108 Scarcity and Surfeitinvestment must have been mostly inappropriate, unsustainable or not actu-
ally carried out. Therefore, even the regional privilege does not extend to all
inhabitants of that region - only to those who manage to gain access to the
state via their connections to the region.
External Economic Relafions and Aid
We have seen the distorting effects of predation on the domestic structure of
the economy. As mentioned in the section on colonial influences, Burundi's
economy is centrally oriented towards external markets; a structure that fur-
ther supports the predatory nature of the state. This section will look at two
external spheres which fundamentally impact on Burundi's economy, and
which have contributed structurally but also directly to shaping the conflict
and prospects for peace. The two spheres are, on the one hand, Burundi's
neighbouring countries and, on the other, the industrialised countries.
Burundi, as a small, landlocked country, has an economy inextricably
linked to its neighbours. This relationship has interacted with the conflict in
two ways. First, normal economic relationships have largely been replaced
with illicit dealings and large-scale smuggling often directly connected to mil-
itary and rebels' activities in the DRC, Tanzania and Rwanda. Second, in
response to Major Buyoya's military coup in 1996, the neighbouring coun-
tries imposed economic sanctions on Burundi, with the purpose of placing
pressure on the regime to return to democratic rule. These sanctions had an
extreme effect on Burundi's economy, but were in turn undermined by the
pre-existing smuggling structures.
'Informal' economic connections between Burundi and its neighbours did
not only commence with the outbreak of the current conflict, as shown by
Burundi's exports of gold and ivory. Although it produces negligible amounts
of both within its own borders, Burundi has for decades been an exporter of
the two valuables. Eighty per cent of gold exported in the 1990s was smug-
gled in from the DRC and 19% from Tanzania and Uganda. The government
licensed gold-trading bureaux brought the government significant revenue in
the 1990s, as did ivory-dealing offices in the 1970s and 1980~.~~ Since the
eruption of the 1993 conflict, and the direct involvement of both government
and rebel forces in the conflict in the DRC, smuggling has taken on a new
character and can even be described as military looting. Large amounts of
coffee beans have been smuggled from the DRC into Burundi, to be sold
onward to international markets as Burundian coffee, as reported by a UN
panel of experts.64 This form of illicit economy has served to finance both
government and rebel forces and the purchase of arms.
Coffee is also smuggled from Burundi to neighbouring countries, as
described in more detail below. This is connected to the conflict through a
different dynamic, namely the attempt of rural coffee producers to evade the
exploitative economic regime and gain better prices for their labour. The 1988