Need to Know

May 26, 2022

A Faustian Bargain

Central African Republic

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Soldiers with links to Russia recently beat, tortured and executed civilians in the Central African Republic. The soldiers included mercenaries employed by the Wagner Group, a Russian private military security contractor, said Human Rights Watch. The United Nations is now investigating the incident. As many as 15 people were believed to have been killed.

Ironically, the Wagner Group “came to prominence” in 2014 when Russian-backed separatists launched a war in the Donbas region of Eastern Ukraine, reported CNN. They have also been deployed in Syria and in Ukraine.

The Central African Republic’s president, Faustin Archange Touadera, is notoriously close with the Wagner Group, whom he invited into the country in 2018 to help put down rebels and kept them around after violence marred his reelection in 2020. As the Africa Report showed, Touadera has been unapologetic for enlisting their help to maintain “peace and order.”

Russia, incidentally, has blocked UN efforts to probe the atrocities that the Wagner Group and the Central African Republic’s government might have committed in the country, added PassBlue, an outlet that covers the UN.

Rich in resources like gold and diamonds, the Central African Republic has been politically unstable since it achieved independence from France more than 60 years ago, wrote the BBC.

While he deploys foreign mercenaries, Touadera has been importing other ideas, too. Recently, he adopted bitcoin as an official currency, for example. His representative called it “a decisive step toward opening up new opportunities for our country,” Reuters reported.

Critics at the New Scientist magazine warned that the cryptocurrency experiment would likely be a failure, noting that in the only other country in the world that has adopted bitcoin as an official currency, El Salvador, the results have been poor. El Salvador’s bitcoin investments have lost value. The Central American country is expected to default on its debt within the year.

A through-line might link El Salvador and the Central African Republic. El Salvador adopted bitcoin because its leaders were desperate for cash, argued Slate magazine. Its bonds are rated as junk. Other credit sources have been drying up due to corruption. It had few other options but to embrace a new untested financing tool. Now, the Central African Republic, one of the poorest nations in the world, as PYMNTS noted, appears to be following the same strategy.

Touadera has offloaded two traditional sovereign powers, security and money, to remain in charge. It is likely to work, at least for a while.

This story originally appeared in the May 26, 2022 newsletter, A Faustian Bargain.