In combat economies, ‘combat networks’ fill the gaps created by destroyed social bonds and community-level exchanges, and “[r]ent-generating wartime activities are no longer a grubby sideline of violent conflict but have become one of its central features”.176 The elite from all factions tend to be the prime players in such economies, but others include criminal profiteers and speculators. These elites resort to corruption and criminality, including the illegal exploitation of natural resources and sometimes even the capture of diaspora remittances and aid flows.177 Armed groups use these revenues to finance and sustain conflict. Shadow economies are characterized by economic activities conducted outside state-regulated frameworks and not audited by state institutions. They include, but go beyond, the combat economies. The main actors here are entrepreneurial elites who exploit the situation generated by a mix of corruption, weak governance and porous borders for the purpose of profit. They may even engage across enemy lines to conduct lucrative commercial deals. For example, Rent-generating although transport merchants were primary backers of the Taliban in Afghanistan, these entrepreneurs frequently underwartime activities are no mined the Taliban’s economic blockade of Hazarajat by keeplonger a grubby sideline ing trading networks open.178
of violent conflict but Coping economies encompass the activities adopted by the have become one of its civilian population as a means of coping and survival in the absence of government-provided services and employment in central features. the formal sector. For example, the production of simple items such as pots, furniture and tools and the production, cooking and sale of food are very common survival activities.179 In Afghanistan, by the end of the 1990s, about 20 percent of the population depended on poppies (for opium production) for their livelihoods. The opium business clearly illustrates the overlaps between the combat, shadow and coping economies as it is “simultaneously a conflict good, an illicit commodity, and a means of survival”.180 Combat and shadow economies complicate economic recovery after war in several ways.181 First, they may limit the political window of opportunity for effecting policy change after war. Very often, those who profit from war are also its victors. They are able to use their accumulated wealth and power to influence the terms of peace agreements in their favour (as in the Democratic Republic of the Congo today and in Liberia under Charles Taylor) or to undermine agreements they deem unfavourable (for example, the Revolutionary United Front (RUF) in Sierra Leone after the 1999 Lomé Peace Accord).182 Very often, too, ex-fighters become part of the transitional governments charged with overseeing both peace implementation and post-conflict economic recovery. Their interests do not always coincide with the objectives of transparent fiscal systems, economic justice or other reforms aimed at promoting general welfare and national economic recovery. In some cases, the sheer volume of the ill-gotten profits available to post-conflict governing elites can far exceed donor funding, thereby reducing donor leverage for reform.183 The continuation of combat and shadow economies also complicates already poor state capacities to mobilize tax and customs revenues. Not only do they undermine revenue capabilities, they also reduce the financing available to the state to rebuild infrastructure and strengthen social service provision, while also bolstering the economic base of state rivals.
The Legacies of Armed Conflict
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