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By Root 1738 0

lives while the majority of Sierra Leoneans lived in indescribable poverty. Hardship among Sierra Leonean citizens markedly increased in 1989 and 1990, as a result of what IMF negotiators called “bold and decisive” free market measures. To control inflation, the IMF required that subsidies to the general public be phased out. As a result, rice prices rose 180 percent and oil prices rose 300 percent, leaving ordinary Sierra Leoneans in desperate straits. Many frustrated Sierra Leoneans blamed their plight on the wealthy Lebanese. By the early 1990s, popular resentment and alienation were widespread, particularly in the provinces where most of the diamond mines were located. Conditions were ripe for the anarchy that followed.

5

RUF leader Sankoh found no difficulty recruiting soldiers from the hungry, disaffected, and angry teenagers in provincial areas. He promised them jobs, free education, and a mission. “That was all the motivation they needed,” as James Traub has put it.

6 The RUF movement was by no stretch socialist or populist; it had no ideology. It was a blatant grab for power and wealth, mobilizing foot soldiers from a destitute, demoralized, 70 percent illiterate provincial population that for years had seen the nearby diamond mines generating fantastic wealth for a handful of Lebanese cronies and corrupt politicians.

In the years of chaos and carnage that followed, an estimated 75,000 were killed and another 4.5 million displaced. The Lebanese plutocrats—their diamond mines taken over by rebels—were the first to leave. The rest of the tiny Lebanese community soon followed. Sierra Leone’s Lebanese population dropped from 20,000 to 2,000 as of 1999.

7 Some have since returned.

Needless to say, these events cannot be blamed on markets, democracy, or globalization. The reign of terror that destroyed Sierra Leone between 1991 and 1999 was the deliberate handiwork of vicious, self-interested butchers and thieves. Nevertheless, it is a mistake not to see how markets, democracy, and a market-dominant minority interacted to make this scenario possible. Since at least 1973, Sierra Leone’s indigenous leaders suppressed democracy to go into cahoots with a deeply resented market-dominant minority. Despite the conditions of enormous instability that resulted, global markets generally approved of these arrangements. At the same time, the pro-market austerity measures imposed by the (heavily U.S.-influenced) IMF exacerbated the economic distress and frustration of the Sierra Leonean population.

While the RUF’s atrocities were unparalleled, Sierra Leone falls into a larger global pattern. The developing world is famous for its crony capitalism. What is less well known is that, almost invariably, crony capitalism arises because of the same interaction of democracy, global markets, and a market-dominant minority.

The Chinese-Friendly Dictatorships

of General Suharto and Ferdinand Marcos

Take, for example, General Suharto’s Chinese-friendly autocracy in Indonesia. Suharto seized power militarily in 1965, bringing to an end the “Guided Democracy” of his predecessor Sukarno, whose economic policies—including the nationalization and “indigenization” of major industries—had produced economic stagnation and widespread bankruptcies. Although in disgrace today, Suharto was for years the darling of the World Bank, the IMF, and Western investors. From early on, Suharto—a barely educated career soldier—placed his trust in foreign and foreign-trained economists, mainly from Harvard or the University of California at Berkeley. Starting in the seventies and accelerating through the eighties and nineties, Suharto embraced economic liberalization and other pro-market policies to encourage foreign investment and rapid economic growth. (Mobil Oil’s massive liquefied natural gas plant in Aceh, for example, was built in the seventies.) Almost by definition, this meant that Suharto needed the help of his country’s Chinese business community, who were the only ones in the country with the capital and entrepreneurial skills needed