This piece was prepared as part of the 2013–2014 Syrian Economic Reconstruction Project run by the Carnegie Middle East Center, which sought to help map the social, political, and institutional dynamics that will be generated when postconflict reconstruction begins in Syria.
All civil conflicts are characterized by a political economy of violence. War economies emerge for a variety of reasons, ranging from opportunists who see the possibility of economic gain during conflict to the need of armed actors to finance their military and political activities. The problem of self-financing is especially acute in situations of protracted conflict where the war economy and its associated activities become increasingly entrenched and, therefore, harder to unravel in the postconflict period.
One of the main concerns in protracted conflicts is precisely that the continuation of violence, rather than a military or political victory, becomes the goal of armed actors whose wealth and political power are directly tethered to the war economy and its economic profitability. From this perspective, conflicts can be prolonged because of the economic opportunities they create, not because of the intractability of the political issues that gave rise to the conflicts in the first place.
One of the central questions facing postconflict planners is how to create disincentives for the self-financing of conflict and to begin to unravel the war economy. The central problem here is how to create or envision a postconflict environment in which the ways that actors currently accumulate wealth and power are disrupted or in which their strategies are no longer effective.
I will explore some of the dominant approaches proffered by the international community and postconflict planners to unraveling war economies and addressing the link between criminality and conflict. In doing so, I hope to identify some of the ways in which disincentives can or cannot work in the Syrian case.
My intention is not to begin a specific discussion of how to do this in Syria, as this is entirely dependent on the trajectory of the conflict and the nature of the political authority that will emerge when the violence begins to subside. Instead, I aim to explore strategies, policies, and approaches employed in other cases and to assess how these can offer insights into how to unravel the link between criminality and conflict in Syria.1 As such, the publication is intended not as a survey of Syria’s war economy or as an inventory of Syria’s armed groups and their participation in the war economy, but rather as a discussion of how self-financing serves to perpetuate conflicts and how the link between the war economy and the continuation of conflict can be severed.
I will begin with a brief overview of how war economies develop in conflicts, the implications this has for the continuation of violence, and how these implications give rise to different forms of warlord and rebel agency.2 This will be followed by a discussion of how the international community and postconflict planners have attempted to dismantle warlord authority in postconflict countries. These efforts have been grounded in liberal peace approaches that attempt to establish formal institutions of governance into which former combatants are integrated. The final section considers some principles that should form an alternative to the liberal peace approach.
War Economies and Conflict Financing
An inquiry into the question of how to disrupt and discourage the self-financing of a conflict should begin with a discussion of the relationship between war economies and warlord or rebel agency. How war economies form, take shape, and evolve in relation to the authority and agency of various warlords and rebel groups is of central concern. Warlord authority vis-à-vis war economies is an outcome of the nature of economic and criminal activity and its short-term and structural characteristics.
The conventional way to understand how war economies develop and how warlords acquire agency is through the greed versus grievance lens. The greed approach reflects a rationalist view of warlords and criminals and argues that they are motivated by the economic opportunities afforded by conflicts. From this perspective, greed is the primary driver of conflict: warlords and criminals develop strong stakes in the continuation of violence as it is their primary means of acquiring wealth. However, such an approach ignores the possibility that warlords and rebels have legitimate sociopolitical grievances. The grievance approach assumes a less deterministic view of war economies and suggests that warlords and rebels have to develop self-financing means to support their political activities.
The greed versus grievance debate was eventually deemed too simplistic a dichotomy, leading scholars to consider the two sides as fused motives.3 Paul Jackson has proposed that warlords should instead be understood as displaying a series of five characteristics that reflect their strategies and the political, social, and economic contexts that make their rise possible.4 These characteristics are that warlords: emerge when centralized power collapses; use violence to exercise power; replace formal structures; may establish governance structures that perform basic state functions; and frequently have links to international trade.
Such a perspective puts into a larger sociopolitical context the rise of warlords and war economies. It is with a broader structural perspective in mind that the original advocates of the greed versus grievance approach abandoned their dichotomy and instead stressed “the primacy of feasibility over motivation.”5
Economic opportunities also change over the course of a conflict. Scholars have identified three basic stages of this evolution that link the type of conflict economy (predatory, parasitic, or extractive) with the military strategy (contention, expansion, or control) of armed groups.6
In the first stage (predatory-contention), rebel groups engage in theft, smuggling, kidnappings, and so on to raise funds for further attacks. These predatory activities are often small-scale, incoherent, and not indicative of larger economic strategies beyond the immediate opportunism of the movement or the need to generate funds to maintain the group’s military activities.
The second stage (parasite-expansion) involves the gradual retreat of the previous political authorities and the assumption of nominal territorial control by rebel groups, however small. Economic activities increase as the control of territory provides greater opportunities for taxation, smuggling, controlling distribution routes, and so on.
In the third phase (extractive-control), rebel groups assume greater responsibility for the provision of services, the establishment of institutions, and other functions normally associated with the governance of day-to-day life. As such, the range and depth of the groups’ economic activities increase substantially, and there can emerge greater coherence and organization to their activities.
War economies therefore have a structuring logic that can evolve into complicated governance systems in periods of conflict. Understood as systems of governance, war economies make possible the exercise of different forms of power by warlords and rebel groups. Severing this link is thus not merely about reducing criminality and its incentives but also about rupturing the sociopolitical relationship that people have with alternative, nongovernmental authorities. Today, in Syria, there is a proliferation of these microsystems of governance, from the creation of different courts to a new curriculum being taught to Syrian children. These patterns are not altogether disconnected from the war economies as they need financial support to be sustainable.
Achim Wennmann has proposed a model for understanding different methods of conflict financing and the effectiveness of these methods in bringing revenues to rebel groups.7
Wennmann’s typology provides an understanding of the different methods of conflict financing and their relative effectiveness in providing the means for continuing armed conflict.
The most effective method of conflict financing involves the capture, extraction, and distribution of resources by rebel groups. Some examples here may include the control of the opium trade by Afghan warlords or the extractive sectors in the Democratic Republic of Congo. These types of conflict financing provide considerable wealth to combatants and can help explain the continuation of conflict. As long as wealth can be generated, the material basis of conflict remains consistent.
This is not the case with other financing methods, which are more conducive to low-intensity conflicts. While this may suggest that these methods are easier to target and eliminate as sources of financing, this is not the case. As long as groups are committed to their military or political goals and have a high incentive to continue to exercise violence, then they can move between different methods if one is effectively cut off from them.
Trends in Syria’s War Economy
These methods of conflict financing are present in Syria today. Syria’s war economy was slow to develop after March 2011, owing to the nature of the conflict. As the Syrian opposition became more militarized and the rebel groups increasingly fragmented, there was a rapid rise in criminality and the slow structuring of a war economy. To date, and despite the informal extraction and distribution of natural resources, Syria’s war economy is largely based on short-term opportunism and mostly predatory behavior, including taxation, smuggling, kidnapping, looting, and aid theft or diversion—in other words, methods of conflict financing that have low to medium effectiveness and that are unstable sources of revenue.
The war economy in Syria is characterized by instability, unlike in Afghanistan, where the war economy was largely driven by the extraction of opium and therefore gave rise to relatively stable economic, monetary, and social structures.8 The Syrian situation is a fragmented one, however, as areas under the control of the self-styled Islamic State demonstrate some levels of financial stability because of oil revenues captured by the militants. For the rest of the country, the war economy has largely discouraged long-term, coherent, and stable economic strategies.
While supply and distribution routes have been established at times during the conflict, these have been largely temporary, unstable, and subject to the changing military dynamics on the ground. Michael Pugh, Neil Cooper, and Jonathan Goodhand have argued that war economies are embedded in “regional conflict complexes” that are characterized by “the empowerment of borderlands as sanctuaries for combatants and . . . also as centers of shadow economic activity.”9 Arms smuggling from Lebanon, for example, thrived in the early stages of the conflict but has now been forced to take alternative routes because of the changing military situation in the Lebanese borderlands. The one consistent factor seems to be the control of border crossings in the northern areas of Syria, but even there, various rebel groups have fought among themselves or negotiated cooperation agreements to share the rewards and responsibilities of the border crossings.
The Syrian conflict has been unique in its military and political fragmentation of the country and its malleable and constantly changing front lines. The proliferation of small enclaves of control—especially in the northern parts of the country, which are independent of one another and not yet integrated into a coherent supply chain or line of command—has further enhanced the fragmented nature of the war economy. Such fragmentation has discouraged the formation of long-term economic strategies and left rebel groups dependent on short-term, predatory behavior to finance their activities.
There has also been a slow fusion of rebel groups and smuggling networks, such as the Syria Revolutionaries’ Front (SRF) created in December 2013, that blur the lines between political, military, and criminal elements. Although the SRF has lost a considerable amount of power on the battlefield, the group’s formation portended other alliances among rebel factions in Syria. Such fused yet fragmented authorities further discourage coherent economic strategies. Needs and alliances are based on the realities and changes on the ground. For example, many alliances among rebel groups have been formed around shared control of border crossings, checkpoints, and highways.
Multiple War Economies
It is perhaps more realistic in the Syrian case, then, to speak of the presence of multiple war economies in which different rebel groups control or share responsibilities and profits. Syria’s political-geographic fragmentation—in which contiguous areas are held and controlled by nonregime groups, such as Kurdish groups in the northeast, the Islamic State in the north and east, and other groups north and south of Damascus—has further contributed to Syria’s multiple war economies. Many of these areas are, economically speaking, more connected to the immediate border areas, such as Turkey and Iraq, than they are to other parts of Syria.
Consequently, patterns and networks of informality and criminality have not necessarily coalesced and are instead more deeply embedded in neighboring economies than in other parts of Syria. This is certainly the case in regime-controlled areas, where the regime has relied on its own criminality, which directly serves its political and military interests. Regime authorities have engaged in various levels of subcontracting out distribution and smuggling, a sort of license for war profiteering, while fostering business interests that are capable of evading sanctions. The reliance on non-Syrian, nonarmy combatants has been central to the regime’s military strategy as well. The point here is that reliance on the war economy works both ways and is not a strategy on which only the rebel groups are dependent.
Liberal Peace Approaches to Conflict Financing
The dominant approach to postconflict reconstruction has been to try to revive or establish the institutions of governance in a society. This approach is motivated by the liberal peace approach to conflicts, which argues for the establishment of liberal institutions and the entrenchment of liberal ideas into a society as the core bases of reconstruction and a sound postconflict order. This poses what Danielle Beswick calls the “single sovereign” problem of postconflict state building, in which planners centralize authority in the institutions of the sovereign state as the primary response to postconflict dilemmas.10
The primary means by which the international community has sought to discourage conflict is to provide material and institutional rewards to warlords through their co-optation and integration into the postconflict order. These rewards come in the form of high-level positions, ministerial appointments, and control of key state institutions. Incentives can also take the form of monetary or financial gains through implicit access to the government procurement system, aid money, and so on. The logic here is straightforward: the financial and political power accrued from integrating into the state outweighs the power accrued from the war economy. Such a strategy has been preferred by postconflict planners who assume that the means to deter conflict are found in the integration of warlords and conflict elites into the postconflict governance structure.
This is consistent with the liberal peace approach and its promotion of institutional, governance, and economic reforms in postconflict countries in which the state is centralized as the key point of contact for international donors, as the space in which civil disputes should be resolved (as opposed to the battlefield), and as the primary director of aid, resources, and services throughout society. Similarly, liberal peace approaches place significant emphasis on reestablishing the state’s monopoly on the use of violence through various schemes, especially disarmament, demobilization, and reintegration programs or security sector reform schemes. The point here is that the dominant approach to discouraging conflict has been to establish, strengthen, and empower institutions of the state.
Such approaches were certainly evident in cases such as Lebanon and Bosnia and Herzegovina, where warlords and combatants were integrated into the postconflict order as politicians and economic leaders. In Lebanon, there were deliberate attempts by the negotiators and guarantors of the Taif Agreement to isolate those individuals and actors who had not accepted the postconflict order. Individuals such as Michel Aoun and Samir Geagea, who commanded loyal followings and substantive combative capacity, were political and military targets of the emerging Pax Syriana order in Lebanon, with Aoun being exiled to France and Geagea placed in prison.
A similar process occurred in Bosnia and Herzegovina, where warlords who rejected the peace process were targets of criminal prosecution, while those who accepted it were able to integrate into the state and assume substantial authority in the country’s postconflict system. The determinants of inclusion in or exclusion from the postconflict order seem to be the willingness of various armed actors to accept the legitimacy of the postconflict order and of the state itself.
The co-optation of warlords into the postconflict political system does not seem to have a demonstrable effect on the level of informality or criminality in a war economy, nor is it an indicator of postconflict stability. Co-optation of warlords has some effect on minimizing violence and the incentives to violence. Co-optation does not, however, lead to dramatic reductions in informality and criminality, as these existed prior to conflict and were only enhanced by it. Moreover, many networks that benefited from the war economy may reject co-optation or try to upset postconflict stability in the interest of maintaining their activities. Therefore, co-optation of warlords or a larger political solution to the conflict is not a sufficient, let alone a necessary, condition for the unraveling of a war economy. As such, it is unclear whether the elimination of criminality and informality is a realistic, or desired, goal in postconflict countries.
Indeed, in the case of Afghanistan, it has been argued that the co-optation of warlords merely provided them with the opportunity to expand their bases of power through the institutions of the Afghan state.11 These examples of the liberal approach to postconflict state building emphasize the need to integrate warlords and rebels, reinstate sovereignty, establish institutions and mechanisms of sound (democratic) governance, and eliminate informality and criminality from the economy. However, such liberal approaches have not always been successful in bringing about stability and an end to violence and conflict.
Conclusion: Alternatives to the Liberal Peace Approach
This brings us back to the original question of how to sever the linkage between war economies and conflict. William Reno has critiqued the liberal approach of co-opting warlords to discourage conflict as ignoring the central role and the inevitability of criminality in both pre- and post-conflict stages.12 Indeed, most alternative perspectives to the liberal peace approach are largely grounded in accepting the inevitability of criminality in the postconflict stage. The illicit businesses and activities that emerged during conflicts cannot be immediately eradicated in the postconflict stage.
For some analysts, such as Peter Andreas, criminality and illicit businesses were actually central in achieving some key peace and stability goals as they helped sustain populations by providing goods and services that the central authorities were unable to provide.13 Andreas has gone so far as to argue that the Bosnian state would not exist without the role that criminal combatants, black-market traders, and arms-embargo busters played in sustaining it.14
The liberal peace approach assumes that the strategic goal of combatants is entry into and participation in a postconflict order. In this perspective, political grievances that underpin conflicts are swept away once warlords are brought to power. Yet, such perspectives narrow the understanding of the political economy of conflict and why combatants may or may not accept the legitimacy of a postconflict order. Combatants may be forced to negotiate or to accept a postconflict order when there is material stress on their activities. Conflict fatigue can set in, and combatants may no longer be able to maintain the material basis of continued fighting and may be forced into a peace process or political negotiations.
In such scenarios, disrupting the methods of conflict financing happen organically and impose new material realities on combatants. This is unlikely to occur in the Syrian case, where there is an established system of smugglers and illicit networks that predate the uprising and that have only grown and consolidated since. One can conclude with some certainty that elements of the war economy will persist in Syria once the violence begins to subside. Any attempts to destroy politico-criminal ties that were created during the conflict will likely be futile.
With such realities in mind, one can begin to identify some of the principles of an alternative to the liberal peace approach:
- There should be an understanding and acceptance of the continued role of criminality and elements of the war economy in the postconflict period. This cannot be legislated away.
- Economic issues should be included in any political negotiations to lay the groundwork for addressing some of the socioeconomic hardships that underpin war economies. Disrupting criminal networks depends on long-term socioeconomic transformation.
- It should be recognized that the nature of economic activity in Syria’s war economy is short-term, incoherent, decentralized, and unstable, and that unraveling these activities is not strictly a policy decision to be made by political authorities. This process is entirely dependent on the contexts of the conflict.
- Some groups are predatory and exclusive, while others incorporate popular aspirations into their activities. The second category should be targeted for selective incorporation into postconflict orders. These groups are more likely to be responsive to political incentives.
- A comprehensive approach should be encouraged that tries to reduce the availability of revenue sources and the incentives behind violence.
1 I understand criminality here expansively as both criminal activity and shadow, black, or illicit market activity.
2 I use the term warlord here in the broadest sense to refer to an individual who has attained political and economic power during periods of conflict. I use the word rebels to refer to armed combatant groups; the term is often used interchangeably with combatants or organized armed groups.
3 Paul Collier and Nicholas Sambanis, eds., Understanding Civil War: Evidence and Analysis, vol. 1, Africa (Washington, DC: International Bank for Reconstruction and Development / World Bank, 2005), 2.
4 Paul Jackson, “Warlords as Alternative Forms of Governance,” Small Wars & Insurgencies 14, no. 2 (June 2003): 131–150.
5 Paul Collier, Anke Hoeffler, and Dominic Rohner, “Beyond Greed and Grievance: Feasibility and Civil War,” Oxford Economic Papers 61, no. 1 (2009): 1–27.
6 R. Thomas Naylor, Wages of Crime: Black Markets, Illegal Finance, and the Underworld Economy (New York: Cornell University Press, 2002), 45; and Achim Wennmann, “Economic Dimensions of Armed Groups: Profiling the Financing, Costs, and Agendas and Their Implications for Mediated Engagements,” International Review of the Red Cross 93, no. 882 (June 2011): 333–352.
7 Achim Wennmann, “The Political Economy of Conflict Financing: A Comprehensive Approach Beyond Natural Resources,” Global Governance 13, no. 3 (July–September 2007): 427–444.
8 Edward Newman and Niklas Keller, “Criminal Legacies of War Economies,” Journal of Peacebuilding & Development 3, no. 3 (2007): 49–62.
9 Michael Charles Pugh, Neil Cooper, and Jonathan Goodhand, War Economies in a Regional Context: Challenges of Transformation (Boulder: Lynne Rienner Publishers), 2.
10 Danielle Beswick, “The Challenge of Warlordism to Post-Conflict State-Building: The Case of Laurent Nkunda in Eastern Congo,” Round Table: The Commonwealth Journal of International Affairs 98, no. 402 (2009): 333–346.
11 Cyrus Hodes and Mark Sedra, The Search for Security in Post-Taliban Afghanistan (London: International Institute for Strategic Studies, 2007).
12 William Reno, “Understanding Criminality in West African Conflicts,” International Peacekeeping 16, no. 1 (2009): 47–61.
13 Peter Andreas, “Symbiosis Between Peace Operations and Illicit Business in Bosnia,” International Peacekeeping 16, no. 1 (2009): 33–46.
14 Peter Andreas, “The Clandestine Political Economy of War and Peace in Bosnia,” International Studies Quarterly 48, no. 1 (March 2004): 29–51.