Conflict, Cotton, and China: Assessment of Risk in Mali

     Mali is one of the poorest countries in the world, heavily reliant on foreign aid and investment, and facing conflict over territorial gain and the growing threats of violent extremism. Yet it has also had over five percent growth each year since 2014 and possesses significant gold mines and agricultural resources. Though the US remains a symbolic ally, there are no trade agreements between Mali and the United States: Its FDI into Mali was a minor USD one million in 2014, and political risk limits its economic presence there. This was best exemplified by the suspension of Mali’s eligibility for the African Growth and Opportunity Act (AGOA) following the March 2012 coup d’état, and its reestablished status in the AGOA as of January 2014, due to the inauguration of a democratically elected government (1). The critical issue is that the current government is in fact threatened by militant groups that assert territorial claims over the northern region of the country. Groups like Ansar Dine, the Movement for Unity and Jihad in West Africa, and al-Qaeda in the Islamic Maghreb (AQIM) undermine the government and threaten to destabilize neighboring countries. Some maintain control of northern territories. Attacks against foreigners, kidnappings, mass shootings and violence against the Malian army further increase the risk of investment (2). Despite their decreased investment in Africa in 2015, China continues to embrace its new plan for global influence not excluding regions of conflict, and has made significant investments in Mali, in contrast with the United States. While China’s focus in Mali has been on infrastructure projects such as roads, bridges and railways, the slow-takeover of agricultural and mineral sectors is on the horizon. 
    
     Violence in Mali is most heavy based in the northern regions, but it is spreading quickly to the south, with more pinpointed attacks in major urban areas. Northern violence is largely connected to inter-tribal politics, friction between local tribes and the central government, smuggling and other criminal activities. The current wave of violence began in January 2012, when several armed extremist and separatist groups took advantage of an influx of arms and mercenaries traveling from Libya. A group known as the Movement for National Liberation of the Azawad (MNLA) launched a series of attacks on military installations in the north. Within months, they had pushed the Malian armed forces away from the northern regions of Gao, Timbuktu, Kidal and part of Mopti, and were within striking distance of the capital Bamako. The MNLA essentially denied the government control over half the national territory. On March 21, 2012, a coup d’état resulted in the overthrow of Mali’s democratically-elected government due to military reversals in the north (3). It is important to note that the MNLA is an organizational branch of the Tuaregs, a semi-nomadic group based in northern Mali and parts of Algeria, Niger and Libya. Their military advantage was found in heavy weapons and training acquired from Muammar Gaddafi’s Libyan army, of which many were once members. Additionally, the MNLA were supported by religiously motivated groups such as Ansar al-Dine, a Tuareg association motivated by extremist Salafi/Wahhabbi interpretations of Islam, and the more established Al-Qaeda in the Islamic Maghreb (AQIM).
 
     In 2012, the MNLA and affiliated Tuareg groups lost power to groups more closely-aligned with AQIM, like Ansar al-Dine and the Movement of Unity and Jihad in West Africa (MUJAO) (4). Currently, the expansion of militant extremist groups into central and southern regions causes even more total national risk, in response to AQIM and the Macina Liberation Front, an affiliate of Ansar al-Dine better known as “Mali’s Boko Haram.” AQIM has gone as far as to attack neighboring Algeria, Mauritania and Niger. Major terrorist attacks in Mali that caught the world’s attention include a machine gun and grenade attack on a restaurant in Bamako in March 2015, another attack on an international hotel in Sevaré in August 2015, and a third at the Radisson Hotel Blu in Bamako in November 2015 (5). 
 
     While the spread of violent extremism southward poses a greater threat to urban societies, it also has a devastating effect on the allocation of resources located there. Mali’s two major resources, gold and raw cotton, account for 78 percent of all exports, 36 percent and 42 percent respectively (6). A vital consideration is that the majority of Mali’s gold mines lie in the southern and far southwestern regions, while agricultural zones are entirely in the center and south of Mali. Historic militant violence in the desert north did not pose a significant threat to the allocation of resources, aside from water; however, the current wave of violence moving southward will certainly entail increased security. In March 2015, Ansar al-Dine fighters easily took over a police base in the southeastern village of Misseni, just 150 km from the enormous open pit Morila gold mine run by foreign giants Randgold Resources and AngloGold Ashanti. Also in the mineral realm, there is a dispute over ownership of the northeastern Ansongo manganese lease, near the major city of Gao. This dilemma arose when the initial operators were forced to flee during the Islamist advance in 2012. In fact, that area has seen two attacks on UN peacekeepers since the incident. Also that year, Canada’s Great Quest Metals suspended its exploration program at the phosphate fields in Tilemsi in northeastern Mali for eighteen months, due to nearby attacks by armed groups (7). 
 
     Despite most noted armed conflict occurring in the north, the predicted route of southward bound violence in the coming months and years may not worry investors as much, but the government will certainly take measures to lessen threats to agricultural resources. The fact is, Mali’s economy is highly reliant on cotton. The head of Mali’s state-owned textile development company, CMDT, recently announced that Mali’s target cotton production for 2018 is 800,000 tons. Cotton production in Mali is a process that guarantees food security, as Malian farmers tend to plant one-third of their land with cotton and the remaining two-thirds with staple grains like maize or millet (8). Mali’s cotton industry is, like most African states, extremely dependent on rainfall, and with that comes definite vulnerability if militant groups were to take control over water resources, thus holding entire agricultural zones hostage. 
 
     Though it appears a dangerous zone for investment, Mali will certainly benefit from Chinese involvement, as opposed to funding from Western powers, which are less likely to invest in a region of risk. The Chinese government has proposed approximately USD 11 billion to improve Mali’s economy. Most of China’s influence in Mali has been in areas of infrastructure and minerals (9). Chinese firms have already explored and extracted from mineral fields in the south, and pledge to invest in railways between Bamako and ports in Conakry and Dakar in order to transport minerals like iron ore and bauxite (10). China certainly is aware of the inherent volatility in transporting heavy minerals across the borders of West Africa, and potential terrorist activity in the south of Mali will be a serious concern that may result in increased security to protect railways from attack or robbery. 
 
     Conflict-based risk is inherent in Mali, and will continue to be a threat until violent extremism is halted through military means, and until a significant peace agreement is developed with moderate Tuareg rebels by granting autonomy in their “Azawad” homeland. Economic conditions naturally must also improve, and Mali will continue to rely on foreign investment and aid for the foreseeable future. China will follow through with its global ambitions and become the major player in Mali through investment in infrastructure and the control over mineral fields. Measures of protection will play a significant role in water and transport in order to protect Mali’s dominant economic providers: minerals and agriculture.
(1) U.S. State Department. "Mali: 2016 Investment Climate Statements." U.S. Department of State. Bureau of Economic and Business Affairs, 5 July 2016. Web.
 
(2) CFR. "Destabilization of Mali." Council on Foreign Relations. Council on Foreign Relations, 5 Oct. 2016. Web.
 
(3) U.S. State Department. "Mali: 2016 Investment Climate Statements." U.S. Department of State. Bureau of Economic and Business Affairs, 5 July 2016. Web.
 
(4) Bak-Christensen, Jesper, and Kevin Amirehsani. "Investing in Mali? An In-depth Look at Malian Political Risk | GRI." Global Risk Insights. Global Risk Insights LLC, 09 Dec. 2015. Web.
 
(5) U.S. State Department. "Mali: 2016 Investment Climate Statements." U.S. Department of State. Bureau of Economic and Business Affairs, 5 July 2016. Web.
 
(6) Observatory of Economic Complexity. "Mali Exports." Observatory of Economic Complexity. MIT, 2014. Web.
 
(7) Bak-Christensen, Jesper, and Kevin Amirehsani. "Investing in Mali? An In-depth Look at Malian Political Risk | GRI." Global Risk Insights. Global Risk Insights LLC, 09 Dec. 2015. Web.
 
(8) Wroblewska, Anna. "Mali’s Cotton Industry: Come Rain Or Come Shine." AFK Insider. AFK Insider, 16 Feb. 2015. Web.
 
(9) Zakaria Dit Zan, Sangare. "Economic Impact of China’s Investments in Mali’s Construction Sector on Mali." Journal of International Relations and Foreign Policy. American Research Institute for Policy Development, Dec. 2015. Web.
 
(10) Bak-Christensen, Jesper, and Kevin Amirehsani. "Investing in Mali? An In-depth Look at Malian Political Risk | GRI." Global Risk Insights. Global Risk Insights LLC, 09 Dec. 2015. Web.

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