- The Washington Times - Thursday, August 22, 2002

BODA, Central African Republic Letting piles of uncut diamonds run through his hands, gem collector Ali Kassala wishes this backwater was connected to the outside world by telephone.
"Diamonds are in abundance here, but we have nobody to sell them to. If we had a foreign partner, we could export diamonds abroad in huge quantities," he said as a breeze threatened to blow away heaps of gold dust.
"Investments could be made in machinery to enable more efficient exploitation. The town would develop. Taxes paid would benefit the country."
For lack of foreign contacts here in his birthplace, Mr. Kassala grumpily sells diamonds and gold at low prices, when he can, to middlemen 185 miles away in Bangui, the nation's capital. The town benefits little, and the diamond collectors work hard for wages that barely provide them enough money for food and the means to send their children to school.
For one of Africa's poorest nations, the Central African Republic is diamond-rich, with two swathes of land in the center and southwest of the country containing large quantities of high-quality gems.
But regulating the country's biggest export earner is difficult, especially amid political instability after two failed attempts to oust President Ange-Felix Patasse last year.
"Around 400,000 carats of diamonds every year goes unaccounted for. It's inevitable, given our huge borders," said Andre Dorogo, the minister of mines.
Last year, this former French colony exported 449,300 carats of gem-quality diamonds. But the Antwerp diamond exchange alone recorded imports to Belgium of 900,000 carats of Central African Republic gems.
The trade is difficult to monitor because the stones are gathered by free-lancers from river areas, rather than from more easily observed mines. Entire families rent sieves and spades, then head for the countryside in the hope of making a fortune by finding gems, which can be smuggled abroad easily.
The CFA franc is the common currency of 14 countries in West and Central Africa that make up the African Financial Community. Twelve of those nations are former French colonies. The U.S. dollar is worth about 700 CFA francs.
"We leave for two weeks at a time. Sometimes we find diamonds, sometimes we don't," said gem hunter Innocent Songuet.
"In 2000, I earned 272,000 CFAF [about $390] for collecting 7.57 carats. Last year, I earned 1.2 million CFAF [about $1,700] for collecting 28 carats. You make more money if you find a foreigner to sell to," Mr. Songuet said.
Entrepreneurs often turn up at the riverside bar of Bangui's faded Sofitel hotel looking for gems, but they rarely get caught leaving the country with briefcases stuffed with untaxed stones. The smuggling of diamonds into the country is also causing the government concern.
In May 2000, a Bangui-based company named Sodiam chartered a flight into rebel-held Kisangani in the Democratic Republic of Congo, where diamonds from the town's mines have been used by rebels to buy weapons.
Sodiam's Cessna aircraft crashed on takeoff from Congo, killing a Central African. An aircraft sent to rescue the stranded employees also crashed, which drew further attention to the incident, leading the Central African government to fine Sodiam.
Mr. Dorogo insists, "If conflict diamonds are coming in from Angola and Congo, the quantities are not large."
But dealers in Bangui say diamonds originating in rebel-held areas of Africa are routinely mixed with Central African diamonds and exported abroad, apparently evading U.N. measures intended to choke off funding for Africa's wars.
Diamonds exported by Chad, Cameroon and the Republic of Congo none of which mines its own deposits may well also originate in war-torn countries.
Once polished, the provenance of a diamond is difficult to identify. But this is not true of rough diamonds. "Buyers know at a glance where most uncut stones originate, but choose not to say," said one European diamond dealer.
There has been a recent influx of diamond companies into the Central African Republic. In 1996, there were three diamond-buying offices in Bangui. That number rose to six in 1999, and now there are 10.
The dealers live and work in heavily fortified villas with satellite communications links, and take groups of hired soldiers for visits off the premises. Minair, which serves the diamond companies, continued to operate flights during last year's fighting, when the rest of the city had shut down.
Established dealers in Bangui say the influx of diamond companies is partly due to a growing market for laundering conflict diamonds.
"The U.N. embargo makes absolutely no difference. The diamonds are getting out anyway," said one dealer.
A revision of the country's mining law is being planned to clean up its diamond business and pump more tax earnings back into the state. At present, the president grants licenses to diamond companies, a system that is open not only to corruption but also to delay.
New proposals, drawn up with help from the World Bank, would put more decision-making into the hands of the Mining Ministry. There are also plans to establish a system of certificates of origin, similar to those operating in Angola and Sierra Leone, to make smuggling diamonds from those countries through the Central African Republic more difficult.
These moves come as the European Commission announces proposals to clamp down on the trade in diamonds from conflict zones.
The plan is that European Union states will accept only diamond imports that have been certified not to have come from rebel-held areas. Uncut diamonds would have to be transported in tamperproof containers. Meanwhile, Central African Republic customs officials in charge of assessing diamonds for export will receive training in Antwerp.
In the longer term, and where geologically feasible, the government wants to establish deep-shaft diamond mines, which are more efficient and easier to oversee but require expensive technology.
"Better management of our diamond and other mineral resources will mean we can pump more money back into the country," said Laurent Bobongo, the civil servant who drew up changes to the mining law.
"More state control will make it easier for foreign companies to operate here, as they will be able to work in a legal rather than illegal way," he added.

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