Understanding trade and markets in a protracted conflict: the case of Darfur

Trade has been the lifeblood of the economy of the greater Darfur region for centuries. This includes longdistance trade between Darfur and neighbouring countries and central Sudan in commodities such as livestock, gum arabic and cereals. It also includes trade within Darfur, often between livelihood groups whose livelihood strategies depend upon one another, for example trade between agriculturalists and pastoralists. Indeed, prior to the start of the current conflict in 2003 markets in Darfur were a key point of connection for Darfurians and for many others who did business within these markets, and an important factor in building social ties. Understanding how trade and trading relations have been impacted during the conflict is crucial to understanding how livelihoods have been affected, and how they can be supported, both while the conflict continues and when, eventually, it is resolved.

Although there are useful tools to carry out one-off analyses of markets to inform humanitarian programming, for example the Emergency Market Mapping and Analysis tool (EMMA), ongoing analysis of trade and markets in situations of protracted conflict is rare. Collaborative work by the Feinstein International Center of Tufts University (Tufts/FIC) and by the national NGO the Darfur Development and Reconstruction Agency (DRA) has attempted to fill this gap in the case of Darfur. The DRA has set up a communitybased market monitoring network in three Darfur states (North, West and Central Darfur) in the last couple of years, and will soon extend the network to South and East Darfur states. Local community-based organisations (CBOs) are involved in regular weekly and monthly data collection and analysis, and quarterly trade and market bulletins for each state are produced in English and Arabic. See http://sites.tufts.edu/feinstein/2011/market-monitoring-in-darfur.  Tufts/FIC has provided advisory support to DRA and the market monitoring network and has also carried out a series of in-depth market studies in Darfur: a study in 2008 that provided an overview of how trade had been impacted by the conflict, Margie Buchanan-Smith and Dr. Abdul Jabbar Abdulla Fadul, Adaptation and Devastation: The Impact of the Conflict on Trade and Markets in Darfur, June 2008, http://sites.tufts.edu/feinstein/2008/adaptation-and-devastation.  a study of how the conflict has impacted the livestock trade in Darfur in 2012, Margie Buchanan-Smith and Abdul Jabbar Abdulla Fadul, with Abdul Rahman Tahir and Yacob Aklilu, On the Hoof: Livestock Trade in Darfur, September 2012, http://sites.tufts.edu/feinstein/2012/on-the-hooflivestock-trade-in-darfur.  and a forthcoming study in 2013 on the cash crop trade in Darfur.

The impact of conflict on trade

All of this work has illustrated clearly the devastating impact the conflict has had on trade. At the most obvious level, many primary markets in rural areas closed down in the early years of the conflict when villages were destroyed and there was largescale displacement. At this time there was much looting, of livestock herds and of trade convoys moving between towns. A number of traders went bankrupt as a direct result of the conflict, or shifted to less risky business ventures.

During a decade of conflict the costs of trade have risen relentlessly, for a number of reasons. First, transport costs have increased because of the fees that now have to be paid at the numerous checkpoints on Darfur’s roads to ensure safe passage. Second, armed escorts are usually required and must be paid for, whether formally or informally. For example, government troops provide escorts for convoys of trucks on one of Darfur’s main trade routes, between the towns of El Fashir and Nyala, pushing up transport costs. Sometimes traders pay for their own armed escorts, especially livestock traders: in 2011, armed guards accounted for 25% of the total transport costs of trekking cattle from El Geneina in West Darfur to Omdurman in Central Sudan. Third, insecurity and numerous checkpoints mean that trade convoys must travel slowly: before the conflict it used to take one day in the dry season to travel between Geneina and Nyala, whereas now it takes two to three. This pushes costs up and is a problem for perishable commodities. Traders often have to take longer and more circuitous routes to avoid conflict hotspots. For example, it took traders 45 to 60 days to trek cattle from El Geneina to Omdurman before the conflict began; during the conflict it could take as long as four months as traders adapted their route through more secure areas. The threat of looting persists, for livestock herds being trekked between markets and for trade convoys, substantially increasing the riskiness of trading.

It is not only the Darfur conflict that has negatively affected trade; conflict in neighbouring countries has also had an impact. Cross-border trade has long been a feature of Darfur’s economy, to Libya, Chad and the Central African Republic. However, the conflict in Libya in 2011 halted one important trade flow, the export of camels from Darfur, depressing prices for almost a year.

Overall there has been a contraction of key parts of the economy. The livestock trade, for example, which is critical to Darfur’s economy, is estimated by traders to have contracted substantially, some said by as much as 50%, and the quality of the livestock brought to market has also deteriorated. Not only has trade in Darfur’s traditional commodities contracted, the conflict has also caused distortion in the economy. The rapid process of urbanisation triggered by the conflict and especially by displacement, combined with the large and unprecedented international presence in Darfur, has fuelled a construction boom and the trade in building materials and manufactured goods. Whereas Nyala used to be a major exporter of livestock and cash crops produced in Darfur, it is now a major importer of manufactured goods from Central Sudan. See Margie Buchanan-Smith et al., City Limits: Urbanisation in Sudan: Nyala Case Study (London: ODI, 2010).

The policy context and trade

Taxes on trade have risen exponentially during the conflict years, often doubling or increasing by as much as 400%. This is partly a consequence of local authorities attempting to maintain revenues while the economy contracts. It is also a consequence of the proliferation of taxes at state and locality levels since decentralisation, which has given state and locality authorities the mandate to set their own taxes in order to finance basic services for which they are now responsible. This is acting as a strong incentive for traders and other businesses to operate in the informal sector, where they can avoid a heavy taxation burden. It is also causing traders to alter their routes to avoid passing through localities with the highest tax rates, for example livestock traders trekking herds of animals through and out of Darfur.

The importance of monitoring and researching trade in a conflict environment

The combined market monitoring and one-off trade studies in Darfur have performed a number of important functions.

1. Understanding conflict dynamics through trade

Trade and conflict are closely intertwined: by monitoring trade it is possible to also gain insights into conflict. Certain trade routes have opened and closed according to the ebb and flow of conflict. Trading activity has also shifted between secondary markets according to which areas are perceived as most secure. Thus, certain livestock markets that were major centres of trade before the conflict have become shadows of their former selves as other more minor markets pre-conflict have overtaken them, principally because they are in more secure locations.

On the Hoof, the study of the livestock trade in Darfur, revealed how livestock traders from different ethnic groups that were otherwise hostile to each other had made agreements in order to maintain cross-border trade in camels from Serif Umra market (the centre of the camel trade) in North Darfur to Libya and Egypt. These trade agreements may offer an opportunity for peace-building between warring groups.

2. Understanding the impact on rural livelihoods through trade

Needs assessments and humanitarian aid programming tend to focus on household assets and how these have been depleted and/or can be replaced. This is important where there has been violent conflict, displacement and looting. But it only tells part of the story, especially in situations of protracted conflict. Understanding what has happened to trade and the trade environment helps in understanding longer-term trends and wider pressures on livelihoods, as well as indicating how livelihoods may have adapted.

Ongoing market monitoring by DRA has revealed a collapse in the trade of some cash crops in Darfur, including sesame. This appears to be a ‘conflict-sensitive’ crop which must be harvested within a week of reaching maturity. This kind of precise timing is not compatible with unpredictable access to fields in an insecure environment. Other cash crops, such as tombac (chewing tobacco), are more conflict-resistant as they do not require daily cultivation and can instead be cultivated in chunks of time according to when access to fields is possible. Tombac is also not palatable to livestock, so is less at risk from grazing, reducing the risk of conflict between farmers and herders. However, the tombac trade has been affected by the outbreak of conflict in South Kordofan and Blue Nile states, both important markets for tombac grown in Darfur, and by the trade embargo between Sudan and South Sudan in 2012. This has affected the whole tombac economy in North Darfur, comprising farmers, internally displaced people (IDPs) working as agricultural labourers and traders. Tax raised on tombac was a major source of revenue for the government: this fall in production thus also hits government revenues.

3. Providing early warning through market monitoring

As well as providing insights into the conflict and into some of the pressures on rural livelihoods, ongoing market monitoring has also played an early warning function, especially during 2011/2012. After a poor rainy season in 2011 DRA’s data analysis revealed rapidly rising cereal prices and deteriorating terms of trade between cereals and livestock in parts of North Darfur. Drawing attention to these pockets of acute food insecurity in North Darfur, the market monitoring bulletins helped to trigger a response by the government and international agencies.

4. In a contracting economy, identifying areas of potential economic opportunity

As well as showing how the conflict has negatively impacted trade and livelihoods, the market monitoring and indepth trade studies have also identified areas of potential economic opportunity and growth in an economy that is contracting overall. For example, On the Hoof identified a growing trade in hides and skins in Darfur during the conflict years. The hides are currently exported untreated, indicating potential to develop the leather industry in Darfur. This could be a source of much-needed employment and income in urban areas. DRA’s ongoing market monitoring has demonstrated the extreme seasonal variability in fresh tomatoes and onions, indicating potential for offseason production and agro-processing. Both of these opportunities deserve detailed feasibility studies, and have been raised with key decision-makers in the government and in international aid agencies.

Conclusion

The experience in Darfur over the last decade illustrates clearly how conflict disrupts and can destroy trade, and thus local economies and livelihoods. In the absence of ongoing and effective monitoring and analysis of trade patterns and trends, this aspect of the impact of conflict can be overlooked and may be poorly understood, especially if aid programming takes a micro-perspective. Yet any attempts to support livelihoods must take account of the wider macro-economy. The combined market monitoring and in-depth trade studies carried out by DRA and by Tufts/FIC are critical in providing this information for the Darfur region. Policymakers and decision-makers within government and the international aid community need this kind of information and analysis to inform decisions about how livelihoods can be supported through the market, and how the economy can be rebuilt. Ongoing market monitoring can also offer an insight into conflict dynamics and identify peace-building opportunities through trade.

Margie Buchanan-Smith and Abdul Jabbar Abdulla Fadul are independent consultants. Youssif El Tayeb is an independent contributor.