to the king’s authority in colonial matters. A royal decree promulgated on 25 October 1908 created the ministry of colonies with the mission to administer the Belgian Congo. This new body was the third constraint on royal power. The king could legislate through decrees proposed by the minister and only countersigned by him. The minister of colonies was a full member of the cabinet and had legislative power since the parliament could not manage all policy details dealing with the Belgian Congo. Except in emergencies, the minister had to submit his decrees to the Colonial Council before he could officially enact them. This was a consultative body comprised of the minister of colonies and 14 councilors: eight appointed by the king and the rest by the parliament. The minister of colonies also represented the colony in the Belgian parliament, formulated the colonial legislation, prepared the colonial budget, issued instructions to the government in the Belgian Congo, and exercised general supervision of the colony among many other functions (Vanhove 1968). DOI: 10.4324/b23045-3

Political order and rule of law  63 As stated in Chapter 1, the first minister of colonies was Jules Renkin, a former minister of justice. Twenty-​nine appointed ministers of colonies succeeded each other in the administration of the Belgian Congo until independence. However, only 23 names held the job because six ministers were appointed twice. Ministers of colonies were mostly associated with the Catholic Party, later the Social Christian Party, in coalition with the Belgian Liberal Party thus explaining the continuity in policies that favored the Catholic Church and a few big Belgian businesses (Vanthemsche 2012). The former was able to control the administration and the formulation of colonial policies because it was represented in most Belgian coalition governments, except for only five years and nine months. The Social Christian Party always tried to have the ministry of colonies by trading ministerial portfolios in the coalition governments. From November 1908 to June 1960, it had 23 appointed ministers out of 29, while the Liberal Party had five. The Socialist Party had one, Lode Craeybeckx, who was in power for only 18 days (from 13 March to 30 March 1946). Seven governors-​ general out of ten in the Belgian Congo were also affiliated with the Catholic Party. Thus, the Catholic Church was the colonial state. Since ministers of colonies were also members of the cabinet, their policies were highly dependent on the political coalition in the Belgian government. Colonial policies of the Social Christian Party were sustained during the entire colonial period. As a result, colonial issues created little debate in the Belgian parliament and the political circle maintained a consensus on the basic principles of colonial policies. This consensus was manifested in the high moral civilizing mission of Belgium and left no room for debate. All political parties agreed on the cogency of Belgian sovereignty over the colony by constantly complaining that the “people of the Belgian Congo should be taken care of because they were the most primitive people on earth” (Vanthemsche 2012: 45). Therefore, King Leopold’s atrocities were buried in what one observer called “Belgian amnesia” (Ewans 2003: 170). The second reform after the annexation followed practices dating back to the CFS. A royal decree of 28 July 1914 reorganized the colony by incorporating the districts into four provinces: Congo-​Kasai, Equateur, Orientale, and Katanga. The last administrative reform occurred in 1933 when the colonial administration established six provinces: Leopoldville (with five districts), Equateur (four districts), Constermansville (later Kivu, with three districts), Elizabethville (later Katanga, with four districts), Orientale (four districts), and Lusambo (later Kasai, with four districts). In 1958, each district had several territories for a total of 134 territories in the colony. Territories included 343 chieftaincies and 523 sectors (Belgium 1959). Another Leopoldian legacy concerns the chiefs. After 1908, a halfhearted attempt was made to restore traditional authorities by creating chieftaincies and sub-​chieftaincies. Although colonial administrators theoretically recognized the authority of hereditary chiefs, every effort was made to weaken them and even

64  Political order and rule of law to replace uncooperative chiefs with trustworthy elements whose only claim to chieftaincy was their personal loyalty to the colonial enterprise. The colonial administration also appointed its own chiefs or puppets in former acephalous societies. A related Leopoldian legacy after 1908 was forced labor. A decree of 5 December 1933 set 60 days per year of this labor, which was reduced to 45 on 29 December 1955. A final Leopoldian legacy was a coercive state apparatus. Belgians ruled their colony in a climate of authoritarianism coupled with a massive dose of racism under the paternalistic assumption that “Negroes have the souls of children, souls that mold themselves to the methods of the educator” (Mottoulle 1946: 54). Political order had to be carried out by all means. The colonial state used almost the same instruments of coercion as its predecessor, but with different sets of incentives. Unlike the CFS, it never employed the private business sector to establish political order. It relied on the missionaries, its army, and the colonial administration including traditional authorities to provide political order. The colonial state was able to supply political order for more than 40 years and the rule of law for at least 30 years (see Table 2.2). This chapter starts with the missionaries in policing Africans.

Christian missionaries The first administration headed by Minister of Colonies Renkin from the Catholic Party continued Leopold’s policy of favoring the Catholic Church whose primary mission was to educate and indirectly to subdue Africans through Christian teaching of obedience. The Church’s main instrument of control was moral to ensure that Africans understood and willingly accepted the civilizing mission of colonization. Belgian policymakers hoped that the feeling of respect, fear, subservience, and high supreme authority that the missionaries had to instill would make it possible to govern most areas of the Belgian Congo with a fair degree of peace with a minimum use of force. A former minister of colonies phrased it in the following terms: “Only the Christian-​Catholic religion, based on authority, is capable of changing native mentality, of giving to our Africans a clear and intimate consciousness of their duties, of inspiring in them respect for authority and a spirit of loyalty toward Belgium” (Franck 1930: 208–​209). The Catholic Church had two moral instruments to help provide political order. First was to preach humility, repentance, and poverty to make Africans police themselves. Humility not only implied turning the other cheek but also obedience to authorities. Repentance meant God’s forgiveness through confession. Unexpectedly, colonial police investigators were able to solve miraculously most serious crimes because priests were likely to report them to colonial authorities after private confessions. Finally was to preach poverty. The Church inhibited any sense of thrift or upward social mobility among Africans. However, it never asked Europeans to avoid accumulating wealth at the expense of Africans.

Political order and rule of law  65 The second instrument was to make sure that Africans did not interpret the Bible directly like what occurred in the British colonies. Most Catholic priests even accused the Protestants to encourage a sense of independence and rebellion against authority, which was a direct outcome of free examination of the Scripture. One Catholic prelate wrote in 1927, “Protestantism ordinarily has the effect of introducing a spirit of pride and independence, which renders access to grace extremely difficult. This spirit of independence, “born of libre examen, has rapidly led primitive peoples to adopt a mentality of revolt against all authority, whether religious or political.”1 This view was partly correct because most millennial and syncretic movements would originate from former Protestant catechists.These movements combined Christian symbols and traditional belief systems. They would challenge the Christian missionary establishment and, indirectly, the state. Simon Kimbangu was among the first prophets to emerge in Bas-​Congo on 6 April 1921. He was a BMS catechist for many years. God asked him in a vision to preach the gospel of liberation against all forms of oppression (Anderson 1958). The news spread quickly throughout the region that a prophet and a miracle-​worker had arisen and who was curing the sick and helping the weak. Crowds could be seen streaming toward Kimbangu’s village of Nkamba. Hundreds of workers abandoned their jobs to hear the new prophet about self-​reliance, liberation, and racial pride (Anderson 1958). The administration issued an arrest warrant, but Kimbangu and his assistants turned themselves in to local authorities in September 1921. He was tried and condemned to death, but a royal decree reduced his sentence to life in prison. Although Kimbangu died in Elisabethville in 1951, his message lived on because other similar movements followed almost everywhere in the colony and were a direct challenge to colonial rule. One of these messianic and syncretic movements was the Kitawala (to rule). This was an African version of American Watch Tower. It penetrated in southern Katanga in 1925 from Northern Rhodesia (today Zambia) and shook the copperbelt region. Its leaders preached the view that ancestors would resurrect and make Africans rich, but the latter had to abandon their agricultural activities. Moreover, “blacks would become whites and vice versa as long as people abandon jobs and schools that were created by whites” (Lovens 1974: 36). The Belgian administrator countered this anti-​colonial movement by the application of the “residence law” through relegations (Belgium 1926: 11). The law consisted of arresting and banishing leaders of these movements from their villages. They were then sent to maximum security facilities called agricultural colonies for dangerous relegated people located in Ekafera (Equateur province), Kasaji (Katanga), Lubutu (Orientale), and Belingo (Leopoldville). Figure 3.1 highlights the widespread intensity of these movements (Belgium 1919–​1929, 1930–​1954, 1955–​1958, annual). The number of relegated leaders jumped during the Great Depression as the authorities strictly apply policies of forced labor. The Leopoldville province had the most relegations since the Kimbangu movement attracted many followers in the region. The Katanga mining

66  Political order and rule of law

Figure 3.1 Number of relegations, 1920–​1960

province followed as a result of the spread of Kitawala. One major revolt by Kitawala followers occurred in Lubutu and Masisi from January to May 1944. It started when the colonial administrator relegated Kitawala’s leaders from Katanga to Oriental Province. The government transferred these Kitawala leaders to Muslim communities in Lubutu hoping that these Muslims would show indifference towards Kitawala and the movement would die. However, the movement persisted because its leaders targeted non-​Muslims. The relegated began preaching among workers of the Comité National du Kivu (CNKi) in Muhulu, sector of Mandimba-​Wasa. Most relegated leaders were so cleaver that their underground propaganda, which began in 1937, became only apparent to colonial administrators five years later. In 1942, the whole area of the sector Mandimba-​Wasa in Lubutu territory was under Kitawala’s leader Bushiri and his disciple Alleluya (Lovens 1974). Bushiri called himself “savior” and announced that he had “a celestial dream to liberate blacks from the yoke of colonialism” (ibid.: 145). He asked his followers to stop working for the white man and to refrain from paying taxes. The colonial government carried out several military operations to subdue the movement. It arrested Bushiri and many of his followers. They were all sentenced to death in 1945. The government adopted the ordonnance no 21/​9 on 12 January 1949 that prohibited the Kitawala movement across the colony, but the movement continued its clandestine work in eastern Congo.

Political order and rule of law  67 Another major cause of millennial and syncretic movements was Catholic missionaries’ campaigns and efforts to undermine and disrupt the dynamics of local culture. In their mission to civilize Africans, Catholic missionaries were fierce adversaries of Congolese cultural practices, values, and institutions they deemed repulsive. Their first target was polygamy and Catholic missionaries used the native courts to curtail the practice. They also campaigned “to abolish bride-​wealth, methods of breast-​feeding, natural long intervals between births, and other African institutions that shaped sexual behaviors and practices as well as social and biological reproduction they deemed obscene, repulsive, or immoral” (Likaka 2009: 50). On the positive side, however, Catholic missionaries carried out many projects including building schools, dispensaries, and hospitals as discussed later in Chapter 4. Where Catholic missions did not own a clinic, they ran and worked in privately owned or state hospitals. If Catholic missionaries remained silent during the atrocities committed by King Leopold’s agents before 1909, they became quite vocal after the annexation of the CFS to Belgium. Catholic missionaries “were unyielding critics of the mandatory cash crop cultivation, particularly, where it caused nutritional deficiencies” (ibid.: 49). They also served as safe havens to women whose behavior challenged existing traditional norms.This group of women included widows, who, because of the widespread practice of levirate, could end up in polygamous unions. Moreover, Catholic missions became “sanctuaries of female adolescents who objected to arranged marriages and had run away from the authority of family and lineage” (ibid.: 49). In a sense, Catholic missions played an ambiguous role in the colonial history.

Army and police Brussels inherited from the CFS an army called the FP. This instrument of violence was an undisciplined corps of soldiers roaming in the countryside in the hands of territorial administrators. One complaint from Boma, the capital city of the CFS, in the late nineteenth century was that territorial administrators appropriated not only African soldiers for non-​military functions, but they had also done the same regarding European officers and NCOs. Soldiers were mostly used to collect rubber and taxes. One year after being in the office, Minister Renkin asked Governor-​general Wahis to create a police force that would be under the control of territorial administrators.The goal was to relieve the army of police duties. He abandoned the idea but approved instead a proposal to split the FP into an army and a police force.The former would be subordinate to military commanders and the latter would be answerable to the governor-​general. This attempt to reform the army failed and its organization remained unchanged until the First World War. In late 1914, the Belgian ministry of defense rated the FP’s capability as “weak and leaving much to be desired” (Belgium 1916: 85). Despite this declaration, the FP showed some improvements. First, army commanders started incorporating drills to create some discipline among the

68  Political order and rule of law ranks. Second, regular pay and weekly food allowances to soldiers became institutionalized. The army became less dependent on looting and local requisitions of food supplies (Gann and Duignan 1979: 79). The number of genuine volunteers began to increase as the children of both soldiers and soldiers’ servants decided to follow the footsteps of their fathers by joining the army. The role of the army as a domestic police force changed to external defense on 15 August 1914 or 11 days after Germany invaded Belgium. In order to confront Germans in East Africa, the Belgian government endowed the colonial army with an autonomous command structure under Charles Tombeur, then vice governor-​general of Katanga. The government initiated an official decision in January 1915 to undertake a combined military offensive with the British against German troops in East Africa in April. However, the FP was not exactly a body made to defend national borders. As a result, there was a delay of 16 months between the beginning of the military campaign and the first real offensive of the FP into German territory (van Reybrouck 2014: 133). The second offensive against German forces in Tanganyika occurred in April–​ October 1917. Congolese troops also fought in Cameroon and Rhodesia. More than 15,000 soldiers were needed during the war years and “no less than 260,000 native bearers –​out of a population of less than ten million inhabitants” were involved in the campaign (van Reybrouck 2014: 133). The miners in Katanga also worked like slaves. As a result, copper exports increased from 52 million BF in 1914 to 164 million CF in 1917 since the British and American shells had brass casings made of 75 percent from Katangan copper (ibid.: 137). Congolese were also forced to cultivate cash and food crops. The FP under Major-​General Tombeur emerged from the First World War victorious by defeating German forces in Cameroon (in 1941), Rhodesia (1942), and German East Africa (1916 and 1917). The first two involved relatively small-​scale operations.The victory of the Congolese troops over German troops helped to preserve colonial boundaries in eastern Congo. Once back home, the role of the army was reduced to keep political order. Contrary to the Belgian Congo, the end of the First World War witnessed the first sign of discontent in the French colonial empire. African troops fought against German troops in Europe and saw many poor Europeans struggling economically and others working in menial jobs. This was an eye opener for African soldiers. Once back home they became active promoters of social change (Coquéry-​Vidrovitch 1986: 359). They obtained pensions and certain privileges from the French government. However, Congolese soldiers returned home to their former subordinate position without any change in their social condition. Minister Renkin reiterated once more the need to reform the army after the war. He appointed a commission made of nine military officers and a few civilians. The commission’s recommendation was to reverse the previous subordination of the military to civilian authorities. This caused an adverse reaction within the civilian hierarchy that later contributed to the swift demise

Political order and rule of law  69 of all the commission’s recommendations. However, Renkin accepted two key recommendations of the 1918 commission: splitting the FP into colonial troops (troupes coloniales) for external mission and territorial police (police territoriale) for internal security. On 15 August 1918, a royal decree incorporating these provisions was signed into law (Belgium 1919: 3). In December, the governor-​general published a list of 44 territories in which this form of rule would be established: five in Katanga, 14 in Orientale province, 15 in Equateur, and ten in the Congo-​Kasaï (Belgium 1919). This new law was a victory of the military establishment over civilians. It did not go into effect until the end of the year. By that time, Louis Franck had replaced Renkin as minister of colonies. On 10 January 1919, Franck ordered the governor-​general to refrain from any reorganization of the army. The defeat of Germany meant no political threat and no fear of seeing colonial borders being violated in the near future. The end of the war also implied that the army’s mission should be consistent with peacetime efforts to build society, to maintain order, and to defend the territory.The minister of colonies also pointed out that “a war army was costing too much and was not needed after the war” (Belgium 1920: 13). Franck proposed a compromise and suggested one unified force. A decree promulgated on 10 May 1919 by Governor-​general Eugène Henry applied this new formula and was the first official act to restructure the FP so that it could ensure the real occupation of the colony and defend it (Belgium 1920). The decree divided the army in two subdivisions.The first was called troops for territorial service (troupes en service territorial) under vice governors-​general and territorial administrators. Their mission was to assure internal security, the occupation, and the policing of the colony. The second was called camped troops (troupes campées) whose mission was external. The army came under the command of a major general and civilian authorities. Unlike troops for the territorial service that did not have any major training, the camped troops and their specialized units had to receive military formation given their external primary mission. These units included engineers, artillery units, telegraphers, and many other specialized bodies. Some battalions had to be deployed in the areas of the colony considered most vulnerable to external threat. Beyond these very general provisions, the 1919 decree was deliberately vague regarding the relationship between the two branches of the army and hence provided the governor-​general freedom of action to organize the colony the way he thought was possible in order to provide political order. The number of soldiers of the FP was set at 16,000 by a royal decree and averaged 16,252 per year until 1960 (see Figure 2.1).This size was probably high “in relation to the total population of the territory by comparison with other parts of colonial Africa” (Jewsiewicki 1986: 471). The Nigerian army counted 3,500 men and military establishments elsewhere in the British colonial Africa were much smaller in relation to the total population (Roberts 1986: 49). The population of the Belgian Congo in 1920 was approximatively ten million,

70  Political order and rule of law Table 3.1 From military and police operations to maximum public order Years 1908–​1919 1920–​1929 1930–​1939 1940–​1949 1950–​1958

Military operations

Police operations

39 2 3 1 0

137 14 16 1 0

Military occupations and promenades 0 96 68 0 0

Source: Belgium (1910–​1923, 1930–​1954, 1955–​1959, annual).

while that of Nigeria was approximatively 17.86 million. This provides 160 soldiers per 100,000 Congolese against only 20 soldiers per 100,000 Nigerians. This disparity explained the easiness by which colonial troops in the Belgian Congo were able to carry out disciplinary expeditions in the colony as illustrated by Table 3.1. Brute military force characterized the first phase of early penetration of the colonial rule. The administration used 39 military operations and 137 police operations from 1908 to 1919 to subdue all early forms of resistance. Colonial administrators justified these operations to make Africans participate in the state-​building enterprise. However, these operations declined considerably after the 1910s because most open rebellions against the state had rescinded. By the late 1920s, the government replaced military and police operations by military occupations and promenades. District commissioners used military occupations whenever they were dissatisfied with any chieftaincy’s performance in collecting taxes. Military promenades were reconnaissance missions mandated by territorial administrators.They were mostly “pacific and consisted of visiting communities to organize the area of contention and to carry out periodic inspections and deployments of force to impress the natives with the power of the colonial authority” (Belgium 1924: 27). The highest number of military occupations occurred in the 1920s and during the Great Depression. Given the size of the Belgian Congo, the state had penetrated the colony by the late 1920s. Most major military operations were down to zero by the mid-​1930s because the colonial administration had established political order throughout the colony. Of course, the rule of law also helped to restrain Belgian rulers from opportunistic behavior and massive abuses of power. Unlike the Leopoldian army that was mostly made of mercenaries and unwanted members of the community, the colonial administrator began a timid professionalization of the army just before the First World War by imposing the drill more systematically and a life of punctuality in the barracks. The government relaxed this mission after the war. As a result, soldiers restarted their life of pillaging in the countryside. The mid-​1920s witnessed two more substantive attempts to increase the control of civilian authorities over the military. In late 1926, Minister of Colonies

Political order and rule of law  71 Edouard Pecher from the Liberal Party initiated his own policy to resolve the problem posed by the army organization. He proposed to relieve troops of territorial service of their police missions by creating from scratch a separate administrative police force independent of the FP. The proposal emphasized a new administrative police corps that would be created from scratch with its recruits coming from former army soldiers. The two attempts attested to the recognition of the gravity of indiscipline among the ranks. The minister remained in office only 41 days and his attempt to reform the army failed as a result of opposition from colonial administrators who feared losing control over their instrument of coercion. Disciplinary problems within the troops of territorial service remained particularly acute. Then, a decree of 22 November 1926 created a separate police force as a supporting cast under the authority of territorial administrators (Belgium 1927). Unlike the army, the police force was locally recruited to maintain public order, investigate crimes, and other unlawful acts as well as to implement the law at the territorial and local levels (Piron and Devos 1959: 375). It was at this juncture that Prime Minister Henri Jaspar took the direction of the ministry of colonies in January 1927 and remained until October 1929. By the late 1920s, the colonial army provided a new ladder of social mobility in the eyes of most Africans. The government became keen to enlist a large number of married men. Each wife received a regular weakly food allowance. The colonial administrator also increased recruitment of children of soldiers to fill the ranks.These policies reinforced the reproduction of the army and began its real professionalization. The administration built clean barracks with potable water to house soldiers and schools for their children. Each major barrack had a well-​equipped and well-​staffed hospital. One major legacy in recruiting soldiers dating back to the CFS remained the emphasis on ethnic groups that the agents of King Leopold II called martial races. From 1915 to the 1920s, recruitment of soldiers followed almost the same practice. In subsequent years, however, the colonial administrator recruited an equal number of people in every corner of the Belgian Congo. The reason behind this change of policy was the belief among Belgian authorities that most mutinies originated from these martial homogenous military groups. The colonial state also started questioning the fight capability of these martial races. Although it was undeniable that the state subscribed to this cliché in recruiting its soldiers, it was equally apparent that throughout the CFS and in the early colonial period, recruits were drawn largely from the physical, social, and educational margins of traditional societies. While these societies may have been described as “fierce and warlike,” the colonial administrator also found regrettably that its recruits fell far short of this cliché. Military officers and their NCOs never had control over the primary selection of their own recruits. Local civilian authorities were the sole designators of who would serve in the FP. Another reform in recruitment was to curtail the long journey to training camps that averaged at least seven weeks before the 1930s.The new army commander, Leopold de Koninck, endorsed a full-​fledged provincial recruitment

72  Political order and rule of law whereby all recruits had to be sent to their nearest provincial training camps. He also requested to train recruits in their own provinces by mixing tribes. These new policies reduced the travel time by 66 percent and mortality rate of recruits from 5.34 percent in 1925 to 1.48 percent in 1931 (Belgium 1932: 74). The colonial state also used tactical exercises and military sporting events as early as 1930 to increase esprit de corps and attract army volunteers. The most important reform of the army was its professionalization. It refers to expertise, commitment, and exclusiveness that allow state managers to control and manage the use of violence. First, the colonial state began educating soldiers into different areas of the army and weapons. In addition to “learning by doing,” a new type of knowledge in the use of sophisticated instruments of violence required some basic education. Thus, the FP acquired artillery units and other mechanized units according to expertise. Moreover, the army leadership began to train African gradés (highest rank soldiers) in the more traditional military skills, like tactics, drills, and instruction of recruits. In sum, soldiers learned skills and knowledge they needed to perform their duties. The state also instilled a sense of duty and loyalty. A major military periodical, Nsango na biso (Our News), and military radio broadcasting system became forums for the cultivation and dissemination of knowledge and esprit de corps to manage violence. Colonial administrators also increased the level of soldiers’ commitment to defend the territory through public works and honoring the colonial flag as a symbol of the nation. Finally, state managers increased soldiers’ exclusiveness by sporting events and public shores to reinforce esprit de corps. Soldiers became accustomed to learn that their function was different and unique from other members of society. The colonial administrator was able to maintain political order as indicated by a drastic decline in both military and police operations by the late 1920s despite a major revolt in the Kwilu region in May 1931 known as the Pende revolt. It was perhaps the most publicized revolt in the Belgian press because it occurred in one of the concessions of the Huileries du Congo Belge (HCB), a subsidiary of the British–​Dutch Univeller Company.The colonial army cracked down the revolt with more than 500 Pende killed (Sikitele 1973). The socialist minister in the coalition government, Emile Vandervelde, stated before the parliament that the revolt was sparked off over-​exploitation of the native workforce by the HCB (Brion and Moreau 1998: 321). This accusation aroused public opinion and provoked storms of protest in colonial circles and the urgency to reform. The revolt of the Pende was perhaps an isolated case because no other revolt of such magnitude occurred in the Belgian Congo during the Great Depression compared to other European colonies that were still struggling to maintain political order. For example, the French government established some semblance of political order in its empire only in the mid-​1930s. Not until 1934 could the French claim that their pacification campaigns had successfully crushed the last Islamic resistance in their Saharan territories (Stewart 1986: 197). Furthermore, the last memorable rebellion in the French Equatorial Africa began in 1924

Political order and rule of law  73 when a prophet known as Karinou, whose real name was Barka Ngainombey, started sermonizing against French colonial methods. He used to preach by holding two batons of leadership and one of them was shaped in the form of a hoe (kongo wara).The revolt became thus known as the Kongo Wara Insurrection. It mobilized 50,000 people among the Gbaya ethnic group in Ubangi-​Shari against 1,000 colonial infantry and guards (Faes and Smith 2000: 285). The deadliest confrontation occurred on 11 December 1928 in which Karinou was killed, but the revolt continued until 1931 and caused the death of thousands of people (Saulnier 1997: 101). The scale of this rebellion is not comparable to the Pende revolt in the Belgian Congo. This is not to minimize the Pende revolt, but to compare the two revolts given the same reasons behind them.The Belgian Congo remained relatively calm after the Pende revolt. The advent of the Second World War would put more burden on soldiers and Congolese working in plantation and mining companies. More specifically, the FP’s mission quickly shifted from domestic to external protection after the invasion of Belgium on 10 May 1940 by Germany. King Leopold III bowed to German victory after the capitulation of his army on 28 May. On 18 June 1940, a decree gave Minister of Colonies Albert De Vleeschauwer full legislative and executive powers to manage the Belgian Congo as its administrator-​general. He contacted big companies doing business in the colony who contested the decree. Nonetheless, the minister urged them to transfer their headquarters to Portugal, Great Britain, Canada, or the USA. However, they all refused and showed their intention to return to Belgium as quickly as possible since they followed King Leopold III’s decision to accept German victory as final (Brion and Moreau 1998: 339–​340). Some business leaders even told the minister that acting otherwise “would not be loyal towards Germany.”2 However, the management of the London office of the Banque du Congo would change the course of history when it signed on 25 June 1940 an agreement with the British authorities that “London office will accept no instructions from any office of the Central Bank of the Belgian Congo in continental France or in territory occupied by or under the control of the enemy” (Vanthemsche 2012: 125). Then, Governorgeneral Ryckmans joined the allies and the Belgian government of Prime Minister Hubert Pierlot in exile in London. Ryckmans mobilized the FP and invited natives to enlist.3 The Belgian Congo would then finance the Belgian government in exile in London for four years by lending it more than seven billion BF (Baudhuin 1958: 31–​32). The Second World War lasted four years. The role of the Belgian Congo was decisive against Italian troops in Ethiopia. Under Major General Auguste Gilliaert, colonial troops headed to Ethiopia to counter Italian troops. Some 3,000 Congolese soldiers and 2,000 bearers took part of the offensive (van Reybrouck 2014: 183).Their first goal was to attack Italians’ held town of Asosa located about 300 miles north of Italians’ headquarters at Saio. The combined attack of the Congolese troops and the British King’s African Rifles began on 11 March 1941. Italian troops were taken by surprise and abandoned Asosa a few weeks later. The second mission of the FP was to take

74  Political order and rule of law Gambela, hundreds of miles away from Asosa. After Congolese troops took Gambela, they made their way toward Saio, which they stormed on 15 April. Italian troops surrendered on 3 July: nine Italian generals, 370 officers (45 of them high ranking), some 2,574 non-​commissioned soldiers, and 3,533 native soldiers (van Reybrouck 2014: 184). The FP was thus instrumental in Haile Selassie’s return to the throne (ibid.: 185). After this victory, smaller detachments of FP relieved Free French units in Madagascar in the summer of 1942 and British troops in Nigeria and Palestine in 1943. A group of Congolese medics known as the 10th Belgian Congo Casualty Clearing Station also assisted the British in Burma where it carried out a number of operations. By early December 1944, all army units were back in their barracks in the Belgian Congo. However, soldiers were less impressed by the colonial regime that was defeated by Germany in 1940.They also became aware of their bravery in the battlefields. In 1946, Belgium received the farewell speech of Governorgeneral Ryckmans, who urged Brussels to change its social policies toward the colony and to carry out some type of “developmental colonialism” or native welfare (van Reybrouck 2014: 202). Although soldiers were not adequately compensated by their performance during the Second World War, one result of the war was to professionalize further the FP. First, the FP learned to maneuver different and new sophisticated artilleries.4 The British supplied the FP with two types of anti-​Aircraft defenses during the war: the short range Mk.III and the heavy AA guns called Vickers QF 3.7. Also, the FP was equipped with motor vehicles including the armored M8 Greyhound cars. The USA shipped a number of these vehicles to the Belgian Congo after the war. These cars were armed with a 37 mm gun and a M2HB browning 0.50 caliber machine gun. The end of the war also witnessed the first army mutiny in the Belgian Congo by Congolese gradés under First Major-​Sergeant Ngoie Mukalabushi, a veteran of the East African Campaign. The mutiny occurred in Luluabourg (Kasai province) on 20 February 1944 (Belgium 1946). The Luluabourg garrison had a large proportion of discontented soldiers from the Luba ethnic group. Many gradés, who served in Ethiopia, Nigeria, and the Middle East, “had known better conditions there and refused to accept the low pay and the lack of respect for their dignity” (Fetter 1969: 274). The soldiers at Luluabourg also resented the seven-​year term of conscription that forced them to cut almost all ties with their families (ibid.).The trigger of the mutiny was a plan to vaccinate the troops who had served at the front, after they had learned that “early in the war a group of conscripts at the Watsa camp in northeastern Congo who were awaiting transport to Ethiopia were inoculated with a defective batch of smallpox vaccine from which they died” (ibid.: 273). A few weeks after this tragedy, the survivors were served meat from cans whose trademark was a smiling African; they concluded that white officers killed their comrades for meat (Fetter 1969). The rumor spread to the Luluabourg garrison where the soldiers were ready to defend themselves with their lives at the threat of vaccination (ibid.: 273).The

Political order and rule of law  75 mutineers attacked many visible signs of colonial authorities and proclaimed their desire for independence. They then dispersed to the countryside trying to reach their home villages by pillaging on the way, but they failed to spread the insurrection to neighboring garrisons. The government version of the mutiny was that provincial recruitment policy within the same territory was the main cause of the mutiny (Belgium 1946: 12). Luba soldiers were used within their own region of origin. The government strongly recommended thereon for a strategy of “mixing races” once again. The revival of old fears of “tribal loyalties” in the FP spelled the end of provincial recruitment. Finally was the atomic bomb that the USA dropped in Hiroshima and Nagasaki to defeat Japan.The US Manhattan project to make the bomb needed a lot of uranium to be able to separate out enough uranium for the project. Two-​thirds of the uranium used for the project came from Shinkolobwe Mine in the Belgian Congo. For a long time, the source of uranium ores was kept a secret and the contribution of the Belgian Congo was overlooked. Credit was given instead to the other source of the ore or one-​third from the Northern Territories of Canada that was used up earlier in the Manhattan Project (Williams 2016) although uranium from the Belgian Congo built the atomic bomb. The effects of the uranium mining of Shinkolobwe was devastating for more than 10,000 miners and their families. It caused illnesses and deformities of Congolese miners because the UMHK never implemented any safety measures. They were neither compensated by the Belgian government nor by the UMHK and even not by the USA. Instead of providing monetary compensation to Shinkolobwe’s miners or their surviving families, the USA gave Belgium a few million dollars in exchange and also granted it access to nuclear technology. A research center was also set up in the town of Mol in 1952 and a small reactor was installed in Leopoldville, the first of its kind in Africa (van Reybrouck 2014: 190). In brief, political order in the Belgian Congo was a result of the size of the military in relation to population. Contrary to British colonies and most parts of the French empire whose military size remained far below 1 percent, the size of the Belgian military establishment in Congo to its population was at least 1.6 percent (Killingray 1986: 420). Political stability in the Belgian Congo, unlike many other colonies during this period, helped to build most railways by the 1920s. In fact, railways are uniquely large, expensive, and vulnerable pieces of fixed capital, which demand political security over very wide areas (Wrigley 1986: 79). As pointed out in Chapter 1, the result of political order was echoed across the globe to make the Belgian Congo a “model colony” and an “investor’s paradise” (see Chapter 1). More specifically, political stability affected the path of time preference of Belgian businesses by enlarging their time horizon. Thus, the Belgian Congo attracted massive foreign investments so critical for sustained economic development. By 1959, net accumulated FDI amounted to 101 billion francs or $16.5 billion in 2015 prices, the most in Africa.

76  Political order and rule of law

Colonial administration and rule of law Traditional authorities made the first layer of the colonial administrative structure. Every colonial power in Africa depended upon a chief as the first layer of this structure. Unlike other colonial powers, the Belgian administrator appointed many former soldiers as chefs de secteur in time of crisis of traditional succession. The rationale behind their appointment was that they were disciplined and Westernized. All these appointed chiefs carried out their job to the liking of the colonial administrator. This direct rule helped to establish political order and the rule of law in the countryside because it also restrained the power of traditional authorities. Following a practice dating back from the CFS, two royal decrees reaffirmed the role of chiefs as members of the colonial administration.The first promulgated on 31 August 1919 fixed the remuneration of chiefs at a level proportional to the number of adult male population suited to manual labor and to the amount of taxes collected (Belgium 1920). New functions were also added to the role of traditional authorities to compel them to cooperate with the development of a modern administration.These functions included carrying out census operations, reporting any contagious or epidemic diseases, organizing markets, collecting taxes, and assuring the execution of public chores.Traditional authorities were the first administrative structure in the state-​building process. One of the instruments that empowered local chiefs was the institutionalization of native courts. Belgian rulers created them in 1926 to enforce the law in the countryside and to regulate conflicts among African villagers (Magotte 1938). These courts became instruments of coercion in the hands of chiefs to minimize revolts or other disturbances and to ensure that rural communities were paying taxes. Although native courts settled intra-​community and intra-​ household conflicts among Africans, they became key colonial organs of repression in the hands of colonial administrators and, to a lesser degree, Catholic missionaries. Moreover, tax collectors relied on the native courts to make sure Africans paid taxes. Health officials also used these courts to assess the status of the population in chieftaincies and this was an important element to allocate labor to different European companies. Furthermore, native courts helped the census taker to establish population figures. Finally, the courts assisted the missionaries in their campaign against polygamy and other African cultural attitudes perceived improper by the European civilizing mission (Likaka 2009). In sum, colonial administrators used native courts to carry out their coercive chores in the state-​building process. Likaka (2009: 45–​ 47) provides evidence from Lower and Upper Uele districts about the coercive nature of these courts that can be applied mutatis mutandis across the Belgian Congo. According to his analysis, 80 percent of cases brought to native courts between 1932 and 1958 dealt with colonial demands rather than with intra-​community conflicts. Appointed chiefs used their courts to punish even those who refused to plant crops in straight lines and to care for them. The chiefs’ harsh punishment of villagers was motivated by generous

Political order and rule of law  77 production premium and incentives they received from the state and private companies for their work as front men in agricultural campaigns and labor recruitment. Given these abuses, the state began a major reform of the traditional administration in 1933 when the entire system was restructured within an elaborate juridical statute (Piron and Devos 1960). By the mid-​1930s, the headquarters of the native circumscriptions became recognizable outposts, with buildings, clerks, tax rosters, and small auxiliary police forces (Brausch 1961). In the words of Piron and Devos (1959: 211), “while respecting traditional organization, the legislator wanted to establish a single administrative and judicial system.” The legislator made the chieftaincy as the lowest echelon of the administrative organization and the chief was fully integrated into the colonial system. The colonial administration allowed traditional authorities to apply customary unwritten laws as long as local customs were not contrary to written laws. The rule of law thus started at the lowest level of the administrative hierarchy to deal with chief ’s authority. The 1933 reform also intended to limit most early abuses in terms of fines and prison sentence.Traditional authorities could sentence African offenders to no more than two months in prison and could not fine offenders more than 2,000 CF. Anything above these limits were the prerogative of white administrative territorial courts. This was the first application of the rule of law in the countryside to curb the power of traditional authorities upon their people. If traditional authorities represented the first layer of the colonial administrative structure, the white territorial administrator was the first link between traditional authorities and the district commissioner. Europeans dominated the second layer of the colonial administration. In this regard, the first act of Minister Renkin aimed to have administrators capable of carrying out their administrative duty with competence. In 1910, he established colonial civil service schools in Belgium to replace the patrimonial administrative staff inherited from the CFS (see Chapter 2). By the late 1940s, the colonial administration had more than 4,640 European university graduates. In June 1960, the Belgian Congo had 10,340 Belgian civil servants in the administration and the judiciary as well as officers in the army to keep law and order (Gérard-​Libois and Verhaegen 1961: 2). The Belgian Congo was well-​governed. As Young (1965: 11) pointed out, “no Congolese, rural or urban, could have failed to perceive that he was being administered.” The number of European administrators in the Belgian Congo represented 72 administrators per 100 000 Africans in the 1950s. In British Nigeria with more than twice as many inhabitants, the number of European administrators was less than half of the Belgian Congo (Richens 2009: 64–​65). Only the policy of racial inequality explains this outcome. As illustrated by Table 3.2, there were no Africans in high levels of the colonial administration in 1959. Most Africans remained in the lowest level of the administrative hierarchy with only 759 or 17.1 percent at the intermediate level. This was in contrast with French colonies where most members of the African elite had a university degree and many were even members of the French government before 1960. The

78  Political order and rule of law Table 3.2 Personnel in the public sector by categories in 1959 Europeans High-​ranked personnel Intermediary personnel   First principal editor  Principal editor  Editor Low-​level personnel Total

Africans

5,900

0

1,690 1,976 774 0 10,340

9 24 726 10,791 11,550

Source: Dupriez (1968: 340–​341).

Belgian state managed to rule one of the largest colonial territories in Africa without depending on indigenous representatives in the highest ranks of the state administration. Historically, the colonial administration was an autonomous entity with its own degree of internal promotion and career stability. It had a merit-​based structure with a competitive salary system that represented checks on rulers located in Belgium. Once a large coalition in favor of bureaucratic autonomy of civil servants was consolidated in the Belgian Congo, it became an insurmountable obstacle for subsequent rulers in Brussels to weaken it with widespread replacement of civil servants for a more directly patronage-​based administration. By the 1920s, the colonial administration was a diversified hierarchical corps reinforcing its iron grip in the countryside. It also affirmed its identity and role by defining its mission “to administer a slow but progressive transformation of African traditional world” (Peemans 1997: 32). Belgian rulers had to accept a colonial merit-​based autonomous bureaucracy because they could not match the resources and expertise of colonial bureaucrats in the Belgian Congo. As noted in Chapter 1, this was a Weberian type bureaucracy with clearly delineated lines of authority and areas of responsibility whose decisions were based on clearly defined codified rules. Colonial bureaucrats were meritocratically recruited, had expert education and training, and advanced in the administration based on objective criteria. The autonomy of colonial bureaucrats was specifically the result of the limited physical capacity of administrators in Brussels to implement their policy choices unless the colonial administration in the Belgian Congo agreed to do so. For example, while the ministry of colonies was promulgating laws that stressed “indirect rule,” the governor-​general in the colony was signing decrees of executing minister’s laws that emphasized “direct rule” (Demunter 1975: 47). The main reason was that colonial administrators did not want to lose their hands on Africans under indirect rule. Governors-​general prevented any Brussels’ executive interference intended to limit colonial administrators’ autonomy in the Belgian Congo. As a result, the colonial administrator always tried to replace recalcitrant chiefs by their own straw men.

Political order and rule of law  79 The colonial system also had an elaborate judicial system to enforce the rule of law. The system was divided along racial lines. The European legal system included in descending order, two courts of appeals (Leopoldville and Elizabethville), seven courts of first instance (one in each province and the capital city), 25 national courts, 26 district courts, and 139 police courts as well as courts of appeals (Belgium 1959: 16). On many occasions, the colonial court even restrained the governor-​general in enacting ordinance laws. The African judiciary system included police courts, town courts, sector courts, and chieftaincy courts. Territorial administrators served as a prosecutor and a judge in police courts. In 1950, there were 694 chieftaincy courts, 682 courts in different sectors, and 100 courts in small towns (Belgium 1951: 37). This system worked predictably according to the law. The most deterrent punishment rested principally on the fear of more than 20 lashes of the chicotte (sjambok) that the colonial administrator inflicted on Africans in condemning them to a prison term where it was regulatory. One major feature of the judiciary system in the colony was its autonomy from the governor-​general to district commissioners. It was a separate entity with a wider administrative framework. Its hierarchy was a powerful body, reformist in orientation and most often in conflict with the colonial administration (Gann and Duignan 1979). A Superior Council in Brussels headed it by acting as a Supreme Court, which also performed certain advisory functions. The judicial system of the Belgian Congo was also responsible to the King of Belgium, not to the governor-​general, and thereby enjoyed wide autonomy and independence in the colony. The members of courts in the Belgian Congo considered themselves the chosen few. A small body of highly educated men, “they were the only body of the colonial administration that attracted men of aristocratic background” (Gann and Duignan 1979: 169). The autonomy of the judiciary was a major institutional check to the colonial administration because it separated power across the two entities. By the late 1920s, the Belgian Congo was a peaceful colony thanks to its administration. The autonomy of colonial bureaucracy and its meritocratic recruitment/​promotion were critical in enhancing predictability, which was at the heart of any economic calculus. As pointed out earlier, an autonomous colonial bureaucracy hindered arbitrary interferences by Brussels’ political elites. The colonial meritocratic recruitment and career stability of administrators also provided them longer time horizon that increased predictability since their career depended on their performance. In fact, “when bureaucrats anticipate a long career, short-​term behavior, such as shirking or taking bribes, may be substituted for long-​term behavior, such as working hard and following rules” (Cornell, Knutsen, and Teorell 2020: 2250). Thus, Weberian features of state bureaucracy tend to enhance economic development because they contribute to the formulation of policies that incentivize investments, physical and human, and their better implementation. There is another mechanism through which this Weberian-​type bureaucracy can promote economic development. The colonial administration was

80  Political order and rule of law

Figure 3.2 Cumulative FDI in millions of BF

able to increase predictability or political order so critical in stimulating FDI necessary to sustain economic development. The direct consequence of political order in the Belgian Congo was a massive inflow of FDI. As illustrated by Figure 3.2, accumulated investments exploded in the mid-​1920s but slowed down during the Great Depression, but picked again after the war (Huybrechts 1970: 338–​339). Three additional factors helped the inflow of early massive wave of investments in the Belgian Congo. First, the Russian Revolution in 1917 and political instability in China forced Belgian investors toward their colony considered by that time more stable than other parts of the globe. In 1891–​ 1900, Russia received an annual average of 47 percent of Belgian direct investments, while the CFS had only 9.2 percent (Vanthemsche 2012: 167). In 1921–​1930, the Belgian Congo received an annual average of 57.9 percent of total Belgian FDI. In other words, Belgian foreign investments in the colony averaged 786.8 million BF a year (ibid.: 167). Another factor was the devaluation of the weak BF in 1919 creating a particular favorable condition for Congolese exports.Third, a high demand for raw materials as a result of the two world wars helped the Belgian Congo in terms of balance of payments. At the outbreak of the First World War, 47 out 267 Belgian enterprises had been operating in the Belgian Congo, as compared to 129 companies out of 211 on the eve of the Second World War (Vanthemsche

Political order and rule of law  81

Figure 3.3 Net FDI in millions of BF

2012: 167). By the 1950s, the Belgian Congo accounted for approximately half of Belgian private capital invested abroad (ibid.: 167). Figure 3.3 highlights annual changes in FDI and provides a clear picture of periods of economic growth associated with both internal political stability and external political instability (see also Figure 1.4). It shows two waves of massive inflows of capital, which also correspond to two waves of industrialization in the Belgian Congo. The first wave of industrialization started in 1920 and ended in 1940. This wave began with the emerging mining sector in southern Katanga, the expansion of IS in Leopoldville, and the cultivation of improved seeds of tropical cash crops. Belgium maintained the classic mercantile colonial opinion that colonies had to supply the “mother countries with raw materials” (Buelens and Cassimon 2013: 232) and the Belgian Congo would be a market where Belgium would dump its manufactured products. Foreign investments increased in the Belgian Congo to achieve these objectives in the 1920s. As expected, net investments increased during this period of political stability until the Great Depression. Long-​term private capital operations exploded from 92 million BF in 1920 to 1,530 million in 1930 (Vanthemsche 2012). This massive influx of long-​term investments seems to explain the first wave of industrialization of the Belgian Congo. In fact, several new industries sprout in the early 1920s, including cement (1920), soap (1922), beer (1924), and textile (1925) among others.

82  Political order and rule of law Net investments plummeted during the Great Depression. The inflow of FDI restarted after the depression in the mining sector again. By 1938, the Belgian Congo was at the top of foreign investments per capita. No other overseas territory (outside the British dominions) attracted more massive foreign investments than the Belgian Congo. The Belgian colony received $48 of foreign capital per inhabitant; in British India (including Burma and Ceylon), the amount was $8 only; in the Netherlands Indies, $36; in the French African colonies, $25; in the British African colonies, $32; in Portuguese Africa, $18 (Frémeaux 2002: 48). More specifically, private investments in the Belgian Congo in the interwar period represented 11.7 percent of total capital invested in Africa, whereas the vast French and Portuguese colonial empires received only 4.2 and 5.4 percent of total investment in Africa, respectively (Buelens and Cassimon 2013: 233). The demand for raw materials increased after the Second World War. However, political order and the rule of law in the Belgian Congo seemed to be the main key factors behind this trend.The Belgian Congo was also specifically known for its tough stand against strikes. If African labor unions existed and carried out strikes in both the British and French colonies, they were prohibited in the Belgian Congo. Strikes were almost absent in the Belgian Congo, except during the Second World War. The first strike occurred on 3 December 1941 by African miners in several sites of the UMHK, including Jadotville and Elizabethville. Most company’s sites became involved by 9 December. The miners were requesting an increase in their wages from 1.50 CF to 2.00 CF to compensate for the cost of living. The government was able to have the upper hand and Governor Amour Maron shot dead the leader of the movement, Leonard Mpoyi. Then, he instructed the army to shoot strikers who refused to go back to work and his order caused the death of 70 people (Belgium 1946). The second strike took place in late November 1945 in Leopoldville when some 6,000 workers and boys went on strike (van Roybrouck 2014: 194). Railway personnel spread the news to the port of Matadi and dockworkers joined the strike. Many people were killed by soldiers and “during the days that followed, the prison at Matadi became so packed that some rioters died of suffocation” (ibid.: 194). If the rule of law was beneficial to the minority white because it refrained Belgian rulers form predatory activities and opportunistic behavior, it also laid the foundation for financial development because it improved marketplace reputations. Investors could focus on developing their businesses instead of mitigating the impact of political instability. As their businesses grew, investors demanded more financing as well. By the 1940s, colonial shares in the Brussels Stock Exchange represented more than 40 percent of total shares. Over the years, Belgian Congo stocks became more profitable than Belgian stocks. Political order and the rule of law in the Belgian Congo and Belgium made the colony quite attractive to the Belgian industrial sector because the colony was a stable market for the Belgian steel industry and semi-​finite equipment materials. This relationship favored the Belgian industrial sector because

Political order and rule of law  83 Belgium was not forced to compete with its own colony. In essence, the development of industries of consumer goods in the Belgian Congo complemented Belgian exports of capital goods. Everything changed when Germany occupied Belgium in May 1940. The Second World War started the second phase of industrialization, which lasted until the mid-​1950s. Like in 1914, this war exerted further burden on Africans to respond to war efforts.To meet the Allies’ demand for raw materials required new labor recruitment efforts that intensified the “unevenness of development between rural areas and industrial centers and towns” (Buelens and Cassimon 2013: 237). Compulsory labor forced rural dwellers to cultivate more cash and food crops. The number of mandatory days in the service of the state increased from 60 to 120 thus placing great pressure on subsistence agriculture. The red rubber regime reemerged as its harvest increased by tenfold during the war from 1,142 metric tons in 1939 to 11,337 tons in 1944 (Belgium 1946). On the positive side, the wartime boom had several beneficial effects on the economy of the Belgian Congo given the entrance of the USA as a new player and the main importer of most Congolese minerals (Buelens and Cassimon 2013). First, the increasing trend in the economy to respond to war efforts required more labor, which increased “from 480,000 in 1940 to 800,000 in 1945” (ibid.: 237). Second, the severance of the link between Belgium and Congo as a result of the war implied an increasing demand for skilled labor in the colony. Consequently, most major companies had to upgrade their African workers’ professional skills through more education and training programs. The demand for skilled labor kept its ascending trend and economic growth rates continued at the same high levels even after the war. The increasing number of African skilled workers in the private sector was not from a deliberate policy to improve the social standing of Africans, but it was rather an accident of history. In 1945, “highly skilled workers and lower-​skilled workers occupied positions they could not have held before the war” (ibid.: 237). Third, the colony could not import intermediate and capital goods from Belgium because the latter was under German occupation.The colonial administrator had to encourage the private sector to begin the development of some heavy industries in the colony. Many foreign multinational companies including new Belgian companies entered the Congolese market to take advantage of the war booming economy. Fourth, the existing transportation infrastructure was no longer sufficient and required some upgrading. It thus attracted massive wave of investments and, as a result, it drastically reduced proximity gap among economic agents. Fifth, the war helped the Belgian Congo to develop several new industrial sectors including shipbuilding. Sixth, most Congolese companies accumulated massive windfall profits as a result of the war and some of these accumulated reserves were used to finance many large-​scale post-​war investments.The Korean War, the Cold War, and strategic stockpiling by the Allied powers also sustained economic growth in the 1950s (ibid.: 238). The widespread fear of another imminent world war propelled the Belgian giant, the SG, to explore other regions for its investments.

84  Political order and rule of law Canada and the Belgian Congo were the two favorite destinations. The result was another inflow of massive foreign investments in the colony in the 1950s. In sum, the Belgian Congo was the only colony in Africa to receive more investments than other colonies after the war because of its stability and vast natural resources. Per capita investment level in the Belgian Congo was $25 in 1953, compared to $19 in French Africa, $15 in British Africa and only $3.5 in Portuguese Africa (Vanthemshe 2012: 168). Paradoxically, the Belgian Congo was also able to sustain a massive transfer of dividends to Belgium in the amount of 26 billion BF from 1948 to 1958 (Peemans 1968) or $4.24 billion in 2015 prices. It is important to note that if the Belgian Congo already had a solid industrial manufacturing base since the 1920s, the war only solidified this position. However, the social consequences of the post-​war booming economy were quite manifest. The class structure in the Belgian Congo changed drastically from almost no middle class in the 1930s to a growing lower middle class in the 1940s made exclusively of middle school graduates called évolués or educated Africans. The increasing number of skilled workers also created another class of industrial workers aware of their rights. At the same time, social conditions in the countryside worsened as a result of war efforts. The colonial administration understood that the best policy was to respond both socially and economically to Africans’ grievances in order to stabilize the market and helped delay political reforms. It implemented a policy of increasing wages, improving social security systems (pensions and child allowances), and even establishing a minimum wage. Ministry of Colonies Pierre Wigny drafted a ten-​year plan of economic development in the late 1940s that was implemented in the 1950s.The plan achieved its goals and provided the Belgian Congo a welfare social system similar to the social system that was also being developed in Belgium. The colonial state also started some timid political reforms to satisfy the increasing demand for political rights from the évolués. The state promulgated a decree on 26 March 1957 that organized the status of towns and communes. The law allowed major urban centers to freely elect a council and elected councilors had to nominate burgomasters from their members. This process occurred in Leopoldville and Elizabethville in late 1957. It was extended to other provincial capitals a year later. The path to political freedom in 1957–​1958 sparked the creation of a number of political parties. As the movement toward independence accelerated, emerging political parties started seeking supporters among the masses. Urban centers were the first arena for competition, but urban mass mobilizations became so tense that they produced waves of riots among the unemployed youth. The most significant riot occurred on 4 January 1959 in Leopoldville and shook the foundation of the “model colony” and an “investor’s paradise.” The speed by which the political process began to change after the riot only indicated the ineptitude of colonial rulers to satisfy competing political demands. In their haste to proceed with the decolonization process, the colonial

Political order and rule of law  85 government initiated two Round Table talks in Brussels in early 1960. From these talks emerged the pseudo-​constitution or the Fundamental Law based on a parliamentary system and an electoral law based on proportional representation. These institutional arrangements mirrored the Belgian political model and did not consider any particular or unique feature of the Congolese society.

Summary In 1908, the CFS became a Belgian colony. Belgium inherited an undisciplined army and a rudimentary administration. The colonial state professionalized the two organizations by carrying out a number of reforms that helped to break with the past. An improved and disciplined army was able to implement political stability in the countryside and even to protect colonial boundaries against German forces in East Africa. The colonial administration used a two-​level delegation that established both political order and the rule of law in the colony. The first level delegation was a professionalized bureaucracy headed by a governor-general. The second level delegation was made of traditional authorities whose role was to enforce the rule of law in rural areas. The connection between the two levels in the Belgian Congo was the district commissioner. This two-​level system made it harder for administrators in Belgium to bypass administrators in the Belgian Congo.The delegation system established the first level of institutional veto players, a critical ingredient to institute the rule of law at all levels.The most effective instrument to constrain ministers of colonies and Belgian kings after 1908 was not legal documents, but their limited physical capacity to implement their policy choices crafted in Brussels. The two-​level delegation thus limited Belgian rulers’ capacity to control administrators in the Belgian Congo and helped the latter to penetrate the countryside. The Belgian Congo was a business venture different from most colonies. It was the privatized patrimony of three lobbying groups in Belgium until the onset of the Second World War: Catholic missions, the colonial administration, and Belgian private companies. The war brought in a new lobbying group, the USA. The Congolese market, and more particularly the mining sector, became responsive to the demand from mostly the USA during and after the war. The new actor would play a major role after independence. The link between the state and big companies meant that the former had to convince the latter that sustained economic growth would benefit the private sector and then the public at large. The colonial state was thus able to coordinate all interactions to ensure competing economic sectors that they would all benefit from a stable political environment. To achieve this objective, the ministry of colonies developed colonial administrative schools to help recruit qualified technocrats, to provide them competitive salaries, to establish honest mechanisms of promotion, and above all to insulate them from political pressures. This bureaucratic autonomy improved performance and helped to enhance predictability so critical for investors.

86  Political order and rule of law The Catholic Church was instrumental in making Africans police themselves through spiritual obedience. Although the state–​business relation became more economically intimate, the colonial state never used the Belgian private sector in implementing political order like its predecessor, the CFS. In brief, political order and the rule of law reinforced each other and institutionalized a set of political interactions and structures with sufficient stability for the right policies to attract massive foreign investments that helped to sustain economic development.

Notes 1 See Dufonteny (1927: 31), cited by Franck (1930: 43). 2 Kadoc, De Vleeschauwer Papers, no 342, De Vleeschauwer to Félicien Cattier (of the SCB-​group), 26 September 1940, cited by Vanthemesche (2012: 124) 3 Pierre Ryckmans, “The Belgian Congo’s War Effort,” in The Belgian Congo at War. www.ibib​lio.org/​ hyperwar/​UN/​Belgium/​Congo. 4 See “WWII Weapons with the Force Publique in the Belgian Congo.” https://​ wwiiaf​terw​wii.wor​ldpr​ess.com/​2015/​06/​29/​wwii-​weap​ons-​with-​force-​publi​que-​ in-​the-​belg​ian-​congo/​

References Anderson, E. (1958) Messianic Popular Movements in the Lower Congo, Uppsala: Uppsala University Press. Baudhuin, F. (1958) Histoire Economique de la Belgique, 1945–​ 1956, Brussels: Etablissements Emile Bruylant. Belgium, Ministère des Colonies (1911–​1929, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1910–​1928) Présenté aux Chambres Législatives, Brussels: M. Hayez Imprimeur. Belgium, Ministère des Colonies (1930–​1954, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1929–​1953) Présenté aux Chambres Législatives, Brussels: F.Van Gompel, Editeur. Belgium, Ministère des Colonies (1955–​1959, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1954–​1958) Présenté aux Chambres Législatives, Brussels: Etablissements Généraux d’Imprimerie, S.A. Brausch, G. (1961) Belgian Administration in the Congo, New York: Oxford University Press. Brion, R. and Moreau, J.-​L. (1998) La Société Générale de Belgique, 1822–​1997, Antwerp: Fonds Mercator. Buelens, F., and Cassimon, D. (2013) “The Industrialization of the Belgian Congo,” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development. The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 229–250. Coquery–​Vidrovitch, C. (1986) “French Black Africa,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp.329–398. Cornell, A., Knutsen, C.H. and Teorell, J. (2020) “Bureaucracy and Growth,” Comparative Political Studies 53(14): 2246–​2282.

Political order and rule of law  87 Demunter, P. (1975) Luttes Politiques au Zaïre, Paris: Editions Anthropos. Dupriez, G. (1968) “Législation et Marché du Travail,” in M. Norro and H. Leclercq (eds.) Indépendance, Inflation, Développement. L’Economie Congolaise de 1960 à 1965, Paris: Mouton, pp. 249–335. Ewans, M. (2003) “Belgium and the Colonial Experience,” Journal of Contemporary European Studies 11(2): 167–​180. Faes, G., and Smith, S. (2000) “République Centrafricaine: La Solitude et le Chaos,” Politique Internationale 88: 284–​291. Fetter, B.S. (1969) “The Luluabourg Revolt at Elisabethville,” African Historical Studies 2(2): 269–​277. Franck, L. (1930) Le Congo Belge, Volume 1, Brussels: Académie Royale des Sciences d’Outre-​Mer. Frémeaux, J. (2002) Les Empires Coloniaux dans le Processus de la Mondialisation, Paris: Maisonneuve & Larose. Gann, L.H. and Duignan, P. (1979) The Rulers of Belgian Africa, 1884–​ 1914, Princeton: Princeton University Press. Gérard-​Libois, J. and Verhaegen, B. (1961) Congo 1960 Volume 1, Brussels: CRISP. Huybreschts, A. (1970) Transports et Structures de Développement au Congo. Etudes du Progrès Economique de 1900 à 1970, Paris: Mouton. Jewsiewicki, B. (1986) “Belgian Africa,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 460–493. Killingray, D. (1986) “The Maintenance of Law and Order in British Colonial Africa,” African Affairs 85(340): 411–​437. Likaka, O. (2009) Naming Colonialism. History and Collective Memory in the Congo, 1870–​1960, Madison: The University of Wisconsin Press. Lovens, M. (1974) “La Révolte de Masisi-​Lubutu (C.B. janvier-​mai 1944),” Cahiers du CEDAF 3–​4: 1–​154. Magotte, J. (1938) Circonscriptions Indigènes, La Louvière, Belgium: Imprimerie Louvière. Mottoulle, L. (1946) Politique Sociale de l’Union Minière du Haut Katanga, Brussels: Académie Royale des Science d’Outre Mer. Peemans, J.-​P. (1968) Diffusion du Progrès Economique et Convergence des Prix: Le Cas Congo–​Belgique, Louvain–​la–​Neuve: Editions Nauwelaerts. Peemans, J.-​P. (1997) Le Congo–​Zaïre au Gré du XXe Siècle: Etat, Economie, Société 1900–​1990, Paris: L’Harmattan. Piron, P. and Devos, J. (1959) Codes et Lois du Congo Belge.Tome III. Matières Sociales et Economiques, Brussels: Maison Ferdinand Larcier, S. A. Editeurs. Piron, P. and Devos, J. (1960) Codes et Lois du Congo Belge. Tome II. Organisation Administrative et Judiciaire, Brussels: P. Weissenbruch, Imprimeur du Roi, Editeur. Richens, B. (2009) “The Economic Legacies of the ‘Thin White Line’: Indirect Rule and the Comparative Development of Sub-​Saharan Africa,” African Economic History 37: 33–​102. Roberts, A.D. (1986) “East Africa,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 649–701. Saulnier, P. (1997) Le Centrafrique: Entre Mythe et Réalité, Paris: L’Harmattan. Sikitele, G. C. (1973) “Les Racines de la Révolte Pende en 1931,” Etudes d’Histoire Africaine 5: 99–​153.

88  Political order and rule of law Stewart, A. (1986) “Islam,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 191–222. Van Reybrouck, D. (2014) Congo.The Epic History of a People, NewYork: HarperCollins Publishers. Vanhove, J. (1968) Histoire du Ministère des Colonies, Brussels: Académie Royale des Sciences d’Outre-​Mer. Vanthemsche, G. (2012) Belgium and the Congo, 1885–​1980, Cambridge: Cambridge University Press. Williams, S. (2016) Spies in the Congo, New York: PublicAffairs. Wrigley, C.C. (1986) “Aspects of Economic History,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 77–139. Young, C. (1965) Politics in the Congo, Princeton: Princeton University Press.

4  Belgian Congo and basic infrastructure for economic development

The Belgian Congo inherited in late 1908 three transportation systems from the CFS. The first was porterage that used humans to transport loads on the head. The second and longest network was an infrastructure of no more than 2,000 km of navigable waterway network on the Congo River basin. The final legacy was a railway system of 690 km (see Table 2.1). However, this infrastructure was inefficient to exploit the mineral-​r ich province of Katanga and other eastern regions located far away from the Atlantic coast. The colonial ruler had to pursue a different strategy, which relied upon some flexible economic planning to build basic infrastructure (as developed in the next section). The second section analyzes the role of transportation technology in economic development. Section three discusses social infrastructure or human capital and health. A brief summary follows.

Flexible economic planning and delivery of infrastructure On 21 November 1918, King Albert 1st appointed Louis Franck as the new minister of colonies. A liberal member of the parliament, Franck wanted to involve the Belgian private sector in exploiting the colony’s natural wealth. He understood that such endeavor required massive construction of physical infrastructure that the private sector was unwilling to undertake given huge fixed costs involved in building it. If the first Minister of Colonies Renkin was able to establish a peripheral capitalism in the Belgian Congo through his market-​based reforms, the second minister, Louis Franck, pursued a different approach since he had to confront different challenges than his predecessor. The first challenge was to deal with the increasing power of mining companies in copper, diamond, gold, and tin industries after the First World War because the mining sector started to play a major factor in the transfer of technology and the early industrialization of the Belgian Congo. In fact, the mines initiated the great flow of financial resources primary from Great Britain and Belgium. Frankel (1938: 210) noted that the mining sector was “the touchtone of economic development in most parts of Africa and the areas most advanced economically” were “those whose main activities rested on mineral exploitation.” He showed that 66 percent of the DOI: 10.4324/b23045-4

90  Infrastructure for economic development private capital invested in Africa from outside, 71 percent had gone to what he called the “special mineral territories,” the Union, South-​West Africa, the Rhodesia, and the Belgian Congo (Frankel 1938: 211). The share of total investments in the mining sector averaged almost 25 percent a year from 1909 to 1957 in the Belgian Congo and was second only to the banking and insurance sectors located mostly in Leopoldville that averaged 36 percent a year.1 Regional divisions also favored the Katanga province that received 30.4 percent of FDI a year from 1908 to 1957 with a record high of 80.8 percent in 1924. The enormous amount of investments in Katanga was linked to the UMHK, which had its first production of copper on 30 June 1911.The province of Leopoldville was second, with an average of 29.4 percent a year. The third zone was the mining Kivu and Oriental regions. The second challenge facing Minister Franck was that most mining areas were far away from the Atlantic Ocean. They required an adequate transportation infrastructure to reach the cost. As developed briefly in Chapter 1, Minister Franck initiated the “Great Works” program in the early 1920s to connect the eastern mineral corridor to the Atlantic coast. He established a new type of capitalism by his program of the “Great Works,” which could be easily labelled state-​led capitalism. Since high transportation costs also implied that copper and other heavy mineral ores could not be transported as raw products, some metallurgical processing to treat them created new industries. This transfer of technology began the first wave of industrialization of the Belgian Congo in the early 1920s and lasted until the late 1930s as a result of copper mining and related industries. Most foreign direct investments in the colony came directly from Belgium during this wave, rising from 92 million of BF in 1920 to 1.53 billion in 1928 (Buelens and Cassimon 2013: 229). The third challenge for Minister Franck was that the Katanga rich mining region was remote, isolated, and sparsely populated. This environment required labor from other regions. Labor recruitment never followed market forces because it totally relied on force.The immediate consequence of this policy was to deprive African villages of most of their young workers in the subsistence economy. This labor migration impoverished large rural areas and contributed to the highly uneven development of the colony (Clement 2013). Excessive labor recruitment for the mines and other European companies led to food shortages and famine in the early years of colonial rule. Consequently, the minister of colonies had to initiate a policy of labor stabilization in the late 1920s to minimize massive turnover in the mining companies and to refrain from depopulating the countryside. One such policy was to improve pay and social conditions in the mining sector. Minister Franck had to deal with two additional challenges to help start the first wave of industrialization (Buelens and Cassimon 2013: 233). First was the expansion of commercial activities that started in Leopoldville. The town was located between the eastern navigable part of the Congo River basin and its non-​navigable western side connected to the Atlantic coast. This location was

Infrastructure for economic development  91 well-​suited for commercial activities to respond to economic needs of the town and the hinterland. It also gave the town a real natural comparative advantage and a predominant role in developing many industries of consumer goods to respond to the demand from the hinterland. Moreover, the town became the capital of the Belgian Congo and developed as a major political center. This agglomeration effect further increased economic activities. The Chantier Naval et Industriel du Congo (Chanic) was the first company to connect not only Leopoldville to the hinterland, but also to bring economic agents in contact. It was created in 1922 to assemble ships to be used on lakes, the Congo River, and its tributaries. Other industries followed in the same year, such as the textile industry that benefited from domestic supply of cotton. The cultivation of cash crops and their export was the second additional challenge. The early industrialization of the Belgian Congo emerged from a variety of wild exportable products, like palm fruits. A whole gamut of these crops could not be exported in their natural state because of some biological issues and had to be transformed locally before being shipped to Belgium. This explains the early manufacturing process of palm oil and other cash crops in the Belgian Congo. In addition to these environmental factors, two institutional factors favored the early industrialization of the Belgian Congo. A pair of international agreements signed in 1885 (the Berlin Act) and 1919 (the Saint Germain-​ en Laye Treaty) on free trade prohibited the Belgian government from discriminating goods from other nations in its colony. The only way that Belgian exporters could compete in their own colony with other nations was to invest in the non-​mineral manufacturing sector. By the early 1920s, the Belgian Congo had several cement, textile, chemical, beer, and tobacco industries among others as a result of massive Belgian investments in the colony. This was an early IS industrialization. The rationale was to produce a variety of consumer goods for a domestic market previously supplied by imports. To deal with his challenges, Minister Franck conceived the idea of grands travaux or “Great Works” program described briefly in Chapter 1. He promulgated a law on 21 August 1921 that initiated it (Belgium 1922). The original cost was 660 million BF, divided as follows (Huybrechts 1970: 134): railways (54.5 percent), ports and waterways (19.1 percent), roads and bridges (6.7 percent), and urban projects (19.7 percent). However, the final cost was more than three times the initial amount or 2,154 million BF ($3.48 billion in 2015 prices) because the prices of materials and salaries increased during years of the depreciation of the BF although the CF remained strong. This amount was financed by loans from the Belgian treasury, but the colony “never paid back the loan” (Stengers 1957: 97). Railway lines more than doubled from 2,058 in 1920 to 4,215 km in 1930 (see Table 4.1). Most railways were built during this period, including the longest railway of 1,123 km between Bukama and Port Francqui. Navigable waterways exceeded 13,000 km. The number of modern ports increased from six in 1908 to 46 in 1930; the road system improved from 2,550 km in 1920 to 29,908 km

92  Infrastructure for economic development Table 4.1 Operational domestic railway networks in 1958 (current names of towns) Exploiting Company

Finished in

1959

Gauge (m)

Distance in km

1. OTRACO/​ ONATRA

1898 1913 -​ 1906 1910 1940 1915

Matadi-​Kinshasa Boma -​ Tshela Kinshasa network Kisangani-​Ubundu Kindu-​Kongolo Kongolo-​Kabalo Kabalo-​Kalemie Kabalo-​Kabongo Sakania-​Bukama Bukama-​Ilebo Tenke-​Dilolo Kamina-​Kabalo UMHK network Aketi-​Mungbere Komba-​Bondo Lienart-​Titule

1.07 0.62 1.07 1 1 1.07 1 1.07 1.07 1.07 1.07 1.07 1.07 0.6 0.6 0.6

370 140 45 125 365 86 273 246 697 1123 520 445 250 683 121 30

2. CFL

3. BCK

4. Vicicongo

1910–​18 1928 1931 1955–​56 -​ 1927–​1937

Source: Belgium (1959).

in 1930; and the government built 112 additional bridges (Belgium 1931). As a result, some 80,000 porters employed by the state and 70,000 porters used by private companies were relieved by the late 1920s. The “Great Works” program expanded the reach of transportation and redirected trade of the eastern half of the colony toward the Atlantic coast or the National Way, thus breaking the link with the Indian Ocean. Minister Franck followed the big push view in the transportation sector by building roads, railways, and waterways in the 1920s because he believed in its “indivisibility” (Rosenstein-​Rodan 1943: 202).The state thus served as a coordinator to supply physical infrastructure. The idea of “Great Works” program was uncommon in the colonial parlance in the early 1920s, apart from Belgium and France. If both countries decided to implement some type of planning in their colonies, Belgium was perhaps the most serious, explaining the early development of physical capital and the industrialization of the Belgian Congo. The construction of physical infrastructure in the 1920s was enough to attract massive FDI, mostly from Belgium. As discussed in Chapter 3, the amount of FDI alone was 31.41 billion BF from 1921 to 1930. This was the highest level of FDI into any European colony in Africa. A big push in infrastructure investments can spur economic development because its benefits are likely to spill over to the whole society (Rosenstein-​Rodan 1943). If the colonial state built railroads with less human cost, Africans bore the burden of the entire road construction through compulsory labor as thousands of

Infrastructure for economic development  93 men were forced to leave their villages. Thus, roads were not exactly welcomed by the rural communities since they symbolized oppression and exploitation. If roads provided the colonial administrator the most efficient way to administer Congolese, they also transformed villagers into easy prey groups to tax collectors and labor recruiters. The colonial government passed a decree on 5 December 1933 that the state was in charge of “roads of general interest,” but the chieftaincies were responsible for maintaining “roads of local interest” with or without subsidies from the government (Belgium 1934: 108). As a result, Congolese in most chieftaincies continued to bear the burden of road construction because they still needed to build and maintain roads that the colonial administration tagged as “roads of local interest” (Likaka 2009: 38). Three major transportation networks that constituted the National Way connected the colony to global markets.The first was in Leopoldville and linked the town with both the upper Congo River and lower Kasai River regions.The second linked the agricultural and mining area of Oriental-​Kivu provinces to the town of Stanleyville. The final was in the Kasai region around Luluabourg and was located between the gravitational center of Leopoldville and the southeastern copper-​belt town of Elizabethville. Thus, the National Way consisted of 4,298 km of railways and some 3,097 km of waterways (Congo and Kasai Rivers). If the CFS had no choice but to use the National Way, the colonial administrator utilized it as a policy tool to subsidize the national transportation system for economic development. It encouraged it despite incurring exorbitant costs rather than through more efficient Angola Benguela railway. This was the “nationalist policy of Belgium” to avoid depending upon its neighbors (Peemans 1975: 207). Although the Second World War affected this pattern, the National Way regained its prominence after the war. On average, more than 65 percent of trade went through the National Way from the early 1930s to the late 1950s. However, the heterogeneity of infrastructure built in the 1920s had a major flaw that hardly made it an ideal transportation system. The Belgian administrator built it without any consideration of its internal connectivity because the system intended to transport primary commodities to the nearest river port to reach Leopoldville and then Matadi. Therefore, the first ten-​year plan of economic development was conceived in the late 1940s to mitigate this existing economic bottleneck. Minister of Colonies Pierre Wigny initiated it in 1947. Its blueprint was published in 1949 after two years of intense assessment of needs and funding despite vehement and strong opposition from the private sector. The plan was a compromise that allowed colonial administrators to “confront their projects and to harmoniously coordinate them with a general context” (Belgium 1949: XII). This was a flexible planned capitalism. The first priority of the plan was to reduce the extroversion and dependence of the colonial economy by expanding national demand and the domestic market.The government targeted

94  Infrastructure for economic development three areas (Belgium 1949). First was to strengthen African agriculture that had been neglected since the early years of colonization. The second goal was to stimulate local industries in order to satisfy increasing domestic demand for consumer goods. The third was social and intended to improve the buying power of Congolese and their social condition. To accomplish these goals, the government decided that education and healthcare should be independent of profit-​seeking motives and be integrated into the national development project. Table 4.2 provides an overview of the plan. The initial cost of the plan was 48 billion BF in 1949 or $5.00 billion (2015=​100). However, this cost was successively modified to align it with the needs of colonial administrators in the Belgian Congo, thus explaining its flexibility. As illustrated by Table 4.2, the final cost of the plan was 51 billion BF or $8.26 billion in 2015 prices. The first forecasting cost provided almost 58 percent of total funding to physical infrastructure. At the end, it received 49.6 percent of total expenditures or $4,097.7 million. The waterway system benefited the most from the plan with 14.6 percent, followed by roads and bridges with 14.4 percent. This was consistent with the idea that transportation was the key to economic development. Night navigation was inaugurated between Leopoldville and Stanleyville in 1953 and along the Kasai River in 1954. Table 4.3 highlights most operational waterways in Congo by the end of the plan in 1959 with a total of 14,518 km (Belgium 1959). The development of the road network was modest but achieved its goal of interprovincial economic linkages by expanding domestic markets. This network complemented the principal complex water–​ railway networks. In 1958, the road system accounted for 145,213 km with some 579 bridges ranging from 10 to 220 meters long (Belgium 1959). There was no surprise here because the role of the road network was economically less important to colonial administrators than the riverine and railway systems that handled most of the traffic, especially for mining and agricultural companies. However, the road network was politically important for colonial rulers because it helped them to penetrate the colony and make their presence felt in each corner of the Belgian Congo. The colonial administrator was thus able to control the countryside thanks to its road network (see Table 4.4). For this purpose, colonial administrators took care of the road network and bridges through a meticulous policy because they knew that this network would help them to build the state. Since most colonial roads were made of gravel, they required constant repair and maintenance. By the early 1930s, the first layer of maintenance of roads of general interest was made up of roadmen supervised by European administrators. Each roadman was responsible for maintaining a section of road whose length varied according to local conditions. Other methods included temporary workers (flying groups), collective contracts with traditional authorities, and contracts with private companies. The most elaborate method was made of mechanized brigades. Established in 1944, they required a large well-​qualified labor pool. In 1958, the annual cost of maintaining standard I road (at least 6.60 meters wide) was between 2.2 million

newgenrtpdf

Table 4.2 Economic plan in 1950–​1959, distribution of funding in $2015 million Categories

Overall total

%

1954 Revised

%

1959 Final Budget

%

1960–​69 Budget(%)

249.5 1,187.7 863.3 189.6 374.3 2,869.4

5.0 23.8 17.4 3.8 7.5 57.5

725.4 959.8 1,201.6 278.3 461.6 4,160.6

9.9 13.1 16.4 3.8 6.3 49.5

778.3 1,191.8 1,211.5 364.8 551.3 4,097.7

9.4 14.4 14.6 4.5 6.7 49.6

416 (4.4) 1,614 (17.1) 904 (9.6) 216 (2.3) 378 (4.0) 3,528 (37.4)

0.0 372.7 382.9 362.9 50.5 314.0 1,483.1

0.0 7.5 7.7 7.2 1.0 6.3 29.7

0.0 732.7 468.9 344.3 51.3 344.4 2,227.4

0.0 10.0 6.4 4.7 0.7 4.7 26.5

23.7 729.6 510.7 445.9 48.6 372.9 2,131.4

0.3 8.9 6.1 5.4 0.6 4.5 25.8

561 (6.0) 0 1,143 (12.1) 672 (7.1) 1,437 (15.2) 0 3,813 (40.4)

156.5 39.1 19.6 64.8 0.0 0.0 280.0

3.1 0.7 0.3 1.3 0.0 0.0 5.4

131.9 58.6 21.9 153.8 29.4 0.0 453.8

1.8 0.8 0.3 2.1 0.4 0.0 5.4

170.2 48.6 24.3 170.8 32.5 32.8 417.7

2.2 0.6 0.2 2.0 0.3 0.5 5.8

1,269 (13.5) 0 0 88 (0.9) 0 0 1,357 (14.4)

234.6 0.0 43.5 91.2 369.3

4.7 0.0 1.0 1.7 7.4

1,344.8 0.0 126.1 92.5 1,563.4

16.0 0.0 1.5 1.1 18.6

1,336.8 29.3 113.6 73.5 1,553.2

16.4 0.0 1.4 0.0 18.8

0 0 395 (4.2) 340 (3.6) 735 (7.8)

5,000.8

100.0

8,405.2

100.0

8,261.5

100.0

9,433 (100)

Computed from Belgium (1949; 1955; 1959) for 1950–​1959; for 1960–​69 refer to Belgium, Ministère des Colonies, Deuxième Plan Décennal, 1960–​1969 (Brussels 1958, unpublished document).

Infrastructure for economic development  95

I.  Physical Infrastructure  Railways  Roads  Waterways  Airways   Electrical energy Total II.  Social infrastructure   Supply of water   Public lighting   African housing  Health  Education  Colonat Total III. Agriculture  African   African ranch   Fishing & farm raising   R&D  Forestry   Special programs Total IV.  Public services  Urbanization   Public transportation  Telecommunications  Others Total

1948 Initial Forecast

96  Infrastructure for economic development Table 4.3 Operational navigable waterway networks in 1958 Companies

Network

Waterway

Distance (km)

1. OTRACO

Seaway Lake network

Banana-​Matadi Lake Kivu Lake Mai-​Ndombe Lake Tumba Upper-​Congo

148 105 162 95 1,734

Ubangi & tributaries Kasai & all tributaries Mongala Itimbiri Lomami Lulonga & tributaries Ruki & tributaries Ikelemba

1,098 3,468 329 255 255 1,510 2,348 320

Kalemie-​Kigoma Kigoma-​North Lake Kalemie-​North Lake Kalemie-​South Lake

135 210 345 320

Ubundu-​Kindu Kongolo-​Kabalo Kabalo-​Bukama Luvua: Ankoro-​Kiambi Kibombo-​Kasongo

310 86 565 150 110

Congo River Congo tributaries

2. CFL

Lake network

Congo River network

Source: Belgium, Ministère des Affaires Economiques at des Classes Moyennes, Institut National de Statistique, Annuaire Statistique de la Belgique et du Congo Belge (Brussels, 1959: 325).

Table 4.4 Operational road networks, 1958 Old Province

Public

Private

Total

Leopoldville Equateur Orientale Kivu Katanga Kasai Congo

27,396 17,362 22,567 13,028 23,494 23,746 127,593

6,010 1,173 2,896 4,829 1,250 1,462 17,620

33,406 18,535 25,463 17,857 24,744 25,208 145,213

Source: Huybrechts (1970: 57 and 63).

Infrastructure for economic development  97 and 3.5 million CF per km a year; the cost for standard II (at least 3.50 meters wide) was between 1.5 million to 2.35 million CF per km (Feytmans 1958). These costs provide a range between $359,021 and $571,169 (2015=​100) a year for standard I roads; from $244,786 to $383,499 for standard II. The second important sector in the first plan of economic development was social infrastructure, which received 25.8 percent of the total budget (see Table 4.2). Two items, “Public lighting and African Housing,” received almost 58.2 percent of $2,131 million allocated to social infrastructure. The two items emerged as net winners to respond to the demands of an increasing number of évolués in most cities. The building of “African Housing” under the Agency of African Cities (Office des Cités Africaines) inaugurated a new era for the évolués who became owners of modern houses with both potable water and electricity. Also, the delivery of healthcare and education more than doubled from 1950 to 1959. Both sectors are discussed in more detail later in this chapter. The third was “Funding of Public Services” (item IV in Table 4.2). From an initial cost of $369.3 million or 7.4 percent, it more than doubled to represent $1,553.2 million or 18.8 percent in the final budget. The net winner in this fourth group of projects was urbanization. The initial funding of 4.7 percent or $234.6 million increased to 16.4 percent or $1.336.8 million in 1958–​1959. This record of funding was again the result of an increasing demand for better life for the évolués. The impact of the plan on FDI was enormous. In 1947, the planners expected to attract 25 billion BF of private capital, but the plan went well beyond expectations and brought in 66.5 billion BF (Vanthemsche 1993: 351). This translates from expected $4.05 billion to $10.77 billion in 2015 prices. Also, the plan improved income of urban dwellers, which doubled from an index of 100 in 1950 to 215 in 1957. The improvement of income was quite beneficial to the manufacturing sector that increased its production from an index of 100 in 1950 to 288 in 1957 (Lacroix 1967). The big business, which was initially against the plan, benefited the most from it. Productivity in the mining sector increased from an index of 100 in 1950 to 211 in 1959 and the index of European agriculture improved from 100 to 186 (Vanthemsche 1993: 351). Research and development in agriculture (R&D) increased from almost $64.8 million to $170.8 million in 1959. However, African agriculture that was supposed to benefit from the plan was not a priority at the implementation stage and it only increased from an index of 100 in 1947 to 139 in 1959. As a result, the ministry of colonies crafted in 1959 a second plan scheduled for 1960–​1969 that intended to level off some inconsistencies from the first plan. The estimated cost of the second plan was 57.81 billion francs or $9.43 billion (2015=​100). It was distributed as follows (see Table 4.2, last two columns): basic infrastructure (37.4 percent), social infrastructure (40.4 percent), African agriculture and related research (14.4 percent), and public services (7.8 percent).The new plan intended to spend $1.27 billion on African agriculture for ten years (see item III) and $1.61 billion for additional

98  Infrastructure for economic development roads (see item I) to deliver agricultural products. Independence came and the plan was never executed for reasons beyond the scope of this book. The first plan of economic development was a major achievement and surpassed by far the British and French planning programs thus explaining economic prosperity in the Belgian Congo in the 1950s. In the words of Lord Haily (1957: 220), “there can be no better evidence of the interest shown by Belgium in the improvement of the social conditions of Africans that the large sum being devoted to this object by the Ten-​year development Program.” To borrow from Dahrendorf ’s (1968: 219) idea of “plan rationality,” the Belgian plan was a “flexible plan rationality.” It was revised several times as colonial administrators in the Belgian Congo provided frequent feedbacks to the administrator in Brussels. The capitalist system in the Belgian Congo was almost a social capitalism in the 1950s. The building of physical infrastructure helped the colonial administrator to overcome proximity gap, which refers to “distance to markets, customers, suppliers, competitors, supporting industries, and governments” (Naudé 2009: 1). It is the ease with which economic agents coordinate decisions. In sum, the implementation of the program of “Great Works” in the 1920s and the first plan of economic development in the 1950s constitute the second mechanism by which a Weberian-​type bureaucracy can indirectly contribute to economic development. Both projects involved the minister of colonies as a coordinator who felt the need and the determination to correct market failures in the provision of basic infrastructure in order to achieve economic development. Brussels also delegated the implementation of the two projects to colonial administrators in the Belgian Congo because these administrators knew better what they needed or wanted to govern the Belgian Congo more effectively than Belgian administrators located in Brussels. This explains the flexibility of the two projects. The success of the two projects of development was thus possible because of a Weberian-​type colonial bureaucracy. The bureaucrats in the Belgian Congo implemented the two projects with a minimal level of corruption, understood here as diversion of public assets for private use. The integrity of the colonial bureaucracy was due to its autonomy and technical skills reinforced by its corporate interests, which were different from the administrators in Brussels. This duality of the colonial system created many beneficial effects related to delegation. The bureaucrat in the Belgian Congo and the bureaucrat in Brussels were two agents who faced a collective action problem if they wanted to collude in corrupt practices since they had different interests. Brussels’ bureaucrats wanted to attract massive private foreign investments in the Belgian Congo to extract resources in order to benefit the Belgian business sector. However, bureaucrats in the Belgian Congo wanted to penetrate and control Africans for state purposes. The Belgian Congo was their home and they wanted to make it the best place for themselves. Thus, colonial bureaucrats carried out the two projects of economic development because they strongly believed that

Infrastructure for economic development  99 Table 4.5 Annual salaries of public servants in Belgium and the Belgian Congo in 1955 Types of allocations

University graduate

Four-​year secondary school graduate

Belgium

Congo

Belgium

Congo

Gross base salary Family allocations Lodging &furniture Medical expenses Travel

119,700 12,840 -​ -​ -​

232,500 52,150 85,000 12,300 32,500

61,740 12,840 -​ -​ -​

155,000 52,150 85,000 12,300 32,500

Total (BF=​CF) Total ($2015)

132,540 23,444

414,450 73,308

74,580 13,192

336,950 59,600

Source in BF: Bézy (1957: 186).

these projects would help them to administer the colony more effectively. The establishment of a professional colonial bureaucracy with its own interests that counterbalanced bureaucrats in the ministry of colonies in Brussels minimized corrupt practices in the Belgian Congo. Another important feature of the Belgian Congo bureaucracy was its competitive salary package that also minimized any temptation to corruption. According to Table 4.5, gross base salary in the Belgian Congo was 232,500 CF in 1955 for a university graduate compared to 119,700 BF in Belgium. This represents a difference of 194 percent for the same qualifications since the two currencies were at equal parity, although the CF was always the strongest. When several allowances are added to these base salaries, differences in salaries are staggering. In 1955, the salary package of administrators with a university degree in the Belgian Congo was on average $73,308 a year in contrast to $23,444 in Belgium. Colonial administrators earned 312.7 percent more than their Belgian counterparts. The same was for four-​year secondary school graduates. They earned an annual salary of $59,600 in contrast to $13,192 a year for their Belgian counterparts.This represents a staggering 452 percent. Inflation rate of 1.08 percent a year in the Belgian Congo was far lower than inflation in Belgium. This colonial policy of competitive salaries is consistent with extant literature maintaining that low salaries make bureaucrats prone to corruption because “public servants maximize expected income”(Dahlström, Lpuente, and Teorell 2012: 658). Legal and economic incentives, both carrots and sticks, tend to deter public servants from being tempted to engage in corrupt behavior (Becker and Stigler 1974). One negative side of these competitive salaries was that these massive European salaries were never applied to Africans, however. When a growing number of Congolese began to acquire the competence necessary for entry at middle levels of the colonial administration in the 1950s, “the question arose as

100  Infrastructure for economic development to whether they should receive the same pay as their European counterparts” (Young 1965: 95). The liberal Minister of Colonies Auguste Buisseret agreed and decided to set up new wage scales to narrow the gap for the integrated grades. However, he reversed his decision when European functionaries in the Belgian Congo reacted violently and demonstrated their anger against the minister during his official visit in Elizabethville in February 1958 (Brausch 1961: 30). Another negative feature of the colonial administration was in education. Although colonial administrators denied post-​secondary education to Africans until 1954, many European administrators or technocrats in the Belgian Congo were university graduates.They received the best education on colonial matters as early as 1911 when Minister of Colonies Renkin created the first colonial school. The teaching staff of the colonial school, later colonial university, was also involved in research related to most colonial issues as illustrated by thousands of publications and monographs on the Belgian Congo.The key was to create better types through socialization of certain values, strong ties among the members of the corps, and isolation from external influences. Just like the Belgian bureaucracy, which was characterized by career stability, lifelong tenure, and special laws, the governor-​general established the same type of bureaucratic esprit de corps in the Belgian Congo.This esprit de corps generated a set of norms within the colonial bureaucracy that minimized corrupt behavior in the Belgian Congo. As a result, colonial rulers were able to provide public goods so critical for economic development. If the “Great Works” project and the first ten-​year plan achieved their goals as a result of minimal level of corruption hardly absolved colonial bureaucrats of wrongdoing. Corruption was present in both the Belgian Congo and in Belgium, but it never impeded economic development in the colony. Most cases of corruption in the colonial period were golden parachutes handed over to former colonial bureaucrats who retired into the private sector with enormous salaries and benefits. Corruption during the colonial period was well-​coordinated to allow the Belgian private sector to flourish and make enormous profits. Bureaucrats made it easier for the private sector to enter the market and to make profits by lowering regulations to ease business operations as long as these private operations did not impinge on state goals. It was certainly to their best interests to minimize regulations in order to make business profitable in the colony. Table 4.6 illustrates this type of good rents. Most former ministers of colonies retired in the private sector either chief executive officers (CEOs) of colonial companies or members of their boards of directors with golden parachutes. This type of organized rent-​seeking behavior does less damage to economic development because it internalized externalities. The result was low levels of corruption, not disorganized rent-​seeking behavior where isolated bureaucrats tend to fend for themselves and hence externalize the negative effects of corruption on others. The effect of coordination and internalization of corruption was to temper individual opportunistic behaviors while working for the public good.

Infrastructure for economic development  101 Tableau 4.6 Selected cases of internalized corruption in the Belgian Congo Names

Public sector position

Private sector after retirement

Renkin, Jules

Minister of Colonies (1908–​18) Minister of Colonies (1924–​26) Minister of Colonies (1932–​34) Minister of Colonies (1947–​50) Minister of colonies (1939–​45) Minister of colonies (1945–​47) Minister of colonies (1947–​50) Minister of colonies (1959–​60) Adviser, Ministry of Colonies

President of Crédit Général de Belgique President of COMINEX Member of several boards of directors

De Tournai, Carton Tschoffen, Paul Jaspar, Henri Vleeschauwer, A. Godding, Robert Wigny, Pierre De Schryver, Auguste Horn, Max

Ryckmans, Pierre

Governor-​General (1934–​1946)

Lippens, Maurice

Governor-​General (1921–​23) Vice Governor-​General Governor Judge (1906) then governor District Commissioner

Heenen, Gaston Liéart, Alfred De San, Arthur Moulaert, Georges

Kronacker, Paul Van Remoortel, W. Hougardy, N. Francqui, Emile Leemans, Franz

President of Lower House Senator Senator Captain in CFS (1873-​ Colonial administrator

Source: Joyce and Lewin (1961: 281–​288).

Administrator of Lukolela Plantations Administrator of Huilever, Lever, Crégéco… President of Compagnie Congolaise de l’Hévéa and board member of Cobega Board member of several companies Board member of several companies Board member of several companies Vice-​President of Caisse d’Epargne du Congo Belge, representative of government in Central Bank, Huilever, and board member of Sofina Board member of Compagnie du Katanga, Forminière, Central Bank of Congo Board member of a dozen of companies Board member: CCCI, Forminière, MGL… Board of Directors in eight companies President of Colocoton -​1923 Member of several Boards of Derectors Managing Director of UMHK Managing Director of Société Générale –​1912 Governor of SG –​1932 President of Sucraf & Board member at Lever President of FBI and Board member Board members of Kilo-​Moto and Otraco Managing Director Banque d’Outremer–​1902 President of Kilo-​Moto, administrator-​director of Régideso while board member of Colectric and Crédit Foncier Africain

102  Infrastructure for economic development

Transportation and economic development The main idea developed in Chapter 1 is that the supply of public goods is the engine of economic development. One major public good is physical infrastructure. The colonial state spent on average 14 percent of its ordinary budget on transportation networks (see Table 2.1). Most impressive was accumulated extraordinary outlays devoted to transportation from 1909 to 1959. Of a total extraordinary accumulated budget of $17.32 billion in 2015 prices, the colonial state allocated $6.21 billion to transportation or 35.85 percent. These massive public investments intended to govern and exploit natural wealth of the colony efficiently, especially its mining wealth. More specifically, the relationship between the mines and the railways was particularly beneficial because “most of the mines were a long way from the ocean or from navigable waterways” (Katzenellenbogen 1975: 361). In other words, the development of big mining companies started in southern Africa in the late nineteenth century and in the early twentieth century in the Belgian Congo. The mines were funded by massive long-​term capital that later became directly linked to the transportation sector. Not only did investments in infrastructure lower transportation costs, but they also helped to connect economic agents and to enlarge the market. As indicated by Table 4.7, the costs of transportation started to decline only at the end of the “Great Works” in 1929, averaging more than 200 percent from 1929 to 1936 for most exports from the colony to Belgium. The decline in transportation costs was a significant feature of the colony because “it contributed to the integration of the entire Congolese territory in the world markets as a supplier of raw materials” (Peemans 1975: 208). It also helped to unify and integrate the Congolese market with the domestic production of foodstuffs and manufactured goods. This is borne out by the impressive reduction in inter-​ regional price disparities between 1910 and 1958 of goods consumed by Europeans and well-​to do Africans (see Table 4.8). Prices of foodstuffs declined by an average of 40 percent from 1910–​1912 to 1957–​1958 as a result of declining transportation costs. This helped to keep wages or costs of production down, a policy that favored big mining companies that relied on domestic food production to feed their miners.

Table 4.7 Transport cost of selected products, Stanleyville –​Antwerp (1936 CF per ton)

Palm oil Coffee Cocoa Average

1913

1925

1929

1936

Percentage decline

1,640 1,640 1,640 1,640

1,600 1,720 1,576 1,632

1,330 1,265 1,170 1,255

425 494 520 480

286 232 215 244

Source: Huybrechts (1970: 217).

Infrastructure for economic development  103 Table 4.8 Transport costs and price disparities among major towns Regions

Types of Products

Matadi & Leopoldville

Food products Household articles Food products Household articles Food products Household articles Food products Household articles Food products Household articles Food products Household articles

Elizabethville Coquilhatville Luluabourg Stanleyville Kindu-​Bukavu

1910–​1912

1957–​1958

% decline

227 229 548 396 155 181 225 97 265 237 203 200

131 132 150 146 88 102 90 96 90 100 85 105

73 73 265 171 76 77 150 1 194 137 139 90

Source: data are from Peemans (1968: 414–​418 and 428–​430).

Another factor that lowered transportation costs was the improvement in its quality as a result of technology transfer.The total river engine-​power increased from 4,500 horsepower in 1911–​1913 to 71,900 in 1958–​1959; qualitatively, an average capacity pulled by a power unit also went up from 1.9 tons per horsepower in 1913 to 6.2 in 1959 (Peemans 1968: 46–​57). The number of railway locomotives also increased from 129 in 1913 to a record high of 458 in 1959, while the number of good vans rose from 1,045 in 1911–​1913 to 9,130 in 1958–​1959. Thus, tons per locomotive in the railway transportation system increased from 400,000 tons per kilometer in 1913 to 4.1 billion tons per kilometer in 1959 (Peemans 1968: 46–​57). Technical progress was also enormous in the management of the Congo River, its tributaries, and lakes. They included cartography of the Congo basin, river maintenance, its cleaning, and other innovative techniques that helped waterways to remain operational all year round, day and night. The waterway capacity jumped from 42,885 tons in 1926 to 304,208 tons in 1957 (Peemans 1968).The Belgian Congo also had more than 55 ports with modern equipment working day and night. An additional important factor that helped the industrialization of the Belgian Congo was the transportation fare policy. It relied upon a number of premises (Camus 1962: 1016). First, high yield products had to subsidize low ones. Second, no primary commodity (crop or mineral) should pay a transportation cost above its value. Third, domestic transportation costs should be lower than international ones because the latter include insurance and freight. Fourth, the fare must correspond to the performance of the transportation system. Fifth, transportation users are all equal with respect to the general fare. Finally, private owners of transportation services should be given profit incentives to operate efficiently. Based on these premises, the colonial state created the Office des Transports au Congo (OTRACO) in 1936 that grouped into a single semi-​ public

104  Infrastructure for economic development corporation most riverine transportation networks. However, the private sector still managed all other transportation networks, including railways. With the creation of OTRACO, the state assumed the burden of riverine transportation costs by granting low fares to agricultural areas where most of the African labor force working for the exporting sector was located in the colony.Transportation fare policies aimed to expand the profitability of private companies and to promote affordable national food production that major mining companies badly needed to keep wages down. The government even subsidized railways to keep quite low the cost of transportation through policy of “neutral zone fares.” Thus, railway fares remained almost the same regardless of distance. The government avoided progressive fares as a function of distance because such fares could have been prohibitively expensive. Policymakers believed that progressive fares could have led to the segmentation of many local markets in the long run by isolating remote rural areas and keeping them unconnected with the rest of the country. In 1951, the government further reduced transportation costs up to 50 percent for inter-​provincial fares of locally manufactured products and for agricultural products to be transformed locally (Huybrechts 1970). Other fare reductions were also applied to domestic inputs supplied to local industries. In Amsden’s (1989: 139–​155) felicitous phrase, the state directly intervened to get “relative prices wrong” in order to sustain economic advancement. An excellent example is the 1,123-​km railway BCK that was completed in 1928–​1929 and connected Bukama (Katanga) and Port Francqui (Kasai). Before the railway, the UMHK’s food needs for its workers were mostly imported from Northern Rhodesia (now Zambia). The construction of the BCK changed this dependence by substituting food imports by local production as a result of favorable fare prices or “neutral zone fares” in the early 1930s (Huybrechts 1970: 114). After just a few years, this policy ensured the supply of maize and other foodstuffs to Katanga. The result was a drastic decline in food imports from Northern Rhodesia to almost zero by the mid-​1930s. Kasai maize producers also harvested surpluses in subsequent years that were exported to Belgium; maize exports reached 50,000 tons per year in the early 1950s (Nicolaï and Jacques 1954). The railway fare system helped to integrate farming populations of Kasai to both national and external commercial circuits. The railway also represented a direct source of employment and a major source of income for its employees. The railway BCK employed more than 5,000 workers in the late 1940s. It provided them healthcare, housing, free primary education of their children, and other amenities (Nicolaï and Jacques 1954). If the agricultural sector benefited from low transportation costs, mining companies paid more than the fare applied to agricultural products.The mining sector was thus indirectly subsidizing low transportation fares of cash crops and foodstuffs because mining companies needed cheap foodstuffs for their workers in order to keep wages down. By the early 1940s, government “neutral zone

Infrastructure for economic development  105 fares” had lowered by more than tenfold the costs of transporting raw materials used by local industries and the costs of foodstuffs supplied to mining towns. The discriminating fare policy favored remote eastern provinces and local industries. It integrated these provinces with the Atlantic Ocean although the Indian Ocean route was closer and cheaper. As pointed out earlier, “the Belgian nationalism was the motivating factor after the First World War to develop the National Way or the western trade corridor” (Peemans (1975: 207). Colonial policymakers were resolved to provide the Belgian Congo a complete, independent transport network even though this was a costly solution. Belgian state managers viewed low transportation costs through British and Portuguese colonies as a danger to the economic development of the Belgian Congo and to its economic security (Fontainas 1921). Table 4.9 provides the evolution of tonnage by major transportation companies. More than 65 percent of this tonnage went through the National Way before independence.The total tonnage increased over the years especially after the Second World War. It reached a peak of 4,903,469 tons in 1959. Then, it started a declining trend a year later. The building and maintenance of physical infrastructure was the most important factor to industrialize the Belgian Congo. A combination of low costs and technology transfer in the transportation sector provided a major stimulus to this process. This infrastructure as a basic fixed capital reduced costs to other sectors and helped locate most industries in two centers of economic

Table 4.9 Evolution of tonnage of major transportation companies (metric tons) Year

BCK

CFL

CVC

OTRACO

Total

1935 1946 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1975 1980 1990 1995

310,623 890,189 1,769,914 1,868,459 1,631,477 1,099,353 1,024,532 1,192,812 1,657,825 1,835,989 2,000,000 1,993,284 2,105,585 2,263,693 1,923,800 2,292,200 1,680,000 1,221,800 195,200

53,673 172,432 366,393 349,221 255,392 67,703 86,000 129,466 105,000 97,462 140,000 125,000 150,000 200,000 133,400 135,500 101,300 86,400 15,400

20,023 44,182 97,348 100,464 90,720 62,126 75,487 72,327 54,700 86 12,258 35,684 45,360 62,664 40,300 43,800 18,500 6,400 200

426,417 866,176 2,537,660 2,585,325 1,875,916 1,298,814 1,517,062 1,566,601 1,368,078 1,175,719 1,508,987 1,618,639 1,750,300 1,859,877 1,621,500 1,110,600 723,900 771,800 138,400

810,736 1,973,079 4,771,315 4,903,469 3,853,505 2,527,996 2,703,081 2,961,205 3,185,603 3,109,256 3,661,245 3,772,547 4,051,251 4,386,214 3,809,700 4,174,800 3,117,600 2,232,500 397,100

Sources: from 1935 to 1969 refer to Lederer (1970: 137); after 1969, refer to Zaire, Banque Centrale, op. cit. (annual 1970–​1996).

106  Infrastructure for economic development growth or “poles of economic development,” Leopoldville in the southwest and Elizabethville in the southeast. A third pole in the northeast, Stanleyville, was in the making in the mid-​1950s. A pole of development is an economic engine space or “an industrial network” that has major upstream impacts (backward linkages) and downstream impacts (forward linkages) on the economy because it houses either a leading economic sector or an ensemble of such units (Perroux 1961: 168). Backward or upstream linkages constitute sectors that supply inputs to the leading or a given industry, while forward or downstream linkages are units that buy output from it. Thus, sustained economic growth does not appear everywhere at the same time, but it manifests at different poles of development with variable intensities for the entire economy (Perroux 1955: 309). As a result, a pole of economic development tends to have its own geographic space. Import substitution and metallurgical mining industrialization The first pole of economic development emerged in Leopoldville because King Leopold II connected the town to the Atlantic coast via Matadi in order to export his red rubber and other wild products. The existence of the falls on the Congo River between Matadi and Leopoldville, which imposed a natural rupture or trans-​shipment, required the construction of a railway. The existence of Leopoldville as a pole of economic development was thus the result of its geographic location as a junction port that connected hinterland navigable waterways to the Matadi port. An agglomeration effect also played here since Leopoldville developed as the capital of the Belgian Congo. The area, after all, had no natural resources. In addition to its location, the town was surrounded by an abundance of cheap labor.The IS industrialization thus began in Leopoldville and was made possible by a progressive agglomeration of diverse industries of equal importance to satisfy the national market. As stated briefly in Chapter 1, IS refers to the creation of local industries to supply many consumer goods that were previously imported. The idea of IS implies a decline in imports of consumer goods in high domestic demand. This is the transformation of the structure of imports (Chenery 1960: 640).The choice of consumer goods sector is that the cost disadvantage is quite low comparatively to capital goods or intermediate goods. The government employed a number of instruments including a combination of fiscal and credit policies. Leopoldville became the center of major industrial activities including food, chemical, transportation parts, textile, and shoe industries, among others. The juxtaposition of many different industries of consumer goods gave birth to a veritable industrial center network by the 1920s. The industrialization of Leopoldville was based upon the idea of balanced growth strategy (see Nurkse 1953). This is a synchronized application of capital to a wide range of different industries producing consumer goods. The industrialization of Leopoldville pole was an act of political will that intended to have rapid positive economic effects in several industries since state

Infrastructure for economic development  107 managers conveniently and consciously planned the environment. It was like a synchronized application of capital to a wide range of different industries to supply consumer goods. Any decline of activity in one industry within the industrial network had no repercussion over the others. Such agglomeration effects spread the industrialization process and led to industrial diversification by the late 1930s. Table 4.10 provides a selected list of products that shows the chronology of this industrialization process based on IS in Leopoldville. The cement industry began in 1920 and the soap industry followed two years later. In 1923, Leopoldville had its first beverage industry. The most important industry was the textile industry that started in 1925. It included spinning, weaving, and other techniques. Given the location of Leopoldville as a junction port, Ministry of Colonies Franck decided to connect the town with the entire hinterland in 1922 through networks of waterways and railways. The first result of connecting Leopoldville to the rest of the riverine transportation network was the establishment of the Chanic company in 1922 to assemble ships for the Congo River, its tributaries, and lakes. During the Second World War, the Chanic company and state-​ owned OTRACO began building tugboats and barges as a result of Germany’s occupation of Belgium. The first barge of 500 tons was built to supply a French company, Compagnie Générale de Transports en Afrique (Vanderlinden 1947: 63). Chanic also built six barges of 800 tons and eight of 675 tons for OTRACO and two barges of 400 tons for Forescom Company during the war. It continued its production even after the war. Table 4.10 Origins of selected industrial sectors in the two poles of development Industries Copper industry Explosive industry Cement industry Chanic Metal (shipyard) Soap (chemical) industry Beer & soft drinks Textile industry Tobacco industry Sulfuric acid industry Sugar industry Shoe industry Metallic industry Hosiery & Clothing Wire-​bars from copper Electric wires Fatty-​based products Synthetic and Fabrics

Leopoldville (Pole 1)

1920 1922 1922 1923 1925 1927 1928 1948 1938 1952 1953 1953

Elisabethville (Pole 2) 1906 1910 1921 1925 1929 1936 1951 1963

108  Infrastructure for economic development The third characteristic of Leopoldville was the concentration of its industries in a single location. Local industries responded to the expansion of the domestic market by enlarging their production capacity. Each industrial sector was unique and developed its own production capacity independently of others. Leopoldville’s industries became relatively important as monopolists in their own rights.The expansion of the domestic market was the result of two factors. First was physical along the Congo River and its tributaries. Second was the result of wage increases of African labor force in the second half of the 1940s. Thus, the industrialization of Leopoldville had both backward and forward impacts in the national economy. Most inputs supplied to Leopoldville’s industries were from the domestic agricultural sector including sugar cane, palm fruits, peanut, rice, cotton, tobacco, and many others as illustrated by Table 4.11. One good example is the demand for cotton that started in 1925. The Leopoldville pole also had some forward effects mostly in the town where most industries were located. Although most of Leopoldville’s industries supplied consumers’ final demand, some of its outputs had impact on other industries thus creating some inter-​industrial linkages. The production of sugar was used in the brewery industry. Palm oil was a major ingredient in the production of soaps (see Table 4.11). One unique feature of Leopoldville pole was the creation of similar industries in several provincial capitals, but on a much smaller scale. These subsidiaries

Table 4.11 Effects of selected manufacturing sectors in Leopoldville Industries 1. Food industries Sugar Palm oil Peanut oil Margerine 2. Beverage industries Beer Soft drinks 3. Tobacco industries 4. Textile industries 5. Shoe industry Leather Linen 6. Chemical industries Soap 7. Ciment industry

Backward effects

Forward effects

sugar cane palm fruits peanut

brewery, yeast packaging margarine, bottle, table oil, tuns, soap packaging, bottles packaging, bottle, cardboard…

barley, rice, maize

bottle-​works, crown cocks… idem

tobacco (34%) urena, cotton (50%)

hosiery, clothes mattress, pillows…

tannery rubber

local inputs

building pipes, hollow bricks, flagstones, rough-​walling, bottle

Infrastructure for economic development  109 were in Stanleyville, Bukavu, Luluabourg, and Cocquilathville. By the late 1950s, these towns’ industries almost mirrored Leopoldville’s industries. Expanding domestic manufacturing sector meant increasing demand for labor and thus rural exodus in the 1950s as the young began migrating to the cities where most industries were located. Despite this exodus, salaries kept their ascending trend in all economic sectors. It was competition over labor that kept this increasing trend in the early 1950s. Like mining companies, the manufacturing sector also began a major effort of mechanization that stabilized the labor force and improved productivity. Major substitution effects took place as capital–​labor ratio increased from the Second World War onwards. Also, labor productivity increased, leading to a low labor–​output ratio in the 1950s in a number of manufacturing companies. In real terms, the contribution of the manufacturing sector to GDP increased from zero in 1908 to 2.8 percent between 1920 and 1939 but reached 17 percent in the mid-​1950s.This performance was the highest in SSA (Bézy, Peemans, Watelet 1981: 27). As indicated in Table 4.12, local industries represented almost 31.3 percent of the total supply of consumer goods (local and imported) from 1950 to 1954. It increased to a record high of 44.5 percent in 1958. The production of intermediate goods averaged 31.9 percent of total supply between 1950 and 1954. The production of capital goods also increased from 2 percent

Table 4.12 Origins of supply of manufacturing sector in $2015 million, 1950–​1958 Types of goods Consumer Goods   Local industry (a)   Imports (b)   Total (c)   a/​c Intermediate Goods   Local industry (a)   Imports (b)   Total (c)   a/​c Capital Goods   Local industry (a)   Imports (b)   Total (c)   a/​c Total   Local industry (a)   Imports (b)   Total (c)   a/​c

1950–​1954

1955

341.8 749.0 1,090.8 31.3

541.6 845.9 1,387.5 39.0

288.0 616.2 904.2 31.9

1957

1958

608.7 962.4 1,571.1 38.7

686.9 1,057.5 1,744.4 39.4

713.1 890.1 1,603.2 44.5

409.8 992.1 1,333.4 30.7

404.0 1,012.9 1,1416.9 28.5

391.0 1,120.7 1,511.7 25.9

374.2 917.1 1,291.3 28.9

68.5 990.6 1,059.1 6.5

91.7 992.3 1,084.0 8.5

101.4 1,123.9 1,225.3 8.3

77.8 1,182.1 1,259.9 6.2

91.4 1,178.7 1,127.7 8.1

698.3 2,355.8 3,054.1 22.9

1,043.0 2,761.9 3,804.9 27.4

1,114.1 3,094.7 4,208.8 26.5

1,155.7 3,360.3 4,516.0 25.6

1,178.7 2,843.5 4,022.2 29.3

Source: the data in BF are from Lacroix (1967: 309).

1956

110  Infrastructure for economic development in the 1940s to an average of 7.7 percent of total supply in the 1950s despite a sensible decline during the 1957 world recession.The result of this industrialization was an increase in “the number of skilled African wage earners from 125,120 in 1920 to 827,500 in 1954, excluding the service sector” (Bézy 1957: 179). In 1956, the percentage of industry to GDP represented 39 percent (Bézy 1957: 75). The second pole of economic development was Elizabethville. It developed around the UMHK, which was created in 1906 and produced its first ton of copper in 1911. If Leopoldville industrialized as a result of its location and agglomeration effects, Elizabethville developed earlier because of its mining wealth, especially copper. Figure 4.1 provides the evolution of its production since the Second World War (USA 1941–​1959; 1960b–​2015b). It remained quite stagnant from 1940 to 1949. However, the UMHK’s managers decided to intensify production despite unfavorable copper prices, hoping that the market would be favorable again once stocks of minerals accumulated during the war were used up. Copper production increased at constant pace in the 1950s. The mining region was also the first producer of cobalt in the “free world” during the Cold War. The mining sector helped the Elizabethville pole to develop economically.As some observers have contended, the mining stimulated the growth of manufacturing industries in Africa, initially by providing a market for products directly involved in mining and smelting operations, notably coke

Figure 4.1 Evolution of copper production in metric tons

Infrastructure for economic development  111 and chemicals” (Katzenellenbogen (1975: 400). This is a typical example of Hirschman’s (1958) unbalanced growth model anchored by a leading sector. Thus, economic growth spreads from one major sector, like copper mining industry, to the rest of the economy. In 1920, the UMHK produced 20,000 tons of copper that required 15,000 workers. A year later, industries of non-​iron minerals like cement began their production to supply the company of needed inputs. In other words, the UMHK’s backward and forward effects were quick to emerge after it began producing its copper. The UMHK became the key force behind all programs of economic development in Katanga and surrounding provinces. Its establishment resulted in the creation of a number of associated peripheral industries. As illustrated by Table 4.13, the upstream or backward effects of the UMHK was the construction and development of industries to supply the mining giant with needed inputs including energy, cement, sulfuric acid, explosives, and metallic materials, among others. For example, the supply of sulfuric acid by the Sogechim began early for its use in leaching, a process of concentrating copper ores before they were smelted. By 1960, the UMHK domestic demand for local inputs represented more than 30 percent of total needs of the company, excluding energy. Of course, its demand for energy was also enormous. One important indirect downstream effect was the construction of the longest railway in the country, the BCK, since Elizabethville and southern Katanga had no navigable waterways. This isolation from the coast required

Table 4.13 Selected impacts of the UMHK in the Belgian Congo Backward linkages

Forward linkanges

Electrical Energy   Sogefor   Sogelec Sulphuric Acid   Sogechim Explosives   Afridex Cement   Cimenkat   Trabeka Metallic Constructions Coal   Luena Coal Mining Production of foodstuffs   Minokat Flour-​mills Railway   BCK

Zinc & Cadmium   Metalkat

Rolling-​mills & Wire-​mills from copper & zinc   Latreca   Cabelcom

 

112  Infrastructure for economic development the construction of this railway to export minerals and to supply the mining region with both domestic and imported capital goods. Unlike Leopoldville where most industries were monopolist, a number of competing industries were established in Katanga after 1945. These included among others three textile factories (two in Elizabethville and one in Albertville) and three cement factories (Lubudi, Jadotville, and Albertville). A key major difference between Leopoldville and Elizabethville was labor shortage in the latter. Located in southern mineralized savanna, which was also poor in fertile land, southern Katanga was barely populated and the UMHK had to recruit labor as far as Ruanda-​Urundi. But the bulk of the UMHK’s labor recruits was mostly from the Kasai-​Lomami regions. Before the construction of the railway, recruits had to walk at least 21 days under watchful eyes of soldiers to reach the mining area. Many recruits succumbed to exhaustion, famine, or both and died as indicated by a number of reports by the colonial government. Given the shortage of labor, the UMHK carried out several policy strategies in 1927–​1928 to stabilize its labor and hence increase the capital–​labor ratio. It also improved pay and social conditions for its employees. In the context of paternalism, the UMHK decided to provide healthcare to its workers and their families, good housing with potable water, electricity, and weekly food allowances. All children received free education. Other mining companies and big plantation companies followed these strategies by bearing social indirect costs to reproduce their labor force without additional outside recruits. In the mid-​1930s, turnover rate in the UMHK was just 3 percent, whereas across the border in British North Rhodesia (Zambia), the copper mines had a 50 percent turnover (Nzongola-​Ntalanja 2002: 73). Most mining companies and big plantations followed these policies of stabilization. Besides the industrialization of Leopoldville based on its location, technical and institutional factors. Technically was the transfer of new technologies in processing mineral ores further helped the early industrialization of the mining region of Katanga. Thus, early technologies using intensive labor, such as steam-​shovels in the early 1910s and then electric shovels, were replaced by churn-​drills to drill mine pits. The new technology freed manual hard work and increased productivity. The transfer of technology improved the capital–​ labor ratio in the mining industry. New metallurgical technologies in extracting mine content from mineral ores also improved labor productivity and thus production. One of the most advanced technologies was in the tin industry. Its production started in the early 1920s but was quite erratic as a result of price instability in the world markets. In late 1931, managers of the Société Minière d’étain de Kalima (SIMETAIN) in Maniema began the regular production of tin.The ascending production of this mineral was made possible by a new technology to treat the ores in Manono. Several years later, most production of tin mines was treated and refined in the Belgian Congo (Wrigley 1986).

Infrastructure for economic development  113 This contrasts with the tin sector in Nigeria Jos Plateau. By 1929, Nigeria became the world’s fourth largest tin-​producer (Wrigley 1986). In the late 1930s, the Belgian Congo saw its output approaching that of Nigeria. However, the British never developed Nigeria’s tin sector at the same technological level as did the Belgians. The entire Nigeria’s tin output was consigned to a smelter in England, while most tin-​ores produced in the Belgian Congo were smelted in Congo by the late 1930s (Wrigley 1986: 92). If the mining sector was critical in the industrialization of southeastern Belgian Congo, the textile industry helped to start the same process in Leopoldville.The textile industry was among the highest in Africa. As pointed out by Bairoch (1963), the demand from agriculture (and that of textile industry) was one of the engines of steel industry in Europe at the eve of the industrial revolution. Light industry is usually the precursor to the second phase of industrialization, like heavy industry and export-​led industrialization. By 1956, the Belgian Congo was at this stage of economic development. Unfortunately, this path was not taken as a result of three major bottlenecks. The first was political instability in the early 1960s and the fear it created among potential foreign investors.The second was a major rigidity in the structure of Congolese industrialization that became manifest in the mid-​1950s. The number of enterprises competing against each other was too high (see Table 4.14). This rigidity involved internal competition for most products substituted for imports.The soft drink industry is one example. Local industries displaced dimensions of their own markets by setting up occasions to invest in future competitors (Lacroix 1967: 180). Moreover, Belgians never attempted to encourage the export-​led industrialization of the Belgian Congo despite its early export of labor-​ intensive consumer goods that averaged almost 7 percent of total GDP in the mid-​ 1950s. A strategy of export promotion could have been more effective in the

Table 4.14 Selected imports covered by local production and competition Products Sugar Water & soft drinks Beer Cement Cotton fabrics Blankets Soap Shoes & sandals Cigarettes

Percentage covered

Number of enterprises

89 99 99 82 49 57 95 62 96

2 13 3 3(a) 4 2 2 3 2

a =​three same enterprises in the east of the country. Source: Lacroix (1967: 179).

114  Infrastructure for economic development mid-​1950s than IS in expanding output and employment. The government could have promoted this development strategy through capital subsidies, depreciation allowances, and import duty exemptions. Usually, the transition from IS to export-​led development is difficult because export expansion takes time and can be slow as most potential exporters have to produce for a domestic market first (Linder 1961). It requires to expand capacity, relocate resources, acquire physical inputs, develop skills, upgrade procedures, and learn by doing before new competitive export industries based on comparative advantages can emerge (Nafziger 2006: 613). Fortunately, all these conditions already existed in the Belgian Congo by the late 1940s. The Belgian Congo had a solid IS and was already exporting a number of consumer goods. Moreover, the Second World War helped to upgrade most procedures and provided it more capacity and skilled labor capable to start export-​led industrialization. However, the Belgian private sector did not want Congolese industries to compete with its own manufacturing products. In brief, when the Belgian Congo became independent in 1960, it had the most favorable initial conditions than most colonies in Africa to spur further its manufacture of equipment goods or to start export-​led industrialization.

Supply and consumption of energy in the development process The industrialization of the Belgian Congo went in tandem with an increasing demand for and production of hydroelectric energy. Hydroelectric energy became the most important factor of production added to mechanized operations. It was only after the Second World War that a third phase of mechanization and an upsurge in the production of energy took place in the Belgian Congo. As a result, mining companies abandoned the old and less profitable operations like alluvial gold-​dredging. In the evolution of the mining industry that started in the early 1910s, the first phase required an abundant labor force that necessitated the transportation of migrant workers from far-​away villages to the mines. During the second stage in the late 1920s, an effort was made to reduce the industrial labor force by stabilizing the Congolese workforce and increasing its professional skills. The third stage was characterized by a reduced labor force and its high productivity as a result of an increased supply of low-​cost hydroelectric energy. The mechanization of the late 1930s and after the war meant less African labor force in the mining industry. Between 1942 and 1958, industry-​wide evolution brought about 50 percent decrease of African labor, while labor productivity rose almost fourfold (Vellut 1983). At the same time, the European labor force increased by 48 percent as a result of mechanization. However, the ratio of Europeans to Africans in the Belgian Congo remained much lower than elsewhere in southern Africa (Vellut 1983: 138). In brief, the supply of “cheap energy” developed a number of industries including that of manganese and zinc (Vellut 1983).

Infrastructure for economic development  115 In 1948, the Belgian Congo was producing at least 497 million kwh of hydroelectric energy. Leopoldville and Elisabethville consumed 40 percent and 21 percent, respectively. The Stanleyville-​Bukavu axis was the third industrial pole in the making, which captured 28.5 percent. The supply of such source of energy also meant sustained industrialization. This contrasts with many parts of colonial Africa that either industrialized late or never took off industrially. For example, the whole French West Africa produced only 34 million kwh in 1948, while Nigeria’s production was 108 million and Ghana 171 million (Hance 1964: 40). The combined total of 313 million kwh of energy of West Africa represents 62.9 percent of the Belgian Congo. The other industrialized colony, Southern Rhodesia, had 230 million kwh, while the production of Kenya and Uganda represented 59 million and eight million, respectively (Hance 1964), again far below the production of energy in the Belgian Congo.

Social infrastructure and economic development Social infrastructure or human capital includes people’s education and their health. Theoretically, educated people tend to be more productive in modern economy since they help to keep up with technological innovations that sustain the process of economic growth (Helpman 2004; Lucas 2002). However, spending on education in the Belgian Congo remained low, averaging only 2 percent a year during the entire colonial period (see Table 2.1). Belgium ruled its colony under the assumption that Africans were children. As one observer of the colonial system pointed out, “the colonizer must never lose sight of the fact that Negroes have the souls of children, souls that mold themselves to the methods of the educator” (Mottoulle 1946: 54). This belief consisted of raising the educational level of a whole generation through primary education rather than elevating rapidly a small group of elites to whom power could be transferred (Stengers 1969). For 17 years, 1908–​1925, Belgium never embarked on any major policy of education because what the colonial economy needed was to supply cheap labor to mining companies and plantations because it could export its qualified personnel from Europe to the colony. However, most Congolese workers in the industrial sector learned to maneuver machines through learning by doing. It was not until 1925 that the colonial administration started some reforms in education as a result of increasing technological needs in the mining and manufacturing industries. The school system was mostly entrusted to the Catholic Church, which also became responsible for running most schools of mining companies in need of cheap, but professional skilled labor. For example, it helped the UMHK to achieve the goal of “developing… advanced technical training of its workers” (Markowitz 1973: 61). By the early 1930s, most mining companies were subsidizing Catholic missions not only to educate their newly Congolese skilled labor force but also to stabilize it as the shortage of skilled labor began to spread across the colony (Vellut 1983: 134).The education of miners’ children was also viewed as an important policy to accomplish this stabilization goal (Vellut 1983)

116  Infrastructure for economic development because it reproduced skilled miners. The mechanization of most mining and metallurgy companies in the Belgian Congo also coincided with the need for a stable and skilled labor force, hence the need for technical and professional education. The need for specialized professional Congolese workers emerged only when the market for European skilled labor became onerous. This implied the substitution of this European workforce by a relatively cheap but skilled African workers. The UMHK started this substitution in the mid-​1920s by also financing some professional schools. After a few years, the company was able to replace 250 Europeans by Africans, but this represented only 5 percent of skilled workforce of the company (Mottoulle 1946: 38–​39).This substitution was only 2 percent in the diamond mining company, Forminière. This low level of African skilled workers in the mining sector contrasts with the transportation sector. In 1921, the biggest transportation company, BCK, opened up several professional schools for locomotive machinists to Africans. Many Congolese became station clerks, adjusters, group leaders and so forth in the transportation-​railway network. Most of these positions were held by Europeans. This move from transportation companies was not welcome by Europeans who resisted it preferring to keep the color barrier of southern Africa. However, most transportation companies resisted such temptation and moved forward with professional schools for Africans (ibid.: 29). By 1932, the BCK had replaced 63 percent of skilled Europeans by skilled professional Africans. Many other companies followed the same strategy and were able to cut enormous costs by this managerial strategy. The colonial system also had an additional type of education called “Accelerated Professional Formation.”This was a technical program whose goal was to educate quickly a semi-​qualified labor force in specialized education centers to respond to increasing labor needs from the industrial sector. This system was made possible by the Orientation Commissions for Professional and Technical Education that included the representatives of schools, the colonial administration, and local enterprises. These commissions were permanent observers of the evolving labor market and, at opportune moments, provided recommendations to professional schools on how to adapt their programs to the needs of the local economy, especially demands for skilled labor from mining and manufacturing companies. In the early 1950s, the government committed 2.6 billion CF ($460 million in 2015 prices) to improve and develop all levels of professional education as a result of these Commissions’ recommendations (Belgium 1955). Economic expansion continued in the second half of the 1950s that accentuated the migration of young adults to cities. Competition among employers increased and resulted in rising wages. As pointed out earlier in this chapter, most businesses reacted to this wage increase by an effort towards mechanization. A comparison between 1954 and 1958 shows a tremendous increase in output in the manufacturing sector: output increased from an index of 166 to 220 given 1950 as the base year (1950=​100); however, labor declined as a result of mechanization

Infrastructure for economic development  117 from 124 to 80 and as a consequence output–​labor ratio increased from 134 to 275 and capital–​labor ratio also jumped from 153 to 267 (Peemans 1975: 194). The decline in employment as a result of mechanization meant that the state had to step in by increasing employment in the public sector. Its payroll increased from 10 percent in 1950 of total wage bill to 25 percent in 1958 (Peemans 1975: 198). In retrospect, the first component of the colonial educational system emphasized mass primary education. The number of schoolchildren increased spectacularly after 1908 to “100,000 in 1913, some 150,000 in 1921, and more than 350,000 in 1929” (Frankema 2013: 161). The need to spread primary education to rural areas led the colonial state to promulgate a decree on 5 December 1933 (article 45) that required traditional authorities to build and maintain one or more primary schools in their chieftaincies with subsidies from the government (Belgium 1934). The result of the policy was an increase in the enrollment in primary education. This achievement was the work of missionaries that made the Belgian Congo as “part of a select group of mainly British African colonies such as Northern and Southern Rhodesia (Zambia and Zimbabwe), Nyasaland (Malawi), and Uganda where gross enrollment rates (6–​14 years) were over 20 percent on the eve of the Second World War” (Frankema 2013: 162). However, the Congolese rate of 18.2 percent was higher than the British African and much higher than the French with 5.4 percent and Portuguese colonies with 5.3 percent (Frankema 2013). Thus, the number of pupils grew by 4 percent a year to reach almost 1.5 million in 1958. In 1959, more than 90 percent of the school age children in the Belgian Congo were enrolled in primary school because it was free for all children of schooling age. The colonial emphasis on free mass primary education reflects the fact that the return on primary level was quite high because it was free and the costs of foregone earnings (what students did not earn had as they not been in school) were quite minimal. Also, returns on primary education were captured by an increase in individual earnings since they benefited society as a whole. In other words, the educational system of the Belgian Congo was tailored to respond to economic needs of the colony by enrolling most children of school age contrary to the French assimilation system that stressed the education of a small elite loyal to the colonial cause. As a result, there were “no more than 70,000 schoolchildren out of 12 million of school age children throughout French West Africa in 1938 and only 20,000 out of five million in French Equatorial Africa” (Coquery-​Vidrovitch 1986: 371). The high number of pupils in the Belgian Congo “compared very favorably with that of school systems elsewhere in colonial Africa” (Jewsiewicki 1986: 490). However, the primary education system in the Belgian Congo had a major flaw. It produced a low level of literacy rate. If the number of students was quite large in the first degree (first and second grades combined), the number of students that moved to the second degree (third grade to sixth grade) was quite small. In 1948, for example, the enrollment in the first degree was 652,918

118  Infrastructure for economic development students, but the number of students enrolled in the second degree was only 191,112.2 This represents only 29.27 percent. Assuming that the number of students enrolled in the first degree in 1948 were supposed to be in the fifth and sixth grades four to five years later, some 206,549 students enrolled in the second degree in 1953 represented only 31.63 of the 1948 first level of primary school. This shows a low level of primary school graduates. The second most important area after primary school was technical and professional education to supply professional and skilled labor to both rural and urban areas. Rural schools were financed by the Fund for Native Welfare (Fonds du Bien-​Etre Indigène or FBI) created by a decree on 1 July 1947 to respond to increasing needs for independent artisanal workers in the countryside.Two years of post-​primary professional school were required for carpenters, mechanics, and brick layers, among others. Post-​primary professional schools in urban areas targeted the needs of the manufacturing, mining, and transportation sectors. Another colonial system was to educate clerks and accountants to staff lower levels of public and private administration. Two years of post-​primary education were enough for clerks and four years were required for accountants. Three to four years of post-​primary school were also required for agricultural and veterinarian assistants to staff vast state rural extension services across the colony. An important additional aspect of education involved four-​to six-​year post-​primary school for instructors to teach at the primary level of education. One very important sector was the education of professional health providers. Physician assistants received four years of theory in post-​primary school and three years of practice under the supervision of specialized medical doctors. Nursing degrees in the Belgian Congo required five years of post-​primary school and nursing aid only two years. Most post-​primary professional schools were run by the Catholic Church. The seemingly collaboration between the Church and the colonial government hide some frictions between the anti-​clerical movement and the Church in both Belgium and the colony. In 1921–​1923, anti-​Catholic policies in education carried out by the liberal Governor-​general Maurice Lippens were blocked in the ministry of colonies. His successor, Martin Rutten, insisted on the necessity to avoid, as much as possible, any type of conflict with the missions and to follow sacred duty to make sure that there was perfect harmony between missionaries and colonial officials. The equilibrium remained fragile, however. The liberal Minister of Colonies Robert Godding carried out a major educational reform in 1945–​1947 to end the unfavorable position of the Protestants in the Belgian Congo. He established non-​confessional education system for European children in the colony despite vehement opposition from the Catholic Church. A few years later, a Socialist–​Christian coalition government drafted a convention project between Belgium and the Vatican that incited strong discontent among anticlerical groups in Belgium because they thought that the convention gave the Catholic Church an upper hand in colonial matters (Frankema

Infrastructure for economic development  119 2013). A long debate in the lower house of the Belgian parliament in 1954 blocked in extremis the adoption of the convention. The anticlerical revenge soon emerged when socialists and liberals put in place a coalition government in 1954.The liberal Minister of Colonies Auguste Buisseret abandoned the 1925 formula in education. He officially established secular schools at primary and secondary levels for Africans weakening drastically the position of the Catholic Church. He thus institutionalized secular education in the Belgian Congo and reduced subsidies to the Catholic Church. Not only did this move break the consensus in the colonial circle of the civilizing mission of Belgium, but it also set the pace towards political reforms to come. The most crippling weakness of the Belgian educational system was that it never laid down the foundation for Africans to pursue sciences and engineering. This policy contrasts with most developmental states, autocracies and democracies, which first emphasize primary mass education, similar to the Belgian Congo. Unlike the Belgian colonial state, however, they later developed secondary schools to prepare graduates to the tertiary level of education in sciences and engineering. Another early factor to delay the tertiary level of education was that the government left the entire educational system to Catholic missions to respond to their own and colonial economic needs. If the missions had no elaborate secondary school system to educate Congolese in general, they established 24 secondary schools or petits séminaires and university-​level education or grands séminaires to educate Congolese priests in order to reproduce the Christian culture. The first Congolese priest was ordained in 1917 and the first Congolese bishop in 1956. By 1960, Congo had at least 600 Congolese priests. Finally, the real reason that the colonial state refrained from developing a complete secondary education was political as stated earlier in Chapter 1, “pas d’elites, pas d’ennuis!” (Stengers 1987: 526) or “no elites, no trouble!” As a result, the Belgian Congo had the highest number of European administrators in the late 1930s than any other colony: 728 against an African colonial average of 94; in British Nigeria, with more than twice as many inhabitants, the number of administrators was 353 or less than half of the Belgian Congo by the 1930s (Richens 2009: 64–​65). The second social infrastructure to explain economic development in the Belgian Congo is healthcare. Bloom, Canning, and Seville (2004) contend that the East Asian growth miracle was actually not a miracle at all, but it represented rather compelling evidence for a process in which improvements in health favored economic development. In fact, investments in health determine the efficiency of labor services. Healthier workers are more productive for a variety of reasons, among them, increased capacity, energy, attentiveness, resistance, creativity, and so on. In brief, healthcare improves human capital to be more productive. As pointed out in Chapter 1, the Belgian Congo developed the best health infrastructure in SSA.

120  Infrastructure for economic development The first step toward improving health infrastructure started with the visit of the heir to the throne, Prince Albert Leopold Clement, to the Belgian Congo in August 1909. The governor-general and his administrators interested the prince in the poor health infrastructure in the colony since it was in their best interest to improve it given the high mortality rate among Europeans residing in the colony and exorbitant costs of sending them to Europe for their healthcare needs. Just by coincidence, Leopold II died a few months later on 17 December 1909. The first act of King Albert I was to reorganize the healthcare system as his highest priority. He asked Minister of Colonies Renkin to create a department of health services in Boma, to centralize information on services, and to coordinate efforts on medical issues in the colony. The government then concluded several conventions with private companies and the Catholic Church to establish health facilities in exchange for state subsidies. From these conventions emerged the Medical Assistance Service to the Natives (Service d’Assistance Médicale aux Indigènes or SAMI). In early 1911, the administration inaugurated a system of mobile and decentralized health groups under SAMI (Kivits 1992: 100). The goal was to detect pandemic diseases and to treat many others. However, the efforts of these mobile groups were limited by the size of the Belgian Congo and dwindling supplies of medicine to treat an increasing number of patients. The most important bottleneck to these mobile groups was the recalcitrant attitude of chiefs who still believed in the power of traditional medicine.The government then decided to build hospitals across the colony to supplement SAMI’s efforts. If annual funds allocated to healthcare were only 1.05 percent before 1908, the government increased it to 3.7 percent after the annexation of the CFS to Belgium. This spending jumped to 10 percent a year in the 1920s (see Table 2.1). By 1920, the Belgian Congo had already built 34 hospitals with 3,040 beds for Africans and ten hospitals with 150 beds for Europeans (Belgium 1921: 87). In 1922, the medical service became autonomous and was directly under the supervision of the governor-general. The government initiated two measures in the early 1920s as part of the “Grand Works” program developed earlier. The first was to establish rural dispensaries across the Belgian Congo and their construction began in 1924 (Kivits 1992: 103). Second, most chieftaincies were required to build their own hospitals with subsidies from the government. Third, major plantation and mining companies were also encouraged to build hospitals and clinics to minimize absenteeism among their workers. The “paternalist” attitude of the Belgian ruler was an important stimulus in the development of the healthcare infrastructure in the Belgian Congo. Diet and housing of workers improved gradually. Also, close supervision of compounds in mining towns and large plantations was maintained weekly for better sanitation and hygiene. It was in conjunction to their policy to stabilize their labor force that big mining companies made the greatest strides in healthcare. This stabilization policy also helped to control the labor force.

Infrastructure for economic development  121 Table 4.15 Spending in healthcare by selected companies in CF, 1926–​1932 Companies

Forminière Chemin de Fer du Congo BCK Société Anonyme Belge Compagnie du Lomami et Lualaba Compagnie Sucrière Manucongo Compagnie des Produits du Congo Ciments du Congo Trabeka

Number of Building Daily exploitation workers Infrastructure (a)

(b)

Spending (c) Per capita (c/​a)

21332 8265 6900 2927 2777 2460 1021 800 657 624

25300000 11000000 24000000 770000 1700000 5500000 2300000 425000 1000000 1500000

55000000 10000000 8000000 675000 1200000 2500000 1200000 152000 1800000 700000

2578 1210 1159 231 432 1016 1175 190 2740 1122

Source: Mottoulle (1946: 21–​24).

More specifically, the colonial state and the private sector strongly believed that healthy workers were more productive than workers who were otherwise comparable, but for their health. The UMHK even began professing the following motto in 1927: “good health, good spirits and high productivity” (Vellut 1983: 153). From 1926 to 1932, the UMHK spent on average 165 million CF to build hospitals and other health facilities; it also spent an average of 28 million CF a year for healthcare delivery (Mottoulle 1946: 15). The UMHK served as a model to the extent that most companies, from small to big ones, improved healthcare of their employees by building their own facilities as illustrated by Table 4.15. The Belgian royal family also became personally involved in the healthcare system in the colony. It established the Queen Elizabeth Fund for Native Medical Assistance (Fonds Reine Elisabeth pour l’Assistance Médicale Indigène or FOREAMI) by a royal decree on 8 October 1930. The goal of the foundation was to complement state efforts in providing healthcare to all rural areas. The first FOREAMI experiment began in Lower Congo in 1931. Its early operations were easy to implement because of the region’s excellent physical infrastructure. By late 1932, the FOREAMI had built more than 120 medical centers that served more than 3,200 rural communities (Kivits 1992: 108–​109). It then ceded these health centers to the colonial government in 1935 for maintenance and improvement. Its second experimental location began in the Kwango district in 1935. This was a difficult experiment because of the district’s size and poor infrastructure compared to Bas-​Congo. However, the FOREAMI successfully built 11 fully equipped hospitals, nine dispensaries, and six maternity wards staffed by 15 full-​time doctors scattered across the district (ibid.: 112). By 1958, the results in

122  Infrastructure for economic development Kwango were spectacular. Infant mortality declined from 167 per 1,000 births in 1938 to 66 per 1,000 in 1958 (ibid.: 119). The third FOREAMI experiment was in the Uele district, Orientale Province, where several diseases had decimated the population. A trend in declining numbers of births as a result of increasing cases of gonococcus among women was a serious problem in the region (ibid.: 120).The FOREAMI started its program in early July 1958 in the Dugu and Poko areas where some 220,000 people resided. It incorporated Niagara, Ango, and Bondo in early 1960. Health improvements occurred quickly as a result of FOREAMI’s operations in Uele (120). However, the program died several months after independence because of political instability and hostile or bitter political relations between Congo and Belgium. Finally, the colonial government implemented its own health program that began with SAMI in the early 1910s.Although health spending declined slightly in the early 1940s as a result of the war, it surged again in the 1950s to average 11.2 percent a year. The extraordinary budget of the ten-​year plan also added more health facilities. The FBI kept its role to supply healthcare to rural areas after the Second World War. Its initial capital came from Belgian reimbursements of sovereign spending that the Belgian Congo incurred on behalf of Belgium during the war. Additional capital was later added from Congolese and Belgian lotteries. By 1957, the FBI had built 32 new medico-​surgical centers and rural hospitals, 481 dispensaries, 125 maternity wards and 139 pavilions for infants, 17 medical secondary schools, and five sanatoriums (Kivits 1992: 121). In 1958, the Belgian Congo had 5,232 well-​ equipped and well-​ staffed health facilities scattered across the Belgian Congo: 76 percent or 3,951 facilities belonged to the colonial state while private companies were second with 15.9 percent or 831 facilities (Belgium 1959). Missionary congregations owned and managed 450 or 8.6 percent of health facilities. By 1959, healthcare was present in both rural and urban areas.With a few exceptions, access to healthcare or the distance to reach a healthcare facility varied between five to ten kilometers in most chieftaincies. Of course, the healthcare system built in the Belgian Congo intended to benefit Europeans against tropical diseases and to exploit the colony more efficiently. In the end, it also benefited Africans. The European population of more than 110,000 people was the highest in Africa, except colonies of settlement. Most Europeans in the Belgian Congo received their healthcare in the colony because they had their own 44 health facilities scattered across the colony as illustrated by Table 4.16. The health system built by private companies for their own workers helped to minimize absenteeism and thus lower the costs of production. The program of tracking down diseases was also quite common to avoid epidemics that could have cost the colonial economy billions of dollars in profits. Therefore, it may also be argued that by trying to satisfy the needs of the colonizer, the visible hand of the state also satisfied the needs of Africans through the best healthcare system in tropical Africa.

Infrastructure for economic development  123 Table 4.16  Major European hospitals in the Belgian Congo in 1958 (current names) Provinces

State-​run hospitals

Missions

Enterprises & others

Leopoldville

Boma, Matadi, Kinshasa Inongo, Kikwit, Kabinda Kabinda, Luebo, Lusambo Lodja Mbandaka, Boende, Lisala, Basankusu, Libenge Kisangani, Buta, Irumu, Niangara Bukavu, Kasongo, Beni, Lubero Lubumbashi, Kalemie, Dilolo, Malemba N’Kulu, Sandoa

Kimpese

Mbanza-​Ngungu Tshela, Kisantu Bakwanga

Kasai Equateur Orientale Kivu Katanga

Kananga

Aba, Fataki Lokandu Kamina

Kindu, Butembo Kamitunga Likasi, Kolwezi

Source: Belgium (1959: 235).

The result was a drastic decline in mortality rate. From 1933 to 1952, for example, an average of 30,062 European outpatients received healthcare in the colony and on average 0.46 percent died each year.3 An average of 5,764 Europeans were hospitalized during the same period and 1.77 percent died. Table 4.17 provides the evolution of African outpatients and hospitalized ones. The percentage of deaths declined over the years in both cases. This is again an indication of a good healthcare system. By helping to bring under control malaria, sleeping sickness and other diseases, big plantations and mining companies were instrumental in removing one of the most serious obstacles to Africa’s economic growth (Katzenellenbogen 1975: 387–​388). This is consistent with several studies in the 2000s showing that one extra year of life expectancy can positively affect steady-​state GDP per capita (Bloom, Canning, and Seville 2004). Another health area is preventive. The colonial state established an annual census in the early 1930s to track pandemic diseases and set a consistent system of hygiene across the country.Traditional authorities were mobilized to achieve this goal.The system involved tracking and treating six principal pathologies: sleeping sickness, malaria, tuberculosis, leprosy, yaws, and venereal diseases (Belgium 1932). The second area of preventive healthcare concerned children of schooling age. A decree in 1946 required medical inspection of schools before the beginning of school year (Belgium 1947). Each school facility was under the control of a medical doctor whose job was to assess the hygiene of school installations and the health of students and teachers. This also required a thorough physical examination of students and appropriate sanitation measures to prevent any contagious disease in the school. The government also embarked in a major undertaking in research on tropical diseases and the establishment of many laboratories across the colony.

124  Infrastructure for economic development Table 4.17 Deaths of outpatient and hospitalized Africans, 1933–​1952 Year

Outpatients (a)

Deaths (b)

1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952

580,650 700,090 820,562 921,601 933,855 1,280,406 1,200,473 1,206,604 1,221,965 1,157,464 1,218,704 1,210,149 1,403,369 1,451,308 1,613,020 1,758,691 2,064,090 2,262,777 2,470,499 2,689,277

5,127 5,026 5,511 6,330 6,005 6,702 6,559 6,502 6,657 7,468 8,338 8,014 7,656 7,801 8,430 9,018 9,485 10,866 11,309 12,258

(b/​a)*100 0.88 0.72 0.67 0.69 0.64 0.52 0.55 0.54 0.54 0.65 0.68 0.66 0.55 0.54 0.52 0.51 0.46 0.48 0.46 0.46

Hospitalized (c)

Deaths (d)

(d/​c)*100

51,117 58,460 70,603 85,279 52,703 60,687 60,410 67,596 68,635 77,454 103,575 148,918 112,705 125,026 194,420 236,022 200,463 284,928 329,393 353,717

3,067 3,373 3,402 3,619 3,253 3,740 3,494 3,515 3,843 4,550 5,473, 6,624 5,137 5,074 5,700 7,479 6,651 8,637 9,240 9,972

5.99 5.77 4.82 4.24 7.50 6.60 5.78 5.12 5.60 5.87 5.28 4.56 4.56 4.06 2.93 3.30 3.30 300 2.88 2.80

Source: Belgium, Ministère des Affaires Economiques et Classes Moyennes, op. cit.

The body in charge of this research established in 1947 was the Institut de Recherches Scientifiques en Afrique Centrale (IRSAC) that was fully funded by the government. The Belgian Congo also had a widespread program of vaccination that reached most villages. In fact, itinerant medical groups carried out vaccination campaigns in remote areas against tuberculosis, smallpox, yellow fever, polio, and the triad diphtheria/​tetanus/​whooping-​cough. As a result, the Belgian Congo’s excellent medical services made themselves felt across the colony. Administrative officers serving in the territorial services were required to spend 20 days per month in rural areas, and the instructions to territorial agents underlined this point:“The government attaches the greatest importance to territorial functionaries visiting frequently the diverse parts of the territory under their authority and entering each time into contact with the natives” (Kivits 1992: 12). In brief, the healthcare system in the Belgian Congo in the 1950s was the best healthcare system in tropical Africa. A final preventive healthcare area was the supply of potable water in both urban and rural areas. The parastatal REGIDESO supplied water to 33 major cities (Belgium 1957: 298). Some 40 small towns received their potable water from plantations, mining companies, charter companies, and local administrations. The FBI was the first parastatal to provide potable water to rural areas by the late 1940s. As a result, the Belgian Congo had almost no outbreak of epidemics related to unsanitary water.

Infrastructure for economic development  125 Although colonial efforts to improve social services was without doubt a major accomplishment, there was considerable variation in development efforts. Vansina (2010: 243) observes that in a large Kuba village at the end of the colonial period “there was no piped local water, no electricity, no advanced school, not even a complete elementary school, no healthcare.” The Kuba situation was perhaps an exception because the colonial administrator required as early as 1925 that each chieftaincy built at least one health infrastructure with some state subsidies (Belgium 1926).This was the case in most chieftaincies across the colony. A decree of 5 December 1933 also required traditional authorities to build and maintain one or more primary schools in their chieftaincies. Certainly, the Kuba chief never lacked resources to accomplish these tasks. In one of his early studies,Vansina (1972) noted that the district administration in the Kuba chieftancy looked upon the king to recruit workers on behalf of the private sector for the construction of the railway BCK in the 1920s. He received numerous bounties from the BCK for which he had recruited manpower. Moreover, the Kuba chief was in charge of collecting taxes required by the colonial administration and took for himself a tribute that was as important as the tax burden to entertain his hundreds of wives (Vansina 1972). As a member of the colonial administration, he received a salary of 60,000 francs a year in the second half of the 1920s (Vansina 1972).This represents $191,709 in 2015 prices. The Kuba chief could have used some of his revenue and bounties to build one dispensary rather than to entertain his hundreds of wives. For Gardner (2013: 128), “increases in expenditure on social services and infrastructure came too late to build a foundation for growth that could be inherited by the government of the Congo after independence.” Gardner (2013) might be correct but postcolonial elites never tried to maintain the embryonic welfare system that the Belgian ruler built in the 1950s. This infrastructure has completely disappeared because the government fixes nothing in Congo. The colonial state built some 579 bridges, several dozens of ports, more than 140,000 km of roads, more than 4,000 km of railways, and thousands of health facilities. As discussed in Chapters 7 and 8, only their relics remain visible across the country like monuments. Although the ten-​year plan of economic development was perhaps late, the “Great Works” project that Minister Franck implemented in the early 1920s to build most infrastructure provided the colony a solid base that attracted massive FDI into the colony. The railway network built in the 1920s and health infrastructure built by the FOREAMI in the early 1930s were probably not late. One major issue is that postcolonial leaders have siphoned billions of dollars and invested nothing to maintain the colonial infrastructure stock. In other words, postcolonial elites never inherited a physical and social infrastructure vacuum. Basic infrastructure and social programs built before independence should be viewed as initial conditions. The key was to maintain the colonial existing stock and to add to it. Unfortunately, this colonial infrastructure no longer exists and according to some experts, it would take the DRC some 50 years to reach the 1959–​1960 level of economic development (World Bank 2004: 9).

126  Infrastructure for economic development

Summary Unlike the CFS, the Belgian Congo state took a different stand on infrastructure. It implemented the program of “Great Works” in the 1920s and the first ten-​year plan of economic development in the 1950s.The two projects provided the Belgian Congo a cornerstone to attract massive FDI that set the path to sustained economic development. They responded to the needs of the market by their flexibility. The 1950–​1959 plan was implemented during a period when colonial authorities were able to affirm state capacity and autonomy despite opposition from non-​state actors. To achieve its goals, the state not only had to coordinate among different agencies, but it also had to innovate by creating new sophisticated management organs and to develop new administrative techniques. The 1950–​1959 plan was really a break with the past and a major innovation in the European colonial history. The development of physical infrastructure in the colonial period paved the way to two centers or poles of economic development, Leopoldville and Elizabethville. The former targeted the domestic market through IS and the latter aimed at the global markets because of its mineral wealth. The industrial sector of the Belgian Congo was basically divided into a mining industry which, in the long run, used more capital than labor and a light industry which used more labor than capital.The IS model was just a transformation of the structure of imports. By the late 1950s, the Belgian Congo was already in the phase of producing capital goods or to embark upon export-​led industrialization. Another factor in the development process is energy. The colonial state addressed this factor of production quite adequately to pursue the industrialization process by using water, the most abundant resource in the colony to produce energy. The economic history of the Belgian Congo indicates that basic infrastructure to help people escape poverty requires careful planning, political will, and a strong commitment from state managers. The third ingredient to develop the Belgian Congo was education. Investments in education targeted primary mass education and post-​primary professional schools because they responded to the needs of colonial economic activities. The first layer of professional schools was mass training within the enterprise to supply skilled workers according to company’s needs. The second layer used specialized private professional schools. Secondary and tertiary levels were developed later for mostly political reasons. One additional public good developed in this chapter was the supply of healthcare. The colonial message was loud and clear: “healthy workers meant high productivity and hence high returns” (Vellut 1983) and economic development. Both the state and the private sector pursued this motto, resulting in one of the best healthcare systems in Africa. In brief, the supply of infrastructure, both physical and social, complemented the supply of political order and the rule of law developed in Chapter 3 to sustain economic development in the Belgian Congo.

Infrastructure for economic development  127

Notes 1 Belgium, Ministère des Colonies, Statistique sur la Formation du Capital au Congo Belge et au Ruanda Urindi de 1886 à 1956, Brussels: Ministère des Colonies, 1957. 2 Belgium, Ministère des Affaires Economiques et Classes Moyennes, op. cit. 3 Belgium, Ministère des Affires Economiques et Classes Moyennes, op. cit.

References Amsden, A.H. (1989) Asia’s Next Giant: South Korea and Late Industrialization, Oxford: Oxford University Press. Bairoch, P. (1963) Révolution Industrielle et Sous-​Développement, Paris : Société d’Edition d’Enseignement Supérieur. Becker, G. and Stigler, G. (1974) “Law Enforcement, Malfeasance, and Compensation of Enforcers,” Journal of Legal Studies 3: 1–​18. Belgium, Ministère des Colonies (1921, 1922, 1926) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1920, 1921, 1925) Présenté aux Chambres Législatives, Brussels: M. Hayez Imprimeur. Belgium, Ministère des Colonies (1931, 1932, 1934, 1947, 1951–1954, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1930, 1931, 1933, 1946, 1950–1953) Présenté aux Chambres Législatives, Brussels: F. Van Gompel Imprimeur. Belgium, Ministère des Colonies (1955, 1957, 1959, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1954, 1956, 1958) Présenté aux Chambres Législatives, Brussels: Etablissements Généraux d’Imprimerie, S.A. Belgium, Ministère des Colonies (1949) Plan Décennal pour le Développement Economique et Social du Congo Belge, Tome I and II, Brussels: Les Editions de Visscher. Bézy, F. (1957) Problèmes Structurels de l’Economie Congolaise, Louvain-​la-​Neuve: Presses Universitaires de Louvain. Bézy, F., Peemans, J.-​P., and Wautelet, J.-​M. (1981) Accumulation et Sous-​ Développement au Zaïre 1960–​ 1980, Louvain-​ la-​ Neuve: Presses Universitaires de Louvain. Bloom, D.E., Canning, D., and Seville, J. (2004) “The Effect of Health on Economic Growth: A Production Function Approach,” World Development, 32(1): 1–​13. Brausch, G. (1961) Belgian Administration in the Congo, New York: Oxford University Press. Buelens, F. and Cassimon, D. (2013) “The Industrialization of the Belgian Congo,” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development:The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 229–250. Camus, G. (1962) “Réseaux Ferrés,” in Apport Scientifique de la Belgique au Développement de l’Afrique Centrale, Brussels: Académie Royale des Sciences d’Outre-​mer. Chenery, H.B. (1960) “Patterns of Economic Growth,” American Economic Review 50(4): 624–​654. Clement, P. (2013) “The Land Tenure System in the Congo, 1885–​1960: Actors, Motivations, and Consequences,” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development: The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 88–108.

128  Infrastructure for economic development Coquery-​Vidrovitch, C. (1986) “French Black Africa,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 329–398. Dahlström, C., Lapuente, V., and Teorell, J. (2012) “The Merit of Meritocratization: Politics, Bureaucracy, and the Institutional Deterrents of Corruption,” Political Research Quarterly, 65(3): 656–​668. Dahrendorf, R. (1968) Essays in the Theory of Society, Stanford: Stanford University Press. Feytmans, G. (1958) “La Rentabilité des Routes au Congo Belge,” Bulletin ARSOM 4: 482–​500. Fontainas P. (1921) “La Politique des Transports au Congo Belge,” Bulletin de la Société Belge des Ingénieurs et des Industriels 2: 163–​220. Frankel, S.H. (1938) Capital Investment in Africa, London: Oxford University Press. Frankema, E. (2013) “Colonial Education and Post-​Colonial Governance in the Congo and Indonesia,” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development: The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 153–177. Gardner, L. (2013) “Fiscal Policy in the Belgian Congo in Comparative Perspective,” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development: The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 130–151. Hailey, W.M. (1957) An African Survey Revised 1956, London: Oxford University Press, Hance, W.A. (1964) The Geography of Modern Africa, New York: Columbia University Press. Helpman, E. (2004) The Mystery of Grwoth, Cambridge, MA: Harvard University Press. Hirschman, A. O. (1958) The Strategy of Economic Development, New Haven: Yale University Press. Huybrechts, A. (1970) Transports et Structures de Développement au Congo: Etudes du Progrès Economique de 1900 à 1970, Paris: Mouton. Jewsiewicki, B. (1986) “Belgian Africa,” in A.D. Roberts (ed.) The Cambridge History of Africa.Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 460–493. Joye, P. and Lewin, R. (1961) Les Trusts au Congo, Brussels: Société Populaire d’Editions. Katzenellenbogen, S.E. (1975) “The Miner’s Frontier, Transport and General Economic Development,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​1960. Volume 4: The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 360–428. Kivits, M. (1992) “Développement des Services de Santé,” in P.G. Janssens, M. Kivits, and J. Vuyleskeke (eds.) Médecine et Hygiène en Afrique Centrale: De 1885 à Nos Jours, Brussels: Fondation Roi Baudouin, pp. 83–160. Lacroix, J.-​L. (1967) Industrialisation au Congo. La Transformation des Structures Economiques, Paris: Mouton. Lederer, A. (1970) L’Exploitation des Transports au Congo pendant la Décennie 1959–​ 1969, Brussels: Académie Royale des Sciences d’Outre–​Mer. Likaka, O. (2009) Naming Colonialism. History and Collective Memory in the Congo, 1870–​1960, Madison: The University of Wisconsin Press. Linder, S. B. (1961) An Essay on Trade and Transformation, New York: Wiley. Lucas, Jr. R.E. (2002) Lectures on Economic Growth, Cambridge, MA: Harvard University Press.

Infrastructure for economic development  129 Markowitz, M.D. (1973) Cross and Sword:The Political Role of Christian Missions in the Belgian Congo, 1908–​1960, Stanford: Hoover Institution Publications. Mottoulle, L. (1946) Politique Sociale de l’Union Minière du Haut Katanga, Brussels: Académie Royale des Science d’Outre Mer. Nafziger, W. E (2006) Economic Development, Fourth Edition, New York: Cambridge University Press. Naudé, W. (2009) “Geography, Transport and Africa’s Proximity Gap,” Journal of Transport Geography 17(1): 1–​9. Nicolaï, H. and Jacques, J. (1954) La Transformation du Paysage Congolais par le Chemin de Fer. L’Example du B.C.K., Brussels: Institut Royal Colonial Belge. Nzongola-​Ntalaja, G. (2002) The Congo from Leopold to Kabila: A People’s History, London: Zed Books. Nurkse, R. (1953) Problems of Capital Formation in Underdeveloped Countries, New York: Oxford University Press. Peemans, J.-​P. (1968) Diffusion du Progrès Economique et Convergence des Prix: Le Cas Congo–​Belgique, Louvain–​la–​Neuve: Editions Nauwelaerts. Peemans, J.-​P. (1975) “Capital Accumulation in The Congo under Colonialism: The Role of the State,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​ 1960.Volume 4 The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 165–212. Perroux, F. (1955) “Note sur la Notion de Pôle de Croissance,” Economie Appliquée, 8(1–​2): 307–​320. Perroux, F. (1961) L’Economie du XXe Siècle, Paris: Presses Universitaires de France. Richens, P. (2009) “The Economic Legacies of the ‘White Line’: Indirect Rule and the Comparative Development of Sub-​Saharan Africa,” African Economic History 37: 33–​102. Rosenstein-​Rodam, P.N. (1943) “Problems of Industrialization of Eastern and Southern Europe,” Economic Journal, 53(210/​211): 202–​211. Stengers, J. (1969) “The Congo Free State and the Belgian Congo before 1914,” in P. Duignan and L. Gann (eds.) Colonialism in Africa, Cambridge: Cambridge University Press, pp. 261–292. Stengers, J. (1987) “Une Décolonisation Précipitée: Le Cas du Congo Belge,” Cultures et Développement 10(4): 521–​556. USA, Department of Interior (1941–​1959; 1960b–​2012b, annual) Mineral Yearbook. Volume III International, Washington, D.C.: Government Printing Office. Vanderlinden, R. (1947) “Les Constructions Navales au Congo Belge,” in Centenaire de l’Association des Ingénieurs Sortis de l’Ecole de Liège: Congrès 1947, Section Coloniale, Liège: A.I. Lg., pp. 332–​360. Vansina, J. (1972) “Les Kuba et l’Administration Territoriale de 1911 à 1960,” Cultures et Développement 4(2): 275–​298. Vansina, J. (2010) Being Colonized. The Kuba Experience in Rural Congo, 1880–​1960, Madison: The University of Wisconsin Press, pp. 337–355. Vanthemsche, G. (1993) “Une Politique de Développement Economique Colonial. Le ‘Plan Décennal’ du Congo Belge 1949–​1959,” in E. Aerts, B. Henau, P. Janssens, and R. van Uytven (eds.) Studia Historica Oeconomica. Liber Amicorum Herman van der Wee, Louvain: University Press, pp. 337–355. Vellut, J.-​L. (1983) “Mining in the Belgian Congo,” in D. Birmingham and P.M. Martin (eds.) History of Central Africa, London: Longman, pp. 126–​162.

130  Infrastructure for economic development World Bank (2004) Transitional Support Strategy for the Democratic Republic of the Congo, Washington, D.C.: The World Bank. Wrigley, C.C. (1986) “Aspects of Economic History,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7: From 1905 to 1940, Cambridge: Cambridge University Press, pp. 77–​139. Young, M.C. (1965) Politics in the Congo: Decolonization and Independence, Princeton: Princeton University Press.

5  Property rights and economic development

The privatization of the colonial economy began soon after Minister of Colonies Renkin took office on 30 October 1908. When Belgium officially annexed the CFS on 15 November 1908, land conceded to major companies for at least 90 years was 27.1 million hectares, including 15 million to the Katanga Company and eight million to the CFL (Heyse 1947: 35). After the annexation of the CFS, these companies returned 10.2 million hectares to the colonial state after negotiations between the parties. Successive land conventions between the state and the private sector aimed at four principal issues (Heyse 1947: 38–​43). The first was to respect rights of natives and to protect both present and future land needs of African collectivities. Second was to develop conceded lands with a progressive process of industrialization. Third, the colonial administration made sure the development of the colony remained in the hands of the private Belgian sector. Fourth was to improve economic and social conditions in rural communities. The Belgian parliament and the ministry of colonies established general rules that presided over the new system of land tenure in article 15 of a law promulgated on 18 October 1908. This law was modified by another on 5 March 1912 and replaced by a decree-​law on 19 May 1942. Minister of Colonies Renkin declared after taking office that his goal was to end state intervention in the economy. He emphasized the fact that the role of the state should be limited to safeguard certain essential areas including public order and the rule of law, but leave the economy to the private sector. His economic philosophy in the late 1900s seems to echo Porter’s influential comparative work on the determinants of economic success among nations (Porter 1990). Porter (1990: 88) states that “government’s proper role is as a catalyst and challenger: it is to encourage –​or even push –​companies to raise their aspirations and move to higher levels of competitive performance.” Briefly stated, the vision of Minister Renkin in 1908 was what Dahrendorf (1968: 219) called “market rationality.” This rationality is based on the assumption that “a smoothly functioning market is in fact to the greatest advantage of the greatest number”; and it requires a “politically passive… hands-​off attitude in matters of legislation and decision-​making” (ibid.). DOI: 10.4324/b23045-5

132  Property rights and economic development In March 1910, a decree ended state exploitation of agricultural products on crown lands (Belgium 1911). The state also privatized several of its pre-​war activities dating back to the CFS. These moves were a major break with the Leopoldian state monopoly. The emergence of free trade increased the number of traders and triggered an unprecedented commercial rivalry that had two important consequences. First, it resulted in a rapid increase in prices paid to African producers to a level that was not reached again until 1950 (Peemans 1997). The second consequence was an increase in competition but also hostility between itinerant traders benefiting from free trade and agents of large concessionary companies hurt by it. The First World War broke out in 1914 and colonial companies gave their support to the forces of the Entente Cordiale. They also founded in London the ABCI to have regular contacts with the Belgian government in exile. As pointed out in Chapter 1, the collaboration between the state and the private sector was “often quite unprecedented in its manner” (Brion and Moreau 1998: 305). As a result, the state even privatized the management of a few state-​owned enterprises (SOEs), whilst retaining possession of all or some of the capital. The same private initiative dominated the liberal Minister of Colonies Franck. More specifically, the appointment in January 1921 of Maurice Lippens, an executive of the Banque d’Outremer as the governor-​general of the Belgian Congo, appeared as an important proof and a sign of the importance that private companies were henceforth to play in the development of the colony (Brion and Moreau 1998: 305). Eight months later, the Belgian parliament voted a law that authorized a loan to finance a program of large-​scale public works or “Grands Travaux.” As developed in Chapter 4, the main purpose of this program was to build basic physical infrastructure in order to attract the private sector in the Belgian Congo. The abolition of state monopoly and most economic restrictions implied that the private sector controlled the economy.The colonial state also continued to guide it to achieve specific state goals. The Great Depression changed this relationship between the state and the private sector, however. Declining world commodity prices and increasing taxation on Africans resulted in several revolts in the Belgian Congo that required some change in the colonial policy. Most financial groups came under attacks in 1933 because of their economic concentration. The Belgian public accused them of foisting a program of “Grands Travaux” in the 1920s that had proved ruinous, but beneficial to major companies. More specifically, the SG was accused to have lined its coffers very profitably thanks to the concessions granted in 1906. The affair reached such proportions that “the Belgian government was forced to issue a public denial of collusion between politics and finance” (Brion and Moreau 1998: 322). Minister of Colonies Paul Tschoffen and Minister of Finance Henry Jaspar had to clarify to the public that the development of colonial infrastructure in the 1920s had nothing to do with Belgian big companies since the budget to build it was voted unanimously by the Belgian parliament (Brion and Moreau 1998).

Property rights and economic development  133 The SG had to remind the public in its February 1934 report that it was “against its will when in 1906 it bowed to the wishes of King Leopold II and took over the UMHK, the BCK, and the Forminière” (Brion and Moreau 1998: 322). In fact, the SG never had very important holdings in the 1906 companies. However, it had to take all responsibilities for their financing and their management when these companies were still infant and required huge, fixed capital to keep them afloat. Although many companies, other than the 1906 group, benefited equally from colonial concessions, they never enjoyed the patronage of the SG, which emerged as the dominating force in the colonial economy in the early 1920s despite its denial. It was able to control many large colonial companies either directly or indirectly as a result of state policies of privatization that allowed the SG to manage most semi-​public colonial companies. The SG managed these companies like private ones to make profits. This was capitalism at its best and was unprecedented in the history of the Belgian Congo and most colonial empires. The assets of the SG operating in the Belgian Congo amounted to more than 4.8 billion BF in capital by the mid-​1930s. According to a Senate report published in 1934, the SG controls the total production of copper, diamonds, radium and cement in the colony, and part of the gold output. Besides the three major railways in the Congo, the three largest electricity networks are in its hands… The fact is that without the Générale group, the economy of the Congo would, so to speak, be non-​existent” If the Congo’s economy base still survives, it is thanks to private enterprise groups and the determined and consistent policy of the Société Générale. The state, alas, has little to show for itself. (Brion and Moreau 1998: 323–​324) The type of capitalism that shaped the colony in the 1920s was almost like the Chinese guanxi but with a contract. Like guanxi, cultural resources channeled through Christian missions allowed the creation of networks to build trust and to reach out informally to those interested in business ventures. Unlike guanxi, however, state-​business networks that created this trust allowed business transactions to succeed because it was capitalism with contracts. As a result, the SG exercised its control over the colonial economy through several companies, like the CCCI and the CSK, whose management was given to the SG although the state had the majority of shares in these companies. The SG also had direct control over other companies and their subsidiaries. Its empire included, among others, many giants like the UMHK, the BCK, the Forminière, and other participations in more than 100 companies. In essence, the capital invested in the Belgian Congo was neither the product of global capital enticed by a free investment climate nor the result of individual decisions. The lion’s share of investments was from Belgium, especially from a few companies. The Belgian Congo became highly dependent on four big Belgian companies that controlled colonial capital assets. The four companies

134  Property rights and economic development were in descending order of financial importance the SG, the Empain Group, the Cominière Group, and the Brufina Group. In the 1930s, they controlled almost 77 percent of total capital invested in the colony.The SG had the lion’s share or 64.5 percent of total accumulated investments in 1920–​1932; the other three had 7 percent, 3.3 percent and 2.1 percent, respectively (Peemans 1975: 183). The four companies could not have controlled the economy without the tacit acquiescence of Brussels. Eighteen years later in 1950, the four companies were still in control of the colonial economy. The total capital invested in the Belgian Congo by foreign companies was between 34 and 38 billion BF, of which 25 billion was controlled by four groups associated with the state (Peemans 1975: 182–​183). This represents between $34 and $38 billion in 2015 prices. These groups included the SG (75 percent), the Empain group (10.4 percent), the Cominière group (5.4 percent), the Brufina Group (0.38 percent) and the colonial state (5.4 percent). In brief, the SG played a vital role in the privatization of the colonial economy with unconditional support and the blessing of the Belgian royal family. The role of the SG in the Belgian Congo is perhaps analogous to the clan-​based conglomerates of South Korea. The SG was created in 1826 with 343 shareholders. The royal family of King William Frederick or William I of The Netherlands controlled 83 percent of the new company or 31,226.5 shares (Brion and Moreau 1998: 23). The SG continued to play the same role after Belgium became independent on 4 October 1830. In a sense, massive investments from Belgium to the colony implicated the Belgian ruling elite.This inflow of investments never represented the invisible hand of the free market, but something much more closed and network based. Most private capital inflows in the Belgian Congo was the work of the “Jadot-​Cousin-​Gillet clan” (Brion and Moreau 1998: 323). An interlocking network of management indicated the power of this exclusive group. By 1937, some 28 people held 400 board seats in the colonial companies (Vellut 1983: 133). The private sector in Belgium and in the Belgian Congo was a major non-​partisan veto player because it invested huge capital in the colony. This network rimes with the developmental state paradigm on the link between the private sector and the state. All these institutional, economic, and personal factors made the Belgian Congo safe for FDI. Colonial companies were seen as safe investments and were all the rage on Brussels’ stock exchange (Brion and Moreau 1998: 292). Two external factors further increased the value of colonial stocks in Brussels. First was an increase in world prices of major mineral products from the Belgian Congo. Second, the fear of a third world war in the early 1950s made the Belgian Congo a safe haven for security deposits of persons residing in Belgium. However, “the strong rooms of the Congolese banks were not big enough to contain all these securities” (Brion and Moreau 1998: 393). The Belgian Congo was an investor’s paradise as a result of its Weberian bureaucracy that established political order and the rule of law. This bureaucracy was able to

Property rights and economic development  135 Table 5.1 Value of shares in the Brussels’ stock exchange in millions of BF Year (average)

1914 1920 1930 1940 1950 1955

Congolese values

All shares

(a)

(b)

340 1,120 13,851 7,981 29,305 77,528

6,323 11,502 87,200 33,137 90,206 189,068

(a/​b) * 100

5.4 9.7 15.9 24.1 32.5 41.0

Source: Bézy (1957: 119).

protect private assets, which, in turn, enhanced investments and sustained economic development. Also, the colonial economy relied on an open financial system based on the Brussels’ stock market with easy mergers and acquisitions that ensure the best management team available to run an enterprise and to manage it efficiently. Thus, the development and liberalization of capital markets allowed shares of most colonial companies to be quoted in the Brussels Stock Exchange by 1914. The value of colonial shares increased from 5.4 percent in 1914 to 41 percent of total shares of the Brussels Stock Exchange by 1955 as illustrated by Table 5.1.

Property rights in the agricultural sector In 1954, the density of African population in the Belgian Congo was five inhabitants per square kilometer. The colony also had one of the highest densities of 405 people per km2 of cultivable land. This anomaly was a result of dense tropical forest and the consequence of a rudimentary technology used by rural masses to till the land. Amalgamation of people into clans and ethnic groups also limited the size of cultivable land and was against the development of a modern agricultural system. Land legislation from the early periods of the Belgian Congo aimed to preserve enough land that would be later granted to a white minority. Although concessions to private enterprises were substantially reduced, they continued under different forms and with different conditions. The colonial state provided extensive land concessions to settlers and to European companies for economic activities. This was different in the British Empire. Except in colonies of settlement where vast arable lands were given to European settlers, the British system also prioritized Africans’ ownership of land even at the expense of Europeans. This policy forced William Lever to seek land in the Belgian Congo after the British Colonial Office refused to give him enough land concession for his scientific cultivation of palm trees and mechanical milling of their fruits. However,

136  Property rights and economic development negotiations between Minister of Colonies Renkin and Lever took months and almost collapsed because Lever wanted vast concessions of land. There was even a major debate in the Belgian lower house on this issue. Finally, Renkin and Lever signed a convention on 14 April 1911 that granted the latter 750,000 hectares of land.This concession was later reduced to 350,000 hectares in 1938. A decree signed on 29 April 1911 sealed the deal that gave Lever’s new company, the Huileries du Congo Belge (HCB), the rights to produce palm oil in domanial lands having elais palm trees located around and less than 50 km of each of the following five locations: Bumba on the Congo River, Barumbu on the Congo River, Lusanga along the Kwilu River, one area located at 40 km south on the meridian d’Igende on the Ruki River, Basongo on the Kasai River” (article 8 of the convention). A few years later, the HCB named these locations Alberta, Elisabetha, Leverville, Flandria and Brabanta, respectively. According to the convention of 14 April 1911, Lever’s goal was to establish large-​scale palm plantations and modern processing facilities that would produce palm oil of superior quality. Since plantations take time to grow, the company requested from the government to harvest and process fruits from wild palm trees. The colonial government agreed to this strategy and leased to Lever all wild palm trees in the five locations described above at the ridiculous rent of 0.27 BF per hectare, thus depriving local populations of their natural harvest. The company was also granted a monopoly over the purchase and treatment of palm fruits within these areas. The HCB’s locations had enough population and their inhabitants had traditionally produced palm oil before the advent of Europeans. The Congo basin also provided an excellent network of navigable waterways that appeared excellent for the company’s activities. The best part of the deal was that all these areas contained natural palm trees and the company began harvesting existing forest trees without spending a single CF to create a new plantation. By 1920, the HCB had already produced more than 5,000 metric tons of palm oil from wild palm trees. Nine years later, Lever Brothers merged with an Anglo-​Dutch company to form the multinational Unilever. On the social side, the 1911 convention gave the HCB enormous administrative responsibilities, including the amelioration of living conditions of workers and African population located within the proximity of company’s factories by building schools for their children and hospitals staffed with at least a medical doctor for its employees (article 4 of the convention). The government also instructed the HCB to pay its workers regularly and fairly for the labor at the rates established by regional district commissioners. These reforms were only on the paper since the concessionary system was still in place. In 1919, the HCB owned seven palm oil factories in the Belgian Congo (Willame 1980: 17). By 1928, the HCB employed 25,000 workers (Deconinck 1996: 43). Eight years later, the HCB had more than 20 factories and 12 of them were located in Lusanga or Leverville in Kwilu and by then the company was exporting 80 percent of Congolese palm oil (Deconinck 1996: 48). The colonial government would encourage further the production of palm oil during the Second

Property rights and economic development  137 World War to compensate for the loss of this product in occupied South-​East Asia by Japan. The number of plants increased after the war because individual Europeans, retired public officials, and even former managers of private companies wanted to have a piece in the palm oil boom. What distinguished the HCB from other agricultural companies in the Belgian Congo was its social endeavor. As a result of the 1911 convention, the company had in 1960 an impressive and vast network of health and social services in its many workers’ plantation camps. The HCB had 12 well-​equipped and staffed hospitals, several dozens of dispensaries, 16 medical doctors, 25 specialist gynecology nurses and more than 400 aide nurses (Nicolaï 2013: 8). Socially, the company established women social centers (foyers sociaux), canteens, workers’ houses, a network of 75 primary schools, dozens of three-​year secondary schools, many technical schools, among others. It had 33,000 permanent workers and some 27,500 palm fruit cutters. Like mining companies, the HCB recruited its workers from high demographic areas. First was its recruitment of palm fruit cutters from the Gungu territory in the Kwilu district for its Leverville area where natural palm trees were in abundance. Located 150 km apart, these recruits had to walk several days. Once in the work site, the cutters were under enormous pressure to deliver palm fruits without considering the nature’s seasonal reproduction. The HCB also used forced labor in porterage for its administrative personnel. With the help of the FP, soldiers burnt down villages that refused to relocate as a result of sleeping sickness. Taxes were also paid in rubber but later in cash that most people in the areas could not afford. Taxes even increased during the Great Depression when global prices of palm oil hit the bottom. This fact was at the root of the Pende’s revolt in 1931 discussed in Chapter 3. Forced labor in agriculture started with the cultivation of cotton in 1917 and was followed by other cash crops and food crops as well. It had three specific goals. The first was “humanitarian” since a number of areas in the colony experienced famine as a result of rudimentary technology such as the hoe, rather than bovine traction. The second was political since it consisted of controlling rural masses. The third was economic or fiscal in nature. The colonial administration articulated the humanitarian factor without mentioning the other two. Forced labor in agriculture was an integral part of the overall colonial policy to include peasants within an early proto-​capitalist economy. The first legal document to initiate forced labor was article 23 of a decree of 2 May 1910 on chieftaincies. An ordonnance-​law signed on 8 March 1916 completed it and the law was implemented during the First World War. However, an ordinance of 20 February 1917 was the first to lay the foundation of forced labor in the production of both food and cash crops. It limited forced labor to 60 days per year or five days a month. Still another ordinance of 30 August 1924 abolished the 1917 decree and introduced a new procedure of investigation before enforcing forced labor. The investigation was over the resources of the territory, the number of healthy adults, transportation networks and the possibility to trade and technology used in the fields, and so forth.

138  Property rights and economic development Paradoxically, these decrees never mentioned the humanitarian aspect to deal with increasing shortage of food production in rural areas. The policy of forced labor was a tacit incentive to encourage Europeans to engage in certain agricultural activities. One good example is the cultivation of cotton. This activity established corresponding manufacturing plants to treat it in the early 1920s. The type of capitalism in this area was perhaps the most brutal and illiberal one. The cultivation of cotton began as a cash crop to help rural communities to earn some income. Instead it was forced upon them and thus brought strong resistance almost everywhere because it was “the premier crop” to negatively affect the village world more than any other crop (Likaka 2009: 37). The colonial government institutionalized forced cultivation of cotton in many parts of the Belgian Congo. It also created small plants. Cotton areas were known as cotton zones or zones cotonnières because of their favorable climate to the crop. The number of households engaged in the cotton sector increased from 15,000 after its imposition in 1917 to 105,556 in 1930, and some 700,000 households were cultivating cotton by 1940 (Likaka 2009: 38). One year before independence, more than 874,000 households were involved in cotton. This meant an increasing trend of volume of cotton from a mere 3,000 tons in 1920 to almost 177,000 tons in 1958. This represents an average of 57,000 tons of cotton per year.The colonial government also established a number of plants to treat cotton. However, it handed them over to Cotonco, which was a subsidiary of the SG. By 1959, Cotonco controlled almost 60 percent of the cotton market in the Belgian Congo. It bought and ginned cotton in assigned monopoly zones and provided sundry human and economic infrastructural services such as seed distribution, feeder-​road maintenance, social services, and technical advice (Young and Turner 1985: 317). On 29 December 1955, a decree reduced the number of days of forced labor from 60 to 45 days per year. Forced labor implied a declining trend in income of rural populations because it took away 45 days of earning income. Some 1.9 million Congolese were under forced cultivation regime including one million women and 900,000 men from 1920 to 1930 (Peemans 1997: 96–​98). The extreme coercive nature of the Belgian colonialism should not overshadow the fact that all European colonial powers used forced labor. The advent of the Great Depression reduced tensions among owners of foreign capital. The government had to institutionalize a strict division of labor between African producers and foreign capital concerning the agricultural surplus (Peemans 1997: 89).The former were confined to the production of coffee, cacao and cotton, while the latter controlled the treatment of cash crops before commercialization.The government fixed the prices of these crops, but the foreign minority controlled the added value of cash crops. Fixed prices to producers were a form of subsidies to the European sector. The government kept prices paid to African producers quite low to help the Cotonco reap huge profits in the cotton sector. For example, a farmer received 200 to 300 francs in 1933 after paying taxes, which varied between 25 and

Property rights and economic development  139 35 percent. This income was quite low compared to a worker in a plantation who received 600 to 1,200 francs a year (Vellut 1982: 319). In sum, agricultural companies were highly dependent on the state to keep both producer prices and transportation costs low. Agriculture in vast concessions of land received 14 percent of total FDI from 1908 to 1957, which was unprecedented in colonial Africa. Two major factors played a role in the fixed price policy, technical and institutional (Peemans 1997: 129–​131). Among technical factors were the declining costs of transportation and of processing cash crops. The first was quite visible after the program of “Great Works” in the 1920s. Institutional factors played a major role in keeping prices paid to African farmers low, including European associations of farmers that constantly lobbied to depress these prices. Forced cultivation and low fixed prices to African farmers facilitated capital accumulation in the European agricultural sector. Prices paid to African producers increased for the first time in 1928–​1929 to average 86 percent of its 1950 value, which was the highest increase before 1956–​1958. In brief, this policy of low prices to African farmers went in tandem with low wages paid to plantation workers. Each fraction of foreign capital strived to get both labor and crops at the lowest price possible by asking the state to intervene and to eliminate any competitive initiative intended to drive prices up and labor supply down. The colonial administration intervened in different ways to resolve these contradictions by limiting petty trade and setting prices of cash crops far below world prices. It also encouraged labor markets to favor compromises among employers in order to eliminate competition among themselves and to pressure traditional authorities to increase labor recruitment (Peemans 1997). These aggressive colonial labor policies increased proletarization, emigration of the youth to cities, and demographic disequilibrium that depopulated the countryside and even spread famine (Peemans 1997). If low prices paid to Congolese farmers, low wages to workers, and forced labor were implicit subsidies to the European sector with several consequences. First, these subsidies helped to lower the costs of production and forced thousands of Africans out of the subsistence agriculture to seek jobs. Second was the stagnation and deterioration of African agriculture with respect to European plantation system. Third, these implicit subsidies delayed the development of African agriculture and contributed to the expansion of proletarization in rural areas. Finally, these policies to keep wages down and prices paid to Congolese farmers low allowed massive profits in the hands of a foreign minority. The colonial administration corrected this trend only in 1950 when it revisited its social policy and tried to increase the productivity of African agriculture. On land tenure, the first important legislation after the annexation of the CFS to Belgium was a decree of 6 February 1920 that distinguished registered lands as “perpetual concessions” and “temporary concessions.” This law was followed by another decree on 15 May 1922 that established mortgage credits and a collateral regime (Heyse 1947: 21–​22). Both decrees implied that owners of permanent or perpetual land could use their land as a collateral to develop

140  Property rights and economic development it and make profits. This was a major legislation because it helped Europeans to use their land to borrow money to develop it. By 1934, the amount of credit allocated to them was 176 million CF with more than half or 90 million allocated to Katanga (Heyse 1947: 21). Accumulated loans under the collateral system were close to 4.94 billion CF in the 1950s or $805.2 million in 2015 prices (see Table 5.2). However, Africans were not qualified to use land as collateral for any economically profitable activity, despite a decree signed on 22 July 1938 that recognized the rights of natives to transfer their land to third parties with the approval of the governor-​general. The collateral system enticed the colonial state to create a new chartered company in 1928 whose purpose was to encourage Europeans to migrate to the Kivu region given its temperate climate. It established a new charter company, the CNKi, with a legal personality by a decree of 13 January 1928. The CNKi had to manage the whole Kivu region by building roads, ports, hospitals, and schools. It also had to establish services of navigation, create towns with public building, organize the collection of climate data, and manage agricultural and forest resources. In brief, the principal goal of the CNKi was to attract Belgian colonists who had so far remained away from areas without major transportation networks despite favorable natural mountainous temperate conditions in Kivu. The CNKi’s status gave it the power to allocate land.The company also controlled and owned all domainal lands over 12 million hectares that it could sell, lease for a profit, deliver licenses to exploit forest resources, prospect mining opportunities, explore and exploit any discovered mining beds or sites, transfer these rights of research and exploration to third parties, extract mining taxes, and so forth (Belgium 1929). In 1929, the CNKi began to operate and administer the so-​called vacant lands allocated to the CFL. The Great Depression and the economic crisis that followed in the early 1930s in Europe slowed down the influx of Europeans in Kivu. In late 1933, the CNKi had only granted 23,276

Table 5.2 Credit using land as collateral in millions of CF Year

1951 1952 1953 1954 1955 1956 1957 1958

Colonists

Personal Businesses

Number

Amount

Number

Amount

48 23 83 139 195 223 234 234

9.67 3.10 11.10 55.01 67.97 60.15 49.93 49.80

406 590 534 634 877 953 932 774

259.26 417.16 386.95 547.58 843.60 684.34 681.74 815.56

Source: Belgium (1956: 219); Belgium (1959: 238).

Property rights and economic development  141 hectares of land to European settlers (Belgium 1934: 244). Consequently, its board of directors decided to abandon the company’s ambitious mandate. Two successive reorganizations in 1933 and 1935 curtailed the company’s functions and cancelled most of its previous obligations to develop the Kivu.The colonial state bought back its CFL’s shares, but the CNKi kept its rights to manage forests and mining rights. The CNKi also established the Albert National Park over 800,000 hectares of land. The alienation of this land seriously aggravated problems caused by the scarcity of cultivable land in the North-​Kivu district given the exceptionally high population density of the region. As a result, land allocations to the CNKi were reduced to 400,000 hectares in 1943 (Lemarchand 1964: 168). By 1957, about 150,000 hectares were conceded to settlers and private companies, however. The concession system became more deeply resented in Kivu than any other province because the CNKi intensified the hostility of the rural population toward the administration. The company made huge profits over the years estimated at four million CF a year in the 1950s for selling land and 10 to 12 million francs more for leasing it (Lemarchand 1964: 170). It also granted licenses for cutting wood over 200,000 hectares of forest, some 100,000 cubic meters of timber, one million meters of round logs, and 200,000 cubic meters of firewood each year (Joye and Lewin 1961). Its mining concessions over 55,000 hectares produced an average annual production of 450 kg of gold and more than 1,500 tons of tin, columbine-​tantalum, wolframite, and other minerals (Joye and Lewin 1961: 246). The CNKi also invested in many other companies in the Kivu province and created its own subsidiaries. Although Europeans had individual rights to land, Africans’ individual rights to land were recognized only by a decree on 19 February 1953. According to this law, “Any Congolese may enjoy all property rights organized by written legislation” (Piron and Devos 1959: 209). The creation of paysannants followed the application of the law by breaking the communal land tenure regime. The system emphasized intensive African agriculture by promoting innovations to move Africans away from subsistence agriculture. It consisted of organizing African agriculture through enclosures by dividing land into small lots allocated to African farmers as individual owners. The system also intended to introduce some mechanization in agriculture to increase production both quantitatively and qualitatively. The colonial ruler aimed to make the Congolese farmer a rational individual rather than a communal one. Brussels had both economic and political objectives in establishing the paysannats. Economically, the purpose was to free land by weakening communal land rights and consequently intensify African agriculture by increasing its production and income. Politically, the goal was to create a class of small Congolese property owners in order to slow down uncontrollable rural migrations. In 1950, the ten-​year plan of economic development targeted the distribution of 385,000 plots, but the government allocated only 200,000 by late 1958 (Belgium 1959: 244).

142  Property rights and economic development One major flaw of this policy was that the colonial administrator never envisioned the use of fertilizers, irrigation systems, and selected seeds to increase productivity. Instead, the paysannats focused on rain-​fed system and expansion of cultivable land.The failure of the system was that many traditional authorities refused to implement the policy because it took away their role of guardians of communal land. In fact, the paysannat policy meant a private regime of land tenure different from traditional communal land tenure. This new system began to weaken traditional power position and most chiefs opposed it. Moreover, the policy was imposed from Brussels and colonial administrators in the Belgian Congo were not keen to have it succeed since they remained attached to pre-​war authoritative allocation of land. Thus, they were against any policy effort that gave African farmers any type of market freedom because such a policy could weaken their power to rule the countryside. Meanwhile, the colonial administration carried out scientific research on cash crops by the creation of Institut National pour l‘Étude Agronomique au Congo (INEAC) in 1933 by neglecting research in the subsistence sector and its role in food production. The impact of paysannats is not easy to assess.A study by Staner (1955) estimated that peasants’ income increased between 6,500 CF ($130 in 1955 price) and 17,000 CF ($340) comparatively to the non-​experimental areas. The income level was higher in most areas where paysannats were implemented: between 10,326 ($207) and 13,411 francs ($268) in the Bakwanga territory; between 14,585 francs and 15,516 for Ngandajika; and 15,263 in Turumbu (Staner 1955). In one locality in Ituri, this income was 7,000 CF and around 8,000 CF in Maniema (Mulambu 1974). Taking the two extreme incomes of 7,000 CF and 17,000 CF, the income in paysannants oscillated between $140 and $340 in 1955 prices. This is equivalent to $1,238 and $3,007 a year in the 2015 prices. These amounts were more than seven times the income of workers in the plantations.

Property rights in the mining sector The first act of the colonial ruler after the annexation of the CFS to Belgium in late 1908 was to institutionalize a market system. By late 1910, however, the mining sector was still partly under state control and organized under public prospection. It was first reserved to the CSK and then extended to the CFL by the convention of 9 November 1921 and approved by a decree signed on 30 June 1922. Before the 1920s, only two decrees were promulgated to deal with property rights in the mining sector, one on 16 December 1910 and another on 16 April 1919.The mining sector was thus under two types of regimes that provided the colonial state a privileged position and specific rights of control, but not ownership. The first regime emphasized the allocation of profits. The 1919 decree included state voting rights and its rights to nominate state representatives to the boards of directors of mining companies in which the state was a shareholder.

Property rights and economic development  143 One exception was the Kilo-​Moto gold mine company created in 1905 in which the colonial state retained direct control and sole ownership until 1926. A major change in legislation occurred in 1937, however.The Belgian legislator promulgated the mining code by a decree signed on 24 September to make the state a partner, but not an owner. The decree allocated 20 percent shares to the colonial state in all mining companies and a certain percentage of profits to the colonial state as a conceding land power according to its shares in the capital of mining companies (Piron and Devos 1959: 628–​630). Article 76 of the decree is perhaps the most important. According to its paragraph f, “one or two representatives of the state would be appointed to the company to protect the interests of the colony as members of the board of directors with all administrative powers” (Piron and Devos 1959: 628). Then, paragraph g states that “each year following the month that the mining company’s balance sheet is approved by the shareholders’ general assembly, the company should pay to the state, one portion of the profits…” (ibid.). The colonial state should receive a portion of profits according to the following formula: 1) 10 percent of profits if company’s total profits for the year do not exceed 3 percent of capital; 2) 12 percent of profits that exceed 3 percent of capital up to 5 percent of capital; 3) 15 percent of profits ranging between 5 percent and 7 percent of capital; 4) 20 percent for profits ranging between 7 and 10 percent of capital; 5) 25 percent for profits between 10 and 15 percent of capital; 6) 40 percent of profits if total profits are between 15 and 35 percent of capital; and 7) 50 percent of profits if total profits exceed 35 percent of capital (ibid.: 629). Also, the colonial state is a partner in all mining companies, but its part of the capital should not exceed 20 percent of the initial capital invested in the mining operation (paragraph i). As a result, the state should also increase its shares whenever the mining company calls for additional capital. Again, the state portion of capital should never exceed 20 percent. The 1937 decree was a major innovation. The colonial state neither owned nor controlled any mining company. However, it had 20 percent shares in each company and had the rights to appoint its own representatives to the board of directors to look after state interests. The state became in the words of a Belgian senator a “portfolio state” (cited in Vellut 1983: 130). From 1936 to the late 1940s, the Belgian Congo economy was really a portfolio capitalist state because the colonial state had a substantial number of shares in most private companies without owning them. A brief overview of the most important ones is critical because this portfolio provided the Belgian Congo its own wealth. The first was made of two chartered companies that the Belgian Congo inherited from the Leopoldian state.The CSK in which the state had two-​thirds of the profits and the CFL in which the state controlled 47.4 percent of voting rights without any capital participation as developed in the previous section. The colonial state also created its own chartered company in 1929, the CNKi. The second group of assets included many semi-​public or parastatal companies. The most important in this group was the Central Bank of the Belgian Congo and Ruanda-​Urundi created in 1951 as an independent monetary

144  Property rights and economic development authority. It took over the mandate of the previous Central Bank of the Belgian Congo. The colonial state held 50 percent of its shares (75,000); the rest was divided among the National Bank of Belgium, Ruanda-​Urundi, and private investors. Three other parastatal companies were the Société de Crédit au Colonat et à l’Industrie established in 1947, the state-​owned transportation company OTRACO created in 1935, and the REGIDESO in 1933 to supply water and electricity. The third group comprised of financial holding companies. One of them was the Union Nationale des Transports Fluviaux created in 1925 for riverine transportation. The colonial state held 43.8 percent of its shares. The Belgian Congo retained 12 percent of shares in another holding, the Katanga Company. Fourth and most importantly, the colonial state had 20 percent of shares in all private mining companies as a result of the 1937 mining code. However, the state let the private sector manage these companies in which it had either majority or minority participation without any state interference. The only exception up to 1926 was the gold mine of Kilo-​Moto because of the link between gold and the BF or the CF.The state owned the gold mining company located at Kilo (actual Ituri province) in 1905. The exploitation of the second site at Moto (actual Haut-​Uele province) started in 1911, hence Société d’Or de Kilo-​Moto.The state held ownership and control until 1919 when the company was entrusted to a private company with limited liability in 1926 called the Société des Mines d’Or de Kilo Moto in which the state had the majority of shares. Thus, the fourth type of companies was a group of mining companies in which the colonial state was a majority shareholder like this gold company, but it let them be managed by a minority shareholder, the SG. Another enterprise was the diamond mining company Forminière created in 1906 by King Leopold to calm his US critics (see Chapter 2). The state had 55.6 percent of shares. Thanks to its majority shares, the colonial state also had shares in all Forminière’s subsidiaries, which included among others the Companhia de Diamantes de Angola, Société Minière de la Tele, Société des Bitumes et Asphaltes du Congo, Société Forestière du Congo, and Société de Colonisation Agricole au Mayumbe (Joye and Lewin 1961: 228–​230). The colonial state also had 50 percent of voting rights and 50 percent of profits in two mining companies, the Minière du Kasaï and the Minière du Luebo. It also invested 10 percent in the Minière de la Lueta, but had one-​third of the voting rights and 44 percent of its profits. The Belgian Congo had one-​ third of the voting rights but had 50 percent of profits after statutory deductions in the Minière du Bécéka (industrial diamond) and Bécéka-​Manganèse. Other mining companies in which the colonial state had a large percentage of shares and voting rights because it initiated their establishment as a result of their huge start-​up costs included Symaf, Symétain, Sominor, and Charbons de la Lukuga (Joye and Lewin 1961: 278).The colonial state also had shares in major transportation companies because of their public nature like the Société des Transports en Commun de Léopoldville (65 percent), the Société des Chemins de Fer Vicinaux du Congo or VICICONGO (57 percent), the Compagnie des

Property rights and economic development  145 Chemins de Fer Katanga-​Dilolo-​Leopoldville or KDL (45.8 percent), the airline Sabena (24.8 percent), and the Compagnie Maritime Congolaise (10 percent) (see Joye and Lewin 1961). Other state investments were in hydroelectric power companies in which the colonial state had more than 85 percent shares because of their public nature including the Société des Forces Hydro-​Electriques de l’Est de la Colonie (98.7 percent) and Forces Hydro-​Electriques du Bas-​Congo (85.8 percent). Finally, the colonial state had minority participations in a large number of other private companies. As a result of all these investments, the colonial state had, by late 1959, a considerable financial portfolio of state holding estimated at 37.32 billion BF (Gérard-​Libois and Verhaegen 1961: 103). This translates into $6.08 billion in 2015 prices. Table 5.3 summarizes this wealth in two different accounting systems. State ownership of this portfolio was separate from its management. The colonial state left the management of its portfolio to the private sector. This system made the state more effective while strengthening its financial position. The portfolio operated on market terms and had to compete with private foreign providers. Most importantly, the colonial state protected private assets because it was a partner. This relation helped to build strong institutions. The 1937 law also made the relationship between the colonial state and the big mining business clear and symmetrical because each party had an independent source of authority over the other. The state and the private sector needed each other, and this interdependence helped to promote mutual incentives for building effective, stable, and strong institutions that reduced both transaction and monitoring costs. State incentives to build institutions that acted as formal guarantees of private interests converged in the colonial period. The boundaries between the two were clear, and this encouraged businesses to invest in productive activities.

Table 5.3 Value of state portfolio according two accounting systems in 1959 (000 BF) Economic sectors

Market value

Stock exchange

Banks and financial institutions Companies and portfolio holdings Real estates companies and public utilities Transport companies Water & electricity Mining companies Agriculture and cattle ranches Public loans Others Total

908,939 9,981,307 1,132,221 11,738,635 4,640,367 6,825,997 376,666 1,494,179 216,782 37,315,093

856,289 9,491,429 1,122,276 10,335,828 4,609,663 6,547,333 301,928 1,494,179 216,782 34,975,707

Source: Gérard-​Libois and Verhaegan (1961: 103).

146  Property rights and economic development Private investments in the mining sector increased over the years to average 35 percent per year of total FDI in the colony. The creation of thousands of jobs and profits generated by most companies also increased the base of direct taxes, the most important factor in the state-​building process (see Chapter 6). Contrary to the system of property rights under the CFS, the colonial state enforced private contracts to sustain private foreign ownership. It also developed a reputation for restricting the use of its expropriation power by limiting its economic activities to the supply of public goods.The colonial state had no choice but to take a farsighted view of colonization to satisfy Belgian business interests. The private sector was not only powerful in Belgium, a democracy, but it also had a credible exit threat that could have paralyzed the entire colonial economy if it had to withdraw its assets from the Belgian Congo under any threat of expropriation. Moreover, unlike the CFS that had no veto players, the Belgian Congo had many institutional veto players including the minister of colonies, both chambers of the parliament, the judiciary, the governor-​ general, provincial governors, and all district commissioners. Also, the colonial economy was dominated by a few Belgian big corporations that were powerful in Belgium and represented what Tsebilis (1995) terms partisan veto players. Because so many veto players existed, the colonial state could not expropriate foreign private assets. The result was its commitment to enforce contracts and respect private ownership. All these constraints on rulers made the Belgian Congo known as “an investor’s paradise” (Solow 1952). The colonial state had no incentives to expropriate private ownership for one additional reason. Most top colonial senior bureaucrats had incentives to foster private ownership because of the interlocking nature between business interests and political structure. As indicated by Table 4.6, top colonial administrators and bureaucrats at all senior levels often retired as top managers of major colonial enterprises with enormous salaries and benefits. Even colonial advocates in the Belgian parliament who adopted policies favoring the private sector in the colony were nominated to the boards of directors of colonial companies. Therefore, both appointed and elected Belgian officials had incentives to sustain a business-​friendly environment if they dreamed to have a golden parachute retirement in the colonial private sector.This was rent-​seeking that never harmed the process of economic development in the Belgian Congo.

Toward independence and the passing of state financial portfolio holdings In the late 1950s, the Belgian Congo was one exceptional colony with its own wealth evaluated at $6.08 billion (2015=​100). In the wake of independence, however, the Belgian private sector became agitated and requested that its government obtain official guarantees from leaders of Congolese political parties that they would refrain from expropriating private assets. The idea that “the new Republic would use its incontestable rights over the country’s

Property rights and economic development  147 financial holdings was terrifying to Belgian financial circles because the new state would have a major leverage over the private sector” (Joye and Lewin 1961: 289). Although no political party was contemplating any nationalization of private assets, the Mouvement National Congolais of Patrice Lumumba and other nationalist parties wanted the Congo’s financial portfolio holdings to be entirely transferred to the new republic without delay or pre-​conditions on 30 June 1960. As independence was approaching, three important issues confronted the colonial ruler and the future leadership of Congo when they met at the Economic Round Table in early 1960 in Brussels.The first was the status of the three charter companies and other corporations in which the colonial state was a shareholder. This involved the financial portfolio holdings of the colony. The second issue was the colonial debt estimated at 46 billion BF or $7.33 billion (2015=​100). Third was the situation of large areas where land or mineral rights conceded to foreign corporations remained undeveloped. These three issues became known in the early 1960s as the Belgian-​ Congolese Contentieux or Litigation. Unlike the first two issues, the last one was not a major concern because undeveloped lands could return to state ownership as required by the law.The Belgian position on the first two issues was to link them together.The rationale was that the new independent state should be responsible for its liabilities if it had to inherit its colonial assets. However, the Congolese position was to treat the two issues separately. For the new political elite, the debt was contracted to benefit both the Belgian Congo and Belgium. Also, the debt issue should rely on the financial principle of “rendering trusteeship” but not on the principle of “legal devolution” between the two states because Belgium was acting as a “guardian” to protect its “minor child,” the Belgian Congo, as a result of its policy of “paternalism.” Finally, the Belgian government also wanted to dissolve the three charter companies to begin the negotiation process. Rather than dissolving the charter companies, the Congolese position was to distinguish direct contributions of the Belgian Congo state to the capital of mining companies from conceded land rights. For the first time since 1908, a minister of colonies, Auguste De Schryver, completely bowed under pressures from powerful Belgian financial interests. He destroyed the economic foundations of Congo by unilaterally adopting two decrees before independence.The first decree was promulgated on 14 June 1960 that authorized any company operating in the colony to choose the Belgian or the Congolese nationality if it so desired. Most major companies changed their nationality as a result. One good example is the UMHK that became a Belgian company on 23 June 1960. This denationalization of the Congolese companies “was to take away from the nascent Congolese government all those instruments that might have enabled it to impose an economic policy favorable to its political, social, and economic interests” (Depelchin 1992: 16). In brief, this law belgianized most big Congolese companies and thus it represented a theft of a major portion of Congolese wealth.

148  Property rights and economic development Second, the Belgian government promulgated an emergency decree on 27 June 1960 that dissolved the chartered company CSK, although its land lease contract expired in June 1999. The dissolution of the CSK meant that the new republic also lost its indirect control over the Congolese giant, the UMHK, in which it had two-​thirds of the shares. In early 1960, the UMHK’s assets were estimated at 21.3 billion CF or $3.47 billion (2015=​100). This decree also modified the distribution of the company’s voting shares between the Belgian Congo state and the Katanga Company. As illustrated by Table 5.4, the number of shares of the Katanga Company in the UMHK increased from 18,500 before the June 1960 decree to a staggering 202,976 after the decree, while the colonial state’s shares declined from 662,768 to 478,292. This change of property rights occurred at the stroke of pen rather than the result of market forces. Before the decree of 27 June 1960, the three private companies held 525,000 shares or 44.08 percent of the voting rights against 662,768 or 55.92 percent of the CSK (the colonial state).This decree automatically changed both control and ownership by giving the private sector the power to oppose any decision made by the state. The voting rights of the private sector increased to 706,928 or 59.65 percent against 478,292 or 40.35 percent for the future republic. The second largest chartered company was the CNKi and its contract expired on 31 December 2011. However, the Belgian government and the company’s board of directors signed a convention according to which the colonial state simply and purely withdrew as a granting associate and renounced entirely all rights of association with the company (Joye and Lewin 1961: 294). A decree promulgated on 30 May 1960 sealed the deal and in the stroke of a pen, the CNKi also ceased to exist as a semi-​public colonial enterprise.Twenty-​ one days later, its shareholders decided to transform it into a private company called Société Belgo-​Africaine du Kivu. According to the convention, if Congolese leaders decided to retake the management of the new company after independence, its shareholders should justly be compensated to the amount of 125 million BF or $20.4 million (2015=​100). Since the CSK and the CNKi had numerous subsidiaries in the mining and agricultural sectors operating in the Belgian Congo, the Belgian government Table 5.4 Voting rights in the UMHK Shareholders CSK (colonial state) Congo(independent) Tanganyika Company Société Générale Compagnie du Katanga Total

May 1960

%

662,768

55.92

375,160 128,792 18,500 1,185,220

31.65 10.87 1.56 100.00

Source: Joye and Lewin (1961: 293).

27 June 1960

%

478,292 375,160 128,792 202,976 1,185,220

40.35 31.65 10.87 17.13 100.00

Property rights and economic development  149 unilaterally decided to deprive the new state of two of its most important sources of non-​tax revenue. Ironically, the third chartered company, the CFL, was not dissolved and remained a semi-​ public company because it never invested heavily in any other economic sector. Unlike the CSK and CNKi, the CFL’s statutory position expired on 17 June 1961 but ironically Brussels extended it to 1990. Briefly stated, these examples show how state managers can change propriety rights in the absence of market forces but by the stroke of a pen to satisfy a group of constituencies that supports them. Thus, property rights can emerge exogenously because “men on the acropolis offer protection to men in the agora in return for support” (Riker and Sened 1991: 967). As a result, the Belgian government deprived the new Congolese state of its major source of financial resources to start any process of economic development. In this context, Belgium is partly to blame for Congo’s postcolonial economic predicament.

Summary The most critical ethos during the entire colonial period was the emphasis on capitalist market system. All ministers of colonies reaffirmed their commitment to market principles and the protection of private ownership. There was no debate on this issue as different types of capitalism developed in the colony from primitive capitalism to state-​led capitalism and social capitalism. The colonial Weberian bureaucracy protected private ownership and this spurred investments in the Belgian Congo. In all these forms of capitalism, the state was not a benevolent and passive ruler, however. It intervened in the market when it suited state purposes in controlling Africans and helping the Belgian private sector accumulate enormous profits. In the countryside, the objective of the colonial ruler was to subdue and crush the rural world with administrative constraints and forced labor. There was no rural economy and no rural capitalism before the Second World War. From 1915 to 1945, the colonial government depressed prices of agricultural products and reinforced labor restraints to squeeze rural masses. The first consequence was the stagnation and then the deterioration of African agriculture with respect to European plantation system. The second was the delay of any type of capitalism in rural areas. This contributed to the enlargement of proletarians in the countryside and hence low wages. Thus, rural production remained “at hazards of state constraints” (Peemans 1997: 45). The agricultural sector also remained technologically far behind, while it was fully integrated in the world markets. If Europeans were granted land, Africans were not until the implementation of paysannat policy. The former even benefited enormously from low interest rates by using their land as collateral and were thus able to develop their land. Just like in the agricultural sector, the state let the private sector own and manage the entire mining sector by assigning itself the role of a partner. The result was state accumulation of wealth unequal in the history of colonial Africa.

150  Property rights and economic development

References Belgium, Ministère des Colonies (1911, 1929) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1910, 1928) Présenté aux Chambres Législatives, Brussels: M. Hayez Imprimeur. Belgium, Ministère des Colonies (1934, 1948) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1933, 1947) Présenté aux Chambres Législatives, Brussels: F.Van Gompel, Editeur. Belgium, Ministère des Colonies (1955, 1956, 1959) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1954, 1955, 1958) Présenté aux Chambres Législatives, Etablissements génénaux d’ Imprimerie, S.A. Bézy, F. (1957) Problèmes Structurels de l’Economie Congolaise, Louvain-​la-​Neuve: Presses Universitaires de Louvain. Dahrendorf, R. (1968) Essays in the Theory of Society, Stanford: Stanford University Press. Brion, R. and Moreau, J.-​L. (1998) La Société Générale de Belgique, 1822–​1997, Antwerp: Fonds Mercator. Deconinck, H. (1996) “Aspects Economiques et Sociaux des Concessions au Congo Belge: L’Exemple de l’Unilever.” Mémoire pour l’obtention du grade d’Ingénieur commercial Solvay. Brussels: Université Libre de Belgique. Depelchin, J. (1992) From the Congo Free State to Zaire: How Belgium Privatized the Economy: A History of Belgian Stock Companies in Congo-​Zaire from 1885 to 1974, Dakar: CODESTRIA. Gérard–​Libois, J. and Verhaegen, B. (1961) Congo 1960,Volumes 1, Brussels: CRISP. Heyse, Th. (1947) Grandes Lignes du Régime des Terres du Congo Belge et du Ruanda-​ Urundi et Leurs Applications (1940–​ 1946), Brussels: Mémoire de l’Institut Royal Colonial Belge. Joye, P. and Lewin, R. (1961) Les Trusts au Congo, Brussels: Société Populaire d’Editions. Lemarchand, R. (1964) Political Awakening in the Belgian Congo, Berkeley: University of California Press. Likaka, O. (2009) Naming Colonialism. History and Collective Memory in the Congo, 1870–​1960, Madison: The University of Wisconsin Press. Mulambu, M. (1974) “Cultures Obligatoires et Colonisation dans l’ex–​Congo Belge,” Les Cahiers du CEDAF 6–​7: 1–​114. Nicolaï, H. (2013) “Le Congo et l’Huile de Palme. Un Siècle?,” Révue Belge de Géographie, 4(4): 1–​42. Peemans, J.-​P. (1975) “Capital Accumulation in The Congo under Colonialism: The Role of the State,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​ 1960.Volume 4 The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 165–212. Peemans, J.-​P. (1997) Le Congo–​Zaïre au Gré du XXe Siècle: Etat, Economie, Société 1900–​1990, Paris: L’Harmattan. Piron, P. and Devos, J. (1959) Codes et Lois du Congo Belge.Tome III. Matières Sociales et Economiques, Brussels: Maison Ferdinand Larcier, S. A. Editeurs. Porter, M. E. (1990) The Competitive Advantage of Capitalism, New York: Free Press. Riker, W.H. and Sened, I. (1991) “Common Property and Private Property: The Case of Air Slots,” Journal of Theoretical Politics, 8(4): 427–​447. Solow, H. (1952) “The Congo Is in Business,” Fortune (November): 106–​112/​165–​175.

Property rights and economic development  151 Staner, P. (1955) Les Paysannats Indigènes du Congo Belge et du Ruanda-​ Urundi, Brussels: Publication de la Direction the l’Agriculture, des Forêts et de l’Elevage. Tsebilis, G. (1995) “Decision Making in Political Systems: Veto Players in Presidentialism, Parliamentarism, Multicameralism and Multipartyism,” British Journal of Political Science 25(3): 289–​325. Vellut, J.-​L. (1982) “Hégémonies en Construction: Articulations entre Etat et Entreprises dans le Bloc Colonial Belge (1908–​1960),” Canadian Journal of African Studies 16(2): 313–​330. Vellut, J.-​L. (1983) “Mining in the Belgian Congo,” in D. Birmingham and P.M. Martin (eds.) History of Central Africa, London: Longman, pp. 126–162. Willame, J. C. (1980) “Le Secteur Multinational au Zaïre,” Les Cahiers du CEDAF 1: 1–​66. Young, M.C. and Turner, T. (1985) The Rise & Decline of the Zairian State, Madison: The University of Wisconsin Press.

6  Revenue imperative, state building, and economic development

In 1910, Minister Renkin introduced the CF to end tax in kind inherited from the CFS. The CF was separated from the BF. The First World War broke momentarily economic link between Belgium and the Belgian Congo. The Congolese economy was immediately integrated in the British sterling zone. One sterling was worth 25.40 CF in 1919 compared to 31.00 BF. Despite this divergence between the two currencies, the Belgian government decided to link the stronger CF to the weaker BF at equal parity in 1919. The CF was united with the BF and differed from the latter only in form and currency symbol. The idea was that “the fortunes of the Belgium’s monetary unit would inevitably impact the colony’s currency” (Vanthemsche 2012: 171). This was a de facto devaluation of the CF by almost 22.05 percent, which replaced the overvalued CF with the weaker BF. The new exchange rate made Congolese exports more competitive in the global markets, but most profits from these exports only benefited a few big Belgian companies. Since 1919, the strong CF followed “its metropolitan senior for better and for the worse” (Gérard 1925: 84).This union was worse for the CF. For example, the BF was still weak in the early 1920s because Belgium was still recovering from the war. The BF dropped from 11.96 BF to 23.86 for one US dollar or from 42.99 BF to 101.61 BF per one sterling pound. Two devaluations of the BF occurred in 1926 and 1935 dragging the CF despite a strong Congolese economy. The CF thus followed all the misfortunes of the weaker BF. In other words, all CF’s devaluations caused by the weaker BF were not warranted, but they only served Belgian economic interests. Although these devaluations increased Congolese exports, they had a detrimental effect on the purchasing power of all Congo’s inhabitants, blacks and whites alike, since these policies made imports quite expensive for all consumers. Of course, the Congolese population suffered the most. The CF also followed the faith of the weaker BF from 1940 to 1958 despite the fact that the Belgian Congo’s economy remained stronger than the Belgian economy. In sum, the CF remained linked to the BF and was exchanged at equal parity for 50 BF or 50 CF per US dollar from 1950 to 1960. On the revenue side, the power to tax was vested in the Belgian parliament once the CFS became the Belgian Congo.The first act of this body was to enact DOI: 10.4324/b23045-6

Revenue imperative and state building  153 the Colonial Charter on 18 October 1908. This law determined the political structure of the colony and served as the foundation of its financial apparatus. The most important feature of the Belgian Congo was its financial autonomy. Article 1 of the Charter states that “the Belgian Congo has a legal personality distinct from that of the metropole;” the assets and liabilities of Belgium and those of the colony remain separate (Belgium 1909: 1). The Belgian thesis on this matter was clear. The colony must be managed without profit or loss to Belgium (Stengers 1957).This financial autonomy was only theoretical, however. Institutional relations between the colony and the metropole were closer than those that existed between the CFS and Belgium as illustrated by the Second World War discussed in Chapter 3. The minister of colonies was the executive body of the Belgian Congo, but any decree establishing new or additional taxes had to be voted by the Belgian parliament. In this context, the parliament directly and indirectly influenced the colonial financial system. This chapter includes two sections and a summary. The first section analyzes the structure of revenue in its goals of building state capacity and developing the economy in the Belgian Congo. The second section complements Chapter 4 on infrastructure by highlighting the role of indirect taxes in the IS industrialization process.

Revenue structure and state capacity The mobilization of revenue in the colony was possible by a competent bureaucracy. This helped to avoid massive budget deficits over the years. Although the colonial state started with a deficit of $188.7 million (2015=​100) in the 1910s that increased to $1,229 million in the 1920s and $1,005 million in the 1930s, it was able to collect enough revenue in the 1940s to have a budget deficit of only $16.7 million. In the 1950s, ordinary budget had a surplus of $216.7 million. Chapter 9 analyzes in more detail this spending side of the colonial budget in comparative perspective. Four periods characterize the colonial fiscal era: 1910–​1915, 1916–​1939, 1940–​1945, and post-​1945. The first period, though short, was important for a couple of reasons. It was the only one during which freedom of trade was fairly effective (see Chapter 5). Also, the minister of colonies replaced tax in kind under the CFS by tax in cash. The second period began in 1916 and ended in 1939. The government reinforced controls and economic constraints that eliminated Congolese petty traders. It also introduced restrictive trade policies to deal with wartime efforts. These policies destroyed all previous economic improvements achieved in 1910–​1915. The consequence was a coercive system of resource mobilization of the agricultural surplus that relied mostly on forced labor. The Second World War was the third fiscal period. Exceptional circumstances during the war also changed most tax exemptions. The post-​1945 was the last period. It occurred in the context of the first plan of economic development,

154  Revenue imperative and state building which targeted education, health, and other public amenities.The colonial state also embarked in a policy to improve Africans’ salaries and to lower their tax burden. African wages increased from 5.1 billion CF in 1950 to 13.1 billion in 1958 (Belgium 1959: 140–​145). Direct taxes and state building A few years after taking office, Minister Renkin passed a decree on 2 May 1910 that established an indigenous tax. This decree followed correspondence between Belgian and British officials following the annexation of the CFS to Belgium in 1908 that focused particularly on the colonial tax system. British officials encouraged the Belgian government to abolish the collection of taxes in kind or in labor, but to introduce a currency and to limit exactions and interference with the market in order to encourage growth (Gardner 2013: 131). The key was to maximize revenue in the long run when Congolese would become major participants in economic activities. The government created the Banque du Congo Belge with the mandate to issue banknotes. Shortly after, a poll tax was institutionalized to become a monetary tax in 1914. Along with the establishment of freedom of trade, “indigenous tax forced Africans into the market economy and opened up the Belgian Congo to capitalist enterprise” (Jewsiewicki 1986: 466). The indigenous tax had two goals. The first was humanitarian and civilizing as stated by colonial state managers. First, it intended to shake up “the apathy of savage populations,” to force them to work, and “to improve their living material conditions by work habits and morale” (van der Kerken 1943: 167). The second was fiscal and aimed to ensure that Africans contribute to government spending. The tax system became a powerful incentive to force Africans out of the subsistence economy and to seek work in the emerging monetized modern sector. This incentive was influenced by rising marginal rate of tax through the operations of the substitution and income effects. The two effects worked in different directions. On the one hand, the substitution effect of the tax reduced the time that Congolese spent on subsistence agriculture because it forced them to seek jobs in the monetary economy in order to pay for the required taxes. The tax system also reduced the net income of Congolese and this made them economize on leisure and work more.The propensity to work was further strengthened and the supply of effort as a function of the tax increased over the years. On the other hand, the income effect was dependent on the amount of money taken by the tax. The more the government took, the more Africans had to work. The goal of the new tax system was thus not fiscal. It was an economic instrument to pressure Congolese to participate in the monetary economy and to supply cheap labor to the newly mining companies and European plantations as well as to curtail the movement of citizens from rural areas to urban centers. These objectives were clearly defined in a letter written by two managers of

Revenue imperative and state building  155 the CCCI, Albert Thys and Camille Delcommune, to the government in the following terms: The goal of the tax system is not only to reimburse the government in some measure for the cost of occupying all the territories, and of providing protection for the native population. Taxes also have a higher purpose, which is to accustom the Negroes to work… The native from the Upper Congo region has not yet reached that stage of evolution where he would increase his comfort by trade and work, and for this reason the tax system will continue to provide for a long time the main incentive to work. The trader can of course steer the native in the right direction, but in the long run he had to be helped by the state. A tax system judiciously and regularly applied is the only efficient tool that can do the job. (Delcommune 1921: 121) A major financial crisis hit the colony in 1913–​1917 when rubber’s prices plummeted in the world markets from 15.80 BF a pound in 1912 to 5.25 CF in 1913.This caused a sharp decline in state revenue from 52.5 million CF in 1912 to 41.5 million in 1913 despite an increase in rubber production from 16,402 tons in 1912 to 19,138 tons in 1913 (Belgium 1913, 1914). The budget deficit reached 21 million CF in 1914 ($96 million in 2015 prices). The advent of the First World War changed the fiscal system from a free trade system to a compulsory economy. In 1917, Governor-​general Emile Henry signed an ordinance-​law on 20 February that imposed compulsory cultivation of agricultural products (Belgium 1918). Politically, this policy forced rural masses to provide foods to the troops. As pointed out in Chapter 5, compulsory cultivation was economically an implicit subsidy to the European sector aimed to supply cheap foodstuffs to urban and mining areas. The collection of taxes in rural areas was extremely important to the colonial administrator to rule and to control rural hinterlands via micro-​administrative grid of “officially appointed chiefs, who were given the unpopular but profitable responsibility for collecting taxes and recruiting labor from the village” (Young and Turner 1985: 35). The colonial administrator penetrated the equatorial infested forest, which by the early 1930s had one of the lowest European mortality rate thanks to European hospitals scattered across the colony as developed in Chapter 4. Furthermore, the colonial administrator established a disciplined army and was able to relocate it from region to region to collect taxes (see Chapter 3). In other words, the colonial state did not need diplomacy with local rulers to extract taxes. Unlike the Leopoldian state, the colonial state in search of more revenue also established a number of noisy direct taxes in 1909. One of these early taxes was a tax levied on polygamous traditional authorities as a supplementary tax. The state extended it in the 1920s across the colony as a moral tax to eradicate polygamy. The supplementary tax applied to each wife beyond the first, thus from the second to the thirtieth (Belgium 1910). This tax on wives was also applied

156  Revenue imperative and state building in Portuguese and some British colonies (Phillips 1953). However, the Belgian Congo situation was so specific about the “thirtieth wife” without explaining why the supplementary tax stopped there. As one critic of this law pointed out, “why not the 31st wife, the 32nd, and so on?” (Vermeersch 1914: 122–​123). The Catholic Church played a major role on this issue because missionaries “unyielding stand against polygamy was an old tradition in Central Africa dating back to the stance of Jesuits and Capucins in the seventeenth century Kongo” (Hilton 1983: 200–​201). However, the colonial government knew that it was too risky to attempt to eradicate a deep-​rooted customary practice by punitive symbolic taxation.The goal of supplementary tax was not only viewed as an attempt to discourage the practice, but it also became fiscal and aimed “to extract a greater contribution from people who had greater wealth” (Hilton 1983: 20). The colonial assumption was that many wives also implied wealth to entertain them. The colonial administrator called polygamy as wealth gained and expressed immorally in terms of slavery or prostitution. Besides wealth and immorality, the colonial discourse came also to associate polygamy with “depopulation” or scarce labor as early as 1905 (Vermeersch 1914). Despite some critics doubting this relationship, the consensus within the colonial circle was that polygamy and prostitution were the root causes of infertility or declining birth rate (Hunt 1991: 475). The solution against these sins was to encourage monogamic relationship and births based on Christian teaching, tax incentives, and expansion of colonial obstetric services and the strengthening of husbands and fathers’ authority over women (Hunt 1991). However, these measures created their own contradictions. The fight against polygamy implied some type of “liberation of women” because polygamous wives were viewed “as slaves” to be liberated by missionaries and the state (Sohier 1939: 207). This liberation was also too hasty since “women were wrenched from customary constraints, while no other source of marital or paternal authority had filled the vacuum; the problem of the femme libre (liberated or free woman) of non-​customary areas was born” (Hunt 1991: 476). In reality, the colonial discourse of femme libre contextually meant prostitute. In 1914, the government reversed its rhetoric and advocated the view that women were better under the customary authority of polygamists than let them run free and misguided into towns as prostitutes (Sohier 1939). This view was based on the fact that polygamy would certainly erode with time as Christian teachings would succeed in altering African sexual habits (Hunt 1991). The colonial administration also began to challenge its own attitudes by the late 1940s by noticing contradictions implicit in the supplementary tax on polygamous men by contending that it instilled “a certain confusion in the mind of the native” (Phillips 1953: 192). The legislator passed a law in 1950 forbidding the legal recognition of any subsequently contracted polygamous marriages and preventing any polygamously married persons from subsequently moving to towns or centres extra-​coutumiers (Piron and Devos 1960: 195–​197). Another noisy tax under colonial rule was tax on single urban women or as the state called it taxing “women theoretically living alone” (Piron and Devos

Revenue imperative and state building  157 1960: 196). The goal was the same, taxing immorality since the assumption was that single women could not survive in towns without being prostitutes. This tax seemed to have started in Elizabethville in 1918 by targeting white women leaving alone without any serious consideration that many of these women may also be part of the workforce. The law fell into disuse until it was reintroduced as a tax on African women in 1932 in Elizabethville (Malira 1972: 33–​35), Leopoldville in 1947, and Stanleyville during the Second World War (Verhaegen 1981). All single African women had to pay the tax. Exemptions included old age, illness, and having more than two children. Women reacted against the tax by creating associations intended to find men. These self-​help associations became known in Elizabethville as Nyota (Star) and Diamond as well as Moziki (self-​help group) in Leopoldville. The direct consequence of this phenomenon was the proliferation of polygamous marriages in towns. In sum, taxes on polygamous marriages and single women were only noises in the tax system to satisfy the powerful Catholic Church. The onset of the Second World War brought again hardship to Africans as the colonial economy financed the cost of the war by an increasing demand for labor through forced cultivation of many cash crops. Land under forced cultivation of palm fruit trees increased from 18,000 hectares in 1939 to 35,000 in 1943; from 50,000 to 132,000 for rice, and from 157,000 to 340,000 for cassava (Peemans 1975). The direct consequence of this policy of forced labor was an increasing number of polygamists because the number of days of this labor rose from 60 to 120 days a year during the Second World War (Merlier 1962: 84). To have several wives was needed to work the fields in the countryside and, as a result, rural zones came gradually to approximate labor camps and “only polygamous husbands seemed able to fulfill their agricultural, hygienic and other corvées with ease” (Hunt 1991: 479). Thus, monogamous husbands were harshly punished because they could not fulfill their state obligations. Forced labor was culturally defined as “women’s work” in the customary colonial world (Belgium 1950: 532–​533). According to these examples, the Belgian colonial state fiscally penetrated the countryside and was not exactly a “nightwatch state.” Social tensions that emerged from forced cultivation of crops and other chores were quite tense during the war. Faced with this environment, the colonial state sought to change its tax policy by lowering tax burden on Africans. An ordinance on 24 March 1944 established an exceptional war tax that imposed 4 percent on profits of major corporations before distributing them to different balance sheet accounts. The administration increased this tax in 1946 in order to lower taxes on Africans given their efforts during the war.The legislator passed a decree on 8 January 1946 that taxed profits according to capital invested.The higher the level of profits was, the higher the level of tax.The idea was to impose harshly those excess profits that the private sector realized as a result of the war. The state considered these profits as abnormal because they were gained during the war and were regarded as windfalls. The colonial state also introduced the second major tax legislation based on progressive tax on salaries and liberal professions during the war.

158  Revenue imperative and state building Table 6.1 Progressive nature of direct tax on singles Taxable base (francs)

50,000 100,000 200,000 500,000 1,000,000

Rate of Taxation 1920

1937

1951

1960

0.0 0.4 0.9 2.3 3.6

0.0 0.7 1.8 6.5 9.1

3.0 5.5 9.0 14.5 19.5

4.3 5.5 11.3 19.9 19.5

Source: Leclercq (1966: 131).

A minimum of 20,000 CF was deducted before imposing the tax rate. This progressive tax scheme favored most African workers and laborers earning wages below this threshold. Expatriates became more affected after the war (see Table 6.1). Because of these policies, taxes on Africans declined after the war to represent only 3.5 percent of total revenue in the 1950s compared to more than 17 percent a year in the 1930s as illustrated in Table 6.2. The colonial administration understood that efforts by Africans during the war could not continue without risk of a social crisis much more serious than that of the Great Depression. There was evidence of growing discontent among Africans just after the war. Civil servants were coming under the influence of a new ideological trend as a result of a new policy designed to stabilize the colonial system. Economic expansion after the war brought a general increase in workers’ wages and a modest increase in peasants’ incomes. Also, the decline in tax on Africans contributed to a rise in their income, which increased their demand for locally manufactured consumer goods. By enlarging the domestic market, colonial tax policies further encouraged IS for mass consumption. In the mid-​1950s, local industries supplied 44 percent of total equivalent imports of consumer goods (Bézy 1957: 170). In general, the fiscal system in the Belgian Congo was the outcome of financial autonomy of the colony and the adoption of some sort of capitalist economy. This fiscal system was similar to that was practiced in Western Europe, except it took into account the structural conditions particular to the colony. The colonial state also intended to have a great level of latitude over societal domestic forces. Unlike its predecessor state, the colonial tax structure aimed to remove bottlenecks of various kinds by forcing labor force into the monetary economy especially to the industrial sector where it was badly needed. The task of the colonial ruler was also to penetrate the countryside and, to some extent, it succeeded as the percentage of direct taxes over nontax revenue (a/​c) increased over the years (see Table 6.2). However, the percentage of direct taxes over indirect taxes (a/​b) declined after the 1930s, showing that the state was perhaps captive by external players. In reality, this was a deliberate development strategy

Revenue imperative and state building  159 Table 6.2 Structure of state revenue, 1920–​1958 1920 1925 1930 1935 1940 1945 1950 1955 1958 Total Direct Taxes (a)   Indigenous tax   Tax on revenue Total indirect taxes (b)   Export taxes   Import duties   Sales taxes Nontax revenue (c)  Portfolio  Others Total (percentage)   (a/​b)   (a/​c)   (c/​b)

27.4

30.0

38.8

35.8

27.7

34.9

28.8

35.7

31.2

20.9 6.5 31.5

12.8 17.2 34.3

16.5 22.3 18.7

19.4 16.4 28.8

12.9 14.8 44.0

8.4 26.5 41.4

4.8 24.0 41.7

3.1 32.6 40.0

3.2 28.0 41.0

4.6 4.9 4.5 12.5 34.2 32.1 25.2 20.7 16.9 26.4 29.2 13.2 14.8 8.5 7.5 17.3 15.7 14.3 0.5 0.2 1.0 1.5 1.3 1.8 2.2 3.6 9.8 41.1 35.7 42.5 35.4 38.3 23.7 26.5 24.3 27.8 6.3 11.1 14.7 13.6 10.5 6.1 5.5 10.1 12.9 34.8 24.6 27.8 21.8 17.8 17.6 21.0 14.2 14.9 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 86.9 87.5 207.5 124.3 62.9 84.3 69.1 89.3 76.1 66.7 84.0 92.3 101.1 72.3 147.3 108.7 146.9 112.2 130.5 104.1 227.3 122.9 87.1 .57.3 63.6 60.8 67.8

Source: Leclercq (1966: 131).

to punish exporters of raw materials needed for domestic industries after the 1930s. As developed later in this chapter, this policy was also the result of IS industrialization, which started in the early 1920s. In this search for revenue, the burden of direct taxes shifted slowly from Africans to private companies and Europeans. Usually, high taxes are employed to finance public goods that support the accumulation of physical and social capital and enhance economic development (Frankema 2011). In the case of the Belgian Congo, there was at least some compliance in paying taxes in urban areas since there was some type of trust among increasing number of évolués after the Second World War that their tax money was being used for the common good, especially during the implementation of the ten-​year plan of economic development. The percentage of spending on healthcare over tax collected from Africans was only 2 percent in the 1910s. In the early years of colonization, the Belgian government spent a minimal portion of tax collected to Africans’ well-​being. In the 1920s, the colonial government collected an average of 17 percent of taxes from Africans, but it spent 8 percent of this collection on healthcare. This represents 47.06 percent of taxes spent on healthcare. In the 1930s, the collection of direct taxes on Africans averaged 16 percent a year of total revenue and ordinary spending on healthcare averaged 19 percent of these taxes per year, implying some 118.8 percent of taxes spent on healthcare.Then, 100 percent of taxes collected in the 1940s from Africans went to healthcare. The government spent almost 310 percent of taxes to healthcare in the 1950s. These numbers reflect a developmental state. In other words, the

160  Revenue imperative and state building African population received more than what they paid for in taxes from the 1940s to the 1950s. However, the story was different on education. A brief overview of indirect taxes In 1910–​1915, the Belgian legislator made labor recruitment free, a situation that was very suitable for the development of the mining industry in Katanga. The government also eliminated most barriers to free trade, such as state monopoly, and drastically lowered taxes on international transactions. The first organization of indirect taxes started in 1912 within the context of free trade when a royal executive order of 15 June created a commission to assess the reorganization of customs in the Belgian Congo (Belgium 1914). Since the colony had no qualified personnel to assess exports, Brussels decided in 1913 to apply specific tariffs rather than the ad valorem system inherited from the CFS. Customs officers had to look at the merchandise, evaluate its nature and its weight and then assess the required tax. However, this system was inefficient because it depressed the taxable base when the world demand for raw materials declined during the First World War. In 1917, the colonial administrator reverted back to the Leopoldian ad valorem system. At the same time, the colonial economy, which relied on the free market, disappeared quickly as a result of the war. The scarcity of a qualified personnel was still a major handicap for the development of an effective customs office in the Belgian Congo. Brussels promulgated a decree on 20 November 1919 that established the Colonial Customs Office (Office Douanier Colonial) in Antwerp. Its task was to collect all export taxes on behalf of the colony. Although efficiency was a major concern to establish the agency, the need to modernize the port of Antwerp was also behind this decision (Leclercq 1966). Nonetheless, the tax collection was done by experienced personnel in the port of Antwerp on behalf of the Belgian Congo. The improvement of the Belgian Congo’s economy in the mid-​1930s as a result of increasing prices of natural resources in the world markets also led to a new colonial policy. Minister of Colonies Edmond Rubbens set up in 1935 a commission for inter-​market development in Belgium with the goal of encouraging Belgians at home to use imports from their colony rather than imports from other countries through some tax exemptions. Imports from the Belgian Congo freed Belgium from its economic dependence on foreign countries and was economically sound for the balance of payments standpoint. By the late 1930s, Belgium was importing the entire Congolese exports of gold, silver, diamonds, tin, copal, coffee, and cotton as well as 70 percent of palm kernels and 15 percent of palm oil at favorable financial terms (Belgium 1939: 234–​256). Belgium also entered several international agreements to protect the market of its colony’s minerals such as copper and tin. In the tin market, for example, the quota agreed upon with the cartel was reached without interfering with the operations of colonial companies. As one representative of the Belgian delegation pointed out, “It is true to say that the results are exceptional: the

Revenue imperative and state building  161 commercial advantages of joining a cartel are normally only acquired at the cost of reduced activity” (Brion and Moreau 1998: 325). The role of trade taxes was both a fiscal tool to mobilize resources and a policy instrument to industrialize the colony. According to Table 6.2, the colonial state received more than one-​third of its revenue from indirect taxes averaging 35.7 percent a year after the 1910s and almost 42 percent a year after the 1930s. Most indirect taxes came from import duties that represented 28 percent a year before the Great Depression, then started declining thereafter. The increase in import duties coincided with the first phase of IS industrialization of the Belgian Congo in the early 1920s to protect many infant industries. The colonial legislator exonerated transport and other capital goods but highly taxed imports of consumer goods. As import duties declined, the state began to rely heavily on export taxes, which picked up in the 1930s. However, the state kept export taxes low enough before the Second World War since high rates could have depressed prices and lower production in those sectors mostly dominated by the Belgian powerful colonial group. Although the Belgian Congo was a world price taker in the world markets, taxes on exports remained relatively stable during the entire colonial period because the colony dominated the world markets in the supply of certain key strategic natural resources in the free world, such as industrial diamond, cobalt, and other rare minerals. This monopolistic position isolated the colony from the fluctuations of the world markets that were transmitted to similar world price takers. Therefore, export taxes on primary commodities were never used for economic stabilization and, as a result, they never engendered negative side effects such as smuggling or under-​invoicing that were so widespread in the British and French colonies. Since taxes on exports remained stable over the years, state savings also remained unwavering. A complementary factor that helped to stabilize export taxes was that Belgium remained the monopsony while the Belgian Congo was the monopolist. Export duties represented not only taxes in the fiscal sense, but they were like a payment negotiated between the state and the exporting enterprise. This was a bargaining process that helped to build the state. The tax was fully supported by colonial exporters as a result of low transportation costs made possible by subsidies to the state-​owned OTRACO to encourage exports as discussed earlier in Chapter 4. Moreover, export taxes never had any negative effect on the volume of exports. Only after 1939 onward did export taxes increase when they became an instrument to finance wartime efforts in the first half of the 1940s. The increase in taxes targeted specific sectors exporting raw materials badly needed by local industries. Non-​tax revenue The first colonial act after the annexation of the CFS to Belgium in 1908 was a decree of 22 March 1910 that ended state monopoly over the exploitation of so-​called vacant lands (Belgium 1911: 334–​344). The colonial state

162  Revenue imperative and state building decided to give the exploitation of land to the private sector with two major consequences. First, it abandoned its policy of recruiting the labor force on behalf of the private sector. The purpose was to leave this task to the private sector whose objective was to maximize profits. Second, since the colonial state could no longer count on its vast domain to collect natural resources after the abolition of state monopoly, it sought new ways of mobilizing revenue and was able to collect an average of 40 percent of nontax revenue per year before the Second World War (see Table 6.2). However, this collection declined to average 25 percent a year after the war. Nontax revenue remained a major portion of state revenue averaging 32.8 percent during the entire colonial period. The first large portion of nontax revenue came from the financial portfolio of state holdings. This portfolio included two chartered companies inherited from the CFS, the CSK and the CFL (see Chapter 5). The former had substantial shares in the UMHK and received a large portion of royalties from the giant mining company. Another source of nontax revenue came from the chartered company CNKi created in 1928. However, the most important source was profits from mining companies as a result of the 1937 mining law. A final portion of nontax revenue averaging 12 percent a year came from legal fines and other administrative fees. The colonial state emerged as an autonomous entity from both domestic and external players. The massive saving from nontax revenue helped it to establish several developmental and agricultural credit banks to carry out its development policies. These included, among others, the Fonds Temporaire de Crédit Agricole (created by a royal decree of 25 March 1954), Crédit au Colonat (a decree of 1 June 1947), Office des Produits Agricoles (a decree of 3 August 1955), and a saving bank for Africans called Caisse d’Epargne (10 June 1950).

Tax regime and the IS process Two factors favored the early industrialization of the Belgian Congo as developed in Chapter 3. The first was a set of international agreements that emphasized free trade in the Congo basin including the 1885 Berlin Conference and the 1919 Saint Germain-​en-​Laye international treaty. From 1885 to the early 1920s, the Belgian Congo state was constrained to abide to these international agreements on free trade. This specter of free trade made it impossible for the colonial administrator to give Belgian exporters any preferential trade treatment. In most colonies, the metropolis was the sole importer from its colonies and the sole exporter to them. International conventions that made the Belgian Congo a free trade area for all nations prevented Belgium to establish any preferential trade zone with its colony. The principle of open-​door policy meant that Belgian exporters had to compete against their European and Japanese counterparts in the Belgian Congo market. Belgian exporters thus found themselves in a predicament.They could be automatically eliminated from their own colonial market unless they competed with less expensive products, especially from Japan (Lacroix 1967).

Revenue imperative and state building  163 The industrialization process of the Belgian Congo based on IS was the only remedy for the survival of Belgian exporters targeting their colony. They had one option to capture the colonial market and to avoid being eliminated from it altogether. They had to invest massively in the Belgian Congo to produce consumer goods. In a sense, institutional pressures helped to start the industrialization of the Belgian Congo in the early 1920s. An additional motivation on the part of the Belgian government to carry out its IS industrialization in its colony was to facilitate balance of payments equilibrium by exporting capital and intermediate goods to the Belgian Congo. Other institutional factors favored the early industrialization of the Belgian Congo as well. Unlike British and French colonies, Belgium prohibited labor unions in the colony before the Second World War. European enterprises were able to impose low wages and to keep their costs manageable in the early years of the industrialization process. Second was the monopsonic nature of the labor market dominated by the colonial state that also implemented a set of policies to favor Belgian economic interests. Third, representatives of economic groups were within the same social groups dominated by the Belgian Social Christian Party (Joye and Lewin 1961). Given these institutional factors, the colonial state became a discriminant monopolist. It provided tax incentives to the most productive segments of society, a few big Belgian companies and their colonial subsidiaries. The most important incentives in the early years of the Belgian colonial rule were accelerated amortizations, import duty reliefs, exemptions of reserved profits, tax holidays and income averaging (where losses in one year could be offset against profits in another year). For example, the rate of amortization of most firms was above 35 percent of total profits in the early years of their operations. It was particularly important for the expansion of efficient firms because the risk from expansion and development was reduced by all standards. Tax holidays were given to industries of pioneering type for the first two years of operation and were awarded on a discretionary basis to firms in specific designated industries and regions. Pharmaceutical and chemical industries located in eastern Congo were exempted and even received lower tax rates on a permanent basis. These incentives affected investment decisions because they helped firms to decide how much capital to hold, when to acquire the capital, how durable the capital should be, and how long to hold it. Although tax incentives had limited effects, the Belgian Congo state used them more successfully than the CFS as a result of its two carefully thought projects of economic development, in the 1920s and the 1950s, its competent tax administration and its quick decisions on applications. Another important tax incentive used by the colonial state to attract Belgian investments was the elimination of double taxation. One major issue regarding Belgian corporations having their operations in the Belgian Congo was that their profits were taxed in both Belgium and the Belgian Congo. This double taxation system ended by a Belgian law promulgated on 21 June 1927 (Belgium 1928). Companies with their headquarters in Belgium but doing business in

164  Revenue imperative and state building the colony were taxed in Belgium only. This law thus deprived the colony of a major source of revenue, but it enormously benefited the metropole despite the Colonial Charter’s prescription that the colony and the metropole were two fiscally legal autonomous entities. Ten years later, the Belgian legislator passed the 1937 mining law on 12 August to deal with this loss of revenue (Belgium 1938). The law distinguished corporations with limited liability from personal business with unlimited liabilities. The former had a legal personality independent of shareholders and their profits were taxed at progressive rate, which was imposed on dividends, profits, and obligatory capital. The government exempted from taxation those profits that were not distributed to shareholders but reinvested in the Belgian Congo. However, personal businesses were taxed at a low rate ranging between 2.5 percent to 10 percent according to brackets of 6,000 CF to encourage their development in the Belgian Congo. In brief, the colonial state used indirect taxes as a policy instrument to industrialize the colony. The rationale was to protect its infant industries. The government used tariffs rather than subsidies because the former were much easier to administer than the latter. Most firms created in the early 1920s had to cope with diseconomies of small-​scale production, workers had to learn new techniques, and so forth. In addition, the government had to invest in technological learning, which, in the long run became socially profitable. The government also used tariffs to tap on domestic inputs for the new manufacturing sectors. As a result, it established high import duties on selective products in the early 1920s to start its IS industrialization. This tax policy gave some breathing room to most infant industries to avoid international competition. Import duties were applied to many consumer goods of high domestic demand to give local industries some comparative advantage.Table 6.3 partly illustrates this contention. The state established a number of high selected import duties to protect local industries with high domestic demand. Examples included sugar, cigarette, peanut oil, soap, palm oil, beer, and textile among many others. Their tax rates were above 30 percent. Cigarettes were taxed at 80 percent rate before independence. Thus, imported goods of locally equivalent manufactured products received relatively unfavorable tax treatment. However, imports of capital and intermediate goods for local industries were either exempted or received favorable tax rates. The colonial state also established a high discriminatory export tax on untransformed raw materials to be used by local manufacturing industries. Most Congolese manufactured exports were either exonerated or were taxed a very low rate as illustrated by Table 6.4. The government structured export duties to encourage early industrialization of products to be exported. The Belgian Congo state used indirect taxes as one of the most important instruments to move the economy from subsistence economy to a monetized and industrialized system in the mid-​1920s. This was made possible because it had to bargain with a few big powerful private actors that controlled mobile assets in the colony.

Revenue imperative and state building  165 Table 6.3 Effects of industrialization on selected goods locally produced Products

% of consumption covered by local production

Margarine Chocolate Sugar Peanut oil Olive oil Water and lemonades Beer Cement Tissues of cotton Jute bags Blankets Soaps Shoes Cigarette Matches Toothpaste

Import duties (% ad valorem)

1950

1957

1952

1960

 4

77

98 25

91 65

97 99 70 55 55 44 94 32 68 45 56

99 99 82 79 79 57 95 62 95 92 85

20 20 35 60 55 30 7 francs/​liter 10 20–​25 5 0–​5 35 12–​20

30 30 35 60 40 30 7–​11 francs/​liter 10 20–​25 20 5–​25 35 20 80 30 40

Source: Lacroix (1967) and Leclercq (1966).

Table 6.4  Export taxes on selected manufactured exports in percentage

Copper wire bars Refined tin Shelled rice Peanut oil Cotton fiber Cotton fabrics Palm oil Soap Margarine Sugar Cement Shoes

1948

1959–​1960

15 11 12 12 12 3 20 15 3 3 3 3

15 3 0 1 5 0 7 0 0 0 0 0

Source: Leclercq (1966: 134).

Summary The literature on state formation in early Europe contends that revenue bargaining process in which the state exchanges security for tax revenue from citizens contributed to state building.Taxation remains a major source of resource mobilization, an instrument of state building, and a policy to foster economic

166  Revenue imperative and state building development. It can generate political exchange that entails bargaining and consultations if it is based on a sustained balance of power between taxpayers and state managers. Unlike the Leopoldian state, the colonial state was able to collect direct taxes on semi-​compliance basis after the Second World War when it started its programs of social welfare. Coercion gradually disappeared over the years to make room for some form of direct compliance. The structure of revenue was evenly distributed across the board to the extent that each revenue base provided at least on third of total revenue. This may be the magic formula to avoid huge deficits and tax discrimination burden. As the economy was monetizing, the colonial tax system became more efficient, the result of its highly professionalized colonial bureaucracy.Taxes on revenue became much easier to collect because foreign enterprises were required to retain a portion of taxes from workers’ payrolls and taxes from profits before their distribution to shareholders and other parts of the balance sheet. This reduced the risk of fraud and evasion and insured the quasi-​totality of tax collection. The state achieved a coherent tax policy by concentrating on a few tax bases like its CFS counterpart, except a noisy tax on polygamous men and single women imposed by the Catholic Church. Unlike the CFS, tax burden on Africans declined over the years as the state expanded its revenue basis to the most prosperous economic sectors, export taxes and nontax revenue. Usually, export taxes tend to be discouraged by free traders since they impinge on trade. They can depress prices paid to local producers if they are collected from agricultural products, leading to a fall in output and, potentially, an overall loss in welfare. However, export taxes in the Belgian Congo helped to create supportive relations by binding states and white minority businesses, allowing them to negotiate and bargain over policies and strategies because the colonial state lowered transportation costs through subsidies to help the exporting sector to flourish (see Chapter 4). This successful relationship between the state and business built trust and eased monitoring. It also supported the exchange of information and, consequently, it fostered reciprocity. In addition to bargaining and consultation, export taxes influenced redistribution, state capacity, and even societal capacity. The role of taxation also differed from the CFS as an instrument of economic development. Both the CFS and the colonial state used tax tools to mobilize African labor. The purpose of taxing Africans in the Leopoldian state was to force them out of subsistence economy without an alternative livelihood in order to collect wild products for the state. However, the tax policy under the Belgian Congo intended to allocate labor to the emerging mining and manufacturing companies as well as plantations where wages and amenities were above subsistence level. The negative side of this policy was a decline in food production that the colonial state corrected when it began its policy of labor stabilization. Moreover, the colonial state used tax policy as a tool to allocate resources efficiently and to mobilize capital in the process of economic development.The

Revenue imperative and state building  167 tax structure was an instrument to protect domestic industries, a bargaining instrument with owners of mobile assets. Thus, the state used some discriminatory tax policy to favor the domestic manufacturing sector with cheap domestic inputs by highly taxing exports of inputs intended for this sector of the economy. This policy was advocated on the ground that an interference with the freedom of international trade would allow an opportunity to domestic industries to develop and to flourish behind a few protective tariffs, which were selective since they tended to preserve the domestic market for Belgian investments in the colony. They strengthened the inducement to invest on the part of Belgian entrepreneurs who otherwise could not have successfully competed against non-​Belgian exports in the colony. Selective protectionism was justified only for industries with possibilities of future expansion and cost reductions because import tariffs allowed the country to undertake production where it enjoyed some comparative advantages. The IS industrialization never created any monopoly to protect faltering domestic industries. In fact, most faltering industries disappeared and new ones emerged almost every year. Import duties were low across the board and high duties were quite selective. Having its source from the Berlin Act, import duties were never aimed to be barriers to trade. In sum, colonial administrators implemented specific fundamental policies that minimized budget deficits, kept inflation low, and stabilized the currency. It provided the colony with secure financial systems, limited price distortions, implemented IS and, above all, it made open the Belgian Congo to foreign technology. The result was sustained economic development.

References Belgium, Ministère des Colonies (1910, 1911, 1913–​1915, 1918 annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1909, 1910, 1912-​ 1914, 1917) Présenté aux Chambres Législatives, Brussels: M. Hayez Imprimeur. Belgium, Ministère des Colonies (1928, 1938, 1939, 1950, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année (1927, 1937, 1938, 1949) Présenté aux Chambres Législatives, Brussels: F.Van Gompel, Editeur. Belgium, Ministère des Colonies (1959) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année 1958 Présenté aux Chambres Législatives, Brussels: Etablissements Généraux d’Imprimerie, S.A. Bézy, F. (1957) Problèmes Structurels de l’Economie Congolaise, Louvain-​la-​Neuve: Presses Universitaires de Louvain. Brion, R. and Moreau, J.-​L. (1998) La Société Générale de Belgique, 1822–​1997, Antwerp: Fonds Mercator. Delcommune, A. (1921) L’Avenir du Congo Belge Menacé, Volumes 1 and 2, Brussels: Office de Publicité. Frankema, E. (2011) “Colonial Taxation and Government Spending in British Africa, 1880–​1940: Maximizing Revenue or Minimizing Effort?” Explorations in Economic History 48(1): 136–​149.

168  Revenue imperative and state building Gardner, L. (2013) “Fiscal Policy in the Belgian Congo in Comparative Perspective,” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development:The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 130–152. Gérard, M.L. (1925) “Note Sommaire sur le Change dans ses Rapports avec le Budget de la Colonie,” in La Politique Financière du Congo Belge. Rapport au Comité Permanent du Congrès Colonial, Brussels, pp. 1–26. Hilton, A. (1983) “Family and Kinship among the Kongo South of Zaire River from the Sixteenth to the Nineteenth Centuries,” Journal of African History 24(2): 189–​206. Hunt, N.R. (1991) “Noise over Camouflaged Polygamy, Colonial Morality Taxation, and A Woman-​Naming Crisis in Belgian Africa,” Journal of African History 32(3): 471–​494. Jewsiewicki, B. (1986) “Belgian Africa,” in A. D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 460–​493. Joye, P. and Lewin, R. (1961) Les Trusts au Congo, Brussels: Société Populaire d’Editions. Lacroix, J.-​L. (1967) Industrialisation au Congo. La Transfromation des Structures Economiques, Paris: Mouton. Leclercq, H. (1966) “Un Mode de Mobilisation des Ressources: Le Système Fiscal. Le Cas du Congo pendant la Période Coloniale,” Cahiers Economiques et Sociaux, 3(2): 95–​141. Malira, K.-​N. (1972) “Regard sur la Situation Sociale de la Citoyenne Luchoise d’avant 1950,” Lukundoli, 11:63–​71. Merlier, M. (1962) Le Congo de la Colonisation Belge à l’Indépendance, Paris: François Maspero. Peemans, J.-​P. (1975) “Capital Accumulation in The Congo under Colonialism: The Role of the State,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​ 1960.Volume 4 The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 165–212. Philips, A. (1953) Survey of African Marriage and Family Life, London: Oxford University Press. Piron, P. and Devos, J. (1960) Codes et Lois du Congo Belge. Tome II. Organisation Administrative et Judiciaire, Brussels: P. Weissenbruch, Imprimeur du Roi, Editeur. Sohier, A. (1939) “Evolution de la Condition Juridique de la Femme Indigène au Congo Belge,” in L’Institut Colonial International (ed.), Compte Rendu de la XXIVe Session Tenue à Rome, Brussels: Bibliothèque Coloniale Internationale. Stengers, J. (1957) Combien le Congo a–​t–​il Coûté à La Belgique? Brussels: Académie Royale des Sciences Coloniales. Van der Kerken, G. (1943) La Politique Coloniale Belge, Antwerp: Editions Zaire. Vanthemsche, G. (2012) Belgium and the Congo, 1885–​1980, Cambridge: Cambridge University Press. Verhaegen, B. (1981) “Le Centre Extra–​Coutumier de Stanleyville (1940–​1945),” Cahiers du CEDAF, 8: 2–​68. Vermeersch, A. (1914) La Femme Congolaise: Ménagère de Blanc, Femme de Polygame, Chrétienne, Brussels: A. Dewit. Young, M.C. and Turner, T. (1985) The Rise & Decline of the Zairian State, Madison: University of Wisconsin Press.

7  From Mobutu to Mobutu and hubris syndrome

In the mid-​1950s, decision makers in Brussels still viewed the path toward independence of the Belgian Congo as a gradual process. The consensus was that Belgium would shape it by initially granting its colony some semi-​autonomous status to allow Brussels to retain some power of decision in several privileged key issues.When Congolese and Belgian progressists began to question this view, some Belgian conservatives started circulating the idea of Congo becoming the tenth province of Belgium (Vellut 2000: 86). However, events that unfolded in early 1960 repudiated this line of thought as Congolese negotiators at the political Round Table Conference in Brussels demanded immediate and full independence. The main issue was the hastiness by which Belgium granted independence to its colony without any well-​thought out and planned preparation. On 30 June 1960, Congo had almost no educated and experienced elite to govern the country. Its political personnel included “60 percent former clerks from the colonial administration, 34 percent of subordinates from the private sector, and 6 percent of others” (Bézy, Peemans, and Wautelet 1981: 54). Seventy percent of this personnel had only three years of post-​primary education. This was the social environment when Prime Minister Patrice Lumumba gave a somber and highly negative verdict of the Belgian colonial balance sheet. His nationalist speech and tone were not welcome within the Belgian royal and political circles. King Baudouin I wanted to get rid of Lumumba whom he did not forgive (Vellut 2000: 93). Prime Minister Gaston Eyskens also tried a moment to persuade President Joseph Kasavubu to dismiss Lumumba (Van Bilsen 1993: 249–​250). A few days after Lumumba’s memorable speech, the army mutinied on 5 July in Leopoldville and Thysville. Four days later, troops in Elizabethville and Luluabourg also followed their comrades. While Lumumba was trying to assert his authority over the army, he had to confront a Belgian military intervention on 10 July after governor of Katanga Moise Tshombe requested Belgian troops to protect Europeans. The next day, Tshombe declared the independence of Katanga. On 2 August, the rich diamond South Kasai also seceded under Albert Kalonji who was at that time in Elizabethville surrounded by Belgian advisors. DOI: 10.4324/b23045-7

170  From Mobutu to Mobutu and hubris syndrome Lumumba appointed two former sergeants from the colonial army to head the newly created National Congolese Army. The first was his uncle, Victor Lundula, who became major general and commander of the army. Second was Mobutu as colonel and chief of staff with the mission to Africanize it. The two appointments were ill advised, however. Lundula was a retired staff sergeant nurse and “did not have the necessary qualifications to manage a modern army” (Nzongola-​Ntalaja 2002: 98). Mobutu retired from the army in 1956 as a sergeant. He went to Brussels for a professional training in journalism and was hired as a member of the Belgian security services. Later he became the “American boy” close to Lumumba (Chomé 1979: 34). The Cold War rivalry would play against Lumumba when Colonel Mobutu staged a military coup on 14 September 1960 to neutralize the prime minister who was perceived by the West as a pro-​communist. This was the first breach of the rule of law to remove a constitutionally elected official. Mobutu appointed a caretaker government on 20 September 1960 made exclusively of university students and graduates called the Board of General Commissioners. Meanwhile, Lumumba’s followers established a parallel government in Stanleyville headed by his former Vice-​Prime Minister Antoine Gizenga. This government began expanding eastward and controlled the province of Kivu on 25 December 1960. Lumumba was caught while trying to reach Stanleyville and was assassinated on 17 January 1961 in Elizabethville. Mobutu handed power back to President Kasavubu eight days later in exchange for his promotion to major general. In less than seven months, Mobutu rose from a former sergeant in the colonial army to colonel and then to major general without any background in military academy or war experience. If Mobutu had followed his promotion through the ranks, he could have been promoted to major general after 65 years. From his first military coup in September 1960 to mid-​1964, Mobutu and three members of the government known, as the “Binza Group,”1 would be the most powerful political pressure body in Leopoldville that would shape Congo’s politics on behalf of the USA. More specifically, Mobutu as the head of the army would play a dominant role in the First Republic (1960–​1965) as a shadowy powerful figure under the wing of the Center of Intelligence Agency (CIA). The result was his second military coup on 24 November 1965. He promulgated a constitution on 24 June 1967 and launched the Mouvement Populaire de la Révolution (MPR) on 17 April 1970. He amended the constitution in 1970 and 1974 to institutionalize a personalist rule based on a single-​party state. A cult of personality elevated Mobutu to a heroic figure and a god-​like image through praise, unquestioned flattery, and veneration. His rule became over the years marked by “impetuosity, a refusal to listen or to take advice and a particular form of incompetence when impulsivity, recklessness and frequent inattention to detail predominate” (Owen and Davidson 2009: 1396).This is “hubris” and represents a common thread tying these elements together. Mobutu was a leader who “hubristically” abused power. Hubris syndrome develops only “after power has been held for a period of time” (Owen

From Mobutu to Mobutu and hubris syndrome  171 and Davidson 2009: 1397). Initially, Owen (2006) defines hubristic syndrome as a person who: 1) sees the world as a place for self-​glorification through the use of power; 2) has a tendency to take action primarily to enhance personal image; 3) shows disproportionate concern for image and presentation; 4) exhibits messianic zeal and exaltation in speech; 5) conflates self with nation…; 6) uses the royal “we” in conversation; 7) shows excessive self-​confidence; 8) manifestly has contempt for others; 9) shows accountability only to a higher court (history or God; 10) displays unshakable belief that they will be vindicated in that court; 11) loses contact with reality; 12) resorts to restlessness, recklessness, and impulsive actions; 13) allows moral rectitude to obviate consideration of practicality, cost or outcome; and 14) displays incompetence with disregard for nuts and bolts of policy making. (Owen and Davidson 2009: 1398) These features describe President Mobutu quite well. From 1965 to 1990, Mobutu remained in power uncontested as he enjoyed both American and French protection for much of his rule. He set about bankrupting Zaire by amassing a personal fortune in a system that has been since described as Africa’s kleptocracy. However, the West abandoned him in early 1990 and struggle to survive prompted the dictator to organize a national conference in order to broaden his autocratic base of support. He was thus able to control the process until the Alliance of Democratic Forces for the Libertion of Congo (ADFL) in conjunction with a few neighboring countries forced him out of office on 17 May 1997. The rest of this chapter is structured in two sections, the First and Second Republics. Both sections are organized along the same themes developed in Chapter 3 (political order), four (supply of public goods), five (property rights) and six (revenue imperative). The third section is a brief summary.

The fragile First Republic (1960–​1965) Political order and rule of law Soon after Lumumba took office as the prime minister, he had to confront a number of challenges. One of these challenges was the promotion of Congolese gradés in the army because Brussels never had any long-​term policy to Africanize it until the mid-​1950s when it started a three-​track system. First, the Minister of Colonies André Dequae established on 1 January 1954 a complete secondary school within the FP in Luluabourg called School for Pupils, which became in November 1959 the Royal School for Cadets. The goal was to have the first graduates in the late 1950s and their immediate enrollment in the Belgian Royal Military Academy. The expectation was to have the first Congolese lieutenants in 1963 (Vanderstraeten 2000).

172  From Mobutu to Mobutu and hubris syndrome Second, the colonial state established a two-​year school program for adjutants in September 1959. The adjutant level corresponded to the bottom ranking of the white officer corps without a university degree. The third track was the policy of Africanization through the ranks. This was quick to materialize. Nine Congolese gradés were promoted to adjutant in October 1959 and 24 in June 1960 (Vanderstraeten 2000: 104). Prime Minister Lumumba was probably uninformed of these new Congolese adjutants. Otherwise, he could not have assigned the command of the army to Lundula and made Mobutu the chief of staff. This was the picture of the army at independence when Lumumba promised to africanize its leadership. However, the last European military commander, General Emile Janssens, convened a meeting of the troops at the main army camp in Kinshasa on 4 July 1960 and wrote on a big blackboard the following equation: “before independence =​after independence” (Gérard-​Libois and Verhaegen 1961: 350). This message of provocation implied that there would be no changes for Congolese in uniform as a result of independence and white officers would remain in command.This equation set in motion the early army mutinies. The army and the new administration The sudden mutiny of the army caused widespread panic among foreigners. Most European officers and administrators left the country. The departure of army officers deprived the new state of its effective monopoly over force and set in motion an environment that favored the perpetuation of violence. At the same time, it opened up to African gradés more than 1,000 officer positions in the army. Also, some 5,900 upper-​level positions and 3,714 in the middle-​level of the administration became vacant. At least 620 highly paid political positions were also created in June 1960 at the central and provincial levels. Former clerks in the colonial administration had to fill the administrative vacuum and manage the country. Most political positions were filled by former clerks and elementary school teachers with middle school diploma without any professional experience in running state organs. The exodus of those who ran the rational state and the incapability of those who tried to form a new alliance for state building marked the first collapse of the new embryonic postcolonial polity. Meanwhile, the presence of Belgian troops in Congo resulted in the Resolution 243 on 14 July 1960 by the UN Security Council (UNSC) that requested these troops to leave Congo since their occupation was in violation of Congo’s sovereignty. Two days later, a UN peacekeeping force landed in Leopoldville. However, the Belgian government ignored the resolution and kept its troops in the country to undermine Lumumba’s authority. Belgium had more than 10,000 troops in Congo and 8,600 soldiers were in Katanga (Chomé 1979: 50). An institutional crisis occurred in early September 1960 between Kasavubu and Lumumba on how to end the Katanga secession. This matter has been

From Mobutu to Mobutu and hubris syndrome  173 discussed extensively elsewhere (Gerard-​Libois andVerhaegen 1961; Lemarchand 1964;Young 1965). In brief, the issue was both political and institutional in the context of the Cold War rivalry. Most importantly was Mobutu’s coup in mid-​ September 1960 to remove Lumumba from the political scene. The assassination of Lumumba in January 1961 and later the removal of nationalists from power automatically resulted in the fragile state that emerged in the first half of the 1960s. A report by the Belgian parliament published in November 2001 clearly established the fact that the Belgian government was behind the assassination of Lumumba (de Witte 2003; Gerard and Kuklick 2015). King Baudouin knew that Lumumba’s life was in danger, but did nothing to prevent it –​perhaps because he never forgave Lumumba for his speech on 30 June 1960. Also, the Belgian government supported Lumumba’s transfer to Elizabethville where Prime Minister Eyskens knew that Lumumba would be killed. When the 2001 report was being debated in the parliament, Minister of Foreign Affairs Louis Michel extended his government’s profound and sincere regrets and apologies for the pain inflicted to the family of Lumumba and to the Congolese people. Brussels also set up a Patrice Lumumba Foundation. Lumumba left his country divided into three separate political and military entities: Elizabethville under Tshombe had some 19,000 gendarmes and mercenaries; Stanleyville under Gizenga and his followers possessed at least 5,500 troops; and Kinshasa or the central government under President Kasavubu had 18,000 poorly-​trained and undisciplined soldiers under General Mobutu (Kisangani 2012). In July 1961, a pro-​Western government of national unity emerged from the parliament under Prime Minister Cyrille Adoula. He coopted most prominent nationalist leaders. Once the nationalists were no longer a threat to Western interests, President John Kennedy gave the UN a green light in early December 1962 to end the Katanga secession (Nzongola-​ Ntalaja 2002: 115). The UN defeated it on 14 January 1963. The early balkanization of Congo was the result of the Belgian government. First, it facilitated the Katanga secession. In fact, it protected the seceded province and cooperated with its leaders through the Mission Technique Belge headed by d’Apsremont Lynden, who was a former associate chief of staff in the office of Prime Minister Eyskens. Brussels even created the National Bank of Katanga and opened an account on its behalf in the National Bank of Belgium with the agreement of Belgian minister of finance (Boehme 2005: 13). Brussels also created an airline called “Air Katanga” with the assistance of Sabena Airlines. Second, soon after Katanga had proclaimed its independence on 11 July 1960, the UMHK gave it 1,259 million BF (Boehme 2005: 16) or $202 million in 2015 prices. Charges, duties, and taxes from the UMHK to the seceded state for 1961 were worth 2,096 million CF or $224 million (2015=​100). From July 1960 to December 1962, the UMHK supported the seceded state by providing it “more than 80 percent of revenue because the seceded state became de facto and de jure collector of all taxes, mining loyalties, and obligations due to the state” (Roosens 2000: 119–​120). The CSK also paid to Katanga authorities

174  From Mobutu to Mobutu and hubris syndrome 431 million BF ($69.88 million in 2015 prices) from 10 July 1960 to April 1962 because the seceded state replaced the Congolese state. All these financial disbursements helped Tshombe to maintain his administration, to hire mercenaries, and to build his Katangan gendarmerie of 19,000 men. Without Belgian technical and financial support, the seceded province of Katanga could not have survived more than two years. As the UN was withdrawing in early 1964, the nationalists excluded from power began two rebellions in early 1964: one in the eastern Congo and another in the western district of Kwilu. By late 1964, the Kwilu rebellion was contained, but not defeated because of its capacity to generate massive participation and to pit spears against firearms demonstrating the sorry state of the national army. The eastern rebellion continued and reached most corners of Kivu and Oriental provinces by mid-​1964 (Kisangani 2012). The fear of another secession propelled the “Binza Boys” to look up to Tshombe for assistance and informed Prime Minister Adoula in early July that they supported the return of Tshombe to power (Nzongola-​Ntalaja 2002). Belgium and the USA also embraced the idea as well. President Kasavubu had no choice but to appoint Tshombe as prime minister in July 1964 with the mission to defeat the rebellions and to organize the elections. This triumphant return surprised many observers after he had led the country to the brink of partition. The new prime minister hired mercenaries and brought back his former Katanga gendarmes to boost the Mobutu’s ragtag and undisciplined army. The zenith of rebels’ self-​confidence was marked on 5 September 1964 by the proclamation of a revolutionary government in Stanleyville. As mercenary units and former Katanga gendarmes were closing on Stanleyville, rebels’ leaders placed Europeans and Americans in the city under house arrest as possible hostages. Two Belgian military interventions with US logistics in late November rescued the hostages held in Stanleyville and in Paulis located 360 km east of the former. On 1 December or five days later, Belgian troops withdrew from Congo. The loss of Stanleyville as the capital seat of the revolutionary government was a mortal blow to the eastern rebellion because it forced its leaders into exile. Legislative elections took place from 18 March to 30 April 1965 and Tshombe’s Convention Nationale Congolaise won 73 percent of the parliamentary seats. However, President Kasavubu appointed Evariste Kimba from the minority coalition as the new prime minister. As expected, tensions mounted between Kasavubu and Tshombe that paralyzed the government. Brussels and Washington became nervous with the political elite split by the Kasavubu-​ Tshombe quarrel in Leopoldville. Belgian Prime Minister Paul-​Henri Spaak suggested that Mobutu intervene on the political scene (de Witte 2003). On 23 November, the US government also approved a military’s takeover of the government. Mobutu took power on 24 November 1965. The Kwilu rebellion ended late in that year and the eastern rebellion officially ended the following year.

From Mobutu to Mobutu and hubris syndrome  175 From 1960 to 1965, political instability had disastrous economic consequences. Economic growth declined by -​10.85 percent in 1961, the second largest drop since the Great Depression (see Figure 1.4). The price level increased by more than 20 percent. The agricultural area suffered the most. The result was food shortages and price hikes despite US food aid and an increase in food imports from “199,799 tons in 1959 to an average of 301,389 tons a year from 1961 to 1965” (N’Dongala 1968: 764). Traditional authorities and the Catholic Church During the decolonization process in the late 1950s, Belgian rulers rethought their strategy and, in their hasty reforms, they allied with traditional authorities by building a coalition that they thought would slow the process.The reaction of the nationalists was to weaken the chiefs, but they also viewed traditional authorities as forces to coopt given the dominance of the rural bloc that represented more than 80 percent of the electorate. Once in office, however, the nationalists began to replace sector chiefs by party militants in predominantly nationalist zones. Since the new republic inherited more sectors than traditional chieftaincies, one understands the power of party militants heading sectors in rural areas. The fall of nationalists from power after the assassination of Lumumba in early 1961 changed the situation in favor of sector chiefs. Another factor that helped sector chiefs was the fact that former colonial clerks who replaced European territorial administrators after June 1960 had less authority over the populace than the chiefs. Contrary to European administrators who had both the carrot and the stick, postcolonial administrators in rural areas had neither. They became overwhelmed by their tasks and, consequently, most sector chiefs regained their status by default after the first wave of anti-​chief measures in 1960–​1961 under the nationalists. In early 1964, the Kwilu and the eastern rebellions broke out. Since they had a nationalist tone, the insurgents targeted traditional authorities almost everywhere the rebellions had gained control. The rebels killed many chiefs and replaced them by party militants. Those chiefs who embraced the rebellions enjoyed some degree of autonomy and freedom. Nationalist leaders also perceived the Catholic Church with some suspicion before independence because of its support of the colonial administration. But they did not directly attack the church since most of them received their education from mission schools. The Catholic Church was also respected because of its impact on education and massive action in healthcare across the country. It thus remained a powerful social player by default and kept its subsidies in education, except in areas engulfed by the eastern rebellion where the rebels attacked the Catholic Church. They killed priests, raped nuns, and destroyed many symbols of the church since they considered it as a neocolonial entity associated with the West. Unlike the colonial state, the First Republic sidelined both the Catholic Church and traditional authorities. Its leaders never used the two bodies in the state-​building process.

176  From Mobutu to Mobutu and hubris syndrome State–​business interactions Most Belgian companies were confronted with two options in mid-​1960. The first was to continue investing in Congo to avoid being labelled “neocolonialist” (Brion and Moreau 1998: 234).The other option was simply to abandon the former colony. This was the option that most boards of directors of major companies were contemplating because they were concerned with political instability and the explosion of African nationalism. One member of the SG’s board of directors even pointed out that the “first priority is to re-​establish political stability” (Brion and Moreau 1998: 404). However, most directors of the company never believed this was feasible for at least ten or 15 years and even suggested that the SG “should not invest a single additional kopeck in this mouse-​trap, but should keep” the company’s “assets safely in Belgium” (Brion and Moreau 1998: 405). As a result, most Belgian companies adopted several financial strategies to protect their assets. First, many companies changed their status from agricultural or industrial activities to financial operations. This strategy had the effect of sapping the growth of capital investments in these productive activities. One example among many is the Société d’Agriculture et de Plantations au Congo. It had owned many agricultural plantations in Congo since 1920, but became a financial company on 21 December 1962 called the Compagnie Financière d’Agriculture et de Plantations (Depelchin 1992: 117). This was a de facto disinvestment in productive agricultural activities. Another scheme was to stop investing in Congo. The UMHK provides a good example of this strategy. Table 7.1 shows the evolution of a few accounts of the company’s balance sheet. From its creation in 1906 to 1956,

Table 7.1 Selected accounts of the UMHK’s balance sheet (millions BF)

1906–​1911 1912–​1919 1920–​1921 1922–​1923 1925–​1934 1935–​1936 1937–​1945 1946 1947–​1951 1952–​1955 1956–​1959 1960–​1964

Capital

Profits (a)

Amortizations (b)

Reserves (c)

(b/​a)*100

(c/​a)*100

10.00 12.50 15.00 26.00 76.00 176.00 300.00 1,000.00 3,000.00 5,000.00 8,000.00 8,000.00

-​ 152 26 239 2,068 182 1,100 891 12,471 20,626 19,467 15,141

1 65 10 50 730 49 181 217 2,720 3,323 3,600 4,500

-​ 22 -​ -​ 149 2 129 80 2,177 5,651 1,325 0

-​ 42.8 38.5 21.0 35.3 21.9 16.5 24.4 21.8 16.1 18.5 29.7

-​ 14.5 -​ -​ 7.2 1.1 11.7 9.0 17.5 27.4 6.8 0.0

Source of data: Le Recueil Financier (Brussels: Etablissements Emile Bruylant, 1926, 1936, 1946, 1956, 1959, 1965).

From Mobutu to Mobutu and hubris syndrome  177 the UMHK adopted a strategy of capitalization by increasing its capital over the years. This was a sign of corporate success and confidence in the political climate of the Belgian Congo.The increase in capital was quite modest after the establishment of the company in 1906. The biggest increase in capital occurred after the Second World War from 300 million BF in 1937 to 1,000 million in 1946. The capital thus sky-​rocketed by more than 230 percent in 1946. It increased by 67 percent in 1947, and by 60 percent from 1952 to 1956. However, the UMHK did not invest a single BF from 1960 to 1964. Like other Belgian companies operating in Congo, the UMHK camouflaged its huge profits in amortizations to avoid both taxation and reinvestment of profits in order to siphon its profits out of Congo. Its early huge amortizations were necessary to maintain equipment. It averaged 42.8 percent of profits in 1912–​1919 (see column b/​a). Amortizations as a percentage of profits averaged 17.3 percent a year in the 1950s, but they increased to 29.7 percent in 1960–​ 1964 although the company had little desire to invest in the maintenance of its equipment. In fact, millions of dollars in amortizations found their way to Belgium. Another scheme that Belgian companies operating in Congo used so cleverly to camouflage their huge profits was to write off their “reserves.” Usually, this account reflects self-​financing or reinvestments of profits, that is, the production and reproduction of capital. From 1960 to 1965, the UMHK like other companies suddenly stopped feeding this account. This account shows an increase averaging 22.5 percent of profits in 1951–​1955. A decline in reserves followed in the second half of the 1950s when Congolese began their quest for self-​rule. The account “reserves” shows zero balance in 1960–​1964. Physical and social infrastructure Political instability in the First Republic affected most transportation services. This meant a loss of revenue placing all major transportation companies in dire financial difficulties to maintain their apparel of exploitation. The total traffic declined from 4.9 million metric tons in 1959 to 3.85 million tons in 1960 (see Table 4.9). This decline continued averaging almost 2.9 million tons a year from 1961 to 1965. The four major transportation companies, including BCK, CFL, OTRACO, and CVC, registered net losses in the first half of the 1960s. The latter registered the worse performance from 54,700 tons in 1964 to only 86 tons in 1965 during the eastern rebellion. On the social side, the new republic inherited an educational system based on primary, post-​ primary professional, secondary, and tertiary levels. As a reminder, the colonial system emphasized the first two levels at the expense of the last two. One major reform in the postcolonial period was to establish a secondary system that emphasized sciences and technology so badly needed to develop the country. The most important innovation was the state diploma inaugurated in 1961. The secondary education was divided in two cycles. The first or the Orientation Cycle consists of two years of general education

178  From Mobutu to Mobutu and hubris syndrome emphasizing mathematics, sciences, and technology. The second cycle of four years is tailored to students’ goal at the tertiary level. It includes “Math-​Physics” section for future engineers and physicists, “Bio-​Chemistry” section for future chemists, biologists, and medical doctors, and so forth.The 1964–​1965 rebellion slowed the reform process momentarily in the east. The First Republic also inherited the colonial healthcare system. The colonial health infrastructure remained almost intact, except in a few eastern localities that experienced heavy fighting during the rebellion. This infrastructure suffered from a shortage of qualified health personnel after the departure of most Europeans in July 1960, but it recovered a few years later. Property rights under the First Republic A few months before independence, the Belgian private sector became agitated by the idea that the nationalists would likely take power and control the economy. Brussels reacted by the promulgation of two laws as discussed in Chapter 5. The first was the law of 17 June 1960 that allowed Congolese companies to choose the Belgian legal personality if they so desired. As expected, many big companies chose the Belgian nationality. This law was a direct expropriation of Congolese companies by Belgium. The second was the law promulgated on 27 June 1960 that dissolved the two major charter companies, the CSK and CNKi. This act deprived the new independent state of its wealth and its major source of non-​tax revenue.This act implied that the new republic had no ownership rights over 37.5 billion CF inherited from its Leopoldian and colonial predecessor states. After July 1960, the Belgian government even decided to retain possession of this portfolio against 46 billion CF of colonial debt, which became a Congolese liability. The issue of the two charter companies and the colonial debt became known in the first half of the 1960s as the Belgo-​Congolese Contentieux or litigation. After two meetings between the governments of Belgium and Congo on 25 February 1963 in Brussels and on 17–​20 March 1964 in Leopoldville, the two sides signed a protocol that defined the principles for resolution. This also opened up the way to a final agreement. Brussels explicitly accepted to transfer the portfolio of state financial holdings to Congo once agreements were signed between Congo and the chartered companies. Unfortunately, two rebellions broke out in early 1964 prompting President Kasavubu to appoint Tshombe in July 1964 as the new prime minister. Several hurdles emerged by the end of the year to continue the negotiations. First, the Katanga Company requested reimbursement of its original investments of 3.01 million gold francs in 1891 and an additional 600,000 BF invested in 1900.The company received full reimbursement (Gérard-​Libois and van Lierde 1965). The CFL also requested full compensation amounting to 3.2 billion BF. Furthermore, the CNKi demanded its share of 125 million francs. All these compensations amounted to 3.3 billion BF that the government could not afford.

From Mobutu to Mobutu and hubris syndrome  179 In the midst of the debate on the litigation, Tshombe promulgated a decree on 29 November 1964 that dissolved the charter companies. The result was to nullify all compensations claimed by these companies (Gérard-​Libois and van Lierde 1966: 292). Strong negative reactions from Brussels forced him to suspend the enforcement of the new law, but he flew to Brussels in late January 1965 to begin a new round of talks that occurred from 28 January to 6 February. Brussels and Kinshasa signed a convention on 3 February 1965 with the three charter companies. The government nationalized the CFL three days later. Belgium never objected because the CFL was a minor player and never invested in major mining companies. On the debt issue, the two governments decided to split it rather than to write it off. The DRC agreed to pay its part of 23 billion in CF and Belgium promised to pay 11 billion in BF. The two parties decided to create a semi-​ public company called the Belgian-​ Congolese Sinking and Management Funds to manage the debt. Both parties also agreed that ownership rights of the state portfolio holdings should be transferred to Congo with all voting rights, rights to appoint board members, and rights to collect taxes. Kinshasa promised to respect its obligations toward the chartered companies and to modify its obligations through conventions involving all the parties. The Katanga Company ceded its 12,000 shares in the UMHK to Congo, but Tshombe gave up Congo’s 12 percent shares in the Katanga Company while also acknowledging the Katanga Company’s rights to one-​third of the CSK’s portfolio. In exchange,Tshombe received 17.95 percent of titles and 24.49 percent of voting rights in the UMHK. From a majority shareholder in the UMHK, Congo became a minority as a result of Belgian financial manipulation of shares in the CSK. Moreover, the Tshombe’s team of experts never solved the transfer of ownership of many major companies in which the colonial state was a major shareholder but let the private sector manage them. These were mostly companies on the “List 6 of the Convention Appendix” (Gérard-​Libois 1967: 145). The 1965 Convention required that the transfer of ownership of these companies would occur only after Congo had concluded an agreement with each company on the list by specifying the modalities of such transfer. Although the spirit of the 1965 Convention entailed expediting the solution by mid-​1965, a concerted effort to solve the List 6 was never carried out for reasons that were neither well-​articulated nor well-​defined by the Belgian government. The transfer of these companies to Congo never took place, necessitating another round of talks. But the Belgian parliament quickly adopted the February Convention that was ratified on 11 May 1965. On the Congolese side, President Kasavubu had adjourned the parliament indefinitely in September 1963 and thus excluded the nationalists from voicing their concerns. Consequently, Kasavubu and Tshombe signed a decree on 30 March 1965 that adopted the convention. The meeting to discuss the List 6 never occurred. Instead, Spaak and Tshombe met again on 2 June 1965 for a new round of talks that concluded with the creation of the Belgian-​Congolese Sinking and Management Funds.

180  From Mobutu to Mobutu and hubris syndrome Tshombe received a check of 92.42 million BF ($13.8 million in 2015 prices) from managers of the UMHK as dividends, taxes, and interests reflecting the shares of Congo in the company since July 1960. Upon his return to Congo from Belgium, Tshombe declared publicly that he had solved the Belgo–​Congolese Contentieux. However, most observers were extremely skeptical of Tshombe’s victory, arguing instead that he “got nothing and he even gave up what Congo already had before 1965. His signature gave some sort of discharge to the Belgian colonization and its spoliations” (Gérard-​ Libois and van Lierde 1966: 299). For example, Tshombe gave up 12 percent of Congolese shares in the Katanga Company implying that Congo was no longer owner of any share in all Katanga Company’s many subsidiaries. The check of 92.42 million BF that Tshombe received from the UMHK was also quite small if it represented the arrears of interest, dividends, and taxes from the Katanga secession in July 1960 to the signing of the convention in February 1965 (Gérard-​Libois and van Lierde 1966: 299). As highlighted in Table 7.1, the UMHK made 15,141 million BF in profits from 1960 to 1964 or $2,385 million (2015=​100) and the check represented a tiny 0.57 percent of these colossal profits. The check was also small in contrast to half a billion dollars that the UMHK gave to Tshombe in 1960–​1962. In brief, the Belgian government blocked any path to economic development of its former colony as a result of pressures from big Belgian businesses. Revenue imperative and state capacity Congo emerged in July 1960 without a qualified personnel to run its treasury ministry. An early attempt to assert its fiscal autonomy was the promulgation of an order in council on 30 October 1960 that established a pseudo-​central bank called the Conseil Monétaire. The government also created several new agencies to intervene in the foreign exchange market in order to stabilize the CF and to collect revenue. The fundamental principle of this decree was to subordinate any transaction in foreign exchange to appropriate central authorities. One major issue was government massive spending in the early 1960s. It increased threefold from 1961 to 1965.The largest portion of spending was from salary hikes of the new administrators and politicians. The second source was uncontrolled spending from the provinces. If government spending remained quite modest in 1961 or 19,221 million CF, it exploded from 36,777 million in 1964 to 63,457 million CF in 1965 (Leclercq 1968: 92–​95). The collection of revenue did not follow this explosion. It remained quite modest, averaging 20.5 billion CF a year from 1961 to 1965. The shortage of revenue was caused by the country’s balkanization. For example, the government collected only 9.52 billion CF in revenue in 1961–​1962 (Leclercq 1968: 59). However, more than 14.21 billion CF escaped the central government: 7.79 billion CF from Katanga, 1.42 billion from South Kasai, and 5 billion from Kivu (Kisangani 2012: 32). Monetary authorities had to cover at least 32.9 percent of government deficit by printing money. The financing of budget deficit by the central bank was as follows: 50.8 percent (1961), 48 percent (1962),

From Mobutu to Mobutu and hubris syndrome  181 29.9 percent (1963), 5.1 percent (1964) and 30.6 percent (1965) (computed from Leclercq 1968: 93). The CF weakened as a result of money printing to finance budget deficits. The government had to devalue the CF by 20 percent on 6 November 1961 with respect to the BF to curb imports and to stimulate exports. This policy failed because all eastern rich mining regions were not under the control of the central government. Another policy followed by a decree on 15 September 1962 that restricted the allocation of foreign exchange under a quota system.The new system intended to protect domestic industries and the exporting sector. The government devalued again the CF on 9 November 1963 to 33 francs buying rate and 28 francs selling rate with respect to the BF to bridge the gap between the parallel and official markets. Although exports increased as a result of this devaluation and favorable prices of mineral products in the world economy, imports declined causing domestic prices to rise. Fortunately, consumer prices increased by only 30 percent during the same period. This modest increase in the price level was a result of many factors developed elsewhere (Reylandt 1970). Suffice it to say that the government was able to provide a helping hand to domestic manufacturing industries. The first policy was its intervention to limit the import of luxury goods, which constrained their consumption by the new political elite. Second, the growth of the money supply to pay for salary hikes increased the demand for domestically produced consumer goods. This helped to mitigate some inflationary pressures in the face of increasing government spending. Another factor was outside government’s control and consisted of low cost of production in the manufacturing industry. These favorable factors allowed an increase in the production of locally manufactured goods and helped both to diversify the industrial sector and to mitigate inflationary pressures. Direct and indirect taxes Table 7.2 provides the evolution of revenue structure from 1960 to 1965 in constant 1958 prices for comparative purposes. It shows a declining trend in

Table 7.2 State revenue in millions of CF Years

Direct

Indirect

Others Total

Direct

Indirect

Total

(1958=​100) (1958=​100) (1958=​100) 1958 1961 1962 1963 1964 1965

3,435 985 1,453 3,104 4,666 10,311

4,501 3,831 5,429 8,493 26,643 28,917

Source: Leclercq (1968: 133).

3,047 1,753 2,082 792 1,766 1,772

10,983 3,435 8,470 770 10,420 704 12,389 905 33,075 976 41,009 2,233

4,501 2,630 2,630 2,476 5,573 6,262

10,983 (100) 4,770 (43.4) 4,343 (39.5) 3,612 (32.9) 6,918 (62.9) 8,879 (80.8)

182  From Mobutu to Mobutu and hubris syndrome tax collection and two factors explain this situation. First was political instability and the panic it created among foreigners with big paychecks. Most of them left the country after July 1960. As a result, direct taxes plummeted from 3,435 million CF in 1958 to a pitiful 985 million francs in 1961. This last amount represents only 770 million CF in 1958 prices. With the exception of 1965, the average annual collection of 838.8 million CF in direct taxes from 1961 to 1964 represented 24.4 percent of the 1958 level. Second, the law of 14 June that allowed Belgian companies operating in the Belgian Congo to choose the Belgian nationality was a real blow to the treasury of the new republic, which could not tax their huge profits given a July 1927 law that prohibited double taxation (see Chapter 5). Direct taxes rebounded only in 1965 when the central government collected 10.3 billion CF thanks to a number of foreign tax experts hired by the ministry of finances. But this amount of direct taxes collected in 1965 still remained far below what the colonial administration collected in 1958. The amount of 10.3 billion CF in 1965 is equivalent to 2,233 million CF in 1958 prices in contrast to 3,435 million CF collected in 1958. If income tax was progressive before independence, it became relatively regressive as illustrated by Table 7.3. The new law favored former clerks now new political elites. On average, income tax increased from 3 percent for people earning $1,000 a year to 4.3 percent in 1960. People earning $1,000 a year saw their tax increase by 463 percent in 1965, compared to only 245.6 percent increase for those earning one million CF. Income tax was around 15.6 percent a year for $2,000 bracket compared to 5.5 percent in 1958. The tax on $1,000–​ $2,000 bracket tripled after independence. The annual average tax for people earning $4,000 and above more than doubled from 9 percent to 24.72 percent in 1961–​1965. The second change in the structure of direct taxes was property tax. Its rate was a uniform 18 percent of income from 1960 to 1962, but it changed in 1963 following a bracket system. These rates and brackets were as follows: 1) 10 percent for revenue up to 24,000 CF; 2) 15 percent for revenue between 24,001 francs to 42,000 francs; 3) 20 percent for 42,001–​60,000 bracket; 4) 25 percent for revenue between 60,001 and 96,000 francs; and 30 percent for revenue Table 7.3 Evolution of income tax, 1958–​1965, in percentage (1958=​100) Annual income (1958 =​100)

1958

1960

1961

1962

1963

1964

1965

50,000 CF ($1,000) 100,000 CF ($2,000) 200,000 CF ($4,000) 500,000 CF ($10,000) 1,000,000 CF ($20,000)

3.0 5.5 9.0 14.5 19.5

4.3 5.5 11.3 19.9 29.5

5.1 6.7 13.7 25.1 35.7

5.4 11.5 18.4 33.0 41.9

10.5 17.1 26.9 41.1 46.5

14.2 21.6 32.8 44.0 48.0

13.9 21.1 31.8 43.9 47.9

Source: Leclercq (1968: 111–​113).

From Mobutu to Mobutu and hubris syndrome  183 beyond 96,001 francs.The goal was to abolish what the government considered as excessive profits from foreign real estate companies. Property taxes were paid by foreigners because the ruling elite had so far not invested in the sector. Tax rates on mobile assets also increased as well. In 1960, the rate on dividends averaged a flat 17 percent, but it increased to 25 percent in 1963. Tax rates on interest income went from 13 percent to 15 percent in 1963. Despite these changes, taxes on capital brought little to the treasury. The government collected only 135.8 million CF from 1963 to 1965 in taxing dividends and interests. This amount represented only 18.2 percent of 745.5 million collected in 1958 because Belgium deprived the new republic of these tax revenues when many big Congolese companies adopted the Belgian nationality before independence. The government also applied a few modifications in taxing corporations’ profits. A decree of 20 January 1961 fixed the tax on these profits according to a percentage of capital invested. However, the government collected little tax from profits because most major companies, like the UMHK discussed earlier in this chapter, camouflaged their profits as amortizations. Moreover, most Belgian companies operating in Congo did not add any BF to their existing capital stock from the second half of the 1950s to the mid-​1960s. As a result, indirect taxes became the backbone of the First Republic’s revenue. They represented 63.34 percent of total revenue from 1961 to 1965 in contrast to direct taxes and non-​tax revenue that averaged 25.36 percent and 11.3 percent, respectively. Indirect taxes provided the government an annual average of accumulated revenue of 14.41 billion CF in 1958 prices or 2,881 million CF a year from 1961 to 1965 (see Table 7.2). The fiscal situation of the First Republic was part of its colonial legacy dating back to the 1910s when Brussels promulgated a law on 20 November 1919 that created a customs agency in Antwerp to collect import duties on behalf of its colony. The Antwerp agency and another located later at the international airport of Zaventen remained functional after independence. If the Zaventen office ceased to collect import duties on 7 July 1960, the Antwerp agency remained functional until a decree-​law liquidated it on 15 December 1964. The collection of import duties on behalf of Congo from July 1960 to December 1964 is questionable given the tense political situation between the two countries. Two factors helped to increase indirect taxes in the early 1960s, however. The first was the 1963 devaluation in a period of high demand for cash crops and minerals given their favorable prices in the world markets. Taxes on goods and services also increased as a result of massive spending following the increase in salaries and buying power of the new leadership. Moreover, the government lowered taxes on inputs used by local manufacturing industries. For example, the Chanic Metal Company began in 1962 to supply the market with some capital goods like hoes, spades, machetes, shovels, flatware, diverse hardware, carpenter products, latex buckets, enamels, and aluminum products (Luabeya-​Kabeya 1969). These goods were produced by the company’s

184  From Mobutu to Mobutu and hubris syndrome newly created departments to respond to increasing domestic and neighbors’ demand. This was a result of high import duties to protect the company from competition. The time was ripe to encourage the production of such equipment goods or to start export-​led industrialization and thus to move away from consumer goods. Nevertheless, two factors played against any new industrialization process. First was political instability that scared off investors. Second, manufacturing industries had neither financial resources nor access to credits to buy spare parts or to upgrade their equipment and machinery despite a high number of their skilled workers. Non-​tax revenue The First Republic collected only 7.7 percent of revenue from non-​taxes. The main cause of this poor performance was that Brussels deprived it of its financial state portfolio made of the two chartered companies, the CSK and the CNKi, when it dissolved them in late June 1960. Also, the new state could not collect enough administrative, judicial, and other fees because of the disorganized state apparatus after independence and the massive departure of white administrators whose expertise was needed to collect these non-​tax revenues. In sum, the First Republic was a weak state. The percentage of non-​tax revenue over indirect taxes remained quite low. From 45.7 percent in 1961, it declined to 38.4 percent in 1962 to average 7.47 percent a year from 1963 to 1965. This is a sign of a non-​autonomous state. This dependent state was also unable to collect enough direct taxes because of its embryonic apparatus as a result of political instability. Thus, the percentage of direct taxes to that of indirect taxes was around 75 percent in 1961, but declined to average 35.9 percent a year from 1962 to 1965. This is a sign of state weakness that is highly dependent on external players.

Mobutu and the hubris syndrome against economic development Political order and rule of law Mobutu inherited his own undisciplined and ragtag army of some 35,000 troops when he became president in late 1965 (see Figure 2.1). The army required some type of reform and reorganization. He accelerated the level of education and training of the officer corps by sending hundreds of secondary school graduates and army officers to the best military academies in the West. The military also acquired new and sophisticated equipment that required more training.The idea was to keep the military a professional and an apolitical entity. This view was the fief of the old military oligarchy whose goal was to have the army as a professional corps similar to the post-​1945 colonial army. Mobutu knew when not to oppose this oligarchy, which was made of former gradés from

From Mobutu to Mobutu and hubris syndrome  185 the colonial army, now generals and colonels.These officers constituted a major group of veto players that imposed on Mobutu some institutional constraints. In 1974, however, Mobutu began to exploit rivalries among his generals to his advantage. He even started to tolerate inept performance as the price of personal security. He was also able to dismantle the old oligarchy through purges and assassinations (Young and Turner 1985: 264). Also, he accused young and well-​educated officers of plotting to assassinate him with the help of foreign powers in June 1975 and August 1978. Although no convincing evidence has ever been supplied to document these accusations, many military officers, mostly educated in the West and from specific ethnic groups were either purged or condemned to death.This strategy helped Mobutu to narrow the ethnic base of the armed forces that averaged 26,000 troops in the 1980s (see Figure 2.1). Mobutu was also smart enough to counterbalance the military by the creation of well-​equipped paramilitary groups, like the Presidential Special Division, made exclusively of ethnic groups from his province to protect himself against eventual military coups. In sum, Mobutu provided political order for nine years, from 1968 to 1976, and the rule of law from 1968 to 1973 during the military regime controlled by the military old oligarchy. This was also a period during which the bureaucracy was relatively autonomous and strong in the Weberian sense.The result was also a strong economy. For example, the manufacturing industry increased to an unprecedented level as illustrated by Figure 1.7. It reached its highest level in 1970, although its backward and forward effects remained minimal compared to the post-​war period. Nonetheless, employment increased and the demand for domestic manufacturing products also increased. In sum, economic growth was positive, averaging 4.1 percent a year from 1966 to 1974 (see Figure 1.4) and GDP per capita averaged $2,762 a year in the same period (see Figure 1.3). Just as Mobutu seemed firmly in control, the Front for the National Liberation of Congo (FNLC), made of some 2,000 rebels living in sanctuary in Angola, invaded the Shaba province on 8 March 1977 or Shaba I. Their goal was to destabilize the mining region as Mobutu was negotiating with the IMF. He was rescued by Moroccan troops with logistical and financial support from the West because the national army failed to stop the invaders. The same group invaded again on 11 May 1978 or Shaba II. French and Belgian paratroopers drove the invaders out of Shaba on 20 May. The American role was to provide air transportation and material during the paratrooper counter-​attack. The Mobutu military collapsed in both cases because of low morale among soldiers caused by a host of factors including low wages and wage arrears. In brief, Mobutu had no military to defend the nation.The apex of soldiers’ indiscipline became manifest on 23–​24 September 1991 when soldiers in Kinshasa rampaged over late pay and launched two days of intense pillage in which the general population also joined. This incident marked a culture of looting throughout the country during the entire post-​Cold War period. The military was thus the first state organ to destabilize the Mobutu regime and to weaken the state further.

186  From Mobutu to Mobutu and hubris syndrome Party-​state, bureaucracy, chieftaincy, and the Catholic Church President Mobutu established the MPR as the supreme organ of the state and the sole legal party on 23 December 1970. The constitution promulgated on 15 August 1974 institutionalized the party-​state. Mobutu became deified and identified with the nation. He was the supreme leader and the father of the nation. These features of hubris syndrome implied that he was above the law. Administrative career and tenure became highly dependent upon the party’s view of public servants. Promotions were based on militantism to the party-​ state. By the mid-​1970s, the administration became an instrument of venality and ineffectiveness. Thus, the Mobutu state was antibureaucratic. In the mid-​ 1970s, real salaries of public servants began to deteriorate to represent virtually zero of their independence level by the early 1980s. The story of traditional authorities is not different from that of the bureaucracy. After his second military coup in late 1965, Mobutu returned to office all those chiefs who were deposed for political reasons during the 1964–​1966 eastern rebellion.This courtship did not last long, however. Mobutu promulgated several decrees between 1969 and 1974 that stripped traditional authorities of their role to build the state by making them simple state bureaucrats within the party-​ state. Traditional authorities kept their seemingly high authority in the countryside by default as a result of state weakness in the second half of the 1970s. The third colonial legacy was the Catholic Church. It was an organization of national scope when Mobutu became president.The Church came into open conflict with the state in the early 1970s as a result of policy of authenticity. The emphasis was on all things African and particularly Congolese. The authenticity program irritated the Church, particularly the decree ordering Congolese to abandon their Christian names for “authentic” African ones and the attempt to convert parochial schools into lay institutions. This policy was another manifestation of Mobutu’s hubris syndrome to exhibit “messianic zeal” and “to enhance personal image” (Owen and Davidson 2009). Another hubris feature was that Mobutu was the state, the leader, and the only supreme chief. No other authority, physical or spiritual, was above him. Despite Mobutu’s efforts to muzzle the Catholic Church, the latter remained a powerful force that continued to criticize the decaying moral of Mobutu and his cronies. Decaying basic infrastructure, state collapse, and underdevelopment Less than two years in power, Mobutu conceived a five-​year plan of economic development from 1968 to 1972 intended to expand infrastructure. However, he never implemented it because his government had no financial means to accomplish it. By the mid-​1980s, the colonial physical infrastructure had seriously deteriorated as a result of lack of funding to maintain it. Mobutu crafted another plan in 1985 scheduled for 1986–​1990. It aimed to develop a number of sectors, including transportation, energy production and

From Mobutu to Mobutu and hubris syndrome  187 delivery, health, education, and water distribution. The road project intended to upgrade 40,000 km of inter-​regional roads and 86 km of national networks, to repair 498 km of roads, and to build 125 km of inter-​provincial roads by using local materials.2 The rehabilitation and modernization of the railway, maritime, river, and lake networks was also in the mix to cope with an annual traffic growth of 2 percent. The plan also included anti-​erosion and environmental controls. The health sector planning targeted 60 percent of the country’s needs by setting up 150 health zones and 2,800 health centers. The plan also intended to rehabilitate 167 primary and secondary schools and several teachers’ training institutes. Moreover, it aimed to equip 107 primary, secondary, and professional schools, as well as to build 54 new ones. Finally, the plan envisioned expanding the supply of potable water to 70 percent in urban areas and 35 percent in the countryside by developing new water plants nationwide. This plan was also not implemented because the government had no funds during this long decade of IMF stabilization programs that trimmed the public sector. Counterfactually and since the plan never occurred, at least 70 percent of urban dwellers and 35 percent of rural population remained without potable water in the early 1990s. On health, it could also be inferred that at least 60 percent of the country’s health needs were not met. More than 300 schools had deteriorated or perhaps disappeared since 1986. Road construction and maintenance never took place, meaning that more than 40,000 km of roads were not upgraded and perhaps had disappeared from the map. The decaying transportation system shrank the market by isolating economic agents. The immediate result was a tremendous increase in smuggling activities. For example, the eastern part of the country became linked to the Indian Ocean and the Far East, while the West became part of West African and European smuggling circuits (Kisangani 1998). Minerals and cash crops became part of these circuits, thus depriving the government of huge indirect taxes. A 1992 government report conceded that some $300 million escaped state coffers each year as a result of illegal diamond trafficking.3 The report revealed that official diamond exports by various registered offices only represented less than $100 million per year whereas production was estimated to average $400 million a year. Another important infrastructure is hydroelectric energy managed by the state-​owned Société Nationale d’Électricité (SNEL). With a few exceptions, most hydroelectric power plants were built during the colonial period to respond to the increasing needs of the mining and manufacturing industries. Three major projects in the Second Republic were Inga, Ruzizi, and the Mobayi Mbongo plants. This section deals with the Inga project because it was the most ambitious and publicized of the three projects. It started in January 1968 and the first phase was completed in 1972 at the cost of more than $140 million. The second phase or Inga II began in 1973 and was operational in 1977 with a potential production of 700 megawatts (MW).The biggest blunder was that foreign companies to consume this energy

188  From Mobutu to Mobutu and hubris syndrome were nowhere to be found despite investment incentives to attract them. One domestic solution was to transport it by building a line from the dam in Bas-​ Zaire to southeastern Shaba located some 1,750 km away. When the line was completed in July 1983, it could transport some 560 megawatts of direct current from Inga to Shaba. The line cost one billion dollars and ran through savannas, mountains, and forests. However, the Inga project line was not well-​integrated within a coherent and national plan to develop economically the provinces of Bandundu, Kasai-​ Occidental and Kasai-​Oriental located below the line, which was like a flying identifying object without any connection with the three provinces. The Inga project was a political tool to control the rich mining region of Shaba after the 1977–​1978 invasions by the FNLC. As Owen and Davidson (2009: 1398) point out, most leaders with hubrus syndrome tend to accomplish things because their “narcissistic propensity to see their world primarily as an arena in which to exercise power and to seek glory.” An additional feature of Mobutu’s hubris syndrome was “to take action primarily to enhance personal image” (Owen and Davidson 2009: 1398). The consequence of his actions was devastating to the Congolese people “because too much self-​confidence” led him “not to worry about the nuts and bolts of policy” (Own and Davidson 2009: 1393). On education, Mobutu increased its spending from 13.7 percent a year in the 1960s to a record level of 21.3 percent a year in the 1970s (see Table 2.3). This unprecedented allocation increased not only the number of students but the quality of education. Although a decline occurred in the post-​primary professional level, the number of students in the primary level increased by 66.5 percent from 2.06 million students to 3.43 million in the same period.The number of students in the secondary level improved from 121,232 in 1965–​ 1966 to 430,735 in 1974–​1975 or 255.1 percent increase in less than a decade. The tertiary level also saw a major jump from 3,704 in 1965–​1960 to 22,139 in 1974–​1975 or 497.7 percent (Verhaegen and Vanderliden 1981). The number of university graduates in political high offices reflects this increasing trend at the tertiary level.The 1977 elections provide a clear example of the rise of university graduates in political institutions. The Political Bureau of the single party had 60 percent university graduates; the Legislative Council had 50 percent; and 100 percent of ministers had a university degree and among them 25 percent had a doctorate degree (Verhaegen and Vanderliden 1981: 101). By the late 1970s, university graduates had occupied all positions associated with opportunities for grand corruption. Unlike the primary and secondary levels, the decline of quality at the tertiary level was, above all, the result of Mobutu’s policies to muzzle students who kept challenging his authority and intellect. After several confrontations with students at Lovanium University from 1967 and 1971, he finally drafted them into the army in June 1972 including some 200 students from the Official University of Lubumbashi who also demonstrated to support their comrades. He then nationalized the tertiary level education under the banner of National University of Zaire. This new university system was managed by

From Mobutu to Mobutu and hubris syndrome  189 one rector, but major difficulties in managing this over-​centralized university resulted in the re-​establishment of the original formula. State monopoly over education officially ended in 1989, which resulted in the explosion of private universities across the country. The unplanned growth in enrollment after this explosion never corresponded to an increase in the number of qualified faculty explaining the deteriorating trend in the quality of education at the tertiary level. One further factor that lowered the quality of education at the tertiary level was the decline of funding from the government. On healthcare, the Mobutu administration inherited an excellent system that was not damaged by political instability in 1960–​1965. However, healthcare started deteriorating in 1976. Ten years later, Congo had almost no healthcare system because the government stopped funding it. Related to healthcare is the rise of malnutrition caused by a host of factors. Briefly stated, the state is very much to blame for this trend. No rural policy to produce food had ever been implemented in the postcolonial period despite government rhetoric to make food production the priority of priorities. Food deficits and population explosion were met by state withdrawal. For example, government spending allocated to agriculture averaged 1.54 percent a year from 1969 to 1974, then it declined thereafter to no more than 1 percent. Government low fixed price policies paid to small producers to feed urban dwellers in the early 1970s discouraged farmers. The government later deregulated these prices, but the breakdown in the farm-​to-​market transportation system in the mid-​1970s led farmers to produce enough for their own consumption and local markets. As a result, Congo has become a net importer of foodstuffs. Another preventive healthcare area is the vaccination of children and the supply of potable water. Most children no longer receive all the required immunization vaccines. Second, potable water has become a scarce commodity implying an increasing number of diseases linked to water sanitation like diarrhea and frequent outbreaks of cholera. One colonial legacy remains the preponderant role of the Catholic Church in education and healthcare. It penetrated the countryside more than the state. By the mid-​1970s, the structure of its social services in education and healthcare was beyond state’s services. As discussed earlier in this section, the conflict between the church and the state did not weaken the church because its role in education and health continued as the state began withdrawing from both sectors in the early 1980s during structural adjustments imposed by the IMF. Major causes of decaying basic infrastructure Zaire’s basic infrastructure has deteriorated as a result of two major factors, external and internal. Externally, the IMF stabilization programs from 1976 to the late 1980s defunded physical infrastructure, education, and healthcare. For example, spending on education plummeted from 21.3 percent a year in the 1970s to 9.1 percent in the 1980s (see Table 2.3). Healthcare consumed an average of

190  From Mobutu to Mobutu and hubris syndrome 3.5 percent in the 1970s, but received only 1.6 percent in the 1980s. The same with physical infrastructure that dropped from 4.1 percent to 3 percent. Internally, the most important cause of infrastructure decay was grand corruption.The institutionalization of corruption under Mobutu’s single party-​ state meant that good conscience was a crime. One Mobutu’s favorite strategy to control his clients was frequent reshufflings of the government. From 1965 to 1990, he reshuffled it 43 times (Kisangani 1997). Some 315 individuals rotated in the government after Mobutu had accused them of unpatriotic opportunistic behavior. This manipulation resulted in frequent embezzlements and mismanagements of the public sector because ministers knew that their time in office was limited and the best strategy was to grab everything while in office. The same occurred at the provincial level. The average survival time of governors was two years.Without stability in office they also had one goal in mind, to loot the public domain. Erwin Blumenthal experienced this danger of having a good conscience in Zaire. The IMF appointed him to the post of director of the central bank in 1978 to clean the rotten corrupt system. He lasted only one year before he gave up to save his life. Despite Blumenthal’s damaging report of Mobutu’s kleptocracy, the IMF and the World Bank kept giving Mobutu’s reform plans serious consideration. Mobutu never made any difference between state expenses and his personal needs. He was the state, one major feature of hubris syndrome. The country’s finances were usually referred to as “presidential endowments” (Kisangani 1997). Another major cause of grand corruption is the lavish lifestyle of the ruling elite. Most state managers tend to entertain at least two wives once appointed in high offices.The implication is that the new appointee has three extended families to feed as required by customs: his own, his wife, and his mistress’ families. With such an overcrowded social environment, state managers cannot survive without resorting to some illegal sources of additional income. Of course, large families are not unique to polygamous marriages, but most polygamous men are less likely to survive financially unless they have some additional income to financially support their three extended families. The second wife in the urban Francophone Africa is usually labelled deuxième bureau or “second office” (Lacombe 1987: 145). A few studies show that the “second office” is quite expensive and her expenses are not at the disposal of everybody. According to Lacombe (1987: 157), the “second office requires important revenue to start with: to buy, rent, or build a house for her, maintain this new home, provide for her needs … her family. These are important expenses but also in regular and monthly/​weekly way.”Vidal (1979) found the same high expenses in her early analysis of the same phenomenon in Ivory Coast in 1977–​1979 by pointing out that the prodigal life of big men is the lux of their mistresses. As she states, “any union between a lover and his mistress … implies a large non-​negligible circulation of CFA money or Coopération Financière en Afrique (Vidal 1979: 154).

From Mobutu to Mobutu and hubris syndrome  191 As these two studies show, the mechanism by which polygamy increases the likelihood of grand corruption is not easy to assess because it remains indirect. The primary line of argument is still demographic or household size, however. Two key assumptions should help to theorize on the relationship between polygamy and grand corruption. The first assumption is that fertility among African women is on average five children in their lifetime. Second, state managers earn a fixed income at the equilibrium given the same professional position, let say around $1,000 a year. Theoretically, in a society where monogamous men who have the same number of people in their household (one wife and five children on average) and earn the same income should have the same living standards at the equilibrium level or $143 spending per capita. Assuming that one of these monogamous men decides to marry an additional mate with the same fixed income and the same previous household size (his first wife and her five children), his annual standard of living should certainly deteriorate to $125 per capita. He should find some additional income to compensate this decline or $1,143 a year to maintain the previous living standard of $143 per capita. Thus, being polygamous implies some additional income above the equilibrium level. Otherwise, one wife should suffice. With an increasing number of people to provide for, state managers are more likely to divert public resources to private ends. An additional assumption is to give the second wife her own five children. Since the education of children is costly, the choice of quantity reduces its quality if income remains the same at the equilibrium. In the absence of an increase in income of some sort, the polygamous man and his families are heading toward a cycle of poverty. However, if the second wife is educated, which may occur but is unlikely, then her additional income might suffice and fecundity might not be an issue because, theoretically, education and fertility run in opposite direction. Thus, polygamous men must have access to additional sources of income to provide not only decent living conditions to their two immediate families but also to enroll their children in good schools. Once three extended families are included in this simple static model, the impact of grand corruption takes an astronomical negative impact on the supply of public goods. Grand corruption hurts most citizens because it takes away billions of dollars intended to supply public goods. This is consistent with a number of cross-​country empirical findings about the negative impact of corruption in the delivery of public goods and low economic performance (see Gupta, Davoodi and Tiongson 2000). At the micro-​level, corruption increases poverty because it diverts to private pockets massive public funds intended to supply public good (roads, children’s education, and healthcare) on which citizens depend upon to make ends meet. At the macro-​level, it destroys good governance to implement good policies capable to build the state and develop the economy.

192  From Mobutu to Mobutu and hubris syndrome Mobutu against foreign private ownership Mobutu began his rule with a nationalist tone that seemed to presage a different economic path from the First Republic. He started with the Belgian-​Congolese Contentieux in early 1966 by questioning the 1965 Convention between Prime Ministers Spaak and Tshombe, as discussed in the previous section. The second move was the nationalization of the UMHK. The third was what President Mobutu called “social justice.” Round II of the Belgian-​Congolese contentieux and the UMHK Once in power, Mobutu revisited the financial litigation between Congo and Belgium. His main issue was the List 6 of the Convention’s Appendix, which included many important companies after the UMHK that were never discussed in 1965.This convention also involved a few specific issues of particular interest to the new regime including the transfer of ownership of Congo’s buildings and the patrimony of its parastatals located in Belgium, the automatic withdrawals as donations to the Sinking and Management Funds company, the Congolese representation in this company, and so forth. The first meeting between the two governments occurred on 13 May 1966 in Brussels. Thirteen days later, the two parties signed a joint communiqué that outlined promises only. In brief, the negotiation reached a dead end. At the same time, Bakajika Isaac-​Gérard introduced a property law in the parliament on 29  May 1966 that Mobutu promulgated on 7 June as the ordinance-​law no. 66–​343. Like Leopold II and the colonial state, this law granted wealth above and below the ground to the Congolese state. This law was followed by another meeting between the two parties that was held in Kinshasa on 26 June 1966. Just like the previous one, it produced no concrete results.The joint document was not even signed by either Congo or Belgium. The Congolese government then sent an ultimatum to Belgium that unless a common accord was reached on 30 June 1966, it would take unilateral actions on the Contentieux. As expected, Brussels never responded to the ultimatum.The Mobutu government unilaterally took several actions from 6 to 20 July 1966 to end the litigation (Gérard-​Libois 1967: 152–​153). Six months later, Mobutu used the Bakajika law to nationalize the UMHK on 1 January 1967. This nationalization has been analyzed extensively elsewhere (Gérard-​Libois 1967; Bézy, Peemans, and Wautelet 1981; Young and Turner 1985). In brief, Mobutu saw the company’s economic power as a threat to his early nationalist image of grandeur. Second was his need to control a major and reliable source of rents. Less than three years later, the government enacted a new code of investments on 26 June 1969 to attract foreign capital. The impact of the new investment code was positive. As illustrated by Table 7.4, FDI increased in manufacturing industries by almost 60 percent from 1970 to 1972. A number of manufacturing industries also emerged during

From Mobutu to Mobutu and hubris syndrome  193 Table 7.4 Agreed investments in the context of 1969 code (000 zaires) Years

Agriculture

Mining & Others

1970 1971 1972 1973 1974 1975 1976 1977 1978

1,362 234 6,703 272 21,268 -​ -​ -​ 1,965

42,113 1,400 600 712 -​ -​ 2,161 -​ -​

Total Cumulated Percentage

31,804 11.4

46,986 17.0

Manufacturing

Services

Total

21,988 25,941 32,704 3,075 40,049 1,110 4,583 3,113 10,778

18,118 19,759 6,306 2,282 3,348 3,862 1,174 -​

83,581 47,334 46,313 6,341 64,665 1,110​ 10,606 4,287 12,743

143,341 51.8

54,849 19.8

276,980 100

Source: Bézy, Peemans, and Wautelet (1981: 96).

this period, including textile (Sotexki in Kisangani), cement (Cinat), wood (Danzer-​Zaire), transformation of agricultural products (Comingem), and the modernization of existing industries and transportation companies. The nationalization of the UMHK never scared off investors because its shareholders were fully compensated by the government. Nine months after the nationalization, the UMHK created the Union Minière Explorations and Mining Corporation under Canadian jurisdiction (Depelchin 1992: 174). It adopted the name Union Minière on 15 February 1968. Mobutu signed a protocol with the Société Générale des Minerais providing for the payment of 4,000 million BF in final settlement of compensation claims advanced by the Union Minière (Depelchin 1992: 174). This amount represents $705 million in 2015 prices. This was generous or excessive given the fact that the UMHK had already gained a profit over $5.5 billion and amortized all its fixed assets. Thus, foreign investors continued to visit Zaire because they felt that they would always recover their assets in case of nationalizations. Foreign direct investments in the IS manufacturing sector increased in 1969–​1972 as a number of multinational corporations (MNC) rushed to Zaire (Willame 1980). The internationalization of capital in 1970 was a sign that Congo was still a friendly environment for business. Major car companies invested massively in Zaire: the Industrie Nationale Zaïroise des Automobiles Leyland began assembling land rovers, lorries, and buses; second was a subsidiary of German Klökner Humboldt, the Deutz-​Zaire, which assembled Magirus-​ Deutz; third and the largest subsidiary General Motors-​Zaire put together Bedford lorries, tucks Chevrolet, and Opel passenger cars. Many other MNC followed in other economic sectors. For example, Mobutu inaugurated on 30 June 1972 the first Goodyear tire factory in SSA in the suburbs of Kinshasa. However, its backward effects were quite limited because the company relied massively on rubber imports.

194  From Mobutu to Mobutu and hubris syndrome The same inflow of foreign capital involved the mining sector as a result of the 1969 code of investments because new copper investors rushed to Congo. Among them were two joint venture companies, the Société de Développement Industriel et des Mines du Zaïre (SODIMIZA) and the Société Minière Tenke-​ Fungurume (SMTF). The mining sector and the two companies have been extensively analyzed elsewhere (Bézy, Peemans and Watelet 1981; Young and Turner 1985). In sum, the main bottleneck that the two companies confronted in the second half of the 1970s was the evacuation of their output from Katanga to the nearest port. The civil war in Angola that began in November 1975 precluded the use of the shortest route or the Benguela railway from southern Katanga to the port of Lobito. Also, the closing of the border between Mozambique and Zimbabwe in March 1976 meant that Zaire could not use the port of Beira. Zaire had no choice but to use the longest route via South African seaports and the National Way with its two trans-​shipments in Ilebo and Kinshasa. Transportation costs exacerbated exportation difficulties when considered favorable prices even at fob value. These difficulties were one of the main reasons that foreign investors, such as SODIMIZA and SMTF, annulled their contract obligations after huge stockpiles of minerals and the lack of their efficient evacuation. On 20 January 1976, American and British partners of the SMTF invited other foreign partners to suspend their projects given the difficulties to evacuate copper and other mineral ores through Angola and the lack of funding to start the Inga-​Shaba power line on which the SMTF had to rely upon in order to exploit the mining site. SODIMIZA also had to close in the early 1980s. Social justice or theft of foreign private assets If transportation bottlenecks represented a major factor that dampened FDI in the mining sector, the massive nationalization of foreign enterprises in 1973–​ 1974 was the most important factor that interrupted the flow of FDI in most non-​mining areas. One major precursor of this policy of nationalization was the General Property Law no. 73–​021 that Mobutu signed on 20 July 1973, which remained the cornerstone of land tenure in the postcolonial period. Because the state owns land only the president and a few other government organs can grant and allocate land to third parties. The law automatically removed traditional authorities from being managers of state land. Even lands occupied by local communities and exploited individually or collectively according to customs become state domain. In the process, this law created an ambiguous land tenure system that had not been corrected by late 2021. The ambiguity of the law has perpetuated a vague system of land tenure that has left plenty of room for abuse of power, corruption, and massive land spoliation (Kisangani 2012: 186–​187). Again, this law provided President Mobutu all legal tools to nationalize all agricultural and commercial sectors on 30 November 1973 (see Lukombe

From Mobutu to Mobutu and hubris syndrome  195 1979). However, he handed over nationalized businesses to himself and to his small winning coalition of no more than 400 cronies, excluding military officers. According to Young and Turner (1985: 327), this policy was “part of a broader African trend toward displacement of foreigners from the commercial sector.” This argument is contradicted by global facts, however. This trend was not unique to Africa. It was global and occurred in most developing countries rich in natural resources. The number of nationalization acts increased globally from 89 in 1964–​1969 to an unprecedented record of 423 in the 1970s (Kobrin 1984: 333), but declined to 16 cases from 1980 to 1992 (Minor 1994: 180). The second motivation behind zaireanization was Mobutu’s personal needs to “enhance his image” (hubris syndrome), to cement clientage relations, and to give his small winning coalition of clients access to free goods in exchange for their loyalty. By mid-​August 1974, most owners of nationalized businesses or acquéreurs had run their businesses into the ground because of mismanagement, incompetence, greed, and lack of business skills. As a result, Mobutu announced “radicalization measures” in August 1974 requesting all beneficiaries of the 1973 measures to turn their businesses over to the state. But a few weeks later, he reversed his decision under pressures from his clients stating that radicalization measures concerned only businesses that were not nationalized in 1973. These measures targeted large foreign businesses including transportation, petroleum, mining, agricultural and ranch, metallurgy, hotels, breweries, financial institutions, food processing companies as well as publishing and printing companies (Lukombe 1979). The government announced on 30 December 1974 that it would assume control of the economy in the name of social justice. In early 1975, the government nationalized more than 120 foreign companies and placed them under state ownership managed by délégués généraux (general delegates) by mid-​March 1975. The most important negative impact of the 1973–​1974 measures was the fear it created within the international financial community. Foreign direct investments declined quite drastically from 64.67 million zaires in 1974 to 1.11 million in 1975 (see Table 7.4). In terms of 2015 dollars, these amounts represent a decline from $621.8 million to $10.7 million.Also, the 1974 measures that created SOEs completely destroyed the colonial foundation of the manufacturing sector. Foreign direct investments in the manufacturing sector had never recovered from their pre-​nationalization level (see Figure 1.7). At the domestic level, the first disastrous effect of the nationalization was in the agricultural sector, which plummeted from 23 percent of total export earnings in 1973 to 12 percent in 1974 (see Figure 1.6). This was the lowest registered earnings since the Great Depression. Also, most nationalized manufacturing companies disappeared in the mid-​1980s because they had no access to foreign capital to import spare parts and to upgrade their equipment and machinery. Imports of low quality and cheap products from East Asia began flooding the domestic market by the second half of the 1970s, leading many local industries to cease their operations by the mid-​1980s because they could

196  From Mobutu to Mobutu and hubris syndrome not compete. The first industry to disappear was the textile industry. Others followed explaining the end of the IS industrialization in the country. The mining sector suffered the most after radicalization policies. First was the tin-​gold area located in eastern part of the country. The production of refined tin by the parastatal Zaireétain in Manono declined from 12,000 tons per year before 1974 to 550 tons of refined metal thereafter. This sector also required new investments, but the debacle of the 1973–​1974 nationalizations discouraged foreign investors. By the time Mobutu was ousted from office in May 1997, the production of refined tin was only 400 tons in contrast to an average of 45,000 tons a year from 1945 to 1974. The situation was the same in the production of gold in eastern Congo. In 1976, the government merged nine companies in Kivu and created the Société Minière du Kivu that employed 17,000 workers. But the production of gold declined from 1,337 kg in 1968 to 476 kg in 1979. The solution was to abandon scarce sources of gold produced by alluvion dispersed in most areas and to invest in mining reef areas rich in gold concentrates. This required millions of dollars in new investments that the state did not have and foreign investors showed no interest in risking their capital because state managers had the reputation to renege on their commitment not to nationalize foreign private assets. The decline of diamonds followed the same fate. The state-​owned Minière de Bakwanga in Mbuji-​ Mayi maintained its production, averaging 10 to 12 million carats of industrial diamond, representing three-​quarters of world production before the nationalization measures. By the late 1980s, however, its production also began to decline to average only four million a year and then was around 235,000 carats by the early 1990s. On copper, Gécamines started its saga in 1968 when Mobutu began privately and regularly grabbing a portion of the company’s copper production. An unknown quantity of refined cobalt was also exported illegally by chartered aircraft to European countries with the proceeds of sales deposited directly into Mobutu’s personal accounts abroad (Young and Turner 1985: 181). If Mobutu smuggled a relatively small quantity of refined copper from 1972 to 1979, averaging a conservative figure of 11,000 tons a year, this activity increased to represent more than 90,000 tons a year in the 1980s with a peak of 102,000 tons in 1987 (Kisangani 1998: 120–​121). In dollar terms, “smuggling activities of refined copper by Mobutu averaged a conservative figure of $120 million a year in the 1980s and reached a maximum value of $154 million in 1987 alone” (Kisangani 1998: 120–​121). The second root of Gécamines’ collapse was from its CEOs and managers who also plundered the company like Mobutu, especially after the May 1978 invasion of Shaba by the FNLC based in Angola when Belgian troops evacuated European managers.The number of European managers and engineers declined from 3,022 in 1977 to 569 a year later (Rubbens 2006). Most European vacant positions were filled by Congolese from Kasai or Luba Lubilanji who previously occupied intermediate level positions.

From Mobutu to Mobutu and hubris syndrome  197 The pillage of September 1991 ended many clandestine operations because it stripped the company of most of its infrastructure, except empty buildings. Gécamines also failed to pay its workers after the pillage. Wage arrears began to accumulate and the first scapegoats were the Luba from Kasai, called “insects” (bilulu) by the autochthons (Rubbers 2006). In the autochthons’ eyes, the Luba were the root cause of salary arrears and hence the misery of the Shaba people. Politicians rallied to the cause and decided to throw out the Luba and all strangers in September 1992. This also began the promotion of autochthons to the direction of the company by occupying positions left vacant. The new autochthonous managers used the same schemes to pillage the company like previous allochthonous managers. In brief, Mobutu’s nationalization policies were at the root of weak institutions that gave the ruling elite more discretionary power to squander the country’s wealth. Good governance was not part of the Mobutu’s equation. In the absence of any veto player, President Mobutu owned the economy. This echoes another feature of hubris syndrome that “leaders with this syndrome tend to identify with the nation to the extent that they regard their outlook and interests as identical to that of the nation” (Owen and Davidson 2009: 1398). Revenue scarcity, state failure, and economic collapse Less than two years in office, Mobutu embarked on a major monetary reform on 24 June 1967 to deal with major macroeconomic disequilibria. The most important aspect of the reform was the creation of a new currency, the zaire, which was exchanged for two US dollars or 100 BF. The 1967 monetary reform brought economic stability and sustained economic growth for almost nine years despite unfavorable copper prices in the world markets (Kisangani 1987). The success of the 1967 monetary reforms can be attributed to several factors, but the most important was good governance under the military regime dominated by the military oligarchy that seemed to have played a major veto role in constraining Mobutu’s impulsive and opportunistic behavior. The collapse of the economy occurred after the 1973–​1974 nationalizations. The government and the IMF reached an agreement on 12  March 1976 to implement a two-​year stabilization program. The agreement was under the Fund’s stand-​by loan intended to create favorable conditions for market operations, to lower government spending, and to increase revenue collection. The usual measures were market-​oriented policies, wage freezes in the public sector, monetary and fiscal restriction policies, financial reforms, and devaluations. The 1976 stabilization program was a total failure (see Kisangani 1987, 1997). This propelled the IMF and the government to set a new program in late 1978 that involved a sequence of three devaluations: on 31 October (1 zaire =​34 BF), 7 November (1 zaire =​30 BF), and on 27 November (1 zaire =​26 BF) (see Kisangani 1987). Two more devaluations occurred in 1979: on 2 January (1 zaire =​20 FB) and on 24 August (1 zaire =​14.3 BF). In late 1979 one zaire was only $0.38.

198  From Mobutu to Mobutu and hubris syndrome All these devaluations never improved the economy for reasons developed elsewhere (Kisangani 1987; Kisangani 1997). In late 1979, the government decided to soak all excess liquidities through currency demonetization. It closed its borders on the Christmas Day to implement its deflationary policy. It froze all bank accounts and forbade flights over the Zairean territory until 31  December 1979. Then, the government replaced old banknotes of “five zaires” and “10 zaires” denominations with new ones. Citizens could exchange their old bills for new notes up to a maximum of 3,000 zaires; small-​and medium-​sized businesses up to 5,000 zaires and major companies up to 10,000 zaires (Kisangani 1987, 1997).The price level declined in early 1980 as a result of the demonetization policy.With the exception of state managers and businesses, most people lost their life savings because they were unaware of the operation (see Kisangani 1987). Under pressure from the IMF, Mobutu began economic liberalization in the early 1980s as part of a deal to stabilize the economy and to attract foreign investors. The first move was the liberalization of the mining sector. He signed the decree 81–​013 on 2 April 1981 and the ordinance-​law 82–​039 on 5 November 1982 that deregulated it. This started artisanal mining and rush to mines in Zaire. The result was the demise of industrial mining. The government also embarked on 14 stabilization programs in the 1980s (Kisangani 1997: 20). The first structural adjustment program of this decade began on 23 February 1980 by a devaluation of zaire that lowered it to 10 BF. In mid-​1985, the government also promulgated a new code of investments to attract foreign investors as requested by the IMF. However, foreign investors remained reluctant to return to Congo because the government had a reputation of reneging on its commitments not to nationalize foreign assets. Of course, IMF stabilization policies helped to control government spending, but the cuts in social sectors were not warranted. In the early 1990s, Zaire was no longer a viable state as a result of these IMF “belt tied” policies that could not control Mobutu’s kleptocratic system. Zaire was already a failed state with huge foreign debt by the late 1980s. The country’s foreign debt stock was around $7.9 billion, but accumulated interests increased the debt to more than $10 billion. As illustrated by Figure 7.1, Zaire had a modest foreign debt in the 1970s (World Bank 2019), but foreign debt was equivalent to 300 percent of the country’s GDP by the mid-​1990s as a result of many factors including uncontrolled borrowing to finance mostly white elephants. Thus, the total collapse of the national economy was manifest at all levels in the early 1990s. As expected, the national currency also reflected the sorry state of the economy. The exchange rate was one US dollar for 718.57 zaires in 1990 and then equivalent to 15,578 a year later. In early 1993, the government issued a one-​million zaire banknote to deal with excess circulation of money. All Zaireans became “poor millionaires” because the banknote was not worthy a US dollar. By October 1993, one dollar was equivalent to 3,000,300 zaires and this prompted the government to initiate a monetary reform on 15

From Mobutu to Mobutu and hubris syndrome  199

Figure 7.1 Foreign debt as a percentage of GDP

October 1993 that created the “new zaire” (NZ), which was equivalent to three million old zaires or $0.33. Four weeks after the reform, the NZ exchange rate plummeted by 50 percent with respect to the US dollar. In the mid-​1990s, the NZ was just a piece of paper without any value to store wealth or a decent means of deferred payments. This began massive dollarization of the economy.The 1993 monetary reform that established the NZ was a total fiasco because it never reached its main objectives of restoring equilibrium in the structure of the money supply through a partial freeze of checking accounts, rehabilitating the banking system and progressively rebuilding the economy (Kisangani 1997). Two years later, the exchange rate changed from 15,000 NZ for one US dollar to 145,424 NZ in January 1997.The weakness of the economy and as a consequence of the currency resulted in massive dollarization of the economy in the first half of the 1990s. Taxes and non-​tax revenue The government initiated the first major tax policy by the ordinance-​law no 66/​186 on 30 March 1966. Contrary to the First Republic, this law increased taxes on profits of corporations according to capital invested. On 6 January 1968, the government reinforced this anti-​business policy by a law on 6 January 1968 that applied a unique rate of 45 percent on all profits regardless of the

200  From Mobutu to Mobutu and hubris syndrome Table 7.5 Structure of revenue in percentage of total 1970

1975

1980

1985

1990

1995

24.2 9.9 9.6 4.7 68.3 12.5 32.4 0.0 23.4 7.5

24.7 6.0 15.5 3.2 71.2 35.4 14.3 13.9 7.6 4.1

27.1 16.9 8.9 1.3 67.0 22.0 25.7 12.5 6.8 5.9

32.3 12.9 17.4 2.0 53.1 17.8 20.3 12.3 2.7 14.6

22.7 8.9 12.9 0.9 61.1 3.8 15.2 19.1 23.0 16.2

20.2 8.2 10.7 1.3 71.9 2.4 26.1 18.3 25.1 7.9

Total (percentage)

100.0

100.0

100.0

100.0

100.0

100.0

 

35.4 322.7 10.9

34.7 602.4 5.8

40.5 459.3 8.8

60.8 221.2 27.5

37.1 140.1 26.5

28.1 255.7 11.0

Total Direct Taxes (a)   Personal tax   Tax on revenue  Others Total indirect taxes (b)   Export taxes   Import duties   Sales taxes  Others Nontax revenue (c) (a/​b) (a/​c) (c/​b)  

 

Sources: Zaire, Banque Centrale, Rapport Annuel (Kinshasa-​ Gombe 1975, 1980, 1985, 1992, 1996) and DRC, Banque Centrale, Rapport Annuel (Kinshasa, Gombe 2000; 2005; 2012).

size of the enterprise, despite a slight decline to 40 percent in 1969. Taxes on revenue increased from 9.6 percent of total in 1965 to 17.4 percent in 1980. On average, it remained 12.3 percent of annual total revenue until 1995 as illustrated by Table 7.5. Although personal income tax was high in the early years of the Second Republic, it began to decline after 1980 and remained on average around 8 percent of total revenue. This represented only 11 percent of total revenue per year from 1966 to 1995 in contrast to several African countries whose income taxes averaged at least 25 percent. From his rise to power in November 1965 until his downfall in May 1997, Mobutu neither used fiscal policies nor mobilized capital for developmental purposes. He built his political longevity on patronage based on more than 120 SOEs that in the end failed to sustain his kleptocratic system because of their mismanagement. For example, state portfolio of financial holdings averaged no more than 3 percent of total revenue from 1976 to the early 1990s (see Table 7.5). Salaries of members of the government remained unknown and were never taxed. Their mansions also escaped property tax, while farmers saw their crops underpriced because of government fixed price policies. Also, workers and public servants bore the burden of income tax. All these policies to squeeze wage earners and small farmers provided little revenue.The low collection from direct taxes meant that the government had to rely on indirect taxes, which averaged 62.6 percent a year from 1966 to 1995 (see Table 7.5). If export duties were quite high in 1971–​1975, averaging 30 percent a year, they began to decline after the nationalization measures of 1973–​1974. From 1976 to 1996, export taxes represented only 9.76 percent of total revenue a year. The result

From Mobutu to Mobutu and hubris syndrome  201 was an increase in import duties that remained the most important source of state revenue after the 1970s with an average of more than 26 percent a year. Moreover, sale taxes of different kinds emerged as the second important source of indirect taxes. By the mid-​1990s, collected revenue from all SOEs represented a pitiful $300,000 or 0.07 percent of total revenue before deducting costs of running them (Lukusa 1999). The most important state enterprise was Gécamines that provided Mobutu an average of 36.8 percent of total revenue before the 1980s. In the 1980s, Gécamines’ portion declined to average 21.4 percent a year and to 13.3 percent in the first half of the 1990s. In brief, the Second Republic collected an average of 10 percent of its revenue from non-​taxes with state portfolio providing only 1.8 percent a year despite state’s ownership and management of this portfolio. Among the three percentages on the bottom of Table 7.5 describing state capacity and autonomy, the percentage of direct taxes to indirect taxes shows a state highly dependent on external players. It remained on average below 46.8 percent.The state never penetrated the countryside and thus remained quite fragile and weak. Furthermore, the Mobutu state was not autonomous from external actors as non-​tax revenue as a percentage of indirect taxes remained below 30 percent throughout his reign averaging no more than 15.6 percent a year. Since President Mobutu had no solid base of tax revenue and no decent portfolio of financial holdings as autonomous sources of non-​tax revenue to finance his budget deficits, he had no choice but to resort to foreign aid and seigniorage. Budget deficits were $22.27 billion in the 1970s (2015=​100). Although they declined to $4.35 billion in the 1980s thanks to IMF stabilization policies, they increased again in the first half of the 1990s to $6.25 billion before he was removed from office in May 1997 (see Table 9.9). His two major sources to finance budget deficits also exploded over the years. For example, Zaire received a total of $9.3 billion in foreign aid between 1975 and 1996. This aid averaged $331 million a year between 1975 and 1984, rising to $542 million a year from 1985 to 1994. The second source of deficit financing was to print money. From the second half of the 1970s to the mid-​1980s, seigniorage revenue or inflation tax varied around $200 million a year (Kisangani 1997). Then, from the mid-​ 1980s onward, the power to print money increased and then exploded in the early 1990s as a result of a drastic decline in both foreign aid and revenue from mining. This financing of the deficit made zaire banknotes so useless that they were called prostates after Mobutu was diagnosed with prostate cancer.The first consequence of financing budget deficits through money printing was hyperinflation in the first half of the 1990s. Consumer prices jumped by 2,154 percent from 1990 to 1991, and then to 4,129 percent in 1992 (World Bank 2019). Although the increase in consumer prices from 1992 to 1993 was modest compared to the preceding year or 1,986 percent, the price level skyrocketed by almost 23,773 percent from 1993 to 1994. In 1995, the price level increased by 542 percent.

202  From Mobutu to Mobutu and hubris syndrome Printing money to finance spending is the best strategy to tax citizens without their consent or knowledge. Seigniorage is usually a tax on cash holdings. As a tax, inflation hurts most citizens who could not hold their cash in foreign currency. Thus, dollarization implied less circulation of the national currency. The use of dollars by citizens in their daily transactions meant that they were avoiding the seigniorage tax altogether. Mobutu lost more than $175 million in seigniorage tax per year as a result of dollarization of the economy (De Herdt 2002: 449).The Mobutu state was so weak it even lost the power to tax citizens through money printing.

Summary The early mutiny of the army in July 1960 resulted in an institutional crisis that set the country on the path to political instability and institutional failure. The picture of chaos in the First Republic was the work of Belgium and the USA with their “boy,” Mobutu. They destroyed the developmental state inherited from the colonial administrator, but the chaotic situation of the early 1960s never destroyed the physical and social infrastructure. A few years after his second coup in late 1965, Mobutu seemed to embrace a long-​term horizon. He implanted a set of policies intended to increase the national pie. What emerged in 1966–​1970 resembled an administrative machinery with more skills and merit-​oriented than based on patrimonialism. The rise of this rational state went hand in hand with economic growth, deeper integration –​though still on a minor basis –​and the movement of people into rational economic activities. From 1966 to 1973, the Zairean state experienced some type of economic development under the military regime dominated by the old oligarchy. The removal of this group and the creation of single party state system removed all veto players and elevated Mobutu above the law. Mobutu’s nationalization policies and his excessive control of the country’s economy without any institutional or partisan veto players were at the root of the collapse of the economy as he massively printed money to finance his huge budget deficits. Members of the Mobutu’s small winning coalition were not interested in the provision of public goods because they all received free private goods to keep Mobutu in power. President Mobutu exhibited hubris syndrome. He was intoxicated by power and as a consequence people suffered economically and socially. As Owen and Davidson (2009: 1404) concludes “hubris syndrome in politicians is a greater threat than conventional illness to the quality of their leadership and the proper government of the world.” By supporting Mobutu openly, the West also helped him to destroy Zaire. Just like the colonial master, the West saw Congolese as children as long as they had political stability. Unlike the colonial state that supplied social paternalism, the West postponed Congolese democratic reforms for 32 years. It was, this time, political paternalism, a more insidious form of paternalism.

From Mobutu to Mobutu and hubris syndrome  203

Notes 1 In addition to Mobutu, the group included Justin Bomboko (foreign Affairs), Albert Ndele (central bank director), and Damien Kandolo (interior minister). 2 “Zaire,” ARB 23, 2 (1986: 8172). 3 “Zaire,” ARB 29 (1992: 11075).

References Bézy, F., Peemans, J.-​P., and Wautelet, J.-​M. (1981) Accumulation et Sous-​ Développement au Zaïre 1960–​ 1980, Louvain-​ la-​ Neuve: Presses Universitaires de Louvain. Boehme, O. (2005) “The Involvement of the Belgian Central Bank in the Katanga’s Secession, 1960–​1963,” African Economic History 33: 1–​29. Brion, R. and Moreau, J.-​L. (1998) La Société Générale de Belgique, 1822–​1997, Antwerp: Fonds Mercator. Chomé, J. (1979) L’Ascension de Mobutu. Du Sergent Désiré Joseph au Général Sese Seko, Paris: François Maspero. De Wite, L. (2003) Assassination of Lumumba, New York:Verso. Depelchin, J. (1992) From the Congo Free State to Zaire: How Belgium Privatized the Economy: A History of Belgian Stock Companies in Congo-​Zaire from 1885 to 1974, Dakar: CODESTRIA. Gelb (1982) Gerard, E., and Kuklick, B. (2015) Death in the Congo: Murdering Patrice Lumumba, Cambridge, MA: Harvard University Press. Gérard–​Libois, J. (1967) Congo 1966, Brussels: CRISP. Gérard–Libois, J. and van Lierde (1965) Congo 1964, Brussels: CRISP. Gérard–​Libois, J. and van Lierde (1966) Congo 1965, Brussels: CRISP. Gérard–​Libois, J. and Verhaegen, B. (1961) Congo 1960, Volumes 1 and 2, Brussels: CRISP. Gupta, S., Dawodi, H., and Tiongson, E. (2000) “Corruption and the Provision of Health Care and Education Services.” IMF Working Papers WP/​00/​166. Kisangani, E.F. (1987) “Implementation of Stabilization Policies in an Authoritarian Setting: Zaire, 1970–​1980,” Canadian Journal of Political Science 21(2): 175–​200. Kisangani, E.F. (1997) Zaire after Mobutu: A Case of Humanitarian Emergency, Helsinki: World Institute for Economic Development. Kisangani, E.F. (1998) “Confronting Leaders at the Apex of the State:The Growth of the Unofficial Economy in Congo,” African Studies Review 41(1): 99–​137. Kisangani, E.F. (2012) Civil Wars in the Democratic Republic of Congo, Boulder: Lynne Rienner Publishers. Kobrin, S. J. (1984) “Expropriation as an Attempt to Control Foreign Firms in LDCs: Trends from 1960 to 1979,” International Studies Quarterly 28(3): 329–​348. Lacombe, B. (1987) “Les Unions Informelles en Afrique au Sud du Sahara: L’Example du Deuxième Bureau Congolais,” Genus, 43(1–​2): 151–​164. Leclercq, H. (1968) “L’Inflation, sa Cause: Le Désordre des Finances Publiques,” in M. Norro and H. Leclercq (eds.) Indépendance, Inflation, Développement. L’Economie Congolaise de 1960 à 1965, Paris Mouton, pp. 51–177. Lemarchand, R. (1964) Political Awakening in the Belgian Congo, Berkeley and Los Angeles: University of California Press.

204  From Mobutu to Mobutu and hubris syndrome Luabeya-​Kabeya, B. (1969) “L’Industrie Manufacturière Congolaise et la Réforme Monétaire du 24 Juin 1967,” Cahiers Economiques et Sociaux 7(2–​3): 197–​218. Lukombe, N. (1979) Zaïrianisation, Radicalisation, Rétrocession en République du Zaïre: Considérations Juridiques, Kinshasa: Presses Universitaires du Zaïre. Lukusa, M. (1999) Congo/​Zaïre, la faillite d’un pays: déséquilibre macro-​économique et ajustements, 1988-​1999, Paris: L’Harmattan. Minor, M.S. (1994) “The Demise of Expropriation as an Instrument of LDC Policy, 1980-​1992,” Journal of International Business Studies 25: 177-​188. N’Dongala (1968) “Le Marché du Travail,” in M. Norro and H. Leclercq (eds.) Indépendance, Inflation, Développement. L’Economie Congolaise de 1960 à 1965, Paris: Mouton, pp. 743–805. Nzongola-​Ntalaja, G. (2002) The Congo from Leopold to Kabila: A People’s History, London: Zed Books. Owen, D. (2006) “Hubris and Nemesis in Heads of Government,” Journal of the Royal Society of Medicine 99(11): 548–​551. Owen, D. and Davidson, J. (2009) “Hubris Syndrome: An Acquired Personality Disorder? A Study of US Presidents and UK Prime Ministers over the Last 100 Years,” BRAIN: A Journal of Neurology 132(5): 1396–​1406. Reylandt, B. (1970). L’Inflation en Pays Sous-​ Développé: Origines, Mécanismes de Propagation, et Effects des Pressions Inflatoires au Congo, 1960–​1969: Interactions entre Phénomènes Monétaires et Réels, Paris: Mouton. Roosens, C. (2000) “La Belgique et la Sécession du Katanga,” in O. Lanotte, C. Roosens, and C. Clement (eds.) La Belgique et l’Afrique Centrale de 1960 à Nos Jours, Brussels: GRIP, pp. 107–132. Rubbers, B. (2006) “L’Effondrement de la Générale des Carrières et des Mines: Chronique d’un Processus de Privatisation Informelle,” Cahiers d’Etudes Africaines 46(181): 115–​133. Van Bilsen, J. (1993) Congo 1945–​1965. La Fin d’une Colonie, Brussels: CRISP. Vanderstraeten, L.-​F. (2000) “La Force Publique et la Préparation de l’Indépendance,” in O. Lanotte, C. Roosens, and C. Clément (eds.) La Belgique et l’Afrique Centrale. De 1960 à Nos Jours, Brussels: GRIP, pp. 99–106. Vellut, J.-​L. (2000) “La Belgique et la Préparation de l’Indépendance du Congo,” in O. Lanotte, C. Roosens, and C. Clément (eds.) La Belgique et l’Afrique Centrale. De 1960 à Nos Jours, Brussels: GRIP, pp. 83–94. Verhaegen, B. and Vanderliden (1981) “La Politique,” in A. Huibrechts and J. Vanderliden (eds.) Du Congo au Zaïre 1960–​1980. Essai de Bilan, Brussels: CRISP, pp. 108–145. Vidal, C. (1979) “L’Argent Fini, l’Amour Est Envolé,” L’Homme 19(3–​4): 141–​158. Willame, J. C. (1980) “Le Secteur Multinational au Zaïre,” Cahiers du CEDAF 1: 1–​66. World Bank (2019) “World Development Indicators,” databank.worlbank.org/​source/​ world-​development-​indicators. Young, M.C. (1965) Politics in the Congo: Decolonization and Independence, Princeton, NJ: Princeton University Press. Young, M.C. and Turner, T. (1985) The Rise & Decline of the Zairian State, Madison: University of Wisconsin Press.

8  From an anarchic to a criminal state

President Mobutu had always reminded Zaireans about the future of their country in disconsolate words. He used to brag openly that “before me the chaos, after me the deluge” (see Callaghy 1984). His maternal uncle, Litho Moboti, often underscored his nephew’s doomsdays in fatalistic terms in Lingala national language: bokoliana sima ya Mobutu or “you will eat each other after Mobutu.” Contextually, it means “you will kill each other after Mobutu.” Nzeza Kabu (2018: 35–​42) describes Congo after Mobutu as a country in total political, economic, security, moral, and humanitarian chaos. Mobutu was correct in his prognostication. Everything started with a power shift in Kigali when the Rwandan Patriotic Front controlled the city in early July 1994. The result was the outflow of 1.72 to 2.1 million Hutu refugees to neighboring countries and Zaire hosted 1.1 to 1.25 million in Bukavu, Goma, and Uvira (Kisangani 2000: 365). Among refugees in Goma were thousands of former Rwandan soldiers and Hutu militiamen who had committed the genocide. Once settled in refugee camps, former Rwandan soldiers started launching armed attacks into Rwanda to make it ungovernable. In October 1996, Kigali decided to end these incursions by dispatching the Rwandan Patriotic Army (RPA) with the mission to attack the camps from all sides, leaving a small eastern corridor towards Rwanda to allow the refugees to return home. Some 600,000 Hutu returned to Rwanda, but 550,000 refugees remained in Zaire. More than 232,000 of these refugees would be later killed by the RPA (Kisangani 2000: 174), a real forgotten genocide by the Tutsi army. After Vice-​President Paul Kagame of Rwanda had authorized the attacks on refugee camps, he decided to oust Mobutu and cobbled a national rebel movement to give his military mission a Zairean face. The ADFL was thus born in late 1996. Burundi, Uganda, and Angola joined the Rwanda-​ADFL coalition later. These forces entered Kinshasa on 17 May 1997 and Laurent Kabila proclaimed himself president 12 days later. On 2 August 1998, a major war against him broke out after he ordered foreign troops that brought him to power to leave. As a new Rwandan coalition was on the verge of taking Kinshasa, Zimbabwe, Angola and Namibia intervened to save Kabila as part of the Southern African Development Community that Congo joined in DOI: 10.4324/b23045-8

206  From anarchic to criminal state September 1997. In early 2001, Kabila was assassinated leaving Congo half occupied by rebel groups and foreign troops. Angola and Zimbabwe agreed to install Joseph Kabila as president on 16 January with the blessing of France and the USA. After several false starts, the belligerents reached an overall peace agreement in December 2002 that paved the way to the government of transition in June 2003. The war against Laurent Kabila was devastating to the Congolese people. Some 5.4 million people died largely as a result of malnutrition and preventable diseases, but one-​tenth of these deaths or 540,000 were violent or battle deaths.1 Hundreds of thousands of women were raped and countless children were drafted into rebel armies. Joseph Kabila was elected president in October 2006 after fair and free elections. He was reelected in November 2011 in what most observers called rigged elections. He ruled Congo like a personalist autocracy with a parliamentary majority that completely muzzled the opposition. Internal and external pressures forced Kabila to call for presidential and legislative elections in late 2018. Félix Tshisekedi won the presidential elections in December 2018. Although these elections were also marred by many irregularities at all levels, they were unique in the history of Congo because they marked for the first time a peaceful constitutional transfer of power since the unconstitutional removal of Prime Minister Patrice Lumumba in September 1960. The next section starts with political order and is followed by basic infrastructure, property rights, revenue imperative, and a summary.

Political order and rule of law The DRC was still politically unstable in 2018 when Félix Tshisekedi became the fifth president of the country. Like in the early 1960s, the UN was the surrogate of the military. Unlike the early 1960s, however, when the UN mission had the support of the USA to avoid turning the Congo conflict into an international crisis by ending the Katanga secession, the UN mission in the post-​ Laurent Kabila period had no such support and had no specific mandate to establish political stability in Congo. The UN, the military, and the administration Following the signing of the Lusaka Ceasefire Agreement in July 1999 between Congo and foreign countries involved in the war against Laurent Kabila, the UNSC adopted Resolution 1279 on 30 November 1999 that established the UN Mission in Congo. In a series of resolutions, the SC expanded the mandate of this mission from July 2007 to June 2020. The UNSC kept an average of 18,000 troops in Congo and spent $1.3 billion a year from 2007 to 2020. The UN missions in Congo had certainly helped the international community to keep an eye on humanitarian and security situations in the country and to prevent conflicts from escalating to massive levels of violence. However, most

From anarchic to criminal state  207 critics argue that the overall balance sheet of the UN in the DRC was negative by the time Félix Tshisekedi was elected president in late 2018 because the country was still politically unstable.2 The military remained a force of occupation rooming the countryside largely unhinged. It oppressed local populations and even collaborated with rebels rather than fighting them.This force of occupation raped women at will, kidnapped people for ransom, looted villages, and killed innocent citizens. Another scourge during the Kabila presidency was the police force whose role was to quell peaceful demonstrations.This force is both military and police but plays bad its police role of investigating and prosecuting crimes, because it is made of illiterate without any knowledge of conducting investigations. Also, the police cannot carry out serious investigations because the country has no forensic laboratories to check fingerprints of criminals. The rule of law is also non-​existent because of the subordination and control of the administration of justice by the political elite. All political appointees, military officers, and elected officials are above the law. Many notorious human rights abusing military commanders were promoted instead of being prosecuted. Political interference with the judicial system represents an enormous challenge in any attempt to bring a well-​connected suspect to trial, particularly when accused of a serious crime. Corruption at the judicial level poses a major and serious bottleneck to the rule of law. The total absence of the rule of law also implies that Congolese consumers are not protected by their government from sub-​standard imports from Asia (Nzenza-​Kabu 2018). For example, most shoes imported from China last only a few days explaining an explosion of strolling shoe repairs in Congolese cities. Most automobile parts from China are also fake and cause accidents all the time (Nzenza-​Kabu 2018). Medicines imported from China and India contain no active ingredients to cure people, but seem to be quite toxic and kill hundreds of Congolese who want to buy cheap medicine. Most cosmetics sold in Congo are also from the two countries and contain allergic or cancerous ingredients. In brief, the lack of an autonomous administration to serve as a veto player to political appointees and protect citizens provides a serious obstacle to accountability. Since the end of Mobutu’s reign in May 1997, the rulers of the Third Republic never contemplated any policy to reform the administration. Like the previous regime, the Third Republic politicized the administration to make it subservient to political elites. An independent and autonomous administration is likely to oppose the political elite’s cronyism and kleptocracy. The Third Republic seemed to mirror the Second and remained anti-​bureaucratic. Traditional authorities and the Catholic Church The Third Republic like its predecessor state never tried to rally the chiefs to help supply political order and implement justice in the countryside. The costs involved in bringing a case to court put the justice system well beyond the

208  From anarchic to criminal state reach of most rural dwellers who are expected to pay for filing a complaint and for extensive legal assistance. Most crimes and other atrocities committed in the countryside go unnoticed and have no chance of being investigated, much less brought to court. President Joseph Kabila’s relations with traditional authorities was to make sure they supported him, especially chiefs of sectors because they were required by the law to be confirmed by a presidential decree. This legal process tends to encourage sector chiefs to be subservient to the central government rather than to be accountable to their communities. One case that led to a major open hostility occurred in the Kasai-​Central province in 2016 when Jean-​Pierre Mpandi refused to join the ruling party in order to be officially confirmed as Kamwina Nsampu (black ant) or sector chief of the Bajila Kasanja group. Mpandi openly supported the opposition in the 2011 elections. As a result, the central government refused to recognize him as Kamwina Nsampu. In reaction, he started an open rebellion against the government in July 2016. His militia launched attacks on local police. He was killed alongside several militiamen and 11 policemen in Tshimbulu on 12 August. His death sparked a major rebellion that escalated in early 2017 and even spread beyond Kasai-​Central. At the peak of the rebellion, the group had more than 10,000 recruits. The conflict ended officially in September 2018 after the death of more than 5,000 people. The Catholic Church was another force that President Kabila tried to muzzle. It remained a vocal force against the moral decay of the political elite. However, Kabila was able to control the church’s anti-​government stance by preventing it from organizing demonstrations. Whenever the Catholic clergy planned to have any peaceful protest, the government would dispatch its well-​ armed police forces inside Sunday masses and attacked parishioners while they were worshiping. On several occasions, the police force even killed innocent parishioners inside churches to deter any action capable of disturbing political order. Like Mobutu, Joseph Kabila saw the Catholic Church as a political rival to weaken at all costs rather than to use it in the state-​building process, given its massive programs in education and healthcare in the country. Impact of political instability on economic development The civil war against Laurent Kabila had more negative effects on the economy and society than any other previous internal conflict since independence. As illustrated by Figure 8.1, domestic savings plummeted from 27.5 percent of GDP in 1996 to -​0.9 percent in 1998 (World Bank 2019). This was the lowest level of domestic savings ever registered since independence. Investments as a percentage of GDP also declined from 25 percent to almost 0.1 percent in the first year of the war. This is consistent with previous studies that have identified a negative relation between political instability and investments (Alesina and Perotti 1996). If investments slightly recovered, savings did not, but both remained below the level of the 1970s. Given the strong theoretical and

From anarchic to criminal state  209

Figure 8.1 Investments and savings as percentages of GDP

empirical link between savings or investments and GDP, it can be inferred that economic development also suffered from declining savings or investments. In fact, GDP per capita dropped from $957 a year in 1990–​1997 to $567 in 1998–​ 2003 during the war as illustrated by Figure 1.3. Also, the manufacturing sector plummeted from 60 percent of its 1970 level before the war to 12 percent in 1999 (see Figure 1.7). The war officially ended in 2003, but the manufacturing sector never recovered and GDP per capita kept its descending trend. A second theoretical channel by which political instability affects the economy is through productivity because it tends to shrink the rate of time preference of society as a whole as economic agents allocate less resources to productive activities. The consequence is uncertainty about the future as the government apportions a large share of its budget to military campaigns. Theoretically, this inefficient allocation means less resources for economic productive activities. Empirical evidence seems to repudiate this argument, however. On average, the military sector received 4.4 percent of ordinary budget per year from 2001 to 2003, while the presidency consumed 14.5 percent a year. Surprisingly, a number of reports by the IMF and the World Bank commended the substantial acceleration of economic growth and improved macroeconomic stability in Congo. Macroeconomic evidence from the two organizations is impressive taken at face value. Congo was ranked among the fastest economically growing countries in Africa in 2010–​2014. Its economy

210  From anarchic to criminal state grew by 8.97 percent in 2014, making it the fastest growing economies on the continent (World Bank 2019). Between 2010 and 2015, the economy grew by 7.6 percent a year. This represented the eleventh highest, thus joining the club of strong performers like Ethiopia, Rwanda, Tanzania, and Zambia. The price level also declined from the hyperinflation levels of the 1990s to single digits in the 2010s averaging 5.39 percent a year. However, the apparent vibrancy of economic activities, especially in services, real estate, and commerce in Kinshasa was an illustration of a declining trend in non-​service sectors of the economy rather than robust post-​conflict economic takeoff. From 2000 to 2018, economic growth in the countryside remained negative varying from -​8 percent in the two former provinces of Kasai to -​ 26 percent in the eastern and northeastern provinces where the dominant agricultural activity was reduced to a minimum. Furthermore, the control of inflation was a result of several factors other than monetary policies. The first was the dollarization of the economy, which was outside the control of monetary authorities. Second, the government had not given public employees, who represented the largest group of the workforce in Congo, any major salary increase since the late 1970s. Salary arrears of several months were quite common in Kinshasa and of many years in the countryside (see Chapter 1).Third and as developed later, the control of inflation was not the result of a deliberate monetary policy, but as a consequence of financing government deficits by foreign donations rather than money printing. Finally was the exchange rate that also reflected political instability and poor economic performance. In June 1998, the government introduced the CF to replace the NZ at the value of one CF for 100,000 NZ. The policy intended to end “the existence of multiple monetary spaces and exchange rates, the lack of generalized confidence in the national currency, the excessive dollarization of the national economy, and the shortage of monetary signs due to the disparity between scriptural money and fiduciary money.”3 The buying rate was fixed at one US dollar for 1.43 CF and the selling rate was one US dollar for 1.38 CF. The double exchange rate was a tax intended to penalize importers, but to help the state accumulate some portion of revenue from this disparity. Monetary authorities gave the population a year to adopt the new currency. The goal was to avoid the panic and debacle of the 1993 reform that established the NZ. A year after the monetary reform, the CF was exchanging between 4.00 and 4.50 per US dollar. The value of the CF dropped during the war and the government announced a massive devaluation of more than 100 percent on 14 October 2000 to have the exchange rate from 23.50 CF per US dollar to 50 CF. The policy narrowed the discrepancy between the official exchange rate and the parallel rate. Exports in general continued to rise despite a brief decline in 1998 and 1999. The country continued to record a trade surplus from 2000 to 2003. From 1.38 CF per US dollar in 1998, the CF plummeted to 1,220 francs per US dollar in late 2016. This deterioration of the currency was not primarily due to trade effects.

From anarchic to criminal state  211 The loss of confidence in the national currency accelerated the process of dollarization that started in the early 1990s.The dollar has since assumed a prominent role in the economy. In late 2012, dollar denominated deposits represented 87 percent of total banking deposits, and dollar assets represented about 79 percent of gross international reserves (Fischer et al. 2013). Dollarization is a cause for concern because it implies that monetary authorities have no control over liquidity, which is a major component of monetary policy effectiveness. The final mechanism through which political instability affects economic development is basic infrastructure, physical and human capital. As discussed below, a perennial problem in Congo remains the lack of goodwill to fund and maintain basic infrastructure.

Decayed infrastructure and economic collapse From 2000 to 2018, the government allocated a tiny 0.1 percent of its annual budget to physical infrastructure, 0.4 percent to education, and 0.6 percent to health (see Table 2.3). These tiny resource allocations to basic infrastructure cannot be explained by conflicts because the presidency consumed an average of 6.1 percent of the annual budget during the same period with a record high of 21.2 percent in 2001, while the budget allocated to the military was only 5.1. The presidency spent again 8.1 percent of the annual budget from 2003 to 2005 with a peak of 12.7 percent in 2003 during the transitional period known as 1 +​4 (one president and four vice-​presidents), but the government allocated only 0.27 percent of its annual budget to physical infrastructure. In dollar terms, the presidency (1 +​4) consumed almost $2.3 billion a year of the budget from 2003 to 2006, while physical infrastructure received $56 million a year. This is criminal even diabolical as Congolese describe their leaders: bazali bandoki, bademon or “they are sorcerers and demons” (Nzenza-​Kabu 2018). This popular description of leaders as “demons” is not far from Kellerman’s (2004) view of bad leadership. She calls “bad” an ineffective and unethical leader. Joseph Kabila was both. He was ineffective in the sense that he failed “to produce the desired change” and he was unethical since he violated “common codes of decency and good conduct” (Kellerman 2004: 33). An ineffective leader is for Kellerman (2004) incompetent, rigid, and intemperate, while an unethical leader is callous, corrupt, insular, and more critically “evil” (ibid.).This last view of being “evil” is what Congolese have in mind when they describe their leaders. Physical infrastructure and evidence The road network had declined from 145,213 km in 1959 to 30,788 km in 2012.4 Only 9,662 km were in good condition in 2012, some 6,470 were in fair condition, but the rest in bad condition. The Congolese Road Agency also estimated a decline of bridges from 579 in excellent condition in 1958 to no more than 27 bridges in fair condition in 2012. In brief, most cities that were

212  From anarchic to criminal state connected during the colonial period had become unconnected because of decayed road infrastructure. The collapse of bridges has brought back the use of canoes to cross most rivers. This was a common practice before the 1920s. Another Congolese tragedy is the railway network. Its traffic has declined sharply since the second half of the 1970s due to a deficient service maintenance thus limiting to play its historic role in enlarging the domestic market. By 2015, the railway system was completely broken down, with the exception of the Kinshasa–​Matadi line that is still functioning with minimal capacity. The CFL line of 683 km in the northeast between Mungbere (Haut-​Uele province) and Aketi (Bas-​Uele province) stopped functioning in the late 1990s. In the south, the regular BCK train schedule that once enabled Kasai rural farmers to supply maize to mining towns in southern Katanga ceased to operate regularly in the mid-​ 2000s. Katanga’s urban population has again become dependent on food imports from Zambia. This situation prevailed until the 1920s before the construction of the railway BCK that ended maize imports from Northern Rhodesia as developed in Chapter 4. The Congolese waterway system was not spared by bad governance. In 2015, the absence of dragging and marking drastically reduced the waterway to 700 km in contrast to more than 14,000 km of well-​maintained waterway network in the late 1950s. The lack of maintenance has made the Congo River and its main navigable tributaries dangerous for navigation. Also, only the ports of Matadi, Kinshasa, and Boma still operate minimally with equipment dating back to the 1950s. The decayed infrastructure has made air transportation the easiest way to connect many parts of Congo. By 2015, more than 20 private companies operated with old planes built in the former Soviet Union. However, air regulations are not enforced and this situation has made the Congolese sky the deadliest in the world. Congo accounted for well over half of all air crashes in Africa from 1997 to 2014 (Kisangani 2016: 62). Finally is the shortage of energy. The supply of energy is the monopoly of the state-​owned SNEL. Like Mobutu who milked the company, Joseph Kabila followed the same step.The company had no reserves to upgrade its equipment. Thus, power supply is heavily constrained and subject to blackouts, placing major limitations on most industries. The shortage of energy implies that most firms own and operate their own backstop generators to shield themselves from frequent power interruptions. In late 2015, Congo had one of the highest percentage of generators in Africa operated by private companies (Gnassou 2019). For example, timber mills in the Kinshasa area spent up to 63 cents per kWh in 2014–​2015 to run diesel-​powered backup generators when needed (Gnassou 2019). Many manufacturing companies have closed down because of excessive costs of energy. In the southeastern Congo, mining companies depend primarily on power from the Inga hydroelectric plant. However, the supply is highly unreliable with many interruptions reported each month as a result of dilapidated infrastructure. The region was estimated in 2012 to have a power supply deficit of 900 MW

From anarchic to criminal state  213 (Gnassou 2019). In terms of capacity, the production of SNEL increased by 50 percent from 400 MW in 2010 to 600 MW in 2014. However, the demand from mining companies skyrocketed from 480 MW to 1,100 MW following the growth of production; thus, energy deficit was responsible of a loss of 50 000 tons in 2015 alone (Gnassou 2019). In April 2015, the government issued a decree exonerating mining companies for four years from customs duties and sale taxes on imported electricity and foreign equipment purchased to generate power in order to meet their demand for energy.5 No Belgian ruler allowed this policy before independence. Joseph Kabila inherited from President Mobutu 11 hydroelectric plants with a total installed capacity of 2,417 MW and more than 76 generators used by territorial capitals and major cities. By 2018, the disponible capacity of hydroelectric plants was only 1,018 MW and the DRC had only 27 operational generators. If Mobutu built Inga I, Inga II, and Mobayi Mbongo dams, Kabila left office without even trying to maintain what he inherited from Mobutu. Human capital and health Social infrastructure includes education or human capital and healthcare. As pointed out earlier, the Kabila government spent 0.4 percent a year in education from 2001 to 2018 to respond to the needs of millions of children, while his office of some 1,700 employees was consuming 6.1 percent a year of the budget. Despite massive foreign aid for reconstruction amounting to $11.13 billion in 2003–​2006, neither the government nor the international community ever invested in education. The complete state’s withdrawal from education means that parents have been forced to pay at the school gate for their children’s education, even for primary school, which, according to the 2006 constitution, should be free and compulsory. Many children who start primary school do not finish it. If this was a choice before independence, it is no longer the case after. In addition, the quality of education has also deteriorated further because of complete state’s withdrawal from funding it. At the tertiary level, the demand for education in the absence of government policy to respond adequately to national needs has resulted in a number of bottlenecks. First is the lack of qualified academic personnel. In 2013–​2014, for example, the whole tertiary level had 2,774 qualitied teachers out of 22,154 or 12.5 percent only (DRC 2017: 232–​234). Second, the lack of employment for university graduates is another blow to the tertiary sector. By the early 1980s, the job market was already saturated and most graduates have since been either unemployed or underemployed, unless they joined the public sector that exploded after the 1980s as illustrated by Figure 8.2. It averaged 456,000 from 1990 to 2002 and reached 820,000 in 2010. The best policy is to revisit colonial policies of professional schools to respond to increasing needs of multinational corporations in need of highly professional skilled labor, but cheap. Therefore, the Congolese educational system needs

214  From anarchic to criminal state

Figure 8.2 Evolution of employment in the public sector

many post-​primary professional schools in textile, electronic, information technology, agriculture, veterinary medicine, human medicine (physician assistants and nurses), laboratory technicians, and so forth. The second social infrastructure is healthcare. At the curative level, the country has theoretically 516 health districts where a district team manages a network of health centers and a district hospital. Districts typically cover a population of 100,000 to 200,000. Practically, however, Congo had no working healthcare system in 2001–​2018 because health spending averaged no more than 0.6 percent a year. With no public funding and weak national leadership, morbidity and mortality have increased over the years, especially among children under five. Kinshasa, with a population of more than 13 million people in 2018, had only four well-​equipped and sanitized private hospitals with no more than 286 beds. At the preventive level, the shortage of water supply and the declining trend of vaccination rate have resulted in many water-​related diseases and preventable ones. An alarming trend is malnutrition that has become widespread because protein intake averages no more than 10 grams daily, which is far below the 150 grams recommended by the Food and Agriculture Organization (FAO). Hunger rate increased by almost 30 percent from 2015 to 2017, according to data released by the FAO and World Food Program.6 In late 2017, the two organizations warned the international community that the people in

From anarchic to criminal state  215 emergency and crisis (or phases 4 and 5 of Integrated Food Security Phase Classification) and requiring urgent humanitarian food assistance rose from 5.9 million in 2016 to 7.7 million in 2017. Thus, more than one in 10 people living in rural areas suffered from acute hunger. Failure to supply basic infrastructure in the Third Republic After he was sworn in as president on 16 January 2001, Joseph Kabila travelled to Europe and the USA to seek external legitimacy since he had no domestic legitimacy. The West pressured him to tackle the corruption scourge because it threatened to unravel all development projects. Joseph Kabila never tried to fight corruption, but embraced it. During the 2003–​2006 transitional period, for example, the international community poured $11.13 billion (World Bank 2019) or 43.3 percent of GDP with a peak of $5.29 billion in 2003 into Congo (see Figure 8.3). This massive aid package intended to rebuild the country was squandered by gangsters, now new legitimate bandits, in defiance of a helpless Commission on Ethics and Corruption. Presidential elections occurred in 2006 and Kabila won in the second round. Massive foreign aid resumed after the elections. It averaged $2.21 billion a year with another record of $5.53 billion in 2011. Similar to the early funding, no single dollar of this round of massive foreign aid was invested in

Figure 8.3 Net ODA in millions of current US dollars

216  From anarchic to criminal state

Figure 8.4 Evolution of the government and its size

physical infrastructure, education, or healthcare. A counterfactual argument is to imagine this massive aid package being given to the Catholic Church as subsidies with its excellent track record in funding education and health across the country. Like the Second Republic, grand corruption remained the most damaging bottleneck to deliver public goods from 2001 to 2018 under Kabila. Contrary to Mobutu who used frequent reshufflings of the government, Joseph Kabila’s corruption strategy was to inflate the government and to keep it stable for at least three years to allow his small winning coalition of cronies to grab everything during their tenure in office. Figure 8.4 shows the size of the central government from 1960 to 2015. The exceptional high number of “members” in the First Republic reflects mostly juniors without portfolios because the government intended to be as inclusive and representative as possible given the fragmentation of the party system. But the number of ministers with portfolios remains quite modest. Government size declined under Tshombe to average 13 members a year in 1964–​1965 since he accumulated at least five portfolios. This size increased under Mobutu, but remained modest averaging 23 ministers a year before the mid-​1990s. The post-​ Mobutu period saw an explosion of the central government. The government of Antoine Gizenga in 2007 had 38 ministries with 40 political appointees. Each ministry had at least five advisors, mostly friends and family

From anarchic to criminal state  217 members without any expertise in managing state affairs. Each advisor received at least a $2,500 monthly salary. Prime Minister Gizenga had 15 advisors in 2007.This group increased in size to reach 65 advisers in 2009 under Prime Minister Adolphe Muzito. On average, 37 ministers rotated in the government from 2007 to 2015. The average government size under the Third Republic consumed more than 75 percent of the budget in salaries alone since ministries were created to reward cronies instead of coping with the country’s socioeconomic crises. The government could be easily reduced to a dozen of ministries. Also, Joseph Kabila never provided public goods because he was more concerned to enrich himself and his family. They have accumulated a vast network of businesses reaching every sector of the economy including farming, mining, banking, real estate, telecommunications, fuel distribution, hotels, pharmaceutical distribution companies, and airlines. The Kabila’s family business empire generated billions of dollars from 2003 to 2017.7 At least one family company was part of a controversial 2009 copper mining deal that led the IMF to cancel its half-​ billion dollar loan program.8 After his 2011 re-​election, Kabila was able to secure the majority in the parliament by coopting many minor opposition parties to govern without legislative oversight or veto players. He was able to control the country’s mineral wealth to the extent that his sister, Jaynet Kabila, has become a major owner of vast mining concessions in the DRC. She has further “set up companies across Congo, in the USA, Panama, Tanzania, and the South Pacific island of Niue.”9 President’s brother, Zoe Kabila, made millions of dollars from mining joint ventures and subcontracts, including at Sicomines, part of Congo’s $6.2 billion minerals-​for-​infrastructure deal with China.10 Kabila also became one of the richest men in the world11 despite his modest background without any university degree and living with a few dollars of allowances from his father before the latter became president in May 1997.12 The lack of transparency in some of the family’s dealings has destroyed the Congolese economy. Thus, the absence of any veto player seems to explain Kabila’s lack of accountability and his financial irresponsibility. At the provincial level, irregular financial advantages are granted to members of assemblies, while provincial expenses face recurrent absence of receipts and public investments lack contracts and evidence of competition. Public funds allocated to pay public servants are embezzled at will. One media report even called the system a “mafia network.”13 Corruption became a normal way of life under Joseph Kabila. In brief, it tends to divert public resources from infrastructure investments that could benefit citizens at large. One observer summarizes the Kabila state as “a bad employer, a bad payer, a bad manager, a bad entrepreneur, a bad guarantor of democratic principles, and a bad catalyst of knowledge” (Nzeza-​Kabu 2018: 46). He adds that “Congolese do not love their country” (ibid.: 45). The same observer concludes that if only “the honest people who struggled so long for democracy could have their say, Congo would have been and could become an independent, successful strong state, with the economic potential of “Lighting the Continent” (ibid.: 47).

218  From anarchic to criminal state

Property rights in a criminal state In April 1997 when the ADFL coalition captured the southeastern rich mining town of Lubumbashi, major foreign companies began to visit Laurent Kabila. Soon after, he started negotiating and even signing a number of mining deals with potential investors. By late May 1997 when he declared himself president, foreign participation in the mining sector was under three regimes. The first was a set of agreements made by Kabila with potential investors either before or after he became president.These investments included, among others, the deal with American Mineral Fields on the Kipushi zinc mines and the Kolwezi copper and cobalt tailings in southern Katanga. The second regime involved agreements during the Mobutu administration ratified by the new government. One example is the contract signed with Consolidated European Ventures for the Tenke-​Fungurume area. The last regime was made of agreements signed by the Mobutu administration but not yet ratified or just ignored by the new government. The war against Laurent Kabila in 1998–​2002 would affect these mining regimes and property rights. The most obvious and widely advertised consequences were the criminalization of the economy and the plundering of Congolese resources by foreign state actors and rebel groups. As soon as he became president in early 2001, Joseph Kabila made various attempts at reforming the natural resource sector with a mining code that was promulgated in 2002.14 Mazalto (2009) reveals the influence of the IMF and the World Bank in the new law because it gives the highest priority to the private sector development and ownership of large-​scale mining projects. The law introduces a very liberal tax and customs regime, clearly designed to “ensure the profitability of projects through transparency and efficiency in granting licenses and providing investment security” (Mazalto 2009: 197). The parliament voted a new mining law code n° 18/​001 on 9 March 2018 after a lengthy reform process that started in 2012.15 This law modifies slightly the 2002 law, but does not replace it. Like the previous law, the 2018 mining code is also quite liberal and contains some provisions on artisanal mining. Artisanal and small-​scale mining The ASM started in 1981–​1982 and has become a livelihood activity in Congo, next to agriculture. Some scholars have identified it as an important economic opportunity to reduce poverty (Maconachie and Binns 2011). Despite the recognition of this potential, a consensus has also emerged that ASM tends to generate few social benefits. The main reason is that it operates outside the regulatory framework of the state in an “illegal or “informal” sphere (Siegel and Veiga 2009: 51). Thus, ASM needs to be formalized or embodied in a standardized legal framework to generate economic prosperity. As De Soto (2002: 355) points out, formalization of property rights is the key to economic development, a necessary and sufficient condition for fostering economic

From anarchic to criminal state  219 growth and productivity. But most Congolese artisanal miners have customary titles, which are just as strong in their eyes and even more legitimate despite their lack of formal titles (Geenen 2012). On the negative side, the ASM has replaced agriculture in many corners of the country. Also, artisanal miners do not accumulate capital to invest in the long term. They also lack equipment and scientific knowledge to explore and locate new mines. When a mining site is exhausted, miners move away to find new alluvion mines in haphazard fashion. Moreover, ASM contaminates rivers because miners use all sorts of chemical products (Bauma 2017). More alarming is the fact that artisanal mining employs many children of schooling age. As economic history of the Belgian Congo showed, industrial mining helped to build infrastructure (see Chapter 4). Mining prospectus minimized costs of exploiting low grade mining and thus preserved the environment. Industrial mining tends to protect workers and prevent accidents. Industrial mining also has the advantage of stabilizing the labor force, providing a regular salary, giving miners healthcare and safety, and educating miners’ children. In brief, it does not employ children of schooling age. SOEs and the mining sector One major issue in the mining sector was the clog of secrecy surrounding contracts during the entire presidency of Joseph Kabila. This began with China one year after his 2006 electoral victory. Beijing entered the mining sector when China Export-​Import Bank signed an agreement with a consortium of Congolese companies that needed financial resources to accomplish Kabila’s program of Cinq Chantiers, which included infrastructure, health, education, water and electricity, housing and agriculture.The government suggested that a component of infrastructure financing should be included into the agreement. The Sino–​Congolese joint venture named Sicomines had 68 percent shares from the Chinese part and 32 percent from Gécamines. The agreement was not welcome by the minority opposition in the parliament and the Bretton Woods institutions. After several discussions, a new agreement emerged in 2009 that conformed to IMF’s requirements. From 2009 to 2012, Sicomines had partly completed a few projects for a total of $458.4 million. However, it lacked finances to continue the different projects outlined in the agreement because China Exim Bank pulled out as Sicomines’ finance provider in early 2012 after disbursing one billion dollars. Despite this fiasco, the Kabila government signed under bizarre and opaque conditions another mining deal with China in January 2016. The clog of secrecy in mining contracts was one major issue between the IMF and President Kabila. The government kept selling mineral assets at a deep discount, flipping them, and at time receiving large bribes. In December 2009, the IMF approved a $551 million line of extended credit to the government for three years to cope with economic crisis on the condition that Kabila

220  From anarchic to criminal state accepted to lift the clog of secrecy surrounding the mining sector under the global extraction industries transparency initiative (EITI). The EITI is a global standard to promote open and accountable management of natural resources. One of the major requirements of EITI is to maintain a public register of real owners of bidding companies, operating or investing in extractive industries including their identity and their degree of participation. In 2011, however, the IMF accused Kabila and members of his cabinet to have undersold Congolese mining assets for $7 billion in 2007–​2009 to 45 offshore shell companies incorporated exclusively in the British Virgin Islands and had pocketed undisclosed amount from the proceeds.16 In brief, the opaque ownership structure reflected the fact that powerful Congolese politicians, including President Kabila and his family, were among the hidden owners and benefited personally from the mining sector. Since mining deals continued to skip transparency despite EITI’s efforts to provide significant data to the public about the sector, billions of dollars disappeared and remained unaccounted for during the entire Kabila presidency.

Revenue imperative and state-​building Laurent Kabila remained in power from May 1997 until he was assassinated in January 2001. He ran a government deficit of $8.61 billion (2015=​100) in less than four years (see Table 9.9). Soon after, the IMF staff and the government concurred that the economic situation was characterized by a set of macroeconomic disequilibria. In the midst of civil war, both parties agreed to implement an IMF Staff-​Monitored Program (SMP) from June 2001 to March 2002 intended to stabilize the economy and lay the foundation for the restoration of economic growth. The goal of the SMP was to give the government the opportunity to establish a track record in macroeconomic management, which could lead to the clearance of debt arrears with the IMF, followed by an extensive program of assistance under the Poverty Reduction and Growth Facility (PRGF). The government was able to clear its $522 million debt arrears in 2002 thanks to bridging loans from Belgium, France, Sweden, and South Africa. The IMF and the World Bank then agreed to a $1.2 billion package under the PRGF. On 12 June 2002, the World Bank allocated $450 million to the government. On the next day, the IMF also approved $750 million over three years under the PRGF, while half of the country was still occupied by foreign troops and controlled by more than 20 rebel groups. The peace agreement signed in late 2002 resulted in the transitional government in mid-​2003. Immediately, the IMF and the International Development Association (IDA) concurred in July 2003 that Congo had taken the necessary steps to reach its decision point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Debt relief under this initiative amounted in 2003 to $10 billion in nominal terms, but $6.3 billion in net present value terms (NPV).17 Under the enhanced HIPC Initiative, the IDA provided a total

From anarchic to criminal state  221 of $1.03 billion in nominal debt service relief (about $831 million in NPV). The IMF also gave some assistance of $472 million in NPV terms under the enhanced HIPC In early March 2004, the IMF’s review indicated that economic progress was made and the government needed to extend structural reforms to the provinces now integrated to Kinshasa after the formation of transitional government in mid-​2003. The IMF also asked the government to continue its comprehensive tax reform, especially the elimination of exemptions and improvement in tax compliance. After the presidential and legislative elections of 2006, foreign investors began to visit Congo again. In December 2009, the IMF approved a $551 million line of extended credit for three years to the government to cope with economic crisis. In return, the government accepted to lift the clog of secrecy surrounding its mining sector that started with Laurent Kabila in 1997. As pointed out earlier, the benchmark agreements included the implementation of a global transparency program or the EITI.The Paris Club thus agreed in July 2010 to erase much of the country’s foreign debt as recommended by the IMF and the World Bank in the context of HIPC Initiative. The cuts amounted to $7.35 billion, which represented the remaining debt with the Paris Club.The reduction intended to enable the government to fight poverty rather than to service its debts averaging $250 million a year. By 2013, however, there was no evidence that the government had complied with the EITI requirements attached to its IMF loan. Meanwhile, the dollarization of the economy continued to grow. If deposits in hard currencies represented 43.5 percent of total in 2001, these deposits averaged 86.53 percent a year from 2004 to 2013 (Sary Ngoy 2018: 118). The causes of the dollarization of the economy are many, including political instability, a weak economy and by ricochet a weak currency, and a decline in economic activities in non-​mining sectors. Also, the government could not collect enough taxes to finance its spending. On average, the bulk of taxes was from exports that averaged 53.79 percent of total revenue from 2001 to 2018. In order to diversify indirect taxes, the IMF and the government agreed in 2012 to institutionalize the valued added tax (VAT) by using the credit invoice method, which remains the most prevalent method across the globe.The VAT is generally thought of as a consumption tax, similar to a retail sale taxes. One important difference is that the VAT is collected in stages as goods and services are produced and sold, whereas the retail sales tax is collected once upon the final sale.The VAT has its proponents and opponents (Keen and Lockwood 2007). Without going into this debate, some empirical evidence suggests that the poorer the country is the less effective is the VAT in replacing government revenues lost by reducing import and export taxes (Baunsgaard and Keen 2009). The VAT tends to tax value added products and Congo produces and sells mostly raw materials. From 2007 to 2011, the government collected an annual average of 23.5 percent of taxes on goods and services. This average was only 24.05 percent from 2012 to 2015 under the VAT system. Therefore, the VAT did not change the collection of indirect taxes.

222  From anarchic to criminal state Even the richest mining sector did not increase revenue collection. In 2013–​ 2015, mining companies made payments to the state equivalent to $2.3 billion, although $10 billion a year of copper and cobalt were dug up and sold abroad.18 These two minerals make up 80 percent of the country’s total export earnings. The Carter Center contends in a report that “Gécamines used its privileged position to generate more than $1.1 billion from copper and cobalt deals between 2009 and 2014, but failed to reliably account for almost two-​thirds of the revenue.”19 This revenue never reached the public treasury and remained largely beyond the realm of parliamentary oversight. A report by Global Witness also contends that “a toxic combination of corruption and mismanagement … is leaching a fifth of mining revenues away from the state budget that should be used on vital public services such as schools, hospitals, and roads.”20 Congo is one of the world’s poorest nations where some 90 percent of its population live in extreme poverty while seating on unimaginable natural wealth. At the heart of Congo’s industrial copper and cobalt mining operations is Gécamines, the most prominent of the country’s state-​owned mining companies. It has a history of being looted by a corrupt leadership clinging to power from Mobutu to the Kabilas. In the words of an observer, “Gécamines is practically a black hole … where you don’t know who is doing what, where the money goes, which deal is going where, under what conditions and so on” (Lezhnev 2016: 48). The company had remained a “cash machine”21 for President Kabila. There was no veto player to constrain the president because the presidential majority dominated the legislature. Since mining resources did not provide the government enough revenue to cover its spending, budget deficit also increased over the years and worsened after the break-​up of the previous ten provinces into 26 decentralized entities including Kinshasa. From 2016 to 2020, most provincial governors adopted no budgets. All decentralized provinces ran unimaginable budget deficits mostly to pay salaries of governors, their cabinets, and provincial legislators. Thus, the Kabila government ran a budget deficit of 16,299 billion CF (see Table 8.1) or $23.7 billion (2015=​100) from 2001 to 2018. In sum, the central government deviated from the official budget and spent more than planned because of the benevolence of external donors to finance the budget deficit. According to Table 8.1, the financing of budget deficits by foreign donors averaged 97 percent of total deficit a year in the 2000s with a peak of 122 percent in 2002. It was on average 98.2 percent in the 2010s with another pick of 133.1 percent in 2012. This was one of those years that the IMF and the World Bank described Congo as one of the fastest growing countries in the continent. At the same time, the government could not collect enough revenue to finance its budget deficits. In brief, the West helped Kabila to avoid using the power to print money to finance his huge budget deficits. This explains low inflation rates under the presidency of Joseph Kabila from 2001 to 2018. One important consequence of financing the budget deficit by foreign donations is to absolve state managers of their accountability to citizens. State-​ building requires an elaborate tax system to make the government responsible

From anarchic to criminal state  223 Table 8.1 Financing of government deficits under the Third Republic in billions of CF Years

Revenue

Spending

Deficit (a)

External Donations (b)1

(a/​b) * 100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

67 145 226 306 495 669 794 1,272 2,105 2,294 2,800 3,762 4,122 4,363 4,439 3,657 5,336 7,937

150 280 456 565 1,169 1,251 1,579 2,135 3,089 2,871 4,146 4,941 5,460 6,108 5,909 5,394 6,596 9,002

83 122 230 259 674 582 785 863 984 577 1,346 1,179 1,338 1,745 1,470 1,737 1,260 1,065

82 149 224 230 644 547 730 847 1,030 730 1,149 1,569 1,288 1,660 1,287 1,306 1,266 925

98.8 122 97.4 88.8 95.5 94.0 93.0 98.1 104.7 126.5 85.4 133.1 96.3 95.1 87.6 75.2 100.5 86.9

1

 This is an integral part of state’s revenue under the rubric “Total Revenue plus Donations.”

Sources of data: see DRC, Banque Centrale (2002–​2019, annual).

and accountable. The financing of the budget deficit by external donations has completely absolved the government from its sacred duties to provide public goods. This financing has weakened institutions that the international community wanted to establish on the first place, a representative and accountable democracy. It has also destroyed all venues of tax collections and minimized the chance of building state capacity. The absence of state’s capacity to collect taxes is closely related to its inability to govern and deliver public goods for economic development.

Summary By the time the presidential mandate of Joseph Kabila ended in late 2018, the Third Republic was still politically unstable. The reliance on the Blue Helmets as the surrogate for the military has completely removed any incentive on the part of state managers to build a military for the purpose of state building. A credible and viable military force is clearly needed to address the security issue in Congo. It makes little sense to talk about security of property if economic agents are themselves insecure. The control of violence is a sine qua non condition for economic development. The second major issue of the Third Republic is the absence of basic infrastructure. Thus, the gap between economic agents has widened to the extent

224  From anarchic to criminal state that economic exchanges have become rare among them and the industrialization process has also suffered as illustrated by Figure 1.7. By undermining growth drivers, more specifically public goods, bad governance has undermined Congo’s long-​term growth prospects and economic development. On the same note, Congo cannot escape poverty trap if its millions of children are absent from a quality primary education. Associated with education is the health of the Congolese people, in general, and that of the workforce, in particular.The state of health in Congo had seriously deteriorated with Kabila’s presidency. The result is that most Congolese use traditional medicine reminiscent of pre-​colonial period. The decay of Congolese state in the post-​Mobutu era is not accidental. It emerged from the deliberate manipulation of the state by elites for the purpose of resource extraction both for private wealth accumulation and for maintaining power.Although the Third Republic had not reneged on its commitment to protect private assets, secrecy surrounding the mining sector remained an indirect exclusive mechanism intended to sideline most western major corporations whose governments are likely to scrutinize corrupt practices in mining deals. In the words of one observer, the Third Republic qualifies as a “criminal state” (Lezhnev 2016). As Lezhnev (2016: 32) points out, violent kleptocracy is a system of bad governance whose ruling networks and commercial partners hijack governing institutions for the purpose of resource extraction and for the security of the regime, with the ruling network utilizing varying levels of violence to maintain its hold on power. When the government fails to allocate resources to finance public goods, it undermines its own capacity to function and govern. President Kabila stayed in power for 18 years and never improved the public sector. He remained the worst disastrous and incompetent leader since independence. Kabila’s bad governance was encouraged by the West that provided him with billions of dollars to finance his massive deficits without resorting to taxes or money printing. Therefore, the West exonerated him and his small winning coalition of cronies from their responsibility to build a state capable to provide public goods. Without major veto players, the rulers of the Third Republic had pushed back the clock of development for more than a century.

Notes 1 International Rescue Committee, Mortality in the Democratic Republic of Congo,” 2007. www.res​cue.org/​sites/​defa​ult/​resou​rce-​file/​2006–​7_​c​ongo​Mort​alit​ySur​vey. pdf. Accessed 23 January 2018. 2 Enough Team, “How to Dismantle a Deadly Militia: Seven Non-​Military Tactics to Help End the FDLR Threat in Congo,” (Washington, D.C.: Enough Project, November 2014). www.enough​proj​ect.org/​files/​FDL​RRep​ort-​HowTo​Dism​antl​ eADe​adly​Mili​tia-​Enough​Proj​ect-​Nov2​014.pdf.

From anarchic to criminal state  225 3 Noel Tshiani,“Pour une monnaie nationale credible au Congo,” Financial Afrika 2013. 4 DRC, Office des Routes, Rapport Annuel de l’Etat des Routes 2012 (Kinshasa: 15). 5 “DR Congo: Energy Insecurity,” ARB (2015: 20880). 6 FAO (August 2017) and World Food Program (2017) cited in “DR Congo: Food Insecurity Soars,” ARB 54, 8 (2017: 21814–​21815). 7 See “DR Congo: President’s Vast Business Network,” ARB 54, 7 (September 2017: 21779). 8 See Michael Cavanagh and Dan McCarey, “All the President’s Wealth: The Kabila Family Business,” Pulitzer Center 20 July 2017. https://​pul​itze​rcen​ter.org/​stor​ies/​ all-​pre​side​nts-​wea​lth-​kab​ila-​fam​ily-​busin​ess 9 Ibid. 10 Ibid. 11 A few weeks before the United States-​Africa summit convened in early August 2014, the journalist of Forbes magazine, Richard Miniter (2014), revealed that Joseph Kabila’s fortune in 13 years as president was close to $16 billion hidden in fiscal havens. 12 Michael Kavanagh, Thomas Wilson, and Franz Wild, “With His Family’s Fortune at Stake, President Kabila Digs In,” Bloomberg 14 December 2016. www.bloomb​erg. com/​news/​featu​res/​2016–​12–​15/​with-​his-​f am​ily-​fort​une-​at-​stake-​congo-​presid​ ent-​kab​ila-​digs-​in. 13 Radio Okapi, “Paie des fonctionnaires: 11.8 millions USD détournés en 3 mois à Kinshasa,” 24 octobre 2015.” www.rad​iook​api.net/​2015/​10/​24/​actual​ite/​soci​ete/​ paie-​fon​ctio​nnai​res-​118-​milli​ons-​usdde​tour​nes-​en-​3-​mois-​kinsh​asa. Accessed 3 March 2019. 14 Law No. 007/​2002 of 11 July 2002 Relating to the Mining Code; available online at http://​mines-​rdc.cd/​fr/​docume​nts/​cod​emin​ier_​eng.pdf. 15 RDC, Présidence de la République, “Loi no 18/​001 modifiant et complétant la Loi no 007/​2002 du 11 juillet 2002 portant code minier, col. 1,” JO numéro spécial du 28 mars 2018. 16 “DRC,” Africa Research Bulletin or ARB (2011, pp. 19333–​19334). 17 The NPV of debt is the discounted sum of all future debt-​service obligations (interest and principal). It is a measure that takes into account the degree of concessionality of a country’s debt stock. Whenever the interest rate on a loan is lower than the market rate, the resulting NPV of debt is smaller than its face value, with the difference reflecting the grant element. 18 “DR Congo: A Damning Report Reveals How Much Revenue Is Siphoned off,” ARB 54, 10 (October 2017: 21908). 19 Idem. 20 Idem. 21 Idem.

References Alesina, A. and Peroti, R. (1996) “Income Distribution, Political Instability, and Investment,” European Economic Review 40(6): 1203–​1228. Bauma, K.F. (2017) “Etude sur l’Utilisation du Mercure et du Cyanure dans l’Exploitation Artisanale de l’Or au Nord et Sud-​Kivu.” Goma: Les Voix de l’Est du Congo en coopération avec IPIS.

226  From anarchic to criminal state Baunsgaard, T. and Keen, M. (2009) “Tax Revenue and (or?) Trade Liberalization,” Journal of Public Economics 94: 563–​577. Callaghy, T. (1984) State–​ Society Struggle: Zaire in Comparative Perspective, New York: Columbia University Press. De Soto, H. (2002) “Law and Property outside the West: A Few New Ideas about Fighting Poverty,” Forum for Development Studies 29(2): 349–​361. DRC, Banque Centrale (2002–​2019, annual) Rapport Annuel, Kinshasa. DRC, Institut National de Statistique (2017) Annuaire Statistique 2015, Kinshasa. Fischer, F., Lundgren, C., and Jahjah, S. (2013) “Making Monetary Policy more Effective: The Case of the DRC,” IMF Working Paper WP/​13/​226. Washington, D.C.: IMF Publications. Geenen, S. (2012) “A Dangerous Bet:The Challenges of Formalizing Artisanal Mining in the Democratic Republic of Congo,” Resources Policy 37: 322–​330. Gnassou, L. (2019) “Addressing Renewable Energy Conundrum in the DR Congo: Focus on Grand Inga Hydropower Dam Project,” Energy Strategy Reviews 26, 100400. Keen, M. and Lockwood, B. (2007) “The Value-​ Added Tax: Its Causes and Consequences,” Washington, D.C.: IMF Working Paper WP/​07/​183. Kellerman, B. (2004) Bad Leadership: What It Is, How It Happens, Why It Matters, Cambridge, MA: Harvard Business Press. Kisangani, E.F. (2000) “The Massacre of Refugees in Congo: A Case of UN Peacekeeping Failure and International Law,” The Journal of Modern African Studies 38(2): 163–​202. Kisangani, E.F. (2016) Historical Dictionary of the Democratic Republic of the Congo, Lanham: Scarecrow Press. Lezhnev, S. (2016) “A Criminal State. Understanding and Countering Institutionalized Corruption and Violence in the Democratic Republic of Congo.” https://​enough​ proj​ect.org/​files/​A_​Criminal_​S​tate​_​Eno​ugh_​Octo​ber2​016_​web.pdf Maconachie, R. and G. Hilson (2011) “Safeguarding Livelihoods or Exacerbating Poverty? Artisanal Mining and Formalization in West Africa,” Natural Resources Forum 35: 293–​303. Mazalto, M. (2009) “Governance, Human Rights, and Mining in the DRC, in B.  Campbell (ed.) Mining in Africa, Regulation and Development, London: Pluto, pp. 187–242. Nzeza Kabu, J.P. (2018) Congo. Comment le Reconstruire, Y Amener la Paix et le Développement? Paris: L’Harmattan. Sary Ngoy, B. (2018) La Dépreciation du Franc Congolais (2001–​2018). Effet d’Hysérèse, Paris: L’Harmattan. Siegel, S. and M.M. Veiga (2009) “Artisanal and Small-​Scale Mining as an Extralegal Economy: De Soto and the Redefinition of ‘Formalization’,” Resources Policy 34: 51–​56. World Bank (2019) “World Development Indicators,” databank.worlbank.org/​source/​ world-​development-​indicators.

9  The Belgian Congo state in comparative perspective

From its creation in November 1908 until June 1960, the Belgian colonial state seemed to reflect the two key attributes of developmental states discussed in the first chapter, namely state capacity and some relative autonomy. These traits helped it to build physical infrastructure that attracted massive FDI in the Belgian Congo and began the IS industrialization in the early 1920s. At the same time, all French, Portuguese, and British colonies remained predominantly agricultural in the late 1920s. The IS process in the Belgian Congo was based on some form of capitalism, which was an indirect governance of economic relations where markets existed within institutional frameworks provided by political authorities. By the late 1950s, the Belgian Congo was more industrialized and even more developed economically than most colonies in Africa. As shown in Table 9.1, the Belgian Congo was, with South Africa, one of the two most industrialized countries, excluding the mineral sector in which Congo was ranked first in refining several minerals such as cobalt, copper, tin, and zinc. Between 1927 and 1930, equipment goods imported for public works accounted for 47 percent of special imports in the Belgian Congo (Coquery-​ Vidrovitch 1986: 354). In 1929 alone, capital goods accounted for 45 percent of the value of imports of French West Africa, but only 29 percent for French Equatorial Africa and 33 percent for Madagascar, compared with over 50 percent for the Belgian Congo (Cocquery-​Vidrovitch 1986: 368). Despite enormous debt that the Belgian Congo incurred in the early 1930s, it was able to “take off as soon as the industrial sector had recovered after the depression” (Coquery-​Vidrovitch 1986: 35). Senegal was the exception in West Africa whose small groundnut oil-​mills were established in 1920–​1922. However, these mills served the local market in the early stages, but they began exporting their products in 1937. Only a few other industries were established in 1940 compared to the Belgian Congo where most industries already existed by the mid-​1920s. Outside Senegal, the principal industry in West Africa consisted of one palm-​oil mill in Dahomey and another in Ivory Coast. West Africa also had several small sawmills, a few cotton ginneries, and the Gonfreville textile works established in Ivory Coast in 1921 (Kilby 1975). The situation in Nigeria and DOI: 10.4324/b23045-9

228  Belgian Congo: comparative perspective Table 9.1 Production in selected manufacturing sectors in Africa in 1959–​1960 Selected Industries Beer Butter Margarine Sulfuric acid Cotton fabrics Lumber Cotton looms Cigarettes Shoes Cement Sugar

Belgian Congo

Egypt

Morocco

South Africa

Nigeria

Kenya

1,190 (1) 107 (10) -​ 796 (3) 140 (7) 348 (5) 1,000 (1) -​ -​ 38 (2) -​ 6 (3) 1,000 (1) -​ 2 (2) -​ 1 (3) -​ 123 (1) 85 (2) 35 (3) -​ -​ -​ 60 (2) 434 (1) 20 (3) 18 (4) -​ -​ 303 (2) -​ -​ -​ -​ -​ 2,070 (3) 19,518 (1) -​ 3,024 (2) -​ -​ 3,920 (3) -​ 2,865 (4) 10,043 (2) 2,953 (7) 2,085 (5) 2,744 (3) -​ 5,077 (2) 21,777 (1) -​ -​ 408 (6) 1,511 (2) 408 (4) 2,722 (1) 113 (12) 240 (9) 40 (9) 3,61 (3) -​ 952 (2) -​ -​

Note: beer (millions hectolitres); margarine and butter (tons), sulphuric acid, cement, and sugar (000 tons); textile (millions m2), broadleaved lumber (000 meters), cigarettes (million units), shoes (000 pairs). Source: UN (1962).

the Gold Coast (Ghana) was almost similar. Taken together, all these small industries in West Africa add up to less than 50 small industries. In contrast, the Belgian Congo had by the mid-​1930s more than 457 modern palm oil mills, 22 textile industries, 74 cotton ginneries, and 1,081 sawmills (Belgium 1939: 212). In East Africa, Protestant missionaries introduced cotton in both Kenya and Uganda. They operated their first-​owned ginnery in Kampala in 1904. Other ginneries followed and by 1925, Indians owned 100 out of 152 small ginneries (Kilby 1975: 476). Most Asian industrial activities before the Second World War were small in size. The only sizeable venture in the whole Uganda was a cigarette factory established in 1937 at Jinja by the British-​American Tobacco Company (ibid.: 477). The industrialization of Uganda based on small-​scale IS also occurred after the 1940s by Asian entrepreneurs, while that of the Belgian Congo began in the early 1920s by massive FDI from Belgium. The British established the Uganda Development Corporation in 1952 with an equity of £5 million (ibid.: 478) or $125.22 million in 2015 prices. This amount is quite minute compared to more than $16 billion invested in the Belgian Congo before the 1940s by a few big Belgian companies. Unlike Uganda, the share of manufacturing in Kenya was in the hands of European settlers. Most British industries were established in the 1920s (Kilby 1975: 477). Although Indians remained prominent in sugar, cotton ginning, seed crushing, furniture and wearing apparel, British overseas investments dominated soda ash, tea, and cement. This European sector also included baking and food processing, beer brewing, as well as the processing of grain, pyrethrum, sisal, and coffee. Again, all industries in Kenya remained small in contrast to large-​scale industries in the Belgian Congo that relied on FDI.

Belgian Congo: comparative perspective  229 In brief, Kenya and Uganda never developed a large manufacturing sector similar to that of the Belgian Congo given little European foreign investments in the two colonies and low level of capital invested by the population of Asian descent. In 1963, the value added of output in Uganda was only £16.3 million and £49.8 million in Kenya; the number of workers was 38,175 and 49,829, respectively (Kilby 1975: 478). These millions sterling pounds translate into $352 million and $1,075 million (2015=​100). By the mid-​1950s, however, the Belgian Congo had already more than one million workers and billions of dollars in value added in the manufacturing sector. One British colony to contrast with the Belgian Congo was Southern Rhodesia (now Zimbabwe) because of its early industrialization that started in 1898 with the manufacture of a large beer company at the Salisbury Brewery (Kilby 1975: 479). The British South African Company also became active in fostering considerable industrial development in Southern Rhodesia and its first industry in 1910 was in food processing. Five years later, Southern Rhodesia had a cement factory and launched the Rhodesia Milling Company in 1920 (ibid.). In 1938, Southern Rhodesia had 300 manufacturing companies, but “it produced a net output of £2.3 million … because each of 298 of these firms had sales of less than £20,000, but only two firms had sales over £250,000” (ibid.: 480). This tiny industrial output of £2.3 million or $188.94 million (2015=​100) in Southern Rhodesia targeted the white minority in contrast to the Belgian Congo where the manufacturing sector aimed at both African and European consumers. The manufacturing sector in Southern Rhodesia also reflected the labor market. The workforce had 2,798 Europeans and 14,756 Africans in the late 1930s (Kilby 1975: 481). This was quite small compared to more than 11,000 Europeans and more than 80,000 Africans employed in the manufacturing sector in the Belgian Congo in the early 1930s (Belgium 1931: 46). By 1952, the number of wage earners in the Belgian Congo was the highest in Africa. It had 1.1 million wage earners with a total population of 12 million. This was roughly equivalent to the number of wage earners in the entire French empire and Nigeria taken together with one million wage earners for a population of 54 million (Bézy 1957: 102). Comparatively, the Belgian Congo had 8,983 wage earners per 100,000 people in contrast to Nigeria with only 2,000 wage earners for 100,000 people. In 1956, the Belgian Congo had 1.2 million wage earners, while the second country, Algeria, had 1.04 million (Bézy 1957: 76). Contrary to the Belgian Congo and southern British colonies in the 1940s, wartime scarcities brought extreme hardship in West Africa. With the exception of Senegal, West Africa never had an industrial or mineral base to stimulate the economy in response to post-​war European reconstruction. As stated by Kilby (1975: 490), “the overall picture for colonial West Africa, then, is of very limited industrial development until the 1950s, with Senegal being somewhat of an exception” because it represented the center of a sizeable French population.

230  Belgian Congo: comparative perspective Kilby (1975) added that the late and small-​scale industrialization of West Africa was the result of monopoly by a few firms in the import-​export trade that limited its IS industrialization. These few trade monopolists had incentives to remain fully committed to the trade business on their own, but they spread disincentives for any new firm to enter the manufacturing sector. Since barriers to entry were exorbitant as a result of oligopolistic nature of the manufacturing sector in the region, “there were few individuals or firms with the requisite qualifications, such as close contact with consumer demand and access to capital and organizing skills, who were in a position to develop industrial incentive to undertake a major industrial investment” (Kilby 1975: 500). The Belgian Congo was quite different. From 1908 to 1960, all ministers of colonies professed competition based on the ideal of free market. This motto attracted massive foreign investments in many areas of the manufacturing sector since the early 1920s. Although a few Belgian corporations dominated FDI invested in the Belgian Congo, hundreds of their subsidiaries competed in the colonial market. At the end of colonial rule, the Belgian Congo, Nigeria, and Southern Rhodesia had, by a substantial margin, the largest industrial sectors. If Nigeria’s share of manufacturing to GDP was only 4.5 percent in 1960, that of the Belgian Congo and Southern Rhodesia represented 16 percent and 14 percent, respectively (Kilby 1975: 472). Using the Pen Tables in 2017 dollar prices to assess these percentages, the manufacturing sector of the Belgian Congo was $6.87 billion in 1960, while the shares of Nigeria and Southern Rhodesia represented $3.34 billion and $1.24 billion, respectively. The Belgian Congo and Nigeria were colonies of extraction, but Southern Rhodesia was a colony of settlement with a sizeable European population. As stated in Chapter 1, Kilby (1975: 473) defines a sizeable European community as one that “is in excess of 50,000.” According to this threshold, the Belgian Congo was quite different from Nigeria and other colonies of extraction because it had a “sizeable” European community. The size of the European population in the Belgian Congo of more than 110,000 people in the late 1950s was unprecedented in the tropics (see Chapter 3). This European community established a large winning coalition that propelled the colonial government to provide this European population most public goods, which in return built the capacity of the colonial state. This was probably one factor associated with the Congo’s early industrialization and its high share of manufacturing to GDP. An additional factor that helped to industrialize the Belgian Congo in the early 1920s, in contrast to most other colonies, was the influx of massive long-​ term capital investments in the mining sector. Frankel (1938: 210) remarked that mining was “the touchtone of economic development in most parts of Africa, and the areas most advanced economically were those whose main activities rested on mineral exploitation.” He cited only a few countries he called “special mineral territories” including the Union (South Africa), South West Africa, North and South-​Rhodesia, and the Belgian Congo. However, the Belgian Congo differed from the other mining rich colonies by the fact that it began refining its minerals earlier than the others. In brief, Congolese

Belgian Congo: comparative perspective  231 state managers inherited on 30 June 1960 strong economic and social initial conditions that should have helped them to develop further the economy. However, they never built upon many of these favorable initial conditions for several reasons developed in Chapters 7 and 8. The rest of this chapter proceeds in four sections. The first compares institutional arrangements between the Belgian Congo and its two counterparts, the CFS and the postcolonial state. The second section discusses political order and the rule of law. Third is the role of basic infrastructure in the process of economic development. Section four provides a brief analysis of property rights. The issue of revenue imperative is the last section.

Better institutions and economic development The Belgian Congo state had better institutions than its two counterparts, the CFS and the postcolonial state. Certainly, it also had better institutions than all colonies of extraction because it was a “model colony” and “an investor’s paradise” (see Chapter 1). When the West and the Bretton Woods organizations emphasize better institutions or good governance as a pre-​condition for economic development, they are really encouraging the establishment of a government that protects private ownership, but also does not renege on that commitment. The first institutional arrangement is thus the protection of private assets. Although the Belgian colonial state aimed to destroy Africans’ communal ownership system, it proved to be quite friendly to the foreign private sector. This was the first channel to start the process of economic development. In this sense, “any channel that makes property rights secure for producers or entrepreneurs is likely to foster both competition and economic efficiency, since it guides incentives to achieve a greater internalization of externalities” (Alchian and Demsetz 1973: 17). The second feature of better institutions is an industrial system based on minimal state control and ownership (Chang 2011). The Belgian Congo state fulfilled this requirement as well. As developed in Chapter 5, colonial rulers let the private foreign sector run most economic activities and even allowed it to manage semi-​public enterprises to make profits. Third, the colonial state established a regime of financial regulations that encouraged prudence and stability, including a politically independent central bank, contrary to the postcolonial state whose central bank remained under presidential control. With greater stability of economic policies comes greater investor certainty, easing fears that unexpected changes in policy will render investments unprofitable (Henisz 2000). The fourth institutional arrangement is a financial system based on a stock market with easy mergers and acquisitions that ensure the best management team available to run an enterprise (Chang 2011). The Belgian Congo had a shareholding oriented corporate governance system that guaranteed the best management to head most companies. More specifically, the development and liberalization of capital markets allowed shares of more than 190 large colonial

232  Belgian Congo: comparative perspective companies to be quoted in the Brussels Stock Exchange by 1914. In the mid-​ 1950s, these shares represented 41 percent of this stock exchange (see Table 5.1). Fifth, a flexible labor market should allow a quick re-​allocation of labor in response to price changes (Chang 2011: 473). Ironically, the private sector in the Belgian Congo was against a flexible labor market that could respond to free market forces. Otherwise, mining and agricultural sectors dominated by the white minority could not have afforded labor costs and could not have been profitable in the long run. The colonial administration further depressed Africans’ wages after the institutionalization of forced cultivation of cash crops to respond to world wars’ efforts, thus adding more pressure on an already scarce labor force. Sixth is a political system that restricts arbitrary actions of political rulers and their agents through decentralization of power and the minimization of discretion for public sector agents (Chang 2011: 474). The Belgian colonial state was ruled by a large number of veto players who minimized discretionary power and rent-​seeking activities of public officials, elected or appointed. Many veto players in the polity tends to make it difficult and even costly for political appointees or elected officials to secure returns through political means. In addition, the winning coalition in the colonial state was large enough to force its leaders to supply public goods so critical for economic development. Finally, the ministry of colonies had a vision of economic development based on the theory that the Belgian Congo could develop and eventually be transformed economically. Motivated by international critics of the Leopoldian state, the elites in the ministry of colonies strove to develop the colony and to some extent they succeeded, as illustrated in more detail in Chapters 3 through 6. Economic development of the Belgian Congo was thus made possible by the visible hand of the state. The economic impetus of the 1950s even continued in the postcolonial period. Congo’s GDP of $3.8 billion in 1967 still surpassed South Korea’s GDP of $3.4 billion (World Bank 2019). When factored against population growth of about 3 percent per year, per capita GDP that stood at $2,876 in 1959, the last year of the colonial rule, had plummeted to no more than $755 a year after the 1990s (see Figure 1.3).

Supply of political order and rule of law The process of ruling the CFS was slow and costly to personal finances of King Leopold II. Despite early financial difficulties, he was able to provide some semblance of political order in western part of the CFS to help evacuate his wild products. The king used his army against domestic rivals because the 1884 Berlin Conference neutralized European powers from challenging his adventure in Central Africa. By the time Belgium annexed the CFS in November 1908, political instability was still the greatest threat in more than half of the country. The colonial state began to reform the army and the administration as early as 1910 to make them major instruments to establish political order. First,

Belgian Congo: comparative perspective  233 it professionalized the army. Second, a Weberain type bureaucracy quickly developed its autonomy in the Belgian Congo and implemented policies that were even against Brussels. Third, if London and Paris never interested their church in building colonial states, Brussels used skillfully the Catholic Church to police the natives spiritually in this process.The Church was part of the colonial trilogy, State-​Business-​Church. However, all colonial empires including Belgium used directly traditional authorities as their major instrument to control the natives and thus to build the colonial state. By the late 1920s, Brussels had provided political order in its colony, while Paris was still struggling to accomplish it. The Belgian Congo became independent on 30 June 1960. In early July 1960, its army mutinied causing panic among Europeans. Brussels unilaterally dispatched its troops on 10 July to protect Europeans and their property rather than to help the government of Lumumba to quell the mutinies that were spreading in the new republic. This Belgian military intervention destroyed the embryonic independent state leading to its early balkanization. Brussels’ military action contrasts with both British and French policymakers. London and Paris also intervened in the early 1960s in several of their former colonies but to support incumbent leaders and to stabilize the political situation. For example, the British intervened in Kenya, Tanzania, and Uganda in late January 1964 to quell army mutinies. The French also intervened in the early 1960s to stabilize Cameroon, Mauritania, Niger, Chad, and Gabon (Kisangani and Pickering 2022: 89–​97). If the Congolese army collapsed in the early 1960s, President Mobutu was able to rebuild it after taking power in late 1965. With the exception of 1966–​1976, the Congolese postcolonial army almost mirrors the Leopoldian army of looters and bandits without any esprit de corps or discipline. This also reflects the picture of many states in Francophone Africa explaining frequent French military interventions throughout the postcolonial period to stabilize them (Kisangani and Pickering 2022). Also, the Weberian colonial administration disappeared almost everywhere across Africa. With a few exceptions, the subordination of administrators to political appointees has become the norm explaining massive poverty in the continent.

Basic infrastructure for economic development Physical infrastructure When Belgium annexed the CFS in November 1908, it inherited human porterage, some 2,000 km of roads, and 680 km of railways. This infrastructure was insufficient to carry out economic activities on a large scale after geologists had discovered potential mineral wealth in southeastern Congo. Minister Franck lobbied in the parliament that promulgated the law on the “Grands Travaux” that was implemented in the 1920s (see Chapter 4). This project built roads to cover the colony, railways to transport both minerals and cash crops to the

234  Belgian Congo: comparative perspective nearest ports, and riverine transportation networks to complement the first two networks. The French Minister of Colonies Albert Sarraut also conceived a similar “Great Works” program for the French Empire. By 1922, however, France’s “empty treasury and nonpayment of the expected German reparations caused the Sarraut’s plan to be abandoned after negligible accomplishments” (Thompson 1975: 131). In other words, the contribution of France to public works in French West Africa was nil between 1914 and 1930, and only 13 percent between 1930 and 1940 (Thompson and Adloff 1975: 131). The Belgian Congo was far ahead in terms of infrastructure than the French empire and this comparative advantage paved the way to early massive inflows of Belgian capital. Another policy that contrasts Brussels from other colonial powers was the ten-​ year plan of economic development in the 1950s that further added to existing stock of infrastructure and developed an embryonic welfare state. The Belgian Congo was the only colony of extraction to have a welfare system similar to what was being developed in Europe and more specifically in Belgium. In sum, the Belgian Congo had at independence on 30 June 1960 better economic and social initial conditions than most European colonies in Africa. In 1959–​1960, for example, it had a network of 145,213 km of roads in excellent condition far ahead of the second African country, Nigeria, which had 67,000 km (Huybrechts 1970, pp. 62–​67). Fifty years after independence, Congo’s road infrastructure was less than one fourth of its 1959 length. The collapse of road infrastructure started several years after the nationalization measures of 1973–​1974 discussed in Chapter 7. By 2012, Congo had only 30,788 km1 across its land spread over 2,345,000 square km. This represents 1 km of road for more than 76 square km. Some World Bank experts explain this tragedy by arguing that low population density and extensive river network make road development particularly challenging in Congo (Foster and Benitez 2011). They also add that a large share of the land area covered by dense tropical forests and crisscrossed by rivers complicate road construction and maintenance due to the numerous bridges needed. For all these reasons, these experts conclude that “it is not entirely surprising that the country should have such a low road network density compared with other low-​income countries in Africa” (Foster and Benitez 2011: 11). These statements are misleading and ignore economic history of Congo for several reasons developed in Chapter 4. They also seem to absolve Congolese leaders of their incompetence and misdeeds by blaming the forest. Table 9.2 contrasts the national road ring in 1958 and in 2012. The Belgian Congo state built and maintained 145,213 km of roads and 579 bridges in excellent condition before independence. More specifically, some 47,670 km of these roads and 193 bridges were located in the “dense tropical forest and crisscrossed by rivers” in the following districts located in the dense rainforest: Boende, Equateur, Haut-​Congo, Ituri, Kasai, Leopold II, Lisala, and Sankuru.

Belgian Congo: comparative perspective  235 Table 9.2 State of national road ring, 1958 and 2012 Former Provinces

Kinshasa Bas-​Congo Bandundu Leopoldville* Equateur Orientale Katanga Kasai Occidental Kasai Oriental Kasai* Sud-​Kivu Nord-​Kivu Maniema Kivu* Total

Year 1958 (excellent condition)

33,406 18,535 25,463 23,400 25,208

17,857 145,213

Year 2012 Total

Good Condition

Fair Condition

251 1,744 3,777

223 1,060 1,331

19 412 725

4,019 4,790 6,070 2,572 2,720

711 1,434 2,400 230 378

657 1,047 1,324 230 620

1,653 1,218 1,974

680 527 688

396 478 562

30,788

9,662

6,470

*In 1958, Leopoldville province included Bas-​Congo and Bandundu; Kasai Occidental and Kasai Oriental were part of Kasai province; Kivu had Sud-​Kivu, Nord-​Kivu, and Maniema. Source: Belgium (1959) for 1958 and DRC, Office des Routes (2012) for 2012.

In 2012, the Congolese Agency of Roads only maintained 30,788 km of roads of which 31.4 percent or 9,662 km were in good condition and 21 percent or 6,470 km were in fair condition.The remaining 47.6 percent or 14,656 km were certainly invaded by the bush. Since Congolese leaders fixed nothing, the road network was probably down to 18,000 km by December 2020, given an annual conservative deterioration rate of 5 percent. Of 597 operational and well-​maintained bridges (69 percent made of steel) inherited from the Belgian Congo in 1959, only 13 operational bridges in good and fair condition remained in 2012 to the extent that the Agency of Roads was baptized by the population as the Agency of Pathholes (Office des Trous). In sum, many cities and towns that were connected during the colonial period became unconnected because of the sorry state of the road infrastructure. The result is that the three major economic centers of Kinshasa, Lubumbashi, and Kisangani are no longer connected and economic agents are more isolated than ever before. Table 9.3 illustrates further the Congo’s tragedy. Boldface numbers represent a deterioration rate of at least 90 percent since 1975. The first line shows the road ring in Kongo-​Central province between Luidi and Songo through Mvuangu and Kakongo. It had 85 km of an excellent and well-​ maintained road in 1959. In 2012, the Road Agency only maintained 3 km or 3.5 percent of its 1959 length. The Tshela-​Maduda-​Sumbi road of 200 km in 1959 had only 6 km in 2012. Also, the Kwilu-​Ngongo-​Kimpangu in the

236  Belgian Congo: comparative perspective Table 9.3 Selected road networks and proximity gap in km Province

Road Networks

Kongo-​ Central

Luidi-​Mvuangu-​Kakongo-​ Songo Tshela-​Maduda-​Sumbi Kisantu-​Ngidinga Kwilu Ngongo-​Kimpangu Batshamba-​Loange Bif Nationale 1-​Idiofa Mongata-M ​ siambio-B ​ andundu Bukangalonzo-​Popokabaka Penda-​Isongo-​Bolia Lisala-​Bumba-​Bunduki Lisala-​Businga Ingende-​Boende Komanda-​Bifircution National-​Kisangani Bunia-​Mahagi1 Kamina-​Kabondo dianda Kamina-​Kabongo Kolwezi-​Mutchatcha-​Kasaji Kavumu-​Minova Bukavu-​Uvira Bukavu-​Mwenga-​Kamituga-​ Kitutu-​Kalole Kananga-​Tshikapa Kananga-​Mweka Ilebo-​Mweka Mbujimayi-​Lake Mukamba Mbujimayi-​Kabinda Mbujimayi-​Mweneditu Beni-​Butembo-​Lubero Mbau-​Kamango-​Lamia Mali-​Punia-​Lubutu Kindu-​Kibombo Kindu-​Kasongo

Bandundu

Equateur

Orientale Katanga Sud-​Kivu

Kasai Occidental Kasai Oriental Nord-​Kivu Maniema

Distance (1959)

Maintenance (2012)

85

3

200 79 102 125 60 240 157 211 281 207 333 604

6 9 0 16 8 76 41 15 55 22 56 56

75 150 200 300 119 141 339

39 27 28 1 10 18 68

265 235 165 93 150 135 99 76 348 159 230

93 49 29 6 15 14 67 41 38 22 28

Source: Belgium (1959) for 1958 and DRC, Office des Routes (2012) for 2012.

same region of 102 km in 1959 no longer exists. The Katanga rich mining region exhibits the same poor road condition. For example, the axis Kolwezi–​ Mutchatcha–​Kasaji in the heart of copper-​cobalt wealth that had 300 km of road in excellent condition in 1959, but it had only one km in 2012. In brief, the forest invaded or ate the roads because the government stopped maintaining them. As expected, people barely use the road as illustrated by Table 9.4. In 1958, for example, more than 2.45 million travelers used the national infrastructure. More than 12.8 percent or 314,529 people used the roads in contrast to 1.6 percent or 14,180 people in 1970. In 2015, this number was down to 8,090

Belgian Congo: comparative perspective  237 Table 9.4 Transportation of people Types Roads   CVC   MAS   OTRACO   Others  Total Railways   OTRACO-​ CFML   Mayombe   Kivu   BCK   CFL   CVC  Total River and Lac Waterways   OTRACO   CFL   Private  Total Overall Total

1958

1970

2015

41,747 265,214 7,568 -​ 314,529

4,500 8,700 980 -​ 14,180

-​ -​ -​ 8,090 8,090

606,868 1,860 8,325 1,097,073 147,657 47,575 1,909,358

158,600 4,200 2,500 644,300 -​ 23,500 833,100

68,974 -​ -​ 95,473 -​ -​ 164,447

159,977 68,889 -​ 228,866 2,452,753

48,800 -​ -​ 48,800 872,580

-​ -​ 2,100 2,100 182,712

Sources: Belgium (1959), Zaire, Banque Centrale (1972) and DRC, Banque Centrale (2018).

because of the sorry state of the road infrastructure. This indicates a decline of more than 500 percent of travelers in a few generations. The state of the railway network is also in lamentable condition. Excluding South Africa, Congo had an operational railroad network of 4,993 km in 1959–​ 1960, while the second African country, Algeria, had 4,074 km. The situation began to deteriorate in Congo, then Zaire, in the mid-​1970s after the 1973–​ 1974 nationalizations. Most traffics declined in 1977 compared to 1959. This declining trend continued in the post-​Mobutu period. In 2015, the railway system had completely broken down, except the Kinshasa–​Matadi line that is still functioning with minimal capacity. In 1958, the railway network carried most people averaging 1.9 million as indicated in Table 9.4. This number declined over the years to average 833,100 in 1970 or 43.6 of its pre-​independence capacity. In 2015, only 164,447 people or 8.6 percent of the 1958 capacity took the train, mostly along Kinshasa–​Matadi line. As pointed out in Chapter 7, the 683-​km railway between Mungbere and Aketi in the northeast disappeared from the map in the late 1990s. Serviced by the CVC, this line served some 47,575 travelers in 1958. However, the forest had swallowed the railway because the government failed to invest in its maintenance. Finally, the Belgian Congo had more than 14,597 km of navigable waterways that functioned day and night. The second country was Egypt

238  Belgian Congo: comparative perspective with only 4,666 km (Huybrechts 1970: 66). In 1959, the Belgian Congo also possessed seven major ports on the Congo River and 49 secondary ports on lakes and major tributaries of the Congo River. They were all well-​equipped and operational day and night. Luxury ships carried passengers all year round on the Congo River, the Kasai River, and a few lakes up to the early 1970s. Some 228,866 people used these waterways in 1958 (see Table 9.4). This number declined to 48,800 in 1970 and plummeted to 2,100 in 2015. By the mid-​1980s, open barges without toilets began transporting people with many of them drowning along the way. Also, only three ports (Boma, Kinshasa, and Matadi) were operational in 2012 with equipment dating back to the colonial period. From 1930 to 1959, the colonial state spent on average 17 percent of its annual ordinary budget to maintain its vast physical infrastructure. From 1970 to 1997, President Mobutu devoted 2.63 percent a year on infrastructure, while President Joseph Kabila allocated to infrastructure a meager 0.15 percent annually from 2001 to 2018. If the plundering of Congo’s resources in the colonial period also meant a consistent supply and maintenance of physical infrastructure, this plundering continued after independence but with no public services. The catastrophic decline of physical infrastructure also means the end of the industrialization process because this process tends to rely on domestic inputs and market. Table 9.5 tells the whole story. Many manufacturing industries that existed before independence had completely disappeared in only two generations as illustrated by Figure 1.7. Human capital and healthcare Chapter 4 showed empirically the impact of education and health on economic development. Unlike its British and French counterparts that developed secondary and post-​secondary systems for a selected few Africans, the Belgian colonial state established mostly primary education and post-​primary professional schools to create a large stock of human capital to respond to economic needs of the private sector. This sector also provided job training programs and established an environment where its workers “learned by doing.” All these mechanisms increased workers’ productivity. Recent examples of developmental states show that job trainings and professional education as part of secondary curriculum is enough to acquire the necessary skills needed by most multinational corporations. Table 9.6 provides a brief evolution of enrollment in the four levels of education. If Brussels emphasized post-​primary professional schools over secondary education, the post-​colonial administrator has completely neglected this area. The percentage of students enrolled in post-​primary professional schools as a percentage of primary school students was on average 1.4 percent in 1959–​1960. It declined to 0.5 percent in the First Republic. Although it rebounded slightly to 0.7 percent in the Third Republic, it still remained below its 1959–​1960 level.

Belgian Congo: comparative perspective 239 Table 9.5 Selected manufacturing sectors and products in 1958 and 2010 Sectors Construction  Cement  Bricks  Lime   Boats, barges … Chemical industry  Acetylene  Bottles   Carbonic acid   Compressed oxygen  Explosives  Flagrance  Products  Insecticide   Paints/​varnish  Soaps   Sulfuric acid Food & beverage  Beer  Butter  Cheese   Chocolate & cookies   Cotton oil  Margarine   Palm oil   Peanut oi  Sugar Metallic industry  Barrel  Can   Nail & bolt  Suitcase  Trunk Shoes  Leather  Shoes Textile   Absorbent cotton  Blankets  Fabrics  Hosiery  Shirts   T-​shirts Tobacco  Cigarette Others  Battery

Unit

1958

2010

tons 1,000 pieces tons units

347,438 134,104 87,864 1200

489,700 0 4,400 0

tons 1,000 pieces tons m3 tons

87 8,187 961 928,813 3,141

9 17,894 0 16,000 14

kilo tons tons tons tons

189,103 568 3,789 27,464 114,861

0 0 43,096 8,971 0

hectolitres tons tons tons tons tons tons tons tons pieces kg tons pieces pieces

1,357,710 340 137 Yes 8,884 759 229,855 8,184 39,321 594,000 979,402 430 381,088 75,316

3,893,000 0 0 0 0 607 5,212 0 102,187 -​ -​

0 0 144

tons pairs

2,227 2,956,200

-​ 4,574,000

kg pieces m2 pieces pieces pieces

47,674 2,021,447 60,421,323 16,050,262 5,832,128 6,032,876

0 0 702,000 75,000 0 0

106 pieces

4,215

3,751

pieces

7,000

0

Source: Belgium (1959) for 1958 and DRC, Banque Centrale (2011).

240  Belgian Congo: comparative perspective Table 9.6 Importance of four levels of education Type

Primary (a) Post-​primary (b) Secondary (c) Superior (d) Total b/​a)*100 (b/​c)*100 (d/​c)*100

1959–​1960

1963–​1964

2013–​2014

Students

Teachers

Students

Teachers Students

Teachers

1,644,044 22,505 37,386 763 1,704,698 1.4 60.2 2.0

35,790 1,500 2,345 160 39,795 4.2 64.0 6.8

1,995,230 10,543 92,273 2,363 2,100,409 0.5 11.4 2.6

53,283 780 4,777 443 59,283 1.5 16.3 9.3

383,207 23,940 300,719 22,154 930,020 6.2 8.0 7.4

13,534,625 89,596 4,388,425 473,894 18,486,540 0.7 2.0 10.8

Source: Dupriez (1968: 381) and DRC, Institut National de la Statistique (2017: 234–​245).

The most important area is the percentage of professional school students over the secondary level. It declined from 60.2 percent in 1959–​ 1960 to 11.4 percent in 1963–​1964 as a result of government emphasis on the tertiary education after independence. It was only 2 percent in 2013–​2014. Meanwhile, the number of students enrolled in the tertiary level as a percentage of secondary students increased over time from 2 percent in 1959–​1960 to almost 11 percent in 2013–​2014. This increase in enrollment has gone concomitantly with a decline in the quality of education at the tertiary level. On healthcare, the colonial state and private companies repeatedly claimed that healthy workers meant high productivity and high returns (see Chapter 4). They understood that illness implies absenteeism and low productivity, hence low production and less profits. As a result, the first state policy was its emphasis on preventive system such as vaccination, the supply of potable water, and nutrition. If the postcolonial state had invested almost nothing in these areas of healthcare, the colonial state invested massively in preventive healthcare. For example, the vaccination of people reached most corners of the Belgian Congo and its rate was far ahead of most colonies in Africa. The French introduced yellow fever vaccination in their colonies in the late 1930s, but it had reached only 1 percent of the population by 1940, almost all in towns (Cocquery-​ Vidrovitch 1986: 370). The Belgian Congo had a widespread program of yellow fever vaccination that already reached most villages by the late 1930s. Also, itinerant medical groups in the Belgian Congo carried out vaccination campaigns in remote areas against tuberculosis, smallpox, yellow fever, polio, and the triad diphtheria/​tetanus/​whooping-​cough.This type of program never existed in both British and French colonies. The Belgian colonial state also emphasized nutrition. If it made the Belgian Congo almost self-​sufficient in food staples by the early 1950s, with food imports averaging only 190,000 metric tons in 1959, the postcolonial ruler has failed to achieve the same goal even though the country has climates that favor cultivation of food year round. Congo has a combination of plentiful

Belgian Congo: comparative perspective  241 rainfall, a wide range of climate zones in different parts of the country, forests stocked with wildlife, and rivers abundant with fish. It holds a vast potential for meeting its domestic nutritional needs and even making the country an important African food exporter. Although this potential was well exploited before independence, in many cases through compulsory labor, it has unfortunately remained relatively untapped and unexploited in the postcolonial period. One example is the production of palm oil, which is a major source of vitamin A.2 Its production has ceased in many parts of the country. According to Figure 9.1, the production of palm oil averaged 224,264 tons a year in the second half of the 1950s, with exports averaging 152,547 tons per year.3 This left some 71,717 tons a year for domestic consumption. The production of palm oil declined over the years to represent 90,000 tons in the 1970s. From being the second producer and exporter of palm oil after Nigeria, Congo has become a net importer of palm oil since the late 1980s. This decline is the result of many factors but the most important is the absence of an adequate food policy. For example, the colonial program of re-​ planting palm fruit trees has completely disappeared, although it was quite modest, averaging 15,000 hectares in the early 1980s compared to 107,000 hectares in 1959; the Belgian Congo had 40,000 hectares of new plantations and 96,000 of natural palm fruit trees (Bézy, Peemans, and Wautelet 1981: 140). By the late 1970s, 32 percent of plantations were more than 20 years old,

Figure 9.1 Production and exports of palm oil in metric tons

242  Belgian Congo: comparative perspective

Figure 9.2 Production of cassava per capita

29 percent were between 15 and 20 years old. Naturally grown palm fruit trees in the three former provinces of Bandundu, Bas-​Congo, and Equateur have drastically declined by the early 1980s and farmers only produce enough for their own consumption and for local markets. The production of cassava illustrates further the declining trend of food production as a result of the government’s neglect of agriculture. Cassava is a major staple in the country’s diet and grows almost everywhere with little effort. Figure 9.2 shows its evolution since the mid-​1940s. It averaged more than 575 kg per capita a year in the 1950s. Despite a major drop in the early 1960s, it increased to 480 kg per capita before the mid-​1990s. The production of this staple consumed across Congo began its declining trend in 1999. At the curative level, Chapter 4 describes the colonial healthcare system as the best in tropical Africa. It reached most corners of the Belgian Congo. The distance to a health facility in the colony averaged between five and ten kilometers. This is in dire contrast to most colonies. For example, the average distance to a health center in Dahomey, which was also “the best-​served territory after the war,” was 50 km on the coast, 100 to 150 km in the central region and as much as 300 km in the north (Cocquery-​Vidrovitch 1986: 369). While most health facilities in the Belgian Congo were made of durable materials, most health facilities in the outposts of the French colonial empire were “usually huts of beaten earth” (Cocquery-​Vidrovitch 1986: 368).

Belgian Congo: comparative perspective  243 Table 9.7 Number of health facilities in 1957 and 1974 Types

Year 1957

Year 1974

State

Companies

Missions

State

Private

Missions

Hospitals Dispensaries Peripheral facilities Specialized facilities

172 1,183 2,560 36

105 726 -​ -​

145 251 -​  54

 82  28 -​  12

27  5 -​ -​

 95 586 -​  12

Total

3,951

831

450

122

32

693

Sources: Kivits (1992: 128–​129).

Table 9.7 compares the number of health facilities in 1957 and 1974. The choice of 1974 is the fact it is the last period of economic prosperity in the postcolonial period (Kisangani 1997). In 1974, Zaire had no more than 847 health facilities compared to 5,232 in 1957. Some 693 or 82 percent of them were run by missionaries, in contrast to 1957 when the colonial state operated 3,951 health facilities or 76 percent of the total health infrastructure. The state managed 1,183 dispensaries in 1957, but it was in charge of only 28 colonial relics in 1974. Given a population of 13,540,182 in 1958 and 22,658,905 in 1974, the Belgian Congo had 37 health facilities per 100,000 people in 1957 compared to only 4 per 100,000 in 1974. By 2018, more than 90 percent of state health facilities had been abandoned while state hospitals in a few major cities were without sanitation, running water, and medicine. The postcolonial state has completely vanished in the healthcare sector. It had abdicated its responsibility in healthcare altogether after the mid-​1970s, leaving the bulk of healthcare in the hands of Catholic and Protestant missions. By 1974, people in rural areas had to travel at least 65 km, on average, to reach a health facility. In December 2018, Congo had only a few operational private hospitals mostly located in Kinshasa, Lubumbashi, and a handful of major cities in a country that had the best healthcare system in the 1950s. As one student of Congo’s history highlights: The Belgian colonist exploited the country …; he used violence, repression … In return, however, he created jobs, he provided healthcare, built schools, hospitals, he opened up roads and put in place basic services and infrastructure for development. However, the black colonist, the Congolese, has destroyed what the Belgian left; he has misappropriated resources of the country, he has created no jobs, he has not paid state employees, he has built nothing, he has killed and used arbitrary rule, he has sold off the sovereignty of Congo, he has impoverished his people and country. ​(Bangenda 2003: 47)

244  Belgian Congo: comparative perspective

Property rights Before the advent of Europeans in Africa, communal ownership dominated the continent with vast unoccupied lands reserved for hunting and collecting wild products. Like other European rulers, King Leopold II appropriated all these so-​called vacant lands. The annexation of the CFS to Belgium in late 1908 never changed this land policy. The colonial state only liberalized it by giving the foreign European minority an easy access to large tracks of land. The same scenario occurred in colonies of temperate climate in other colonial empires. The story was different in colonies with hot climate where landownership was restricted in real or supposed interests of Africans. In most British colonies in West Africa, “the whites were confined to leasing land for mining and timber use” (Duignan and Gann 1975: 12). The same occurred in French West Africa where little land was alienated and only a few land concessions were granted. Thus, the economy of West Africa was mostly based on peasant farming, not on large plantation concessions like in the Belgian Congo. The implication of peasant farming in West Africa meant little foreign capital in agriculture and less impact overall since most of these farmers never received any subsidies from the colonial state. By the eve of the Second World War, European properties in West Africa “covered only 75,000 hectares, mainly in the Ivory Coast and Guinea” (Thompson and Adloff 1975: 140). The story in Equatorial French possession was different, however. The government ceded huge land areas to a few European companies in the 1880s and even granted them monopoly of their production and control over their lands “on condition that they respect African customary rights and undertake works of public utility;” the result was disastrous in both economic and human terms (Thompson and Adloff 1975: 140).The last concessionary company disappeared in 1929 in the French empire. In sum, France was reluctant to grant large concessions of land to foreign enterprises. As a result, European concessions were no longer a burning issue in French colonies by 1945, but they remained a major issue in the Belgian Congo until the eve of independence. One additional area that separated the Belgian Congo from other colonies was the level of state control and ownership. Brussels continued to reaffirm its commitment to market principles after the 1920s, while other major colonial powers adopted state control policies. One good example of state control is Great Britain. Contrary to Belgium that reaffirmed no state control in the economy, Great Britain moved from a system of free trade before the 1930s to a system of full protection in the early 1930s and expanded further the reach of the state in most areas. Bauer (1953: 644) lists the following British state controls after the 1920s: state monopoly of the export of the major cash crops, as well as other branches of trade and industry; the establishment of many state-​owned and –​operated enterprises …; official prescription and definition of the numbers and categories of traders permitted to operate in certain areas and

Belgian Congo: comparative perspective  245 of the commodities that could be traded; extensive licensing of commerce and industrial activities, including imports, exports and foreign exchange … Unlike the Belgian system where private companies bought and exported cash crops, the British government established state exporting monopolies of non-​ mineral commodities known as state marketing boards in the early 1930s. They had sole right to purchase cash crops at fixed official prices and to export them. These boards were able to cash in huge profits as a result of the difference between low producer prices and competitive world market prices, in contrast to the Belgian Congo where private companies benefited enormously from these price disparities. The most far-​reaching consequence of state marketing boards in the British colonies was that “the huge sums collected by the state export monopolies passed through the hands of administrators and politicians” who usually tended to regard these huge sums of money “as instruments for the promotion of their personal interests or political power” (Bauer 1953: 649). All these adverse effects of state control were manifest throughout British Africa in the terminal years of colonial rule. These monopolies continued after independence that turned “West African polities into kleptocracies … This diversion of energy from economic activity to political life inhibits economic progress” (ibid.: 650). Like the British, Mobutu also created hundreds of state marketing boards after his 1974 nationalization policies. As a result, most large companies that roamed in the Belgian Congo and provided jobs, healthcare, children’s education, and retirement benefits to millions of people also disappeared by the mid-​1970s. Table 9.8 illustrates this tragedy. Only 2,426 companies employing at least 100 workers existed formally in 1984 compared to 23,292 in 1958. This represents an astronomical decline of 860 percent in just one generation. Agriculture as the largest productive sector in the colony had 12,771 companies or 54.83 percent of total. Although this sector represented 49.7 percent in 1984, it had only 1,206 private companies in nominal terms. This represents only 9.4 percent of the colonial agricultural infrastructure. The Belgian Congo had 490 companies per 100,000 people in the labor force at the end of colonial rule compared to only 14 companies per 100,000 potential workers in 1984. Mining, manufacturing, and economic development If the mines had a developmental effect in the Belgian Congo and Southern Africa, it never had the same impact in West African colonies that relied mostly on artisanal mining. Individual African diggers in West Africa remained important and their share of output was sometimes much greater than that of foreign companies (Katzenellenbogen 1975: 380). For example, diamond output in the Gold Coast from mining companies was 2.69 million carats from 1949 to 1953 in contrast to 3.10 million from African diggers (Pedler 1975: 101). The dominance of artisanal mining meant low level of investments from Europe and hence a low level of technology transfer in the mining sector.

246  Belgian Congo: comparative perspective Table 9.8 Number of private companies employing at least 100 workers Types of activities Agriculture Forestry, forest exploitation & wood industries Fishing Mining and Metallic activities Food industries Beverage and tobacco industries Textile, cloth and leather industries Paper industries, printing and editing Chemical industries Industries of non-​metallic mineral products Industries of metallic products, machines & material Other manufacturing industries Total (a) Labor force (b) [(a/​b) * 100,000]

1958

1984

12,771 1,081 311 298 2,617 69 418 70 118 1,915 1,038 2,586 23,292

1,206 245 23 31 569 26 68 81 60 47 59 11 2,426

4,748,762 490

16,411,737 14

Sources: for 1958 see Belgium (1959: 212–​213); for 1984 see Zaire, Banque Centrale (1988: 7).

Thus, most alluvial diamonds that Africans dug in Sierra Leone found their way to Liberia and Guinea through African smuggling circuits swelling those countries’ diamond export figures (O’Connor 1971: 82). It was only in 1932 that the British government gave a monopoly over the exploitation of the diamond sector to the Sierra Leonne Selection Trust. Contrary to the British government in West Africa, the Belgian colonial state initiated the exploitation of diamond in the Belgian Congo by conferring exclusive monopoly to one of the 1906 companies, the Forminière. It received large concessions of land in the Kasai region rich in diamonds. Other companies followed later with massive FDI from Belgium. The tin mine deposits in Nigeria also never attracted massive British investments for the same reason. Thus, 39 firms were operating in addition to 75 private operators (Katzenellenbogen 1975: 381). Therefore, early transfer of transportation technology never had any economic impact in West Africa. In addition, the Belgian Congo had a more developed mining sector than the French West Africa for the obvious reason that no effort was made during the colonial period to develop the mineral sector in the French empire. The French government established its first agency to promote prospecting and mineral development only in 1948 (Katzenellenbogen 1975). By 1948, the mining sector in the Belgian Congo had already earned billions of dollars in value-​ added. The consequence was that the French empire never benefited from the mining sector long enough to have the same level of economic development similar to the Belgian Congo. The postcolonial period experienced the same booming of the mining and the manufacturing sectors until President Mobutu nationalized them and

Belgian Congo: comparative perspective  247 deregulated the mining sector in the early 1980s. By the late 1980s, artisanal mining enclaves that have no added-​value in the economy have replaced most industrial mining companies. Thus, the post-​1970s period shows an economy that has moved backward in terms of its productive capacity. More specifically, the mining sector has moved from a mining and metallurgical sector connected to industrialization and high value-​added economic activities “to extractive artisanal mining associated with low-​tech alluvial production” (Exenberger and Hartmann 2013: 32). Peamans (1997: 163–​165) has drawn attention to the emergence of a Zairean “state bourgeoisie,” which was the class that benefited from the enlargement of the state sector and the take-​over of foreign trade and service enterprises in 1973–​1974. This idea of “state bourgeoisie” is appealing but inappropriate. The existence of a bourgeoisie implies wealth creation and accumulation.The political elite in Congo never created wealth, but only squandered it.

Revenue imperative, state building, and economic development King Leopold’s search for revenue was the first step to build state capacity. He paired the CF to gold to establish an accounting system, but the economy remained a barter system where people paid their taxes in kind. Minister of Colonies Renkin changed this system of revenue mobilization by ending Leopoldian tax in kind. The CF remained stronger than the BF during the entire colonial period because the colonial economy was stronger than the metropole’s economy. However, the two currencies were linked at equal parity. In the 1950s, both were exchanged for 50 CF/​BF to one US dollar (see Figure 9.3). The stability of the CF reflected the colonial strong economy and fiscal discipline after the Second World War.This discipline helped to avoid large deficits that could have led to hyperinflation and balance of payment crises. Budgetary equilibrium influenced the mobilization of financial resources because it forced state managers to establish a powerful autonomous system of revenue collection to cover colonial expenses. According to Table 9.9, colonial administrators seemed to have spent wisely enough that their fiscal discipline produced manageable deficits before the 1950s and a budget surplus of $216.7 million in the 1950s.4 The result was low inflation averaging only 1.08 percent a year in the 1950s (UN 1962). The Belgian Congo was unique in this regard compared to other colonies that were costly to their metropoles. Political instability and the country’s balkanization in the first half of the 1960s changed this colonial fiscal discipline as the government kept financing its massive deficit by printing money.The deficit increased to an unprecedented level in the Second Republic, especially in the 1970s. This situation began after the 1973–​1974 nationalization policies that resulted in major losses of sources of revenue. Laurent Kabila was sworn in as president on 29 May 1997, but he was assassinated on 16 January 2001. He ran a budget deficit of $8.61 billion

248  Belgian Congo: comparative perspective

Figure 9.3 Index of Congolese currency with respect to the BF (1950–​1960=​100) Table 9.9 Ordinary revenue and expenditure in Congo, 1885–​2018 (million) Years

1885–​1890 (G) 1891–​1900 (G) 1901–​1908 (G) 1910–​1919 (G) 1920–​1929 (B) 1930–​1939 (B) 1940–​1949 (B) 1950–​1959 (B) 1961–​1969 (Z) 1970–​1979 (Z) 1980–​1989 (Z) 1990–​1993 (Z) 1994–​1997(NZ) 1998 -​-​2000 (F) 2001–​2010 (F) 2011–​2018 (F)

Ordinary Revenue

Ordinary Expenditure

Deficit or surplus ($)

Local currency*

$2015 = ​ 100

Local currency*

$2015 = ​ 100

$2015 =​ 100

15.7 118.3 223.5 260.4 1,599.3 5,080.2 16,320.0 88,933.0 718,500.0 6,575,400.0 788,007.8 3.486E+​09 1.802E+​07 14,293.2 8,385,500.0 36,416,000.0

84.2 677.7 1,280.3 1,491.6 1,694.9 2,787.8 4,327.4 15,481.6 16,488.5 36,028.5 22,502.1 3,552.3 1,812.0 8,875.7 20,880.1 32,803.0

14.7 119.9 212.0 289.6 2,759.0 6,912.0 16,383.0 87,688.0 892,000.0 10,325,000.0 952,909.6 1.387E+​10 6.043E+​07 28,161.1 13,545,000.0 47,556,000.0

78.1 686.8 1,214.4 1,680.3 2,923.8 3,793.1 4,344.1 15,264.9 23,078.5 58,295.5 26,853.9 9,475.4 2,147.6 17,486.8 33,727.3 43,663.0

6.1 -​9.1 65.9 -​188.7 -​1,228.9 -​1.005.3 -​ 16.7 216.7 -​6,590.0 -​22,267.0 -​4,351.8 -​5,923.1 -​335.6 -​8,611.1 -​12,847.1 -​10,860.0

*G=​Latin gold franc, B=​Belgian franc, Z=​zaire, NZ=​new zaire, and F=​Congolese Franc.

Belgian Congo: comparative perspective  249 (2015=​100) in only two years, while Mobutu ran a deficit of $34.9 billion in 32 years or $2.18 billion once every two years. The same patterns continued under Joseph Kabila. From 1960 to 2018, postcolonial leaders built a colossal deficit of at least $61.76 billion in 58 years in contrast to a colonial deficit of only $2.23 billion in five decades, from 1909 to 1959. The colonial deficit thus represents a tiny 3.61 percent of the postcolonial deficit. The Congolese currency also followed this policy to finance budget deficits by printing money. For example, the government devalued the currency twice in the early 1960s that reduced its value by 95 percent in order to increase exports and thus the tax base. From 1961 to 1996, cumulative official devaluations of the national currency mounted officially to a net loss of more than 859.26 percent with respect to the BF (see Table 9.10). Unending cycles of devaluation Table 9.10 Evolution of official exchange rate, 1950–​2018 Period or year

Equivalent to $1.00

Official devaluation Percentage change

1950–​1959 1960 1961 (devaluation) 1963 (devaluation) 1967 (devaluation) 1971 (dollar devaluation) 1973 (dollar devaluation) 1976 (devaluation) 1978 (1 November) 1978 (7 November) 1978 (27 November) 1979 (January & August devaluations) 1980 (devaluation) 1981 (devaluation) 1983 (devaluation) 1988 (March) 1988 (November) 1991 1993 (October) 1998 (devaluation) 1999 2000 (devaluation/​June & October) 2001 2005 2010 2014 2018

Cumulative (1960=​100)

50.00 francs 50.00 francs 65.00 francs 150.00 francs 500 francs =​0.50 zaire 0.50 zaire 0.50 zaire 1.00 zaire 1.11 zaire 1.22 zaire 1.34 zaire 2.66 zaires

0.00 0.00 30.00 65.00 233.33 (7.89) (10.00) 100.00 11.00 10.00 10.00 50.00

100.00 100.00 130.00 195.00 423.33 431.22 441.22 541.22 552.22 562.22 572.22 622.22

3.85 zaires 5.56 zaires 29.90 zaires 162.00 zaires 228.00 zaires 15,578.00 zaires 9,090,909.09 zaires =​3.03 NZ 138,000 NZ =​1.38 CF 4.50 CF 50.00 CF

44.74 40.00 80.00 10.00 10.00 48.00 4.30

666.96 706.96 786.96 796.96 806.96 854.96 859.26

-​ -​ 112.80

859.26 859.26 972.06

84.00 -​ -​ -​ -​

1,056.06 1,056.06 1,056.06 1,056.06 1,056.06

315.00 CF 474.00 CF 906.22 CF 920.22 CF 1,690.00 CF

250  Belgian Congo: comparative perspective and inflation also resulted in exchange rates inimical to FDI because an unstable currency is both an inadequate means of economic transactions and a poor monetary instrument for storing wealth. Unlike the postcolonial state that had no tax policy to develop the economy, the colonial state used tax policy to start the IS process, to build the state, and to finance its spending. As Young (1994, p. 35) pointed out, the “revenue imperative of African colonial governments was a precondition for establishing European hegemony as it not only provided the necessary resources, but also symbolized the authority and the legitimacy of the colonial state.” Colonial fiscal systems were functional in turning Africans into governable people (Bush and Maltby 2004). According to some critics of the colonial state, this portrayal of colonial states as “near absolutist” overlook much of the practical limitations to their political, economic, and military power (Frankema 2011: 137). Herbst (2000: 73) has argued that the colonial state in Africa was a prototype “Night watchman state, performing a minimum set of tasks at minimum costs.” If this view of the minimalist colonial state can describe many European colonies in Africa, it does not reflect the Belgian colonial state. The power that European administrators gave traditional and appointed chiefs in the Belgian Congo to collect taxes and recruit labor from the villages was far from the Night watch state (Young and Turner 1985: 35). Table 9.11 summarizes revenue collections from the CFS to the postcolonial state to illustrate the effectiveness of the colonial tax system. Although the CFS was able to collect 30.3 percent of its revenue from non-​taxes, direct taxes represented the bulk of its revenue averaging 47.1 percent of total revenue in the early periods of state-​building. More specifically, the tax incidence fell mostly on Africans. Of course, it was not the provision of public goods that explained compliance at that time because the CFS did little in this regard. The scarcity of tax handles, such as monetary income, which characterized the early days of state building required excessive use of force in a non-​monetized economy as discussed in more detail in Chapter 2.

Table 9.11 Summary of revenue in percentage of total revenue

Period

Direct taxes (major source)

Indirect taxes (major source)

Nontax (major source)

CFS

1885–​1908

Belgian Congo

1909–​1959

DRC

1960–​2015

47. 1 (Africans) 32.0 (private companies) 31.8 (state-​owned enterprises)

22.6 (exports) 35.7 (exports) 54.6 (imports)

30.3 (state portfolio) 32.3 (state portfolio) 13.6 (others)

Belgian Congo: comparative perspective  251 The postcolonial state collected its revenue mostly from import duties that had no developmental purpose and remained only a fiscal instrument to collect revenue. The postcolonial state also relied on printing money and foreign aid to finance its huge deficits. In contrast, the tax structure in the Belgian Congo reflects its developmental features. The colonial state distributed the collection of its revenue almost evenly, one third from each of the three parts of revenue structure. This seems to be perhaps the magic formula in the collection of revenue for developmental purposes. The same argument can also be applied to the spending side of the equation. The proponents of the minimalist and extractive perspectives have suggested that colonial public expenditures were geared towards securing colonial order for perhaps different reasons (Frankema 2011). One was that the allocation of public resources was the result of underdeveloped fiscal systems leaving little resources for social spending. The other could have simply been that spending options were deliberately neglected by colonial authorities. Contrary to many colonial powers, the linkage between tax revenue and spending on public goods show that the Belgian Congo state was developmental. Although it was a highly “extractive state” in terms of taxation, its “comparatively high tax levels were used to finance public goods that supported the accumulation of physical and human capital and enhanced economic development” (Frankema 2011: 138). In fact, spending on political order averaged only 7.7 percent a year of ordinary budget from 1915 to 1959, while spending on physical infrastructure and health averaged 13 percent and 9 percent, respectively. Education took almost 5 percent because the Belgian ruler was only interested in developing mass primary education and professional schools to respond to colonial economic interests. In sum, basic infrastructure accounted for 27 percent of the colonial budget in the Belgian Congo, while it was far lower in most colonies in Africa.

Notes 1 See DRC, Office des Routes (2012). 2 A key feature of vitamin A in health is to maintain a high level of immune system and cell growth. 3 For sources of the data refer to Belgium (1952–​1959, annual), from 1960 to 1971 2010 refer to DRC, Banque Centrale, op. cit., Zaire, Banque Centrale, op. cit. 4 The parity between the Latin gold franc and the BF was as follows: 1.00 (1914), 0.25 (1919–​1923), 0.20 (1924–​1925), 0.16 (1926), 0.13 (1927), and 0.03 franc gold (1945–​ 1959). Other conversions were also involved in terms of decades such as follows: 1.00 (1885–​1910), 0.625 (1919–​1919), 0.185 (1920–​1929), 0.0958 (1930–​1939), 0.0457 (1940–​1949), and 0.03 (1950–​1959). See Stangers (1957, p. 318). Data to make the table are from three sets of sources: 1) for the CFS see Huybrechts (1970); for the colonial period refer to Belgium, Annuaire Statistique de la Belgique et du Congo Belge (Brussels: 1911–​1960, annual); 3) for the postcolonial period see DRC, Banque Centrale (1964–​1971, 1997–​2019) and Zaire, Banque Centrale (1972–​1996).

252  Belgian Congo: comparative perspective

References Alchian, A. and Demsetz, H. (1973) “The Property Rights Paradigm,” The Journal of Economic History 33(1): 16–​27. Bangenda, P. (2003) Le Congo Malade de ses Hommes. Crimes, Pillages et Guerres, Brussels: Editions Luc Pire. Bauer, P.T. (1953) West African Trade: A Study of Competition, Oligarchy and Monopoly in a Changing Economy, Cambridge: Cambridge University Press. Belgium, Ministère des Colonies (1931–​1954, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1930–​1953) Présenté aux Chambres Législatives, Brussels: F.Van Gompel, Editeur. Belgium, Ministère des Colonies (1955–​1959, annual) Rapport sur l’Administration de la Colonie du Congo Belge pendant l’Année X (1954–​1958) Présenté aux Chambres Législatives, Brussels: Etablissements Généraux d’Imprimerie, S.A. Bézy, F. (1957) Problèmes Structurels de l’Economie Congolaise, Louvain-​la-​Neuve: Presses Universitaires de Louvain. Bézy, F., Peemans, J.-​P., and Wautelet, J.-​M. (1981) Accumulation et Sous-​ Développement au Zaïre 1960–​ 1980, Louvain-​ la-​ Neuve: Presses Universitaires de Louvain. Chang, H.-​J. (2011) “Institutions and Economic Development: Theory, Policy and History,” Journal of Institutional Economics 7(4): 473–​498. Coquery–​Vidrovitch, C. (1986) “French Black Africa,” in A.D. Roberts (ed.) The Cambridge History of Africa. Volume 7 from 1905 to 1940, Cambridge: Cambridge University Press, pp. 329–398. DRC, Banque Nationale (1964–​ 1871, 1997–​ 2019, annual) Rapport Annuel, Kinshasa. DRC, Institut National de Statistique (2017) Annuaire Statistique 2015, Kinshasa. DRC, Office des Routes (2012) Rapport Annuel de l’Etat des Routes 2012, Kinshasa. Duignan, P. and Gann, L.H. (1975) “Economic Achievements of the Colonizer: An Assessment,” in P. Duignan and L. H. Gann (eds.) Colonialism in Africa 1870–​1960, Cambridge: Cambridge University Press, pp. 673–696. Dupriez, G. (1968) “Legislation et Marché du Travail,” in M. Norro and H. Leclercq (eds.) Indépendance, Inflation, Développement: L’Economie Congolaise de 1960 à 1965, Paris: Mouton, pp. 249–335. Exenberger, A. and Hartmann, S. (2013) “Extractive Institutions in the Congo: Checks and Balances in the Longue Durée” in E. Frankema and F. Buelens (eds.) Colonial Exploitation and Economic Development: The Belgian Congo and the Netherlands Indies Compared, London: Routledge, pp. 18–40. Foster, V. and Benitez, D.A. (2011) “The Democratic Republic of Congo’s Infrastructure. A Continental Perspective.” Policy Research Working Paper 5602, Washington, D.C.: World Bank. Frankel, S.H. (1938) Capital Investment in Africa, London: Oxford University Press. Frankema, E. (2011) “Colonial Taxation and Government Spending in British Africa, 1880–​1940: Maximizing Revenue and Minimizing Effort,” Explorations in Economic History 48: 136–​149. Henisz, W.J. (2000) “The Institutional Environment for Economic Growth,” Economics and Politics 12(1): 1–​31. Herbst, J. (2000) States and Power in Africa: Comparative Lessons in Authority and Control, Princeton: Princeton University Press.

Belgian Congo: comparative perspective  253 Huybrechts, A. (1970) Transports et Structures de Développement au Congo : Etudes du Progrès Economique de 1900 à 1970, Paris: Mouton. Katzenellenbogen, S.E. (1975) “The Miner’s Frontier, Transport and General Economic Development,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​1960. Volume 4 The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 360–428. Kilby, P. (1975) “Manufacturing in Colonial Africa,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​ 1960. Volume 4 The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 470–520. Kisangani, E.F. (1997) Zaire after Mobutu, Helsinki: The United Nations University, World Development for Development Economic Research. Kisangani, E.F. and Pickering, J. (2022) African Interventions: State Militaries, Foreign Powers, and Rebel Forces, Cambridge: Cambridge University Press. Kivits, M. (1992) “Développement des Services de Santé,” in P.G. Janssens, M. Kivits, and J. Vuyleskeke (eds.) Médecine et Hygiène en Afrique Centrale: De 1885 à Nos Jours, Brussels: Fondation Roi Baudouin, pp. 83–160. O’Connor, A.M. (1971) The Geography of Tropical African Development, Oxford: Oxford University Press. Pedler, F. (1975) “British Planning and Private Enterprise in Colonial Africa,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​1960. Volume 4 The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 127–164. Thompson, V. (1975) “French Economic Policy in Tropical Africa,” in P. Duignan and L.H. Gann (eds.) Colonialism in Africa 1870–​1960. Volume 4: The Economics of Colonialism, Cambridge: Cambridge University Press, pp. 95–126. United Nations (1962) Survey of African Economies, New York: UN Publications. World Bank (2019) “World Development Indicators,” databank.worlbank.org/​source/​ world-​development-​indicators. Young, C. (1994) The African Colonial State in Comparative Perspective, New Haven:Yale University Press. Young, M.C. and Turner, T. (1985) The Rise & Decline of the Zairian State, Madison: The University of Wisconsin Press. Zaire, Banque Centrale (1972–​1996, annual) Rapport Annuel, Kinshasa.

Conclusion

Getting to Denmark1 Bazali bandoki, ba demons”2 (Popular label of Congolese leaders in Kinshasa) “Le Congo, l’enfer sur terre pour les Congolais”3

“Denmark” is Francis Fukuyama’s allegory of a well-​governed, peaceful, prosperous, and uncorrupted place. It captures some aspects of the Belgian Congo after the Second World War. Economic growth averaged 5.2 percent a year in the 1950s. Inflation was on average 1.08 percent a year. The private sector provided 80 percent of employment and the state role in the economy was minimal. The Belgian Congo was almost a welfare state in the 1950s similar to the same system that was being developed in Belgium.The Belgian Congo also had the most physical infrastructure in Africa and the best healthcare in tropical Africa. It was one of two most industrialized countries in Africa and produced a pie that was large enough to help people live decently in the 1950s. In one of his famous songs, the father of the Congolese modern music Antoine Wendo described the post-​war Belgian Congo as Poto Moindo or “Black Europe.”The Belgian Congo was truly “getting to Denmark” or to Poto in the 1950s. Poto means Europe in Lingala national language. It came from Portugal, the first European country that became acquainted with the people of African Atlantic coast in the fifteenth century. Fifty years after independence, this African “Denmark” had disappeared, although it started with the best initial economic and social conditions on 30 June 1960 than most colonies in Africa. Since the early 1980s, most Congolese dream to live in Poto or in the West. Poto implies good life and success even if it means doing menial paying jobs. Congolese call these jobs in Lingala, kobeta libanga, which literarily translates into “hitting the rock.” Thus, hitting the rock in the West is far better than to remain in Congo described as “hell on earth.”4 The Denmark of the post-​war has become hell in the postcolonial period. Congolese now label their leaders as “sorcerers and demons” as highlighted above. This “hell on earth” has also become a bad place to do business. Thus, the argument developed in this book is that economic development is unlikely without sufficient supply of public goods. The Belgian Congo state DOI: 10.4324/b23045-10

Conclusion  255 supplied these public goods because it was a relatively strong and autonomous polity than its two counterparts, the Leopoldian and postcolonial states. Its most important characteristics included a vision of development, an effective bureaucracy in the Weberian sense, some interdependence between the state and major owners of capital, and a strong infrastructural power to penetrate society, but limited autonomy. The Belgian Congo state was a real coordinated political entity that developed an economic signaling device to create a market friendly environment. It directed the economy with a friendly hand. It also identified national economic goals and operated with various degrees of pressure to urge the private sector to act in accordance with state goals. This environment not only attracted massive FDI, but it also fostered industrialization and economic diversification. The result was economic development for decades. Of all public goods supplied by the colonial state, the first and most important was political order and the rule of law as developed in Chapter 3. It was not until the annexation of the CFS to Belgium in 1908 and the formation of a professional army that political order was established by the early 1920s. Unlike the CFS and the postcolonial state, the colonial state also relied upon the Catholic Church to police citizens voluntarily because the church was in every corner of the colony given its social and educative services. It was close to the governed than white administrators.The rule of law was implemented only after the state had professionalized its army, provided political order, organized the state apparatus with an autonomous colonial administration to counterbalance the ministry of colonies in Brussels, and established friendly relations with the big business. Unless political order is established, other public goods will not be adequately supplied. Political order is thus a precondition to foster economic development. Even advocates of a relatively minimalist role for the state acknowledge that governments need to do more in those areas where markets alone cannot rely upon.The lack of political order explains poor economic performance of many postcolonial African countries including the DRC. Of course, the colonial ruler was not a benevolent Leviathan. The main goal of colonial state managers was to protect their most important clients, Belgian corporations that had mobile assets to exploit efficiently the colonial natural wealth. These corporations always remained a credible threat should they had decided to disinvest from the Belgian Congo if the state had reneged on its promise to protect private assets. The private sector was a powerful group that constrained state power. Thus, the state-​building process requires the institutionalization of key veto players to minimize political opportunistic behaviors and the enlargement of the winning coalition to supply public goods. Contrary to the Belgian Congo state, the Leopoldian state was a prototype of personalist regime with a small winning coalition of friends and military officers.The same picture emerged five years after independence. As discussed in Chapters 7 and 8, Mobutu (1974–​1996) and the Kabilas (1997–​2018) governed the DRC with small winning coalitions with economic disaster.

256 Conclusion The fourth chapter developed the role of basic infrastructure as the engine of economic development. First was the transfer of transportation technology that started during the CFS on a small scale to facilitate King Leopold’s exports. This transfer began with the construction of ports and railways that involved mostly the private sector. In contrast to the CFS, the colonial state implemented the program of “Grands travaux” in the 1920s to build infrastructure and the first plan of economic development in the 1950s to develop more infrastructure, to invest in research for development, and to establish a welfare state. The two programs required the state to innovate, create new management organizations such as statistical services, develop new administrative techniques including long-​term previsions and coordinate among different services to achieve state goals. The results were quite positive because the colonial bureaucracy was an effective corps characterized by a meritocratic recruitment system that minimized rent-​seeking behavior and opportunistic behaviors. Each generation of colonial bureaucrats, for perhaps self-​interested or nationalist motives, made a commitment oath to hand down to the next generation of colonial bureaucrats a greater, better, and a more economically prosperous Belgian Congo than it was handed down to them. The emphasis upon this type of accountability was to generate a change in bureaucratic culture and the incentives that public employees face in their routine job. Physical infrastructure paved the way to two centers of economic growth, Leopoldville and Elizabethville with different backward and forward linkages. By the mid-​1950s, the Belgian Congo was already in the second phase of industrialization like the production of capital goods or export-​led industrialization because the production of consumer goods for the national market began to stagnate. Unfortunately, several events pushed back the clock of this industrialization and thus economic development. Among them, the unexpected rapid decolonization process and political instability of the early 1960s as developed in Chapter 7. A second area to benefit from technology transfer was the energy sector. The Belgian ruler used what the colony had the most abundant, waterfalls, in order to supply hydroelectric energy. As the industrialization process proceeded and population grew, the colonial state responded adequately to accommodate the rising demand for energy that sustained economic development. By the early 1980s, however, the lack of maintenance had taken a heavy toll on old equipment with devastating effects on the supply of energy. Cities that had power in the last decade of the colonial period had no power by the time Joseph Kabila left office in late 2018. Most capital cities have returned to the early years of the colony without electricity despite Congo’s potential hydroelectric power estimated at 100,000 MW and capable to light the whole continent. The final set of basic infrastructure includes education and healthcare. These two public goods were not on King Leopold’s menu since his efforts were concentrated on military campaigns against internal rivals to monopolize the

Conclusion  257 collection of wild products. However, the colonial state developed primary education and post-​primary professional or technical schools to respond to the growing economic needs of the private sector. It never developed the tertiary sector until 1954 because its economy only needed skilled and professional labor. Chapter 4 also indicates that healthcare emerged in the Belgian Congo as another major public good that fostered productivity. Of course, colonial state managers developed healthcare system to sustain economic interests of the European minority. The Belgian Congo was a colony of extraction straddling the equator with the worst humid climate. Ironically, it also had the largest number of European administrators, priests, army officers, and traders like colonies of settlement despite its hostile climate. Europeans’ mortality rate in the Belgian Congo was among the lowest in colonial history because of its best healthcare infrastructure. In other words, environmental factors that negatively affect the economy can be mitigated by good health policies. Thus, living in the tropics is not by itself a handicap to sustain economic development. Since postcolonial state managers relied on small winning coalitions and no veto players, they produced far less public goods than their colonial counterparts. Their policies were inimical to the state-​building process and hence to economic development. Chapter 5 analyzed the role of property rights in economic development in the Belgian Congo. Contrary to King Leopold II who changed property rights by the stroke of a pen to create land scarcity in the CFS and institutionalized a new regime of property rights based on state ownership and control, the colonial state was different and relied mostly on private ownership. The first act after the annexation of the CFS to Belgium in 1908 was to establish a market-​oriented economy to benefit the Belgian capital because the colonial state saw itself as an economic partner. All colonial institutional arrangements reduced transaction costs, lowered monitoring costs, and made property rights and contracts more secure than during the Leopoldian period. This business-​ friendly environment fostered both domestic and foreign private investments that sustained economic development. Mobutu embarked on two unprecedented policies called zaireanization of small-​and medium-​sized businesses in November 1973 and radicalization or nationalization of large foreign businesses in late 1974. The result of these policies was economic catastrophe of unimaginable proportions. Since the 1973–​ 1974 nationalizations, major foreign investors have been reluctant to return to Congo. The manufacturing sector that flourished before 1974 had disappeared altogether. The state cannot achieve its goals without an adequate base of revenue. Chapter 6 discusses the collection of revenue. In the early years of state formation in the CFS, an extreme degree of coercion and brutal force was applied to force Africans to pay for the cost of the state-​building process (see Chapter 2). The CFS thus applied coercion fairly consistently everywhere to collect taxes resulting in uniform compliance rates across all districts.

258 Conclusion The Leopoldian system changed after the annexation of the CFS in November 1908. Tax coercion continued but disappeared slowly to make room for quasi-​voluntary tax compliance after the Second World War because of societal groups’ perceptions that the state was delivering public goods. Moreover, tax burden on Africans declined over the years as the colonial state expanded its tax bases to the most prosperous segments of the economy, the exporting sector. The colonial state used its tax structure as an instrument to allocate resources effectively and to mobilize capital for the industrialization process. First, indirect tax policy was employed to protect domestic manufacturing industries in the early phase of IS. Second, the state implemented some discriminatory tax policy to supply the domestic manufacturing production with cheap inputs by highly taxing exports that were supposed to be used by domestic producers. Third, tax policy was also a tool to provide public goods in order to facilitate economic transactions and to expand domestic markets. The use of IS neither created any monopoly to protect domestic markets nor intended to protect inefficient or faltering enterprises.The colonial state used its tax system to build state capacity in order to develop the economy. If the colonial state depended heavily on taxes to finance and maintain the flow of public goods, Chapter 7 showed that the postcolonial state under Mobutu relied massively on printing money to pay for its budget deficits. Joseph Kabila used foreign donations to finance his deficits (see Chapter 8). Thus, the postcolonial state remained weak and fragile by all standards. Financing the budget outside taxation has removed postcolonial state managers’ accountability to their citizens. As a result, they no longer respond to citizens’ needs for public goods on which citizens depend on for their livelihood. Elite predation has become the modus vivendi in the postcolonial period to the extent that the entire population has become its prey. Chapter 9 briefly compared the Belgian Congo with other colonies, on the one hand, and also with the Leopoldian and postcolonial states, on the other. In sum, the colonial state developed good institutions over the years because of constraints placed upon rulers thanks to a large number of veto players and a large winning coalition. The result was the supply of public goods that sustained economic development. The colonial economy was more diversified than most colonies because Belgian colonial rulers implemented good policies. Therefore, economic ills of the DRC are the result of political instability, kleptocracy, state weakness, and poor governance in general. More specifically, the absence of veto players and the existence of small winning coalitions are at the root of Congolese predicament. The control of grand corruption is likely to make the DRC a business venture and even get it to “Denmark” again. Congo only needs a few good citizens with some national pride to develop it. Belgium did it.

Conclusion  259

Notes 1 F. Fukuyama, The Origins of Political Order: From Prehuman Times to the French Revolution (New York: Farrar, Straus and Giroux, 2012). 2 “These are sorcerers, demons.” 3 “The Congo, hell on earth for Congolese.” See J.-​P., Nzeza Kabu, Congo. Comment le Reconstruire, y Amener la Paix et le Développement (Paris: L’Harmattan, 2018: 127). 4 Ibid.

Index

Note: Endnotes are indicated by the page number followed by ‘n’ and the endnote number e.g., 20n1 refers to endnote 1 on page 20. accelerated professional formation 116 Adoula, C. 174 Afro-​Arabs 40, 52 agricultural surplus 19, 138, 153 Albert I (Albert L. C.) 120 Albert National Park 141, 205 Algeria 237 Alliance of Democratic Forces for the Liberation of Congo (ADFL) 171, 205, 218 Anglo-​Belgian Indian Rubber and Exploration Company (ABIR) 44 Angola 93, 144, 185, 194, 196, 205–​6 Angola Benguela Railway 93 artisanal and small mining (ASM) 18, 218–​19 Asian tigers 3 Asosa 73–​4 atomic bomb 75 authenticity 186 Bakajika, I.-​G. 192 balanced growth 106, 173, 180; see also unbalanced growth balkanization 173, 180, 233, 247 Bangala 39 Barghash bin Said el Busaidi 40 Baudouin 169, 173 Belgian-​Congolese Contentieux 147, 178, 192 Belgian Liberal Party 63 Berlin Act 37, 41, 51, 53, 56, 91, 167; see also Berlin Conference Berlin Conference 36, 47, 162, 232 better institutions 24, 231 better manner approach 24, 31n5

bigger pie approach 24, 31n5 Binza Group 170 Blumenthal, E. 190 Bomboko, J. 21, 203 Botswana 23 Brazil 23 British-​American Tobacco Company 228 Brufina Group 134 Brussels Act 56; see also Brussels Conference Brussels Conference 36, 47, 162, 232 Brussels Stock Exchange 82, 135, 232 Bua’s wars 40 Buisseret, A. 100, 119 Burma 74, 82 Burundi 205 Cameroon 68, 233 camouflage slavery 53 Canada 73, 75, 84 capital goods 56, 83, 106, 109, 112, 126, 161, 183, 227, 256 capitalism 6, 19, 90, 93, 98, 133, 138, 149, 227 capital-​labor ratio 109, 112, 117 Catholic Party 63–​4; see also Social Christian Party Center Intelligence Agency (CIA) 170; see also USA Ceylon 82 Chad 233 Chantier Naval de construction (Chanic) 91, 107, 183 charter companies 56, 124, 147, 178, 179 chicotte 53, 79 China 48, 80, 207, 217, 219

Index  261 cobalt 110, 161, 196, 218, 222, 227, 236 Cold War 83, 110, 170, 173 Colonial Charter 9, 62, 153, 164 Colonial Council 62 colonies of extraction 26–​8, 230–​1, 234, 257 colonies of settlement 26–​8, 122, 135, 230, 257 Cominière Group 134 Comité National du Kivu (CNKi) 66, 140–​1, 143, 148–​9, 162, 178, 184 Comité Spécial du Katanga (CSK) 43, 44, 56, 133, 142–​3, 148–​9, 162, 173, 178–​9, 184 Compagnie Anversoise du Commerce au Congo (Anversoise) 44 Compagnie Cotonnière Congolaise (Cotonco) 16, 138 Compagnie du Chemin de Fer du Bas-​Congo au Katanga (BCK) 44, 48–​9, 92, 104–​5, 111, 116, 121, 125, 133, 177, 212, 237 Compagnie du Congo pour le Commerce et l’Industrie (CCCI) 42–3, 45, 48, 101, 133, 155 Compagnie du Katanga 43, 101, 148; see also Katanga Company compulsory labor 17, 83, 92, 241; see also forced labor concessionary companies 40, 44, 56, 132 Concordat 42 copper 1, 6, 9, 13–​14, 16, 43–​5, 49, 68, 89, 90, 107, 110–​12, 133, 160, 165, 194, 196–​7, 217–​18, 222, 227, 236 Cornet, J. 43 corruption 7, 98–​101, 188, 190–​1, 194, 207, 215–​17, 222, 258; see also embezzlements; kleptocracy cult of personality 170 Dahomey 227 de Koninck, L. 71 Delcommune, C. 155 demonetization 198 Denmark 254, 258 Dequae, A. 171 de San, A. 101 de Schryver, A. 101 de Tournai, C. 101 deuxième bureau 190; see also second office devaluation 80, 152, 181, 183, 197–​8, 210, 249 developmental democracies 23

developmental dictatorships 23 developmental state 1–​5, 8, 15, 23, 119, 134, 159, 202, 227–​8 de Vleeschauwer, A. 70 de Winton, F. 41, 50 diamonds 14, 16, 45, 89, 116, 133, 144, 157, 160–​1, 169, 187, 196, 245–​6 direct rule 42, 76, 78; see also indirect rule dollarization 199, 202, 210–​11, 221 double taxation 163, 182 East African campaign 74 economic diversification 11, 255 economy of plunder 9, 34, 58 Egypt 228, 237 elections 25, 28, 174, 188, 206, 208, 215, 221 embezzlements 140; see also Kleptocracy Empain Group 134 Entente Cordiale 132 Ethiopia 73–​4, 210 extraction industries transparency initiative (EITI) 220–1 Eyskens, G. 169, 173 failed state 198 femme libre 156 fewer folks approach 24, 31n5 First World War 10, 15, 57, 67–​8, 70, 80, 89, 105, 132, 137, 152, 155, 160 fiscal autonomy 9, 180 fixed price policies 138–​9, 198, 200 flexible economic planning 89 flexible planned capitalism 93; see also capitalism Fonds Reine Elisabeth pour l’Assistance Médicale Indigène (FOREAMI) 121–​2, 125 forced labor 19, 54, 64–​5, 137–​9, 149, 153, 157, 244 France 44, 46, 73, 92, 206, 220, 234 Franck, L. 6–​7, 64, 69, 89–​92, 107, 125, 132, 233 Francqui, E. 101 French Equatorial Africa 72, 177, 227 Front for the National Liberation of Congo (FNLC) 185, 188, 196 Gabon 233 Gambela 74 Général des Carrières et des Mines (Gécamines) 196–​7, 201, 219, 222 General Property Laws 194

262 Index Germany 7, 68–​9, 73–​4, 83, 107 Gilliaert, A. 73 Gizenga, A. 170, 173, 216–​17 Godding, R. 101, 118 Gold Coast 228, 245 good rents 100 Grands travaux 6, 58, 91, 132, 233, 256 Great Britain 36, 44, 73, 89, 244 Great Depression 10, 14, 65, 70, 72, 80–​2, 137–​8, 140, 158, 161, 175, 195 Hailey, W. A. 98 Hamed bin Muhammed el Murjebi 40; see also Tippo Tip Heavily Indebted Poor Countries Initiative (HIPC) 220–​1 Heenen, G. 101 Henry, Emile 155 Henry, Eugène 69 Horn, M. 101 Hougardy, N. 101 hubris syndrome 169–​71, 184, 186, 188 Huileries du Congo Belge (HCB) 72, 136–​7 human development index 1 import substitution (industrialization) 7, 91, 106–​7, 153, 159, 161–​4, 167, 196, 227, 230 India 23, 82, 207 indirect rule 41, 78 Indonesia 1–​2, 23; see also Netherlands Indies informal economy 18 infrastructural power (state) 4, 30, 57, 255 Inga 187–​8, 194, 212–​13 Inga-​Shaba 194 initial conditions 21, 144, 125, 231 International Association of Congo (IAC) 36 investor’s paradise 1, 84, 134, 146, 231 Italy 44 Ivory Coast 190, 227, 244 Jadot, J. 48 Janseens, E. 172 Janssen, C. 41 Japan 3, 75, 137, 162 Jaspar, H. 71, 101, 132 Kabila, Jaynet 217 Kabila, Joseph 14, 206–​8, 211–​13, 215, 217–​20, 222, 224, 238, 249, 256, 258

Kabila, L. 14, 28, 205–​6, 208, 218, 220, 221, 223, 247 Kabila, Z. 217 Kagame, P. 205 Kalonji, A. 169 Kamwina Nsampu 108; see also Mpandi Kandolo, D. 203n1 Karinou 73 Kasavubu, J. 21, 169–​70, 172–​4, 178–​9 Katanga Company 43 Kennedy, J. F. 173 Kenya 233 Kimba, E. 74 Kimbangu, S. 65 Kitawala 65–​6 kleptocracy 1, 171, 190, 207 Kongo Wara 73 Korean War 83 Kronacker, P. 101 Kwilu rebellion 174 Lavigerie, C. 42 learning by doing 12, 115 Leemans, F. 101 Leo XIII (Pope) 42 Leopold III 7, 73 Lever, W. 135–​6 Liéar, A. 101 Lippens, M. 101, 118, 132 Lumumba, P. 21, 147, 169–​73, 175, 206, 233 Lundula,V. 170, 172 Lusaka Ceasefire Agreement 206 Madagascar 74, 227 market rationality 131 Maron, A. 82 Mauritania 233 Mauritius 23 mercenaries 38–​9, 70, 173–​4 Michel, L. 173 Middle East 74 military coup 13, 28, 170, 185–​6 military intervention 169, 174, 233 military occupations 70 military operations 46, 70, 72 military promenades 70 mini-​welfare mining states 20 mini-​welfare states 20 minimal state 5, 15, 231 Mission Technique Belge 173 Mobutu, S. S. 1, 13–​14, 22–​3, 25, 28–​30, 169–​74, 184–​6, 188–​90, 192–​8, 200–​2,

Index  263 205, 212–​13, 216, 218, 222, 224, 233, 237–​8, 245–​6, 249, 255, 257–​8 model colony 1, 25, 84, 231 Moroccan troops 185; see also Morocco Morocco 228 Moulaert, G. 101 Mpandi, J.-​P. 108 Mpoyi, L. 82 Mukalabushi, N. 74 mutiny (mutinies) 40, 71, 74–​5, 169–​72, 202, 233 Muzito, A. 217 Namibia 205 National Way 92–​3, 105, 194 nationalization 20, 147, 192, 197, 200, 202, 234, 237, 245, 247, 257; see also zaireanization Ndele, A. 203n1 Netherlands Indies 16, 82 Ngainombey, B. 43 Niger 233 Nigeria 74, 228, 230 nightwatch state 157 Niue (island) 217 Northern Rhodesia 117 Nyasaland 117 Office des Trous 235 output-​labor ratio 117 Palestine 74 Panama 217 paternalism 20, 62, 112, 147, 202 paysannants 141, 142, 149 Pecher, E. 71 Pende (revolt of) 72 peripheral capitalism 6, 89 Pierlot, A. 73 Pius X (Pope) 42 plan of econimic development 6, 10, 84, 93, 97–​8, 125–​6, 141, 153, 159, 186, 234, 256 plan rationality 98 poles of economic development 106–​8, 110, 115, 126 police operations 46, 70, 72 political constraints 24, 26 porterage 43, 48–​9, 89, 137, 233 portfolio capitalist state 143 portfolio state 143 Portugal 73

Poverty Reduction and Growth Facility (PRGF) 220 primitive capital accumulation 52, 58 proto-​capitalist economy 137 proximity gap 83, 98, 236 radicalization 195–​6, 257 rebellions 46, 53, 65, 70, 72, 174–​5, 177–​8, 186, 208; see also revolts regulatory states 3, 5–​6 Renkin, J. 5, 9, 15, 23, 63–​4, 67–​9, 77, 89, 100–​1, 120, 131, 136, 152, 154, 247 rent-​seeking 25–​6, 100, 232, 256 resource curse 11, 30n1 revolts 40, 44–​6, 52–​3, 65–​6, 72–​3, 76, 132, 137 Round Table Conference 147, 169 Royal School for Cadets 171; see also School for Pupils Rubbens, E. 160 rubber 8–​9, 13, 40–​3, 46, 51–​2, 54, 67, 83, 106, 137, 155, 193 Rutten, M. 118 Rwanda 205, 205 Ryckmans, P. 7, 10, 73–​4, 86n3, 101 Saio 74 Sarraut, A. 234 School for Pupils 171 second office 190 Second World War 6–​7, 10–​11, 15, 30, 73–​4, 80, 82–​3, 85, 93, 105, 109–​10, 114, 117, 122, 149, 153, 157, 159, 161–​3, 166, 177, 228, 244, 247, 254, 258 Selassie, H. 74 selectorate theory 26–​8, 31n6 Senegal 227 Shaba I & II 185 Shinkolobwe 75 Sicomines 217, 219 Sinking and Management Funds 179, 192 skilled labor 83, 114–​16, 118 slave trade 17, 37, 40, 56 smuggling 161, 187, 196, 246 social capitalism 98; see also capitalism Social Christian Party 63 Société Générale (SG) 44–​5, 83, 132–​4, 138, 144, 176 South Africa 23, 194, 220, 227–​8, 230, 237 South Korea 3, 134, 232

264 Index Southern Rhodesia 115, 117, 229–​30; see also Zimbabwe Spaak, P.-​H. 174, 179, 192 Stanley, H. M. 36, 47 state: autonomy 4, 57–​8; building 8, 10, 47, 57–​9, 152, 154, 165, 172, 223, 247, 250; business 6, 29, 42–​3, 86, 133, 233: capacity 4, 8, 30, 56–​7, 126, 153, 155, 166, 180, 201, 223, 227, 247, 258; collapse 186; monopoly 5, 50, 52, 132, 160–​2, 189, 244; portfolio 55–​6, 145, 179, 184, 200–​1, 250 state-​led capitalism 90; see also capitalism strikes 20–​1, 82 Sudan 43, 48 Suharto, M. 1–​2 Sweden 220 Switzerland 44

unbalanced growth 111 Union Minière du Haut-​Katanga (UMHK) 9 16, 20, 44–​5, 49, 75, 90, 92, 101, 104, 110–​12, 115–​16, 121, 133, 147–​8, 162, 173, 176–​7, 149–​80, 183, 192–​3 United States of America (USA) 3, 42, 44, 73–​5, 83, 85, 110, 170, 174, 202, 206, 215, 217 uranium 75

Taiwan 3 Tanzania 210, 217, 233 tax incentives 57, 156, 163 technology transfer 245, 256; see also transfer of technology Thys, A. 44–​5, 155 Tippo Tip 40 Tombeur, C. 68 transfer of technology 48, 89–​90, 112 Tschoffen, P. 101, 132 Tshisekedi, F. 207 Tshombe, M. 169, 173–​4, 178–​80, 192, 216

Wahis, T. 38, 67 wars of red rubber 40 weak state 184 welfare state 7, 10, 20, 234, 254, 256 Wendo, A. 254 Wigny, P. 84, 93, 101 William, F. (William I) 134 winning coalitions 8, 26–​9, 31n6, 46, 195, 202, 216, 224, 230, 232, 255, 257–​8 world price taker 161

Ubangi-​Shari 73 Uganda 115, 117, 205, 228–​9, 233

value added tax (VAT) 221 van Eetvelde, E. 41 van Remoortel, W. 101 Vandervelde, E. 72 veto players 8, 24–​6, 46, 58, 85, 146, 185, 202, 217, 224, 232, 255, 257–​8 Vleeschauwer, A. 101

zaireanization 185, 257 Zambia 210, 212 Zanzibar 40 Zimbabwe 205–​6