Tycoons and contraband: informal cross-border trade in West Nile, north-western Uganda

Abstract

This article presents ethnographic evidence on the activities of the “tycoons” – large-scale cross-border contraband traders in north-western Uganda. It shows how engagement with state officials, but also integration in the broader community are two crucial aspects which explain the functioning of informal cross-border trade or “smuggling” in north-western Uganda. In doing so, it shows how, although there is a high degree of interaction between the “formal” and the “informal”, the informal economy still has a distinct regulatory authority rather than simply merging in the state regulatory framework. Secondly, the regulatory authority governing this trade has a distinct plural character: rather than being either a “weapon of the weak” for marginalised sections of the population or a “weapon of the strong” for political elites, it has a much more ambiguous character, which influences the behaviour of the tycoons: both of these interactions limit the maneuvering space of these traders.

Keywords:

• informal economy
• cross-border trade
• smuggling
• West Nile
• Uganda

This article deals with informal trade in the borderlands of north-western Uganda or West Nile. It shows how the large-scale contraband trade in these borderlands is to a large extent dominated by a number of powerful businessmen, who have a firm grip on this trade through a coalition with particular state officials: it allows them to conduct their illegal trade and pushes out potential outside competitors. These businessmen are called “giants” or “tycoons”. The border town of Arua is the centre of their activities, and north-western Uganda their main area of operation. Their trading activities however extend further, as certain goods such as cigarettes, fuel and batteries (“drycells”) are traded in the rest of Uganda. The tycoons are also active in Southern Sudan and certain border areas in north-eastern Congo.

This article will present ethnographic evidence on how informal trade1 in the borderlands of Uganda poses specific challenges and creates a specific regulatory authority suited to these particular activities. In the literature on the informal economy, emphasis is often placed on the engagement of state officials in the informal economy, which is seen as another strategy of the “instrumentalisation of disorder”.2 This has two consequences: firstly, the informality concept itself is being contested, as the distinction between the formal and informal sector no longer makes sense; and secondly, little attention is given to the links with the broader population. This article argues how the informal character of the cross-border trade creates specific regulatory dynamics, which are distinctively different from the official state regulatory framework. Firstly, it is going to be shown how this regulatory authority has a distinct plural character, as the tycoons rely on a broad range of institutional resources to regulate their trade: the tycoons are not only forced to interact with government officials, but also with the broader population. Interaction with both sets of actors is needed to protect and regulate the trade in these borderlands. Whereas government officials are for example needed for the passage of goods; certain non-government actors, such as the traditional elders, are needed to regulate conflicts between the tycoons. Secondly, it will be shown how these different sets of interactions limit the manoeuvring space of the tycoons in different ways. In doing so, certain political and economic dynamics are created which are distinct for the informal economy rather than simply blending into the formal economy.3

Informal economy: weapon of the strong or weapon of the weak?

One vision of the informal economy emphasises the role of marginal sections of society: economically disempowered sections of the population look for a means of survival in informal trade, which has become unavailable through regular formal activities. It constitutes a “weapon of the weak” in a situation of general state neglect, corruption and the incapacity of the state to provide basic services or decent formal wages.4 Moreover, not only is the state unable to provide services, the oppressive state regulations make it difficult for traders to function, because of which they create an income for themselves outside of the law. Self-employed traders in the informal economy are therefore seen as “quintessential free traders”5 who neglect state regulations. The informal economy is therefore not only a space of strictly economic survival, but a more general political site of resistance and protection: it is therefore a reaction against the state and the domination of the political class, and their neglect of the concerns of the marginalised groups – the “powerless”. Because it involves illegal activities and the evasion of the control of a predatory state, it is an act of popular resistance or a political option co-opted by a political discourse6 challenging the legitimacy of a predatory state – an “attempt to beat the system”.7 This was explained in detail by De Soto,8 who described how the informal economy in Peru was used as a site of resistance against the state. In other words, informal economic activities allow marginalised sections of the population to create an income for themselves, independent of the oppressive state, and turn it into a political option. In doing so, dictatorial state-rule creates its own “massive social contradictions” in which protest and collective action is created.9

This line of thinking became increasingly criticised by another, more recent, vision, which argues that the informal economy is not primarily a site of survival for marginalised sections of society, but is rather used by political elites for personal profit, leading to increased corruption and conflict:10 it constitutes a “weapon of the strong” rather than a “weapon of the weak”. This vision is largely associated with the literature on the criminalisation of the state, in which the involvement of state officials in illegal economic practices, and particularly cross-border trade, is a central element. In this situation, access to the informal economy was no longer considered free – producing “quintessential free traders”11 – but primarily prospers through connections with state officials. This does not only enable these illegal activities, but also protects this informal economy from competitors. In this context, informality exists because of formality: those in charge of the formal rules and control use their position to manipulate these rules for private gain, something which Portes et al. describe as the “informalization of privilege”.12

The informal economy therefore is another strategy for opportunistic elites to enrich themselves – another strategy in the “instrumentalisation of disorder”.13 The political consequences of these economic activities are diametrically opposed to those of the informal economy as a site of empowerment for marginalised sections of society: through participation in the informal economy, political elites are not only able to enrich themselves, they are also able to further strengthen their dominant position. For the majority of the population, rather than being a site of empowerment, the informal economy becomes a site of disempowerment, which further entrenches clientelist practices. In other words, rather than representing a disengagement of the state,14 the informal economy signifies an engagement with the state: rather than constituting an escape route from a corrupt state, it is intrinsically part of the corrupt state.

This article wants to engage with this debate by providing in-depth ethnographic detail of the organisation of informal trade in the Ugandan borderlands of West Nile in north-western Uganda, which is the result of a unique opportunity to closely observe these activities. As Lourenço-Lindell15 argues, the complexity of the informal economy is better grasped by combing different elements of different pressures and perspectives on the informal economy which might seem a priori incompatible. Concretely, the article shows the fluidity between the visions of the informal economy as a “weapon of the strong” and a “weapon of the weak”: traders do not only need to engage with political elites, but also with the wider population in order to guarantee the functioning of their informal trading activities. In doing so, the traders rely on a range of institutional resources which blend the “weapon of the strong”/“weapon of the weak” dichotomy. As the traders cannot rely on the state regulatory framework, the informality of their activities forces them to engage with a variety of actors in order to regulate and protect their activities. On the one hand, they need to engage with a number of state officials who collaborate and instrumentalise this trade: they enable these trading activities and push out competitors. On the other hand, the engagement with the population is needed, in order to solve conflicts between the traders and also to protect the trade. This engagement or “negotiation” with both sets of actors defies the distinction between “weapon of the strong/weapon of the weak” visions, and shows the high political and economic ambiguity of the actions of this set of traders.

It is not possible to go into detail with regard to the challenges of research into this kind of unrecorded and illegal trade, but a brief reflection is necessary. It is obvious that it is not possible to conduct large-scale surveys of a randomly selected population on these illegal issues. Crucial in this kind of research is therefore entrance to these illegal networks and, related to this, building up relations of trust with the participants of this trade. I started working on the informal cross-border trade through a group of fuel smugglers, the OPEC boys, as part of my PhD research.16 Through working with them for some years (since 2005), and befriending them, I managed to build up trust in the wider smuggling economy of the area.17 What played an important role in this was the fact that I kept coming back over the years, while nothing “bad” happened to the given information. This reputation allowed me to gradually befriend key-players of the broader smuggling economy, which became key-informants for this research. Once these relationships of trust were established, they were very strong and allowed me to engage in (non-participant) observation of the cross-border contraband trade. Concretely, about 400 interviews have been conducted with actors within and/or related with this smuggling economy. A small number of middlemen, lower-level smugglers and government officials constituted my “home base”, who introduced me to other actors in the smuggling economy, and who made sure I could conduct this research in a “secure” way. I have generally spent a lot of time with them, both in their activities in the informal economy and in their leisure time, conducting semi-structured interviews, participant and non-participant observation. This allowed me to better understand the interaction between the different actors in the broader cross-border contraband trade. Similarly, the assistance of two research assistants was crucial in this research: they were (and still are) active in the informal cross-border trade, and facilitated entrance into certain networks, or conducted research into areas which were too sensitive to research for myself. In order to avoid biased views, attention was given to interview actors from different social backgrounds and networks. This allowed me to continuously cross check information among different actors. For example, information from certain smugglers was cross checked with other smugglers, but also with customs officials, other government officials, “legal” traders18 and various other actors. In all, interviews were not only conducted with traders who are active in this trade (higher- and lower-level smugglers, retailers, transporters and so on), but also with the relevant government actors (such as the customs officials, security agencies and population) and the general population (consumers). Finally, there are a number of ethical problems related with illegal activities, which can place both researcher and informants in jeopardy.19 For this reason, I have not used real names, to protect both my informants and the other subjects of research as much as possible: this article wants to analyse practices, not personalities.

Cross-border trade in north-western Uganda

The informal economy has played an important role in Uganda. Green20 and Prunier21 have shown the pervasive character of the informal economy in Uganda in the second half of the 1970s.22 At the end of the regime of Idi Amin “magendo” became a major source for day-to-day survival of the general population, in the light of an incapable and violent state. Informal economic activities are particularly important in the borderlands of Uganda, and more particularly in north-western Uganda. Firstly, this has to be understood within the national politics of Uganda. People in West Nile, and northern Ugandan in general, feel strongly marginalised by the regime of President Museveni, which has been in power since 1986: they feel they lack the necessary infrastructure and have no access to key positions, both within the civil service23 and on a political level.24 In this situation, cross-border trade is seen as an indigenous way to provide development, in the light of an incapable and/or unwilling national government.25 In other words, the cross-border trade can be seen as a Ugandan version of the famous “systeme D” in Mobutu's Zaire which allowed the population to “fend for itself”: since the government is not taking care of the area, people take the right into their own hands by trading goods across the different borders, outside of the state framework.26 Secondly, this is related with the geographical location of the West Nile region, bordering the Democratic Republic of Congo (DRC) and Sudan, which has fuelled an intensive informal trade across the different borders and which has long historical roots.27 As described by Meagher,28 this cross-border trade is advanced, for example, by the fact that similar ethnic groups live on different sides of the border and are in close contact with each other. Particularly the border with Congo has been important: it has led to different cross-border patterns, both in people and commodities, which are different from the rest of northern Uganda.29 Whereas trade with Sudan was strongly reduced due to the second Sudanese civil war, trade with Congo has always continued to function.30 A wide variety of goods are traded across these borders. Foodstuffs and natural resources are traded from Congo to Uganda, while manufactured goods follow a more complicated route: manufactured goods, which often originate from the Far East, enter Uganda from Kenya, where the customs point (most often Malaba) is told the commodity is on transit to (eastern) DRC or (southern) Sudan. As the goods are in transit, no Ugandan taxes have to be paid. Part of the goods remains there to be sold, while another part is smuggled into Uganda and supplied to the retail shops. The goods are mostly smuggled back by groups of “transporters” who ferry the goods via smuggling routes (panya roads) on bicycles back into the country. This is of course facilitated by the long, weak and porous borders with Sudan and Congo.31 In other words, the basis of their cross-border contraband trade is the evasion of taxes in the import and export: when the commodities are brought back into Uganda, they are much cheaper than other goods, as no taxes whatsoever were paid. Popular smuggled goods are, for example, cigarettes, fuel or batteries. These goods do not only remain in West Nile, but are also supplied to the wider region.32

This intense cross-border trade is reflected in the trade statistics. For example, the Bank of Uganda has a large research project in which the amount of unregistered goods through official border points are counted: in 2006, the total of informal trade between Uganda and Sudan was estimated at $9.1 million. In 2007, the increased trading opportunities through the peace agreement in Southern Sudan and the improved security also led to an increased unregistered trade, totalling an estimated $456.4 million for that year. The total informal trade between Uganda and the DRC was estimated at $91.7 million in 2006 and $174.8 million in 2007.33 The above figures only show the amount of unregistered goods through official border points, which means that the value of the “real” cross-border trade is much higher, as the Ugandan–Congolese border in north-western Uganda is estimated to have 300 smuggling routes and only six official border points.

A large number of petty traders are active in this cross-border trade, but the tycoons play a particularly important role in the illicit cross-border trade of certain contrabands: fuel, cigarettes and batteries. Apart from these contrabands, which are at the heart of their trading activities, they are also engaged in the illegal cross-border trade of minerals, alcohol, pharmacy drugs, sugar, sweets, kithenke (women cloth) and various other goods, depending on the particular demand. The tycoons are not only engaged in illegal cross-border trade, but also in legal activities such as hardware or transport, which serve as a cover-up for their illegal activities. Apart from smuggling goods back in West Nile from eastern DRC, there are also other ways in which the tycoons bring contraband into the area: a popular option for the tycoons is the “dumping” of goods into West Nile, without having to reach DRC or Sudan. This contraband is immediately supplied to different middlemen or directly to retail shops which are owned by tycoons.

The tycoons and the presence of the state

The roots of the activities of the tycoons, and the current contraband trading regime, can be found in the period after the fall of the Amin regime in 1979. Idi Amin originated from West Nile, and with the overthrow of his brutal dictatorship, Obote's Uganda National Liberation Army (UNLA) occupied the West Nile region, during which many brutalities were committed in revenge for the atrocities of the Amin regime. These brutalities forced the majority of the population to flee into exile in Congo and Sudan in late 1979 and the early 1980s. During this period, a number of traders made use of the opportunities created by the period in exile (relative lawlessness, the presence of Ugandan refugees on the different sides of the border and the large demand for goods in Congo and Sudan) to engage themselves in the profitable triangular cross-border trade. Within Uganda and the wider region, this group was called the “Arua boys”. Soon, the Arua boys had established a well-functioning trade organisation: they bought manufactured goods and foodstuffs in Kampala, Mombasa or Nairobi and brought these to Congo, where there was a major shortage of goods. With the profit of these goods, they bought gold and dollars, which were respectively provided by the Congolese and the Sudanese traders. These were in turn sold in Kampala, Mombasa or Nairobi. This flourishing cross-border trade in turn attracted foreign traders from, for example, Somalia, Kenya and Senegal.34 The export of manufactured goods to Congo and the import of gold remains the basis of the cross-border contraband trade up to today. There were however two changes in this trade: firstly, from the early 1990s onwards, traders started shifting their activities to the Far East (Dubai and Hong Kong). Traders collaborated in importing containers from these destinations, and soon the Arua middlemen had not only established themselves in the wider region (Burundi or Kenya), but also in the Far East. These changing destinations also brought a change in the nature of the traded goods. In the beginning of their trade, the traders mainly dealt in basic goods such as salt or soap, but soon expanded their activities to other goods, such as fuel or batteries. Their activities in the Far East, a large market for cheap manufactured goods, signified a second shift as they started trading in these manufactured goods. For example, Chinese motorcycles and generators became increasingly popular.

Although most of the tycoons were already among the biggest traders in the area from the early 1980s – they were among the “Arua boys” – they had no dominant position in this regional trade. Even though the active cross-border trade started because of the disengagement of the state in the area, it was the engagement of the national state that structurally changed the organisation of the cross-border trade in the area. Paradoxically, the increased state presence has led to a decreased importance of the state regulatory framework. Through their position within the state regulatory framework, state officials have preferential access to the informal economy, which allow them to regulate and instrumentalise this trade: the activities of the tycoons are dependent upon the protection of the government officials, and therefore upon the power of these officials in regulating the cross-border trade. Two manifestations of the increased state engagement were particularly important in explaining the current trade regime. Firstly, there was the establishment of the Uganda Revenue Authorities (URA) in West Nile in 1996 – more particularly in Arua, their regional headquarters. The increased state control at the borders decreased the profits of smuggling, which pushed a lot of actors out of the trade.35Most importantly, it constitutes the basis of the current trading regime, as a number of traders received preferential treatment by government officials who protected their trade. Secondly, the involvement of the Ugandan army in the DRC did not only signify a gradual militarisation of the area from 1998 onwards, it also brought a higher involvement of state (military) officials in the cross-border trade.36 Particularly the regime of the Congolese rebel forces the Forces d'Armées du Peuple Congolais (FAPC) played an important role. This rebel group was in power from 2003 to 2005 in parts of Ituri in north-eastern Congo (such as Aru and Ariwara), just across the border from Arua.37 The FAPC was supported by the Ugandan government and signified a high degree of engagement of Ugandan state officials, and particularly army officers, in the regional contraband trade. It also brought advantages for the traders: through the FAPC regime, the Ugandan traders established contacts across the border with Congolese rebel officials and traders. This engagement defined the regime of cross-border contraband trade which is currently in place, as the tycoons emerged as the principal contraband traders in this “military-commercial nexus”.38 Particularly one of the tycoons established himself during this period, as he was cooperating closely with this rebel force: he was supplying the rebels (with, for example, weapons) in return for which he was given a monopoly on the trade in certain goods, such as cigarettes. After the rebels signed the peace agreement, the tycoons continued cooperating with Congolese state officials and traders, as well as with particular high-level (and local-level) Ugandan state officials.39 In sum, above events highlight the increased engagement of state officials in the cross-border trade: although this increased engagement made conditions much more difficult for many traders and pushed out a considerable number of them – the increased state presence was seen as a “source of aggression”40 – it equally made trade considerably easier for a small group of traders with the necessary connections to state officials, i.e. the tycoons.

In the remainder of this section, it is going to be explained how the state officials regulate and mediate the trade. Firstly, and most obviously, the participation of state officials allows the illegal trade to function, for example by allowing large consignments of illegal goods to be smuggled into the area. In case of any problem, the tycoons (and the higher-level middlemen) are able to contact certain government officials: if their goods are confiscated by particular government agents, they know which higher-level officers to contact (within the army, customs, civil service, national politics and so on). These higher-level officials in turn pressure lower-level actors. For example, an official from the URA argued how “all people with some authority use their power to influence the URA: the army, politicians, high-ranking officials, cronies, tribesmen, and so on”.41 A striking example is reported by the UN group of experts, when the Ugandan military intervened on Congolese territory to release a consignment of confiscated cigarettes.42

Secondly, the involvement of government officials also has another advantage: it enables pushing new large-scale contraband traders out of the trade. The involvement of government officials is crucial in protecting the market share of the tycoons. Whenever a new large-scale player tries to enter the cross-border contraband trade in West Nile and the wider region, the tycoons are in a position to inform the different authorities, which in turn take action against this newcomer. For example, in 2004 a large-scale smuggler from eastern Uganda wanted to extend his territorial market by bringing cigarettes into West Nile: he was bringing the cigarettes on transit to Ariwara (eastern Congo), after which he wanted to smuggle them into northern Uganda. The Arua tycoons were informed about this and they in turn informed particular (eastern) Congolese officials, who confiscated the trailers of cigarettes. The newcomer was completely blocked: there was no way he could release his goods and sell them. The newcomer eventually was forced to link up with one of the tycoons in order to release and distribute the cigarettes. The message of this event was clear: he had to act through the tycoons if he wished to engage himself in West Nile.43

An interesting mirror of this situation is provided by Raeymaekers,44 who describes the activities of transnational traders across the border in Butembo, Eastern Congo, about 380 km from Arua. Raeymaekers describes how “the entrepreneurs engaged in transborder enterprise on the Congo–Ugandan frontier need a kind of external ‘protector’ to facilitate their economic enterprise, especially when it comes down to securing their accumulated assets”.45 In Butembo, it was the rebels who were selling protection to transnational smuggler-traders on the Congolese border, and in doing so established a “more or less stable economic agreement that respected the logic of these state-resistant entrepreneurs in dealing with taxes and economic rents”.46 In other words, there is a striking similarity on both sides of the Ugandan–Congolese border, in which both the Congolese rebels and Ugandan government officials are selling their protection to guarantee the informal transborder economy.47 For businessmen on both sides of the border, success in the local economy therefore depends to a large extent on the relation with respectively rebels and government officials.48

This interaction between the tycoons and the state officials constitutes a regulatory authority in its own right, which sometimes leads to rather absurd situations, as certain institutions and functions of the state have become imitations of what they are supposed to be. For example, in early 2006 the national Special Revenue Protection Services49 (Kampala) office had ordered its troops to conduct a large-scale search operation in the town, as the smuggling was perceived to be running out of hand. This was leaked beforehand to the tycoons and higher-level middlemen who in turn informed their whole network: on that specific day, the security agencies were searching specific depots, where only very little smuggled goods were found. The only confiscated goods were those from actors outside of the tycoons’ trading coalition, who were not warned. The large-scale confiscation had almost become a theatre play: the security agencies knew that the main players were informed about the search operation and the main traders knew that the security agencies were going to confiscate. This “performance” was therefore not taking place to be watched locally (by of the coalition between the tycoons and the government officials) as the main actors knew everyone was “acting”, but for the national “spectators”, i.e. the national authorities who had complained about the large-scale smuggling in Arua. This example illustrates the plurality of regulatory authorities in the area: the regulatory authority of the state is only one of the registers at play in the local economy; and is being undermined by the regulatory practices of the participants in the cross-border informal trade.

In sum, these events also show a strong enmeshment between the “informal” trade and “formal” actors. This has to be understood in the context of the history of cross-border trade in West Nile, in which the increased attempts of the state to regulate the cross-border trade paradoxically led to a better organisation of the illegal activities of the tycoons. In other words, the large-scale organisation of this informal trade is only possible through the participation of formal actors. The strong complicity between the formal institutions and the informal sector is exactly the reason why the “informality” concept has been criticised for having becoming obsolete: as there is no longer a functional formal economic sector, the informal sector has also ceased to exist. Klein puts this in the following way: “As a paired negotiation each marker depends on the integrity of the opposing term. But with criminalisation, the key referent of formality has defected across the binary divide, and become absorbed by informality. The rest is simple: no formal sector, no informal sector.”50 The founding father of the concept, Keith Hart, suggests that in certain countries, such as the DRC or Jamaica, the entire economy has become “informal”, because of which we are “entitled to ask whether the term has outgrown its usefulness”.51

However, as Meagher52 argues, the informal economy has distinctive economic and political dynamics: the informal economy has particular regulatory characteristics, which reshape rather than just merge into official regulatory processes. Most importantly, their informal position forces these traders into specific engagements with state officials: logically, government officials have to be bribed for illegal goods to pass. The tycoons’ engagement does not end there, as they support the government officials in various other ways: the tycoons play an important role in financing the election campaigns of the most important government politicians in the area. For example, they organise the politicians’ transport or finance various elections events. On an overall level, the trading networks offer “new rents and possibilities for redistribution among strategic military, political, and commercial personalities”:53 several high-level government officials directly participate in the tycoons’ trading activities, both in the “formal” and “informal” activities. For example, some of the tycoons’ buses are directly owned by a number of politicians and army officers, i.e. these actors receive all profits from these buses. Government officials do not only participate in the formal activities of the tycoons, but also in their informal trade: they can, for example, participate in the purchase of large consignments of contraband, and of course receive the profits of this. In sum, the interaction between the state officials and the tycoons can be seen as a continuous negotiation process, which is at the heart of the regulatory authority of the cross-border contraband trade: state actors regulate this trade, in return for which they directly participate in the tycoons’ trading activities. The financial and material support of the tycoons towards the government can be seen as a form of informal “taxation” for their activities, in return for which their activities will be protected. This “informal taxation” is part of a different regulatory authority, but nevertheless contributes to the political power of the state: similar to the formal tax of the state, this “informal tax” serves clear redistributive functions, because of which “these forms of redistribution are a primary mode of the exercise of state power”.54 In this context, cross-border trade is therefore not in opposition to the state, a sign of disengagement of the state or an “attempt to beat the system”.55 On the contrary, state officials are at the heart of the informal cross-border trade.

The central role of the state officials in the informal cross-border trade also highlights the limits of the tycoons in the negotiation process: in this figuration, open support to the opposition by contraband traders is not tolerated. Doing so would signify the end of their business: high-level government officials are aware of the practical organisation of the trade (routes, quantities, methods and so on) and can always decide to end their support. In other words, the tycoons and their trading networks are able to constitute a different regulatory authority, which confronts the regulatory authority of the state, but they cannot confront the political power of the state. As the participation of state officials is a sine qua non for this trade to function, they will also not tolerate open and widespread support of these “shadow economies” for the opposition forces. In other words, for the tycoons, this tribute does not only consist of paying (“bribing”) government officials for their services, but also of politically supporting the government. In this context, Roitman's distinction between “regulatory authority” and “political power” is useful: although the regulatory authority governing the informal economy is different, or even opposed to the state regulatory authority, state power continues to reproduce itself through clientelist relations in the informal economy, contributing to the “viability for the state through the production of new rents and possibilities for redistribution among strategic military, political, and commercial personalities”.56 Through these tributary relations between the state and these trading networks, the emergence of counter elites is prevented, because of which these arrangements are “part and parcel of the political logics of the state”.57 The clearest example of this are a group of (lower placed) fuel smugglers in Arua town, called the “Opec boys”: this group had gathered too much political power and were, openly and successfully, supporting the opposition forces, after which their leaders were arrested, their supply lines cut and their accounts blocked.58 In other words, different from formal economic actors, the “negotiation space” of informal actors is much more limited: the context of legal marginality and institutional exclusion makes informal actors particularly vulnerable to clientelist pressures.59 In this case, the tycoons have no other choice as state officials act as the “mediator”60 through which access to the informal economy is obtained.

It has to be emphasised that not all state actors are a priori involved in these trading activities (and therefore follow the rules of this different regulatory authority). For people lacking connections with government officials or the tycoons, the state regulatory framework continues playing its “traditional” role: government officials can confiscate smuggled goods at any time. As Lourenço-Lindell argues for informal trade in Bissau, there is a “selective permeability between formal and informal realms, where opportunities for straddling may not be equally open for all”.61 For the selected commodities in which the tycoons are dealing (cigarettes, batteries, and so on), it becomes difficult for other traders, and particularly small-scale traders, to develop themselves: they simply lack the necessary connections with state officials to bring in large quantities of these goods. The position of the “weak” in the informal economy is therefore compromised both on a political and an economic level: the activities of the tycoons threaten the role of the cross-border trade as a “survival economy” as the small-scale smugglers experience the strongest difficulties in this informal trade. Similarly, as the case of the OPEC boys demonstrates, the space for political opposition is limited, as open and powerful support is not tolerated.

The integration of the tycoons in the broader society: “The Tycoons, they bring the community close to them”

It has been explained62 above how the coalition with government officials is crucial in explaining the activities of the tycoons: on the one hand, government officials protect the activities of the tycoons; but on the other hand, this engagement limits their manoeuvring space, as they have to respect certain limits in their interaction with government officials, who act as mediator and regulator of this trade. However, the government officials cannot regulate every aspect of the trade. For example, they are unable to formally protect property rights of smuggled goods. Inversely, the tycoons cannot rely on the judiciary system in case they want to solve conflicts. They therefore have to rely on other institutional resources to solve these issues, and a variety of non-state actors are able to do so. Local elders are a good example of this: in case of any problem between the different tycoons, the local elders come together to discuss the issue and to intervene when necessary. For example, in late 2007, a tycoon without a bus company wanted to start one, and had even secretly purchased buses. This led to strong protests from two tycoons who already owned bus companies, and who threatened to take violent action. To resolve this issue, the traditional authorities of the locality intervened: under strong pressure from these traditional authorities, this particular tycoon decided not to engage himself in the bus business and sold his buses. In other words, the integration of the tycoons in broader societal configurations – and in particular in this traditional centre of social power – acts as a structural buffer for potential conflicts, adding to the stability of the contraband trade: it provides a platform of negotiation in case of any problem.

Similarly, the engagement of traditional authorities alone is not enough to regulate every aspect of the cross-border trade. The tycoons also depend on the support of the general population: all over West Nile and northern Uganda, there are smuggling routes (panya roads), collection points, distribution points, depots and hideouts for the smuggled goods. For people living along these different points, it would be very easy to disclose these points to the revenue authorities. There also is a financial incentive for this as informants receive 20% of the recovered taxes of the confiscated goods, which in the case of the storage rooms signifies a substantial amount of money. The tycoons therefore put a lot of effort into developing their relationships with the general population. They do so by providing a number of services: apart from providing numerous jobs to the unemployed (not only as “transporters” for smuggling goods across the borders, but also in their different “formal” companies), the tycoons, for example, construct roads within Arua town, pay for the school fees of a large number of children, financially help the local football team, almost weekly pay for funerals and weddings, and make sure there are always different ambulances ready in different sub-counties. The tycoons and their middlemen are considered highly approachable, as they provides favours to the wider population on a case-by-case basis: numerous examples were given by a variety of people on how the tycoons had helped them, their cousins, uncles, neighbours and so on. Also religious activities play an important role within the local community. For example, one of the tycoons is a devout Christian and is a major well-wisher of the Christian community in Arua. In a region that considers itself strongly marginalised by the current regime,63 the tycoons are considered as service providers who genuinely care about the community in the absence of state services. They are regarded as home-grown and extremely successful businessmen who are “fathers for their children”. Important in this context is the fact that they also provide support to the opposition figures. As has been argued above, cross-border trade is perceived as a “weapon of the weak” against an oppressive government, because of which the population mainly supports the opposition. In order to remain on good terms with the population, they are therefore obliged to also provide support to opposition forces. However, as has been shown above, they cannot do this openly: they have to limit themselves to discreet support to certain key-figures, rather than openly rallying support for the opposition. As one trader summarised: “The tycoons, they support the government during the daytime, but they approach the opposition during the night-time!”64 For example, all tycoons have been financially supporting particular opposition MPs, but on a much smaller and limited scale than government politicians.

It has to be emphasised that the tycoons not only use “pull” factors in guaranteeing secrecy (providing certain public services), but also “push” factors: if the tycoons or middlemen discover government informants, this leads to severe punishments. These physical punishments are not only carried out by actors of the trading network, but also by the general population: informing the authorities is seen as unacceptable (as it threatens the major well-wishers of the area) and can lead to mob justice.

The provision of these various services is not only a sign of the clientelist redistribution of resources, but also serves clear rational and strategic goals which are specific to the tycoons’ activities in cross-border contraband trade. It helps the practical organisation (and protection) of their trade, and can be seen as a strategic decision to legitimise their practices and transform them into trustworthy “rulers” with “acceptable” practices.65 As Raeymaekers argues, economic agents are inserted in a “plurality of social networks, primarily of family and kin, but also of friends, neighbours and other members of the community”.66 These connections act as a “social insurance”67 which allows the informal cross-border trade to function.

Conclusion

Andreas 68 uses the metaphor of the border as a “stage” upon which the state performs. This is also the case in West Nile: it was shown how state officials regulate, collaborate and instrumentalise these trading activities. In doing so, concepts such as “legality” and “illegality” have become very blurred, as these “illegal” practices exist through their protection by the “legal” authorities. This has been an argument to challenge the distinction between “formal” and “informal” activities. However, the article has shown how the informal character of the economic activities has a specific influence on the regulatory authority of cross-border trade, which forces these traders in a number of interactions which are particular to the informal economy. In other words, informality plays an important role in regulatory processes of the informal cross-border economy: rather than simply merge into official regulatory processes, it creates distinct economic and political dynamics.69

Since the traders cannot rely on the state regulatory framework, they have to engage with a variety of actors to regulate their trade. These engagements have a distinctive plural character: the tycoons are not only obliged to engage with government officials, but also with actors in the broader society. Both of these linkages cannot exist without the other: although the participation of government officials is a sine qua non for the cross-border contraband trade to function, it was shown how the tycoons manage to further protect their economic interests by not only engaging with the political elites, but also with the wider community. In other words, rather than only constituting a “weapon of the strong”, the “weak” are also important in regulating informal cross-border trade. The strength of the tycoons therefore lies in the fact that they can move between these different spheres: they have privileged access to formal state institutions, and at the same time privileged access to the wider community. This is, for example, important for the resolution of conflicts, an area in which the tycoons cannot rely on the official regulatory capacities of the state and consequent legal protection. On the one hand, the engagement of the state officials helps to resolve conflicts: they help to ward off potential competitors, and prevent the eruption of conflicts among the tycoons. On the other hand, the collaboration with non-state actors is a structural buffer for potential conflicts: for example, the elders serve as a negotiation platform in case of any problem. The regulation of the tycoons’ informal trading activities is therefore rooted in the many ways in which they managed to link their activities, and through which they are able to rely on a range of institutional resources.

The relationship between these different actors (tycoons, government officials, wider population) can be considered as a figuration, which Norbert Elias defined as “patterns which interdependent human beings, as groups or as individuals, form with each other”.70 As Veit argues, figurations are networks of individuals which are mutually dependent on each other, and thus oriented towards each other.71 Because of this mutual dependence, the figuration has an impact on the actors, which are participating in it. Power is an important issue here: the informal character of the trading activities puts the tycoons in a less powerful position vis-à-vis the other actors, as they are dependent on these other actors for the regulation of the informal cross-border trade. In this dependent relationship, the tycoons need to respect certain boundaries. This is not only the case for the interaction with the state, but also with regard to the wider population. These dynamics can sometimes even be contradictory. A clear manifestation of this is the political dynamics of this regulatory authority: the engagement with the state officials makes widespread support for the opposition difficult, whereas support from the population requires support for oppositional forces. Again, a similar process can be seen on the Congolese side of the border: as Raeymaekers describes, Congolese traders on the one hand need to engage with government officials as an “external ‘protector’ to facilitate their economic enterprise” while these traders at the same time need to “defend their ‘oppositional’ status in order to maintain internal solidarity and cohesion, or trust”.72 However, this does not mean that both dynamics are equally powerful. As argued above, power plays an important role in these figurations: whereas support from the wider community is useful, the support from state officials is absolutely necessary. This is also reflected in the consequent political dynamics: open support for the opposition forces is simply not tolerated, because of which support for the opposition forces has to happen on a much smaller scale. In other words, although the regulatory authority of the cross-border trade has a distinct plural character, certain actors have more regulatory influence than others. More specifically, the informal nature of the tycoons’ activities means that they primarily depend on the protection, collaboration and mediation of government officials. Although the regulatory authority of the cross-border contraband trade is different from the state, it therefore still contributes to state power: support to government officials is essential and the tycoons help the state in various other ways.

Notes

1. The informal economy is considered the unmeasured and unrecorded economic activities which evade taxes. I take a nominalist approach, in which there are no problems in substituting the term for related ones such as underground, secondary, and so on (Portes, Castells, and Benton, The Informal Economy, 3). Most of the cross-border trade in north-western Uganda (and cross-border trade in general) takes place outside of the framework of the state, because of which the term “informal cross-border trade” is used. Cf. for example Chalfin, “Border Zone Trade and the Economic Boundaries of the State in North-east Ghana,” 203.

2. Chabal and Daloz, Africa Works.

3. Meagher, “Informality Matters.”

4. Tripp, Changing the Rules, 111. Azarya.and Chazan, “Disengagement from the State in Africa.” MacGaffey, Entrepreneurs and Parasites. MacGaffey, The Real Economy of Zaire. Prunier, “Le Magendo.”

5. Staudt, Free Trade?, 73.

6. Redclift and Mingione, Beyond Employment, 4. Cited in MacGaffey, The Real Economy of Zaire, 9.

7. Azarya.and Chazan, “Disengagement from the State in Africa,” 121 and 123.

8. de Soto, The Other Path.

9. Fatton, “Africa in the Age of Democratization,” 71.

10. Reno, Warlord Politics and African States; Lambert, “Les Commercants et l'integration regionale”; Bayart, Ellis, and Hibou, The Criminalization of the State in Africa; Chabal and Daloz, Africa Works. This vision was largely connected with an ideological shift in the development discourse, something which is described in Meagher, “A Back Door to Globalization?”

11. Staudt, Free Trade?, 73.

12. Portes, Castells, and Benton, The Informal Economy, 289.

13. Chabal and Daloz, Africa Works.

14. Azarya and Chazan, “Disengagement from the State in Africa.”

15. Lourenço-Lindell, “Informal Trade in Bissau and the Politics of Informalization,” 85.

16. Titeca “Les OPEC Boys en Ouganda.”

17. The informant's trust is a key issue in anthropological research in general, and this kind of illegal and unrecorded trade in particular. Ellis and MacGaffey, “Research on Sub-Saharan Africa's Unrecorded International Trade,” 24.

18. The brackets are used to signify the difficult distinction between “legal” and “illegal”: most smugglers are to some extent involved in legal trading activities. Similarly, “legal” traders are most often to some extent involved in illegal activities. They are therefore categorised according to their main activity.

19. Ellis and MacGaffey, “Research on Sub-Saharan Africa's Unrecorded International Trade,” 28–9.

20. Green, “Magendo in the Political Economy of Uganda.”

21. Prunier, “Le Magendo.”

22. Wafula, “Magendo and Survivalism.”

23. This feeling is felt all over Northern Uganda and seems confirmed by several reports, e.g. Nalugo, “Banyankole, Baganda Lead URA Employees List – Report.”

24. There is, for example, disgruntlement because people from West Nile only have access to positions of Minister of State, not to actual Minister positions. See, for example, Mwenda, “National Cake.”

25. Titeca, “The Changing Cross-border Trade.”

26. Titeca and De Herdt, “Regulation, Cross-border Trade.”

27. Leopold, “Crossing the Line”; Meagher, “The Hidden Economy.”

28. Meagher, “The Hidden Economy.”

29. Leopold, “Crossing the Line.”

30. Titeca, “The Changing Cross-border Trade.”

31. Tegera and Johnson, “Rules for Sale”; United Nations, “Report of the Group of Experts in Accordance with Paragraph 6 of Security Council Resolution 1552 (2004) of 27 July 2004,” 24–5.

32. Particularly the Congolese border market of Ariwara plays an important role in this regional dynamic (Meagher, “The Hidden Economy”; Titeca, “The Changing Cross-border Trade”).

33. UBOS, The Informal Cross Border Trade Survey Report 2006; UBOS, The Informal Cross Border Trade Survey Report 2007.

34. Meagher, “The Hidden Economy.”

35. Leopold, Inside West Nile, 42.

36. Leopold, Inside West Nile, 41.

37. Titeca, “Access to Resources and Predictability in Armed Rebellion.”

38. Roitman, Fiscal Disobedience.

39. This article focuses on the contraband trading complex in north-western Uganda, the details of the activities of the FAPC are described elsewhere: Titeca, “Access to Resources and Predictability in Armed Rebellion: The FAPC's Short-lived ‘Monaco’ in Eastern Congo”; See also Vlassenroot and Raeymaekers, “The Politics of Rebellion and Intervention in Ituri,” 398.

40. Lemarchand, “Uncivil States and Civil Societies,” 162.

41. Interview URA official, Kampala, October 15, 2008.

42. United Nations, “Report of the Group of Experts in Accordance with Paragraph 22 of Security Council Resolution 1596 (2005),” §74–5.

43. As argued in the methodology section, these findings are based on long-term research (6 years) with actors within and outside this smuggling economy (high- and lower-level smugglers, different categories of government officials, and so on).

44. Raeymaekers, “Protection for Sale?”; Raeymaekers, “The Power of Protection.”

45. Raeymaekers, “The Power of Protection,” 44.

46. Raeymaekers, “Protection for Sale?,” 15.

47. For other studies on the collusion between informal trade and state agents, see for example Lambert, “Les Commerçants et l'integration regionale.”

48. This, and the example of the smuggler from Malaba, show the fragmentation of the regional contraband market, which is divided into several spheres of influences, controlled by different complexes of power. More research is needed on the relation between these different complexes of power.

49. The para-military unit of the Uganda Revenue Authorities, which was abolished in September 2006.

50. Klein, “The Barracuda's Tale,” 568.

51. Hart, Money in an Unequal World, 155. Portes makes a similar conclusion by arguing that “the formal/informal distinction loses meaning since all economic activities approach the character of those labelled informal” (Portes “The Informal Economy and its Paradoxes,” 432).

52. Meagher, “Informality Matters,” 3.

53. Roitman, Fiscal Disobedience, 168.

54. Roitman, Fiscal Disobedience, 176.

55. Azarya and Chazan, “Disengagement from the State,” 121 and 123.

56. Roitman, Fiscal Disobedience, 168.

57. Roitman, Fiscal Disobedience, 22, 176.

58. For a detailed description of this, see Titeca “Les OPEC Boys en Ouganda.” The OPEC boys are divided into several sub-groups, each of which works for a different tycoon.

59. Meagher, “Informality Matters.”

60. Lemarchand, “Uncivil States and Civil Societies,” 164.

61. Lourenço-Lidell, “Informal Trade in Bissau and the Politics of Informalization,” 95.

62. Interview Arua retailer, February 23, 2008.

63. Titeca and De Herdt “Regulation, Cross-border Trade.”

64. Interview trader Arua, October 3, 2008.

65. Giustozzi, “Respectable Warlords?” 1–2.

66. Raeymaekers, “The Power of Protection,” 40.

67. Raeymaekers, “The Power of Protection,” 40.

68. Andreas, Border Games.

69. Meagher, “Informality Matters,” 4.

70. Elias, Involvement and Detachment, 85; cf. Titeca, “The ‘Masai’ and Miraa,” 297.

71. Veit, “The Politics of Uncertainty,” 5.

72. Raeymaekers, “The Power of Protection,” 44.