Sierra Leone: Greed, Diamonds, and the Global Marketplace

“The right of peoples and nations to permanent sovereignty over their natural wealth and resources must be exercised in the interest of their national development and of the well-being of the people of the State concerned” вЂ"UN resolution 1803(XVII), passed 14 December, 1962.

Sierra Leone has one of the worst standards of living in the entire world. It has occupied the bottom of the United Nations Human Development Index for over a decade, coming in last, or close to last every year since 1990. The tragic story of the failed African state is now, regrettably, so common that people in so-called developed nations have built up a tolerance to the shock that such abject poverty should have on their sensibilities. However, what is surprising about Sierra Leone in particular, is not that it is poor, but that its poverty is the result of its possession of some of the most productive diamond fields in the entire world. These natural resources which are, according to the UN, the sovereign property of Sierra Leone, to be used for the benefit of its citizens, have proven to be a curse rather than a blessing for the people of this country. The reason for this bizarre twist of fate lies far beyond the borders of this small East African Republic. In fact, responsibility for the situation there falls uncomfortably close to home. Understanding the plight of Sierra Leone is impossible without first recognizing the global conditions that gave rise to the civil wars that have crippled it.

The international diamond market is one of the most lucrative in all the world, accounting for roughly 50 billion dollars annually (Global Witness 2000). Rough diamonds are mined in places like South Africa, Botswana and Angola, and are then sold to middlemen who transport the rough to the major cutting houses in Antwerp, Belgium and Surat, India. Once cut, polished, and set in jewelry, diamonds value increases exponentially. Once finished, the jewelry and loose stones are sold to retailers across the globe.

At first glance this seems to be a straightforward production model of supply and demand, but the truth is much more complicated. Diamonds are, in themselves, not very valuable. Apart from the utility inherent in the hardest substance known to man, diamonds have no value apart from their pleasing ascetic qualities. The diamond industries’ advertisements stress the beauty and scarcity of diamonds, and creates demand in the market by linking them to romance and marriage (Campbell). However, the fact is that diamonds are not actually very rare. After the South African diamond rush of the 1870’s, diamond entrepreneurs and miners began to flood the market with rough, driving diamond prices down, and cutting into their own profits. Cecil Rhodes, had the foresight to begin buying up all the land he could find, and created the De Beers Mining company. Cecil instituted an aggressive buyout policy, aimed at removing all competition from the market.

By 1888 Rhodes controlled 90 percent of worldwide diamond production, a figure that has only shrunk in the last few years. Instead of selling all the diamonds produced every year, De Beers began stockpiling rough in order to keep them off the market, resulting in artificially low supply, and drastically inflated prices. De Beers was only able to maintain its control over the market by ravenously buying up all the rough it could find. The upshot of this policy is that diamonds can be exchanged for hard currency by anyone, anywhere, because De Beers cannot afford to let a private supply ruin its carefully engineered monopoly.

In most cases though, diamonds cannot be simply pulled out of the ground. Diamonds form in geological structures known as kimberlite pipes, which can stretch many hundreds of feet below the surface. Therefore, diamond mining in most countries is restricted to those with the capital to invest in heavy mining equipment.

However, Sierra Leone possesses what is called an alluvial deposit, meaning that the diamonds have been disbursed over centuries of erosion and scattered all over the landscape. Once diamonds were discovered there in the 1930’s, De Beers quickly convinced the colonial government to grant their sub-company, Sierra Leone Selection Trust, exclusive mining rights to the national diamond resources. The locals who worked in the mines were kept in the dark about the nature of the stones they harvested.

“Things changed drastically in the wake of World War II, when Sierra Leoneans serving the British...returned from the battlefields of Burma, having learned the value of the innocuous stones that were being mined out from beneath the feet of villagers. It’s not surprising what happened after tales of limitless fortunes began circulating through the bush. Miners abandoned their jobs and became independent operators. They were also illegal operators, since only the SLST had the right to mine for diamonds in Sierra Leone.”

(Campbell 2002:18)

A massive diamond rush followed in the post-war years, in which farmers and other indigenous people abandoned their land and began small-scale, indigenous mining operations all over the country. Many of these miners were supported by wealthy Lebanese merchant, who had moved to Freetown in the wake of the war to sell general merchandise. In the mid 1950’s,. During the 1950’s, it was estimated that 20 percent of all diamonds reaching the world's diamond markets were smuggled from Sierra Leone (Warah 2004), yet during this time, the country suffered from the first food shortage in history, and had to import staples like rice and grain.

The SLST requested the government send more than a thousand troops to the Kono district (one of the most lucrative mining areas) to help control the illegal miners, who had begun clashing violently with local authorities trying to enforce the De Beers monopoly.

Violent conflict continued to afflict the nation during the years leading up to its independence from Britain in 1961.

The incoming government inherited not only the economic windfall that came with the diamond trade, but a host of problems that had developed as a result of confrontation with illegal miners, and those whose economic survival was now inextricably linked to the diamond trade. Even though the new government curtailed the mining rights of the SLST, they could not find a way to allow ordinary Sierra Leoneans to benefit from their countries natural resource. Imposing taxes on the diamond trade simply made smuggling them to neighboring Liberia even more lucrative.

Government officials