ZimAsset: The Hidden Link between Asteroids, Platinum Group Metals and a NewSpace Company

“Most of our assumptions have outlived their uselessness.”

― Marshall McLuhan

“Assumptions are dangerous things to make, and like all dangerous things to make ― bombs, for instance, or strawberry shortcake ― if you make even the tiniest mistake you can find yourself in terrible trouble. Making assumptions simply means believing things are a certain way with little or no evidence that shows you are correct, and you can see at once how this can lead to terrible trouble. For instance, one morning you might wake up and make the assumption that your bed was in the same place that it always was, even though you would have no real evidence that this was so. But when you got out of your bed, you might discover that it had floated out to sea, and now you would be in terrible trouble all because of the incorrect assumption that you'd made. You can see that it is better not to make too many assumptions, particularly in the morning.”

― Lemony Snicket, The Austere Academy 

In a blogpost which is titled ZimAsset: The Things That Haven't Been Said and The Numbers You've Never Seen, I discussed the insurmountable hurdles that the architects of ZimAsset would need to overcome, including:

1. Idiosyncratic Factors and Political Realities.
2. Funding Constraints and Realities of the Global Economy.
3. Debt Sustainability Issues.

Evidently, the hurdle that lies outside the sphere of influence of the architects of ZimAsset is Funding Constraints and Realities of the Global Economy. 

As I alluded to in the blogpost which is titled ZimAsset: The Things That Haven't Been Said and The Numbers You've Never Seen, the key constituent of this particular hurdle is China's demand for commodities.

Stated otherwise; any adverse change in China's demand for commodities would, in essence, be a headwind that would have a negative bearing on the implementation of ZimAsset. Illustration 1, below, depicts this, and another, headwind:

Illustration 1 (click on illustration to zoom in)

Illustration 1 is a headwind metaphor that depicts the forces that:

• Lie outside the sphere of influence of the Zimbabwean government.
• Would have a negative bearing on the implementation of ZimAsset.

To expound on the headwinds in Illustration 1:

1. The Global Commodities Supercycle: Over the last twenty years, the upsurge in global commodity prices was largely driven by China's demand for commodities (particularly energy commodities and base metals). This demand was, in turn, spurred by China's growth model which was driven by: 1) Exports of manufactured goods, and, 2) Fixed capital investments. In a blogpost which is titled China's Edifice Complex: Shadow Banking, Debt Bubbles and Mining Opportunities in Africa, I discussed how this growth model had run out of steam. Further, in a subsequent blogpost which is titled ZimAsset: The Things That Haven't Been Said and The Numbers You've Never Seen, I discussed how China's policymakers intended to supplant the fixed-investment-and-export-led growth model with a more sustainable domestic-consumer-spending-led growth model. Furthermore, in the latter post, I also discussed how this change in China growth model would: 1) Cut China's demand for commodities, which would; 2) Ignite a secular decline in global commodities prices, and; 3) Adversely affect the natural resource-centered aspects of ZimAsset. At the just-ended 2014 Milken Institute Global Conference, Dr. Nouriel Roubini  (also known by the following moniker: "Dr. Doom") stated, and I quote: "The reality is that while they [Chinese policymakers] do realize that their growth model is unsustainable and uncoordinated as they say; fixed investment is 50% of GDP; savings more than 15% of GDP and consumption only 35% of GDP. The re-balancing from one to the other, in my view, is going to occur much more slowly than is desired and optimum. Because of two reasons. One: is that the interest groups that are in favor of the old growth model are very powerful; state-owned enterprises, provincial governments, their SPVs [Special Purpose Vehicles], the PLA [People's Liberation Army] and the state sector. While those who are going to be benefiting from a growth rate that is consumption-oriented and labor intensive ―  workers and households ― are politically not strong because it [China] is not a democracy. Secondly, when I was, in November, in China, on delegation, I met both the President, Xi, and the Prime Minister, Li, and both of them said; 'It's a utmost [sic] our goal to have 7.5% growth during this decade. Because we have an objective to double GDP by the end of the decade'. It's a political objective. But if you are really serious about the re-balancing and stopping this build-up of credit; every time growth slows down towards 7%, in the last five years, they have gone into a panic and done another round of credit-fueled fixed investment. That means: more bad assets ―  in the banks and the shadow banks; more NPLs [Non-Performing Loans]; more bad investment ―  in real estate in infrastructure, in industrial capacity ― which is already excessive; and more debts that, both in the private and public sector are excessive. The leverage ratio right now in China 240% [of GDP] and rising, between private and public [sector] debt (sic). That eventually is going to lead to a hard landing. To me, a hard landing is not 3% or 4% growth. But I think that by next year [2015] growth is going to be 6%, and the next year [2016] it's going to be lower than 6%. That is not hard landing, and that is not the consensus soft landing". Succinctly put: Dr. Nouriel Roubini states that; owing to vested interests, the anticipated reorientation of China's growth model may not occur in the near-term. Therefore, this implies that in the near-term China's pace of fixed capital investment will remain unchanged. Further, this also implies that her export-led growth model would only be disturbed by lack of global demand. Otherwise stated; in the near-term, commodity prices may not dip because of falling Chinese demnd. However, in the medium-to-long term, the change in China's growth model poses the greatest downside risk to global commodity prices. Thus, it is reasonable to assert that the Global Commodities Supercycle headwind remains a threat to the architects of ZimAsset in the medium to longer term. This is depicted by the weaker headwind labelled 1 in Illustration 1.
2. Extraterrestrial Sources of Platinum Group Metals and Energy Minerals: This factor is depicted by the stronger, larger and more proximate headwind which is labelled 2 in Illustration 1. And, it will be discussed in the forthcoming sections of this post:

***

One of the highlights of the just-ended 2014 Milken Institute Global Conference was a panel discussion which was christened Why Tomorrow Won’t Look Like Today: Things that Will Blow Your Mind. The panelists included:

• Eric Anderson the Co-Founder and Co-Chairman of Planetary Resources.
• Eric David the Co-Founder and Chief Strategy Officer of Organovo.
• John Kelly III the Senior Vice President and Director of IBM Research.

In this post, I'll focus on the presentation that was made by Eric Anderson of Planetary Resources:

In November of 2010, Planetary Resources was established by Peter Diamandis (of the X-Prize fame), Erick Anderson and Chris Lewicki.

Currently, the organization has a team of forty PhD-level engineers. Noteworthily, some of the members of Planetary Resources's team were constituents of the Nasa Jet Propulsion Lab (JPL) unit that landed a probe on Mars.

Curiously, the company has a bland mission: to "expand the Earth's natural resource base". Interestingly enough, this mission masks the complexity of the vector that the company will take to this envisaged end-state: extracting mineral resources from extraterrestrial bodies, like asteroids.

Illustration 2, below, is a picture of an asteroid:

Illustration 2 (click on illustration to zoom in) Adapted From: Crystalinks, 2014

Essentially, asteroids are remnants of the early solar system. They are chemically equivalent to the material that lies at the planetary core of Earth.

Generally, asteroids are located in a heavenly zone that lies between Mars and Jupiter. As Illustration 3, below, shows, this region is known as the Asteroid Belt:

Illustration 3 (click on illustration to zoom in) Adapted From: World Mysteries, 2014

In the Asteroid Belt, there are between 60 and 100 million asteroids. Intriguingly, the aggregate mass of these asteroids is equivalent to, at least, the mass of an Earth-sized planet. As it currently stands, we've only discovered 1% of the asteroids in the Asteroid Belt.

Generally, there are over 10,758 asteroids that equidistant to Earth as the Moon. By and large, some of these asteroids travel in similar orbits as Earth. Tellingly, these asteroids are known, in astronomical parlance, as near-Earth asteroids. [1]

It is the mineral wealth that is contained in these proximate asteroids that Planetary Resources seeks to tap. Naturally, this begs the question: How much mineral wealth is in one asteroid? Generally:

• An asteroid contains Platinum Group Metals. These minerals can be found at concentrations that average 10,000 times the concentrations of the richest platinum mines on Earth. To put this into context;
• An asteroid with a volume of approximately 2,500 cubic meters would have approximately USD600 billion-worth of Platinum Group Metals (valued at current prices). This suggests that the average near-Earth asteroid has about USD240 million-worth of Platinum Group Metals per cubic meter.
• The Platinum Group Metals that are found on asteroids are twenty-five times the density of water.
• The non-Platinum-Group-Metal constituents of asteroids, i.e. the volatile materials on asteroids, are one of the most energy efficient materials known to mankind (when you break them down into hydrogen and oxygen). According to some estimates, asteroids may have up to USD50 million of rocket fuel per tonne.

Succinctly put; asteroids are replete with metals and energy materials.

***

Heretofore, the mineral wealth of asteroids was inaccessible because of expense:

Interestingly, the key innovation that Planetary Resources brings to bear is cost; the company is implementing a cost leadership strategy. More precisely put; Planetary Resources has brought down cost of sending a (small) droid into deep space from USD250 million to USD2 million. By and large, the components that Planetary Resources uses are one hundredth the cost of the components that were used by other space missions.

Hence, it is reasonable for one to conclude that Planetary Resources's cost disruptions have: 1) Opened-up a new frontier of resources, and; 2) Enabled humanity to become a space-ferrying species.

Naturally, this begs the question of when Planetary Resources will start having a disruptive impact on the extraction of Platinum Groups Metals. The timeline in Illustration 4 has the answer:

Illustration 4 (click on illustration to zoom in) Adapted From: Anderson, 2014

As Illustration 4 shows, Planetary Resources will start to have a disruptive impact on the Platinum Metal Group industry between 2016 and 2017; i.e. two to three years from now.

To provide an illustrative example of the possible scale of the disruption: During the 18th century aluminium was the most expensive metal.

Why? Because;

• Aluminium is extremely rare in its purest form.
• The contemporaries did not have the technology to separate aluminium from its ore, bauxite.

In fact, in the 18th century, aluminium was so rare (and valuable) that important visiting dignitaries to the court of the French King would be served on a table with fine aluminium cutlery; while the nobles were served on a table with golden cutlery.

As recently as 1890, aluminium was priced at $33 per kilogram (which translates to a price of $888.51 per kg in 2014 dollars). After the Pittsburgh Reduction Company started commercial production of aluminium, using the Hall-Heroult process, the price of aluminium plummeted to $1 per kilogram (which translates to a price of around $26.92 per kg 2014 dollars).

I firmly believe that Planetary Resources will have a disruptive impact (of a similar order of magnitude) to the Platinum Metals Group industry.

For Zimbabwe, this implies:

1. That its untapped Platinum Group Metal wealth would become worth less (not worthless);
2. The communities that entered into the "vendor-financed" empowerment deal with Zimplats will never realize the benefits of owning a stake in the company.

Clearly, the architects of ZimAsset made the mistake of assuming that tomorrow will look like yesterday and today. Evidently, they did not factor in the impact of industries of the future like; Energy Technology (Shale Gas), Biotechnology (Stemcell Therapy), IT (Bigdata and Autonomous Robotics), New Manufacturing Technology (Nanotech) and Defense Techonologies (Drones).

The mistake that they made may prove to be costly.


[1] For more information on asteroids visit this Planetary Resources blogpost.

On Kagame's Allegation: Did France Participate in the Genocide? Satellite Image Data Answers: "Maybe - on the 17th of July 1994"

"If we use the word 'genocide' and are seen as doing nothing, what will be the effect on the November [congressional] election?"

― Susan Rice (1994 National Security Council Advisor), 1994 NSC Call

“The truth will set you free, but first it will piss you off.”

― Gloria Steinem

"All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

― Arthur Schopenhauer

In his 5th of April 2014 interview with Jeune Africa Magazine, Mr. Paul Kagame, the current President of Rwanda, said and I quote [1]:

“The Western powers would like us to believe that Rwanda is an ordinary country; as if nothing ever happened [8]. This accords them the space to forget and distance themselves from their responsibilities, but it is impossible. A case in point is France. Twenty years after the genocide, the only thing we can tell the French to their faces is that they did not do enough to save lives during the genocide. This is a fact, but it glosses over the reality. Belgium and France played a direct role in the political preparation of the genocide and they participated in the genocide. Ask the survivors of the massacre that occurred in Bisesero in June of 1994 and they will tell you that the French soldiers, who were part of Operation Turquoise, did it.”

Before I explore the merits of the accusations that Mr. Paul Kagame leveled in the italicized sections of the quotation, I will start by discussing the context:

  

By all accounts, France's track record on the African continent is checkered, at best, and inordinately flawed, at worst. Otherwise put, it is very easy to ― rightfully or wrongfully ― link France to any nefarious activity that occurred in Francophone Africa; the defining feature of France's Africa Foreign policy was/is its ruthless amorality. 

Generally, during the period which intervenes (Valéry Giscard) d’Estaing and (Jacques René) Chirac's terms in office, France's Africa Foreign policy was predicated upon the following broad aims:

1. Maintaining France's control over the political and cultural spheres of Francophone states, with the underpinning goal of;
2. Maintaining and expanding France's control over the economic and financial spheres of Francophone states.

To protect her interests in Africa, France forged military allegiances with the governments of virtually all Francophone states, including the government of Juvénal Habyarimana (in 1975). 

When the Rwandan Patriotic Front (RPF) invaded Rwanda in 1990 ― i.e. four years before the Rwandan genocide occurred ― it threatened the contemporary geopolitical alignment, which buttressed France's Rwandan interests. Otherwise put, the attack on the Habyrimana government was tantamount to an attack on France.

***

...Four Years Before the Genocide Occurred: Invasion by Ugandan-Sponsored RPF Forces

"There are no 'good guys' in this story"

― Allan Stam

When the Ugandan-Sponsored RPF invaded Rwanda in 1990, it managed to bring large swathes of territory in North Western Rwanda under its fold. From the vantage point of the commune chiefs in the region, the RPF's push towards Kigali had immense chances of success. Owing to this belief, they cast their lot with, and lent their support to, the RPF. Succinctly; it was a forgone conclusion that the Rwandan Defense Forces (FAR) could not match then invading RPF in combat. And, that the RPF would march to Kigali unopposed.

In a bid to protect her interests and aid a pliant ally, France intervened militarily in the conflict and helped to bring the RPF's advance to a grinding halt. During the ensuing period, i.e. while the Arusha Accords were being negotiated and signed, France, in accordance with the terms of her military alliance with the Rwandan government, gave basic military training to a youth reserve force. Unbeknownst to France at the time, this youth reserve force would evolve into the Interahamwe; the militia that would execute the genocide in 1994.

Otherwise put, France did, as Paul Kagame suggests, help to prepare for the genocide (albeit indirectly). Her military trained the Génocidaires. However, it is important to point out that there is no credible evidence which suggests that France trained the Génocidaires with the intent to bolster their capabilities to commit acts of genocide. 

Rather, all the evidence in the public domain suggests that she trained the Génocidaires with the intent to bolster their collective ability to thwart, what was theretofore, widely perceived as a foreign-sponsored invading force (which sought to depose, via violent means, a legitimately elected government). 

Further, the military training that France gave to the-said youth reserve force was part of an ongoing military collaborative relationship between France and Rwanda. This collaborative relationship was/is permissible under international law, and, is analogous to the relationship that France has in place (since 1960) with; Mauritania, Senegal, Mali, Guinea Bissau, Ivory Coast, Burkina Faso, Benin, Niger, Togo, Chad, Cameroon, Gabon, Congo Brazzaville and the Central African Republic.

...On whether France participated in the Genocide

I think that the most serious aspect of Mr. Paul Kagame's allegation is the suggestion that French troops participated in the 1994 Rwandan Genocide.

To explore the merits of this allegation, it is prudent to start by determining when French troops were in Rwanda and when they "left". The abbreviated timeline in Illustration 1, below, will aid this endeavor:

Illustration 1 (click on illustration to zoom in) Adapted From: UN Independent Inquiry, 1999, and; Soderlund et al., 2008

 

As Illustration 1 shows, prior to the 14th of April 1994, French troops were part of the UNAMIR peacekeeping force which was mandated to oversee the implementation of the Arusha Accords [6]. After a contingent of Belgian peacekeepers was executed by members of the Rwandan Presidential Guard, i.e. on the 7th of April 1994, France was compelled to shift her priorities from peacekeeping to the evacuation of French nationals and troops.

Further, Illustration 1 shows that there were no "battle-ready" French Troops in Rwanda between the middle of April 1994 and the 22nd of June 1994. To be more precise; according to Soderland et al, 2008, while France's troops had officially "left" Rwanda by the 10th of April 1994, France did maintain a para-battalion of troops which was stationed in Kigali.

Between the middle April of 1994 and the 22nd of June 1994, this para-battalion force was dormant. Otherwise put, the battalion did not provide the UNAMIR peacekeeping force with any form of assistance. According to all indications, the "para-battalion" force did nothing during the captioned time period.

Thus, this suggests that French troops cannot be held to account for (committing) the atrocities that occurred after the 15th of April 1994 and before the 23rd of June 1994. 

As Illustration 1 shows, on the 23rd of June 1994, a contingent of 2,550 French troops and 500 troops from Senegal, Guinea-Bissau, Chad, Mauritania, Egypt, Niger and the Republic of the Congo arrived in Rwanda.

They were mandated, by the UN, to establish a "safe-zone" in the South Western region of Rwanda. This mission was christened, by the French, Operation Turquoise. And, it was under the command of General Jacques Hogard.

***

To recap: In the quote that opened this post, Mr. Paul Kagame alleges that the French contingent of Operation Turquoise helped the Génocidaires, sometime in June of 1994, to commit the callous atrocities that occurred in the Bisesero region of Rwanda.

In the forthcoming sections of this post, I will use reconnaissance satellite image data on battle-front positions, and, records of the atrocities that occurred during the Rwandan genocide to explore whether Mr. Kagame's allegation has any merit.

***

Paul: “Yes, General. I am glad you came by. I overheard something that I think you should know about.”
General Bizimungu: “What did you overhear?”
Paul: “A discussion between an American Embassy official and a UN Colonel.”
General Bizimungu: “What did they say?”
Paul: “The American assured the colonel that they would watch everything.”
General Bizimungu: “Watch everything? How? They are gone.”

Paul points surreptitiously to the sky. The General looks up.

Paul: “Satellites.”
General Bizimungu: “Satellites?”
Paul: “Yes, they can photograph the epaulets on your shoulder.”
General Bizimungu: “And what will they do with these satellites?”
Paul: “The American said intervention is too costly, better to get photographic evidence and snatch up the high command.”
General Bizimungu: “The high command? Our high command?”
Paul: “'Snatch them up and put on a war crimes trial. Lock them all away forever. No political risk, and big publicity.' That's what he said… I thought I'd better tell you.”

The General looks again to the sky then.

General Bizimungu: “The Americans! Who are they to put us on trial?”   

― Exchange from the 2004 Historical Drama Film, Hotel Rwanda

The first challenge I faced was to identify exactly where Bisesero was situated. To aid my endeavor, I consulted the Great Oracle of our modern age, Google Maps. Illustration 2 sums-up what I discovered:

Illustration 2 (click on illustration to zoom in) Adapted From: Google Maps, 2014

I soon discovered that Bisesero was a mountain range in Rwanda, which is in the vicinity of the following locales; Kibuye, Gisovu and Gishyita. 

In this post, the Bisesero Massacres will be taken as any massacre that occurred, in June of 1994, within a 10 mile or 16.10 kilometer radius of Gisovu, i.e. the marked spot in Illustration 2.

After I had located Bisesero, I then faced the following challenges:

• Locating a dataset of the atrocities that occurred during the Rwandan genocide. I needed a dataset that would stipulate where an atrocity occurred, who the perpetrators were and when it occurred, i.e. an event catalogue.
• Locating a dataset of the battle-front, troop movements and the territory that was controlled by the RPF, the FAR and the Operation Turquoise Force.

Otherwise put, I was looking for an integrated dataset with four dimensions; 1) Killings, 2) Geography, 3) Battle-Fronts / Troop Movements and 4) Time. 

Interestingly enough, there is only one research project in the world that built the four-dimensional dataset that I sought; the Genodynamics project that was spearheaded by Professors Allan Stam and Christian Davenport.

From the outset, I have to point out that the project is inexorably controversial in certain circles [2] [9]. The controversy does not stem from the methodology that was employed to collect the data. It largely stems from the conclusions that the researchers drew from the data. 

When one uses a dataset that underpins the controversial conclusions of a research project, like the one that was conducted by Professors Allan Stam (Stam) and Christian Davenport (Davenport), it is important to be transparent on the aspects of the research findings that will or will not be used [9]. 

Table 1 expositions the seven dimensions of the Genodynamics project (I will not discuss most of the things that are shaded in grey):

Table 1 (click on table to zoom in) Adapted From: Davenport and Stam, 2004

In this post I will use the dimensions of the Genodynamics project that attract limited controversy, including; 1) Nature of the Killings, 2) Types of the Killings, and 3) The Perpetrators of the Killings.

***

Before I explore the merits of the allegations that were leveled by Mr. Paul Kagame, I'll start by briefly discussing how the data that underpins the Genodynamics project was collected. With this specific research project, it is of critical importance to be transparent:

Illustration 3 shows the data sources that were used to construct a database of the atrocities that occurred during the Rwandan Genocide:

Illustration 3 (click on illustration to zoom in) Adapted From: Stam, 2009, and; Davenport, 2010

As Illustration 3 shows, the killings database of the Genodynamics project was primarily built using:

• Ten sources of data.
• Both Rwandan sources and International sources.
• Datasets that covered both large scale killings and the (other) killings that occurred throughout Rwanda.

The principal sources of data that will be used in this particular post to establish the killings that occurred in Rwanda during the 1994 Genocide include:

1. The Rwandan Ministry of Education: The Rwandan Ministry of Education conducted a house-to-house survey to establish the number of killings that occurred in each prefecture.
2. The Rwandan Ministry of Youth, Culture and Sport: Conducted a mass-grave identification programme. The exercise identified a total of 130 mass-graves. Davenport and Stam visited a sample of 85 out of the 130 mass-grave sites to verify whether they existed or not. [3]
3. Ruzibiza Deposition.
4. Physicians for Human Rights: Exhumed one of the mass-graves to identify if the remains in the mass-graves corresponded with the reported totals. [4] 
5. Human Rights Watch: Collected 12,000 witness testimonies. These testimonies were used, in the Genodynamics project, to establish exactly when the killings in each region began.

Like the Genodynamics flagship presentation, this post will use a median estimate of the casualties that were reported by all five of the above-mentioned sources. Otherwise put, the killings that were not reported by all five sources will not be considered.

To establish the battle-fronts and the territories that were controlled by RPF, FAR and Operation Turquoise, Davenport and Stam used the following five step methodology:

1. Acquire Reconnaissance Satellite Data: The Canadian Military had reconnaissance satellites that were monitoring troop positions in Rwanda during the entire duration of the genocide. Davenport and Stam obtained this reconnaissance satellite imagery and used it as a starting point; [5]
2. Verify Troop Positions Using US Defense Intelligence Estimates: The authors verified the troop positions that were captured by the reconnaissance satellites using de-classified US Defense Intelligence estimates;
3. Verify Troop Positions Using CIA National Intelligence Estimates: They obtained, through the Freedom of Information Act, the troop positions of each side in the conflict. Using the de-classified CIA National Intelligence estimates, they verified the troop positions;
4. Verify Troop Positions Using Kuperman's Estimates: They revised the data to incorporate the troop positions that underpin the treatise which Professor Alan J. Kuperman presents in The Limits of Humanitarian Intervention: Genocide in Rwanda.
5. Verify Troop Positions Using Combatant Accounts: Davenport and Stam's research collaborator, Professor Peter Erlinder, an International Criminal Tribunal for Rwanda defense lawyer iteratively discussed, separately of course, the battle-front and territory data that his team had collected with RPF members (see Map 1, Map 2, Map 3 and Map 4 here), the UN and members of the FAR. He incorporated their feedback into the template that his team had built.

Hence, it is reasonable to assert that the troop position, battle-front and territory data that will be used in this post represents: 1) the opinions of the principal players in the conflict, and; 2) the intelligence that was gathered by US and Canadian governments. 

When Davenport and Stam collected the data, they discovered that there wasn't much variance between the troop positions that were declared by all the sources.

***

To help interpret the information in the Illustrations that will follow, here is a rough key:

• A zone which is shaded in Green: Was under the control of the Rwandan Patriotic Front (RPF) on the given date.
• A White zone: Was under the control of the Rwandan Defense Forces (FAR) or the Interahamwe on the given date.
• A zone which is shaded in Turquoise: Was under the control of the French Army on the given date.
• A solid Green line or edge: Indicates the RPF's battlefront on the given date.
• A solid Blue line or edge: Indicates the French's battlefront on the given date.
• Orange shading: Indicates that an atrocity occurred in the prefecture on the given date. The deeper the shade of orange; the greater the number of killings.

Further the atrocities that occur:

• Along the Battlefront: Are defined as Combat Deaths.
• Behind the Battlefront: Are defined as Reprisal Killings, Politicide or Random Killings.

***

As I alluded to before, French Operation Turquoise troops officially set foot in Rwanda on the 23rd of June in 1994. However, as Illustration 4 clearly demonstrates, the French did not have any battle-front position on the date:

Illustration 4 (click on illustration to zoom in) Adapted From: Davenport and Stam, 2004 [7]

The only massacre that occurred in the target region (refer back to Illustration 2), occurred in Kibuye; i.e. in the territory that was controlled by the FAR.

Illustration 5, below, shows, a massacre that occurred in Rwanda on the 24th of June 1994:

Illustration 5 (click on illustration to zoom in) Adapted From: Davenport and Stam, 2004

As Illustration 5 demonstrates, the French did not have a battle front position on the date; the massacre occurred in FAR-controlled territories.

Illustration 6, below, shows two massacres that occurred in Rwanda on the 27th of June 1994:

Illustration 6 (click on illustration to zoom in) Adapted From: Davenport and Stam, 2004

Of the two massacres, the killings that occurred in the commune near Kibuye fall in the target region (refer back to Illustration 2). However, they occurred in a territory that was controlled by the FAR; the French did not have any battleground position on the date.

Illustration 7, below, shows a massacre that occurred in Rwanda on the 28th of June 1994:

Illustration 7 (click on illustration to zoom in) Adapted From: Davenport and Stam, 2004

As Illustration 7 shows, the massacre occurred in the target region (refer back to Illustration 2). However, the French did not have any battleground position on the date.

***

To close off, according the data at hand, the French did not have any battleground positions during the entire month of June.

From the data, one can deduce the following: Between the 23rd and the 30th of June 1994, French troops were probably establishing a base, securing the perimeter and sending off reconnaissance scouts to probe the area. 

Otherwise put, the French did not have command control over the regions wherein the massacres (that Kagame cites) occurred. Thus, it is reasonable to assert that the FAR was probably responsible for the killings that occurred during the month of June 1994.

This does not imply that Mr. Paul Kagame made a baseless allegation; it simply suggests that: he may have based his allegation on witness accounts that have inaccurate dates, or, that the battle front data that I used does not fully capture the dynamics of the battleground. Or, maybe he is correct; there was a French para-battalion that was stationed in Kigali when the genocide occurred. Could the para-battalion have committed the-said atrocities?

***

According to the data, the French only had a discernible battleground position in Rwanda on the 4th of July 1994 as Illustration 8, below, shows:

Illustration 8 (click on illustration to zoom in) Adapted From: Davenport and Stam, 2004

Illustration 8 clearly shows that killings occurred along the French-FAR battlefront on the 4th of July 1994. These killings occurred in the target zone (refer back to Illustration 2).

Technically, the-said killings cannot be defined as genocidal killings because they occurred along the battlefront. However, given the allegations that Mr. Paul Kagame leveled, it would be wise to conduct a detailed investigation into: the nature of the killings that occurred on the 4th of July 1994 and the perpetrators of the atrocities. 

Illustration 9, below, depicts atrocities that occurred in Rwanda on the 17th of July in 1994:

Illustration 9 (click on illustration to zoom in) Adapted From: Davenport and Stam, 2004

As Illustration 9 clearly demonstrates, the killings occurred in the Turquoise Zone, i.e. a zone that was under the territorial jurisdiction of the French. This zone lies behind the French-FAR battle-front. And thus, the killings could either be defined as Genocide, Politicide, Reprisal Killings or Random Violence. 

Approximately 85 lives were lost in this incident.

Clearly, it is important to stress that the existence of the 17th of July 1994 killings lends credence to the allegations that Mr. Paul Kagame leveled; the French had command control over the region wherein the killings occurred.

Thus, it would be prudent to conduct further investigations to establish:

1. The contextual factors.
2. The nature of the killings.
3. The perpetrators of the atrocities.

Meaningful reconciliation can only occur in Rwanda when all the unpleasant truths are known.


[1] Be advised this is an English Translation of a French Translation of an interview that Mr. Paul Kagame gave in English. Otherwise put, it isn't a verbatim quotation. However, it should accurately capture the gist of Mr. Paul Kagame's statement.
[2] The principal collaborators in the project, Davenport and Stam, were both declared persona non-grata in Rwanda. Because of the misinterpretation of his research conclusions, Christian Davenport was harassed and he (and members of his family) received numerous death threats. Further, Peter Erlinder, a UN International Criminal Tribunal for Rwanda Defense lawyer, author and research collaborator on the project, was arrested and tried in 2010 for "promoting genocide ideologies" and for links to the FDLR, i.e. the Génocidaires. Owing to this episode, Peter Erlinder suffers from Post Stress Traumatic Disorder (PSTD). Generally, all the members of this research projected were savagely attacked and vilified by the Rwandan Public Relations Machine. 
[3] The site visits positively verified the existence of all the 85 mass graves in the sample.
[4] The exercise confirmed that the declared cadaver count in the mass grave tallied with the actual number of remains in the mass grave.
[5] It took Davenport 3 years to obtain that reconnaissance satellite footage.
[6] It is important to stress that the force did not have the mandate to engage in combat.
[7] As Illustration 4 clearly shows, the data suggests that the RPF, i.e.  Mr. Kagame's army, conducted reprisal killings near the commune of Gitarama on the 23rd of June 1994. In aggregate, the data provides prima facie evidence for a total of 1,683 RPF Reprisal Killings. Otherwise put, the data suggests that there are no pure knights in shining armor in this story. A verbatim quote that helps to explain why no one talks about this: "We used communication and information warfare better than anyone.We have found a new way of doing things." ― Mr. Paul Kagame (Source of Quote: Gowing, N., (1998) ‘New challenges and problems for information management in complex emergencies: ominous lessons from the Great Lakes and eastern Zaire in late 1996 and early 1997’. Paper presented at Dispatches from Disaster Zones conference, Oxford)
[8] This is clearly an instance of the use of the 'narrative of difference' that Van Leeuwen (2001) wrote of in ‘Rwanda’s Imidugudu programme and earlier experiences with villagization and resettlement in East Africa’, Journal of Modern African Studies 39 (2001), pp. 623–44.
[9] For an abbreviated and easily digestible narrative of Davenport and Stam's (2010) research findings read: What Really Happened in Rwanda?

Missing from the EU-Africa Summit Agenda: How France will Repay the USD965 Billion+ She Owes CFA-Franc Union States

"There is an element of delusional obsession in the French political elite's preoccupation with the notion that France is still a global power."

― Zbigniew Brzezinski (Carter Administration Advisor), The Grand Chessboard

“Without Africa, France will slide down into the rank of a third [world] power”

― Jacques Chirac (French President 1995 - 2007), March 2008 Speech

"There is a dismal record of failure in Africa on the part of the developed world that shocks and shames our civilization."

― Tony Blair (UK Prime Minister 1997 - 2007), Trying to Feed a Billion People

”Without Africa, France will have no history in the 21st century”

― François Mitterand (French President 1981 - 1995), Speech

“The tragedy of Africa is that the African has not fully entered into history ... They have never really launched themselves into the future. The African peasant only knew the eternal renewal of time, marked by the endless repetition of the same gestures and the same words. In this realm of fancy ... there is neither room for human endeavor nor the idea of progress."

― Nicholas Sarkozy (French President 2007 - 2012), Dakar University Speech

From the 2nd to the 3rd of April 2014, delegates from 65 African and European states will converge, at the 4th EU-Africa Summit in Bruxelles (Belgium), to discuss the following pertinent topics:

• Education, Training and Human Capital Development.
• Inter-Continental Flows of Documented and Undocumented Migrants.
• Economic Growth and Employment Creation.
• Peace and Security.

It is reasonable to assert that this transnational gathering of policy-makers will spawn initiatives that target to improve the well being of Africans. However, by and large, most of these initiatives will fail to achieve their envisaged end-states. Why? Because their architects will fail to meaningfully explore the root causes of the problems that bedevil some African nations.

For instance, some of the economic ailments that affect Francophone African states have their origins in an agreement that was signed by France and her African colonies before they attained their independence in 1960. This agreement is known as the second Colonial Pact or, in polite quarters, as Françafrique.

Essentially, the agreement has eleven facets that are discussed extensively in the following seminal texts:

1. Colonialism in Africa, 1870-1960: The Economics of Colonialism by Lewis H. Gann and Peter Duignan (1975).
2. The Political Economy of a Common Currency: The CFA Franc Zone Since 1945 by Dr. David Stasavage (2003).
3. Les Servitudes du Pacte Colonial by Dr. Mamadou Koulibaly (2005).
4. The French Empire Between the Wars: Imperialism, Politics and Society by Martin Thomas (2005).
5. When War Ends: Building Peace in Divided Communities by Professor David J. Francis (2008).
6. History Of Development 3rd Edition by Gilbert Rist (2009).
7. France and the New Imperialism: Security Policy in Sub-Saharan Africa by Dr. Bruno Charbonneau (2013).

In this post, I will focus my discussion on the facets of the Colonial pact that pertain to the management of the financial reserves of former French colonies. 

In the late 1950s, France's African colonies, excluding Algeria, signed an agreement that:

• Obliged the African parties to the agreement to deposit 65% of (current and future) financial reserves in either of two CFA-Franc union banks (depending on the location of the country). 
• Compelled the African states to surrender 20% of (current and future) financial reserves to the French Treasury. These funds would be warehoused in an "operations account" that would be used to: 1) Settle offshore liabilities of CFA-Franc union states, and; 2) Guarantee the convertibility of the two CFA-Franc monetary units of account (i.e. the West African CFA-Franc and the Central African CFA-Franc).
• Allowed the African States to keep 15% of (current and future) financial reserves.

From the preceding bullet points, it is evident that the annual foreign currency earnings of each CFA-Franc union nation have the following destinations:

Illustration 1 (click on illustration to zoom in) Adapted From: Koulibaly, 2005

To further-illuminate the web of relationships that underpin the management of the CFA-Franc union's reserves, Illustration 2, below, will be employed:

Illustration 2 (click on illustration to zoom in) Adapted From: Koulibaly, 2005

Illustration 2 is an extension of Illustration 1. It demonstrates that the foreign currency reserves of CFA-Franc union states have three principal destinations:

1. The Nation's Central Bank: As Illustration 1 demonstrated, 15% of the forex earnings of a CFA-Franc union state are deposited directly in the reserve account of the central bank of the state.
2. The French Treasury: As Illustration 1 demonstrated, 20% of the forex earnings of a CFA-Franc union state are deposited directly in the "operations" account of the French Treasury.
3. The CFA Area Bank: As Illustration 1 demonstrated, 65% of the forex earnings of a CFA-Franc union state are deposited in an account with the local CFA Area Bank.

Theoretically, the funds that are held by the CFA Area Bank are "domiciled" in Africa and managed by the CFA Area Bank. But, in reality, as the grey arrow in Illustration 2 demonstrates, the "CFA Area Bank" is, in essence, a feeder-fund of the French Treasury. 

Otherwise put, once the reserves have been transferred to the CFA Area Bank, they are directly transferred to the French Treasury for management.

Illustration 3, below, depicts the two CFA-Franc union banks and the member states of each of the two CFA-Franc zones:

Illustration 3 (click on illustration to zoom in) Adapted From: Koulibaly, 2005

As Illustration 3 demonstrates, there are two CFA-Franc union banks: 1) the UEMOA Central bank, which caters to the needs of West African CFA-Franc union members, and; 2) the CEMAC Central bank, which caters to the needs of Central African CFA-Franc union members.

Curiously, CFA-Franc union member states:

1. Never receive any bank account statements: They have no access to information on their respective or collective bank account balances, and, they are not informed of the prevalent interest rates on their deposits. Further, they do not know how much interest has been accrued on the deposits they made.
2. They cannot "withdraw" their funds, in the traditional sense: If they need funding in excess of the "15% allotment" of their reserves, they have to borrow money from the CFA-Franc Area banks, at interest rates that are in the 5% to 6% range. Loans from the monetary union banks are capped at 20% of the borrower's tax revenues in the preceding year.

Succinctly put; once funds are deposited in CFA-Union banks, they are managed using black-box strategies and locked-up indefinitely. Indeed, this sounds like a diabolical plot from the most deranged and florid conspiracy theory. But, this is, regrettably, a factual account.

Naturally, this begs the question: How much money is in CFA union banks, or rather, the French Treasury? To answer this question as accurately as possible, it is important to distinguish between: Known-Knowns, Known-Uknowns, Unknown-Knowns and Unknown-Uknowns. 

To do this, I'll use the two-by-two matrix in Illustration 4:

Illustration 4 (click on illustration to zoom in)

Illustration 4 is a shades of grey metaphor, which basically serves to illustrate that the lighter shades of grey, i.e. Known-Knowns and Known-Unknowns, will illuminate the darker shades of grey, i.e. Unknown-Knowns and Unknown-Unknowns.

***

As Illustration 4 demonstrates, the most critical Known-Known is GDP. One of the most reliable databases of GDP figures, which factors-in relative standards of living, is the University of Groningen Development Center's Penn World Table. From the open-access resource, I extracted the GDP figures of 13 out of 14 CFA-Franc union nations. And, I aggregated the USD GDP figures of each nation from 1960 to 2011. Luckily, the GDP figures were expressed in real terms, so I did not have to adjust them for inflation before I used them.

The result of this exercise was Illustration 5 below:

Illustration 5 (click on illustration to zoom in) Adapted From: University of Groningen, 2014

Illustration 5 demonstrates that the jewels of the CFA-Franc union, as far as economic weight is concerned, are the Ivory Coast, Cameroon and Senegal.

Once I had derived the database of aggregated GDP figures, I faced the challenge of building a database of the tax revenues of CFA-Franc union nations. One of the most reliable open-access resources for this endeavor was the World Bank's database of development statistics. Unfortunately, the tax revenue time series of CFA-Franc area nations had large gaps.

From the range of the data that was available, it was evident that a tax-revenue estimate in the 11%-of-GDP-range would suffice for all countries. I then calculated 11% of each GDP figure in the time-series that underpins Illustration 5. And, I came-up with the aggregated dataset in Illustration 6:

Illustration 6 (Click on Illustration to zoom in) Adapted From: University of Groningen, 2014; World Bank, 2014, and; Chirinda, 2014

The shaded elements of Illustration 6 reveal that the biggest tax revenue generators in the CFA-Franc region are; Ivory Coast and Cameroon. Again, this comes as no surprise.

Once I produced the time series of revenue figures and aggregated them, I faced the challenge of building a database of the Export figures of CFA-Franc union states. From the World Bank's database of development statistics, I was able to locate the database of export metrics.

They were expressed as a proportion of GDP as is shown in the abbreviated of dataset in Illustration 7:

Illustration 7 (click on illustration to zoom in) Adapted From: World Bank, 2014

As Illustration 7 demonstrates, the countries that depend most on exports to generate GDP growth include: Congo Brazzaville, Gabon, Mauritania, Togo and the Ivory Coast.

If you multiply the timeseries that underpins Illustration 5 by the timeseries that underpins Illustration 7, you'll produce the export timeseries of CFA-Franc Area nations. Illustration 8, below summarizes the export timeseries which I produced:

Illustration 8 (click on illustration to zoom in) Adapted From: World Bank, 2014, and; University of Groningen, 2014

As Illustration 8 demonstrates, in US dollar terms, the largest exporters in the CFA-Franc region are the Ivory Coast, Cameroon, Gabon and Senegal.

***

Interestingly, the datasets that were presented in Illustrations 5, 6, 7 and 8 morphed the following Known-Unknowns into Known-Knowns:

• The export figures of CFA-Franc area nations since the 1960s.
• The tax revenues that were earned by CFA-Franc area nations since the 1960s.

These two information pieces will help to answer the following questions:

1. How much money was transferred from CFA-Franc area nations to France since 1960?
2. How much money was borrowed, or "withdrawn", by CFA-Franc area nations, from CFA-Franc area banks?

They will also help to answer the following question: What are the allocative effects of the CFA-Franc zone arrangement?

...Allocative Effects of the CFA-Franc zone arrangement

The CFA-Franc area is not an optimum currency area. Otherwise put, is it the grouping of widely dissimilar and economically unequal nations. Fundamentally, this simply implies that the monetary zone cannot remain intact unless there are explicit or implicit transfers of wealth from economically stronger states to the weaker states. Otherwise put in contemporary parlance; there is a Germany-Greece dynamic in the CFA-Franc union area.

Naturally, this begs the following questions: 1) Who are the “profligate idiots”?, and; 2) Which countries can be defined as centers of fiscal rectitude:

To answer this question, I had to revisit the basic principles of the CFA-Franc area to identify the mechanisms for:

• Contributing money to the system.
• Taking money out of the system.

Just to recap:

1. The system's inflows are the export proceeds of CFA-Franc area nations. 65% of them are deposited with the CFA-Franc area central banks.
2. The outflows from the system are loans from the CFA-Franc area Central banks. They are capped at 20% of a nation's tax revenues in the preceding year.

Circuitously, this simply implies that the nations that have relatively higher taxes and relatively lower exports benefit from the system at the expense of the nations that have relatively lower taxes and relatively higher exports.

Otherwise put, countries with a high (tax) revenue-to-exports ratio are living-off countries with a low (tax) revenue-to-exports ratio. 

Illustration 9 depicts the revenue-to-exports ratio of CFA-Franc area nations:

Illustration 9 (click on Illustration to zoom in) Adapted From: University of Groningen, 2014; World Bank, 2014, and; Chirinda, 2014

From Illustration 9, it is evident that the CFA-Franc area arrangement disproportionately benefits Guinea Bissau, Niger and Benin, and that the system is most unfair to; Gabon, Burkina Faso and Congo Brazzaville.

The relationship between revenue and exports unearths the CFA-Franc area's hidden perverse incentive. It is shown in the vicious cycle in Illustration 10 below:

Illustration 10 (click on illustration to zoom in)

The debt binge in Illustration 10 cannot go on ad infinitum. Usually, it ends in:

• A fiscal crisis and forced austerity: In his text which is titled The Political Economy of a Common Currency: The CFA-Franc Zone Since 1945 (The International Political Economy of New Regionalisms) David Stasavage (2003) chronicles the fiscal problems that have afflicted CFA-Franc union nations since 1945. It is not feasible for me to delve into his narrative in great depth, so you may want to purchase the book. 
• A coup (If the debt crisis adversely affects the upkeep and provisioning of the army): By and large, poorly remunerated soldiers are mutinous soldiers. A cursory analysis of the Integrated Network for Societal Conflict Research's (INSCR) database for Peace and Security reveals that, on average, 2.51 coups are attempted in the CFA-Franc region per year. These attempted coups have an average success rate 56%, and, an average body count of 254 cadavers per coup.

When I was going through the geopolitical and export data of the CFA-Franc zone, I developed the urge to answer the following burning question: What is the relationship between the (tax) revenue-to-export ratio of CFA-Franc zone nations and success rate of coups that have occurred in the monetary union?

Illustration 11, below, answers the question:

Illustration 11 (click on illustration to zoom in) Adapted From: World Bank, 2014, INSCR, 2014, and Chirinda, 2014

As Illustration 11 demonstrates:

• For the countries that are prejudiced by the CFA-Franc zone arrangement (indicated by the blue shaded region in Illustration 11): The higher their (tax) revenue-to-exports ratio; the lower the success rate of a coup. Clearly this indicates that ― in nations that are prejudiced by the CFA-Franc zone arrangement ― there is an inverse relationship between the (tax) revenue-to-exports ratio and the success rate of coups.
• For the countries that are not exactly prejudiced or unfairly rewarded by the CFA-Franc zone arrangement (indicated by the red shaded region in Illustration 11): The higher their (tax) revenue-to-exports ratio; the higher the success rate of a coup. Clearly this indicates that ― in countries that are not exactly prejudiced or unfairly rewarded by the CFA-Franc zone arrangement ― there is a direct relationship between the (tax) revenue-to-imports ratio and the success rate of coups.

I don't want to read too much into the correlations, but they certainly warrant detailed interrogation at some point in the future.


...How much of the CFA-Franc Zone's money is in French Banks?

“We have to be truthful and admit that the bulk of the money in French Banks originated from the exploitation of Africa.”

― Jacques Chirac (French President 1995 - 2007), Interview 

“The African people’s money stacked in France must be returned to Africa in order to benefit the economies of the BCEAO member states. One cannot have billions and billions placed on foreign stock markets and at the same time say that one is poor, and then go beg for money"

― Abdoulaye Wade (Senegalese President 2000 - 2012), November 2007 Speech

To calculate the value of the CFA-Franc zone's money that is in “French Banks”, I formulated the following set of assumptions:

'
To value the reserves, I formulated the following model, which takes into account the aforementioned assumptions:

The equation simply says that the aggregate reserves of CFA-Franc zone countries can be computed by:

1. Adding the liabilities, for a specific country and a specific year, to the potential drawings;
2. Subtracting the result from the corresponding net exports figure;
3. Adding the time series of the adjusted net export figures of a specific country from 1960 to 2011;
4. Adding the aggregated adjusted figures of CFA-Franc zone countries to each other;

The result of this four-step computational process is the aggregated Net Reserves figure.

Interestingly, the model can be alternatively expressed as follows:

In reality, CFA-Franc zone nations finance their imports using an admixture of their 15% annual allotment of their reserves, borrowings from CFA-Franc zone banks (that are equivalent to 20% of a nation's tax revenues from the preceding year), and, debt from other sources.

Thus, a more accurate expression of the valuation model can be found below:

To arrive at the aggregate exports figure of the CFA-Franc zone from 1960 to 2011, one would need to sum the total export figures of each CFA-Franc zone country as is shown in Table 1 below:

Table 1 (click on table to zoom in) Adapted From: World Bank, 2014

As Table 1 shows, between 1960 and 2011, CFA-Franc zone countries exported $1,668,004,706,174.03 worth of goods to the world.

Table 2 aggregates the liabilities totals of CFA-Franc zone countries:

Table 2 (click on table to zoom in) Adapted From: Reinhart and Rogoff, 2014; University of Groningen, 2014

In Table 2:

• 2012 liabilities were subtracted from the dataset, as they were not in the range that was under consideration; 1960 to 2011.
• There was a 10-year gap in the dataset which I used. During the 41-year period that was explored in Table 2, liabilities for the entire zone stood at an average of $2,338,324.756.10 (in each year). Hence, to fill the gap between 1960 and 1969 (inclusive), liabilities are assumed to be $2,338,324.756.10 per year. Therefore, this simply implies that the grand total for liabilities is $119,254,562,560.98.

Table 3 aggregates the potential drawings of each country from 1960 to 2011:

Table 3 (click on table to zoom in) Adapted From: World Bank, 2014

As Table 3 shows, the grand-total for potential drawings is $118,846,971,939.64.


Tables 1, 2 and 3 are all that is needed to compute the net reserves of CFA-Franc zone.

To calculate the net reserves, it is important to be cognizant of the following things (refer back to Illustration 1):

• 65% of the gross reserves is deposited in CFA-Franc zone area banks.
• 20% of the gross reserves is deposited in the "operations" account of the French treasury for liabilities management.
• 15% of the gross reserves is transferred directly to the states.

Hence, the net reserves of CFA-Franc zone nations are:

Table 4 (click on table to zoom in)

To arrive at the net figures in Table 4:

• Deposits in CFA-Franc zone Central banks were adjusted for "withdrawals".
• The liabilities grand total was subtracted from the Liabilities Management Reserve.

As Table 4 shows, between 1960 and 2011, Mauritania, Senegal, Mali, Guinea Bissau, Ivory Coast, Burkina Faso, Benin, Niger, Togo, Chad, Cameroon, Gabon, Congo Brazzaville and the Central African Republic deposited a combined sum of $965,356,087,073.48 in their respective CFA-Franc Zone Central Bank accounts (This figure doesn't account for interest accrued and it is not a nominal figure). [1]

At this year’s EU-Africa summit I hope that the delegates will discuss:

1. The modalities that would be put in place to allow CFA-Franc zone states to access this money.
2. The formula that would be used to compute the interest that is payable to the depositors of the-said funds.
3. A plan for disbanding the CFA-Franc Union and the Françafrique policy which buttresses it.

It's time to do away with the relics of bygone eras.


[1] Post script 24 April 2014: Take this figure as a back of the envelope calculation. If I encounter better data, I will refine it.