Pyramid schemes in Darfur

I briefly touched on South Sudan’s new instant brewery yesterday. A associated, rather than strictly related, development is this startlingly weird Reuters AlertNet story; OK, so there’s been a riot in a refugee camp in Darfur. Right. People have been killed. Not good. But a riot by people who lost money in an investment fraud? In the wilds of western Sudan?

Seriously. It seems that someone in El Fasher ran a classic Ponzi burn on a large number of people. They paid in money or goods and received “certificates”; to begin with some of them actually received payouts; then, as always, the curve went exponential, the inevitable crash arrived, and they lost it all. And then they went looking for the guy who burned them, with a view to burning him.

The weirdest bit of this is that you can actually promote a Ponzi fraud there; Charles Ponzi invented his eponymous scam in the hyperurban world of Italian Boston in the 1920s. How many people would you expect to be even vaguely familiar with the concept of investing money in securities in a Darfuri refugee camp? A few years ago, there would have been no chance.

The Sudanese government’s own peculiarly vicious take on counter-insurgency, which bears a similarity to the Soviet strategy in mid-80s Afghanistan, was to bomb and raid them until they flee to the big city (in relative terms), where they are thought to be easier to keep an eye on. Samuel Huntington – for it is he! – thought something similar was happening in South Vietnam in the 1960s. In an odd symmetry, the logistics of international humanitarian aid reinforced this – aid is delivered to the refugee camp, because it’s where refugees are, and it’s near an airfield.

The result has been a form of instant urbanisation; interestingly, however, there is little evidence that the strategy was successful in its own terms. The population has become an urban one, but that doesn’t mean its opinions are any different, and the problems of policing an instant city are hardly any easier than those of patrolling a vast wilderness; the guerrilla base area still exists, but rather than being the desert, now it’s the urban wall of silence – a fortification in software.

In other news, you may consider this a contribution to the ongoing international symposium on “The Geneva Conventions – Actually Pretty Good When You Really Think About It”.

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