Rejuvenating the Liberian Economy
By Ezekiel Pajibo
January 13, 2004
From February 3-4 in New York, the international community will be meeting to discuss its role in jump-starting the Liberian economy. The meeting, according to press reports will be chaired by the Secretary General of the United Nations, Kofi Annan and the Secretary of State of the United States of America, General Colin Powell. This is a very important meeting because the contours of the Liberian economy will be discussed and debated. Given that our current government does not represent the vast majority of Liberians, the need to inform the Liberian Government’s position at the Donor Conference is compelling. But there is no framework in place for this to happen. This is a public appeal to the National Transitional Government, including the transitional assembly to convene a town meeting on the Liberian Economic Recovery Plan since this is what the Donor Conference will be discussing.
While the lobby for such a meeting is taking place we want to offer some snapshots of what the core elements of the Liberia Economy Recovery Plan should include. Former U.S. Secretary of State, James Baker, is touring the developed world to call for the cancellation of Iraqi’s debt. Press reports indicate that he is succeeding. Japan has promised to cancel Iraqi’s debt if other countries follow suit. The Iraqi’s debt is a mammoth $120 billion. Well, Liberians can only be envious of the Iraqis. Needless to say, that if the cancellation of Iraq’s debt is a necessary pre-condition for the country’s economic recovery, than surely cancelling Liberia’s paltry $3 billion debt must be on the table in New York. The war years aside, and its concomitant destruction of the country, one will be hard pressed to see how Liberians truly benefited from the debt it acquired during the seventies and eighties. The argument that Liberia’s debt is odious is correct since the money was invested in ill-advised projects that did not improve the material conditions of Liberians. Let our Minister of Finance and Planning & Economic Affairs tell that to the Bretton Woods Institutions. But can they muster the requisite spine and stand up to them?
Second, our economic recovery plan must be anchored in job creation. Jobs, jobs jobs! One can not say this enough. We need to pursue an industrial policy that adds value to our exports. Instead of exporting iron ore, if there is any left, we can at least export steel rods; instead of timber we can export furniture, instead of latex, we can export condoms, sanitary gloves and plastic wares. We can even polish our diamonds right here in Liberia. If Antwerp can be a diamond capital even though there are no diamond mines in Belgium, why not Monrovia, or Greenville or Voinjama? We produce cocoa and coffee but we do not produce chocolate and coffee that we can drink as well as export. Our Minister of Commerce and Industry must tell this to our "partners in progress". Liberia needs to add value to its export.
Investment in our social sectors is of primary importance. Our hospitals, schools, utilities, including water, sewer system and electricity need to be rebuilt and made affordable. We cannot privatise these institutions, because doing so will put them out of the reach of the majority of our people and will generate social discontent - something we should be careful about and avoid. Our road networks need to be repaired, modernised and expanded. Our economic recovery plan must take a careful look at our comparative advantage, i.e., agriculture and commercialise the sector. Fishery is another sector that is severely underdeveloped. In this regard, we need to invest in this sector while creating sufficient patrol of our territorial waters to prevent encroachment by thieving nations and or individuals.
The communication and banking sectors are extremely important sectors that need particular attention. The Governor of the Central Bank should be ashamed of himself. How can a nation thrive with just 4 banks and almost zero percent deposit rate. He is spending too much time protecting his job and too little time liberalizing the sector in order to put it on a competitive footing. Banking services must be expanded throughout the country and easily accessible to the majority of Liberians. Our people need to develop confidence in the banking sector so that they will deposit their monies as well as be able to acquire loans. It is simple economics that businesses need to have access to loans so that they can do business. I have learned that close to more than 80% of the money printed by the Central Bank never sees any bank once released to the public. Those in possession of the money are stacking them up under their mattresses at homes and in their vaults. Obtaining loans in this country is like waiting for manna to drop from the sky. The Governor of the Bank should stop travelling so often and pay attention to the efficient functioning of the Banking System or else quit his job honourably. Still on the banking sector, attention needs to be paid to the transfers of money into the country. Our banking system needs to be streamlined in order to ensure that the state benefits from remittances from Liberians abroad. I have been told that more than 70% of remittances from abroad do not go through the banking system. If this is true, we need to investigate and formulate policies that will significantly reduce this figure.
Our communication infrastructure is a disgrace to our country. We need to improve the sector. The recent declaration to abolish the monopoly on the sector is welcome but insufficient. If we can improve our communication infrastructure, we can begin to truly develop the tourism sector. There is no reason why our 300 miles of coastline can not create more jobs for our people. Our tropical rain forest should be income-generating and benefit those who are resident there.
I must confess that these issues are not based on rigorous research and I stand corrected. Nonetheless the issues raised herein are not totally unfathomable given the precarious nature of the economy. There are many other issues I have not covered including land tenure, the Liberianization policy, the entertainment sector, and foreign direct investment – we would need a subsequent column to touch on those issues. In lieu of the national indaba, these ideas are proffered to hopefully, in the mean time, provoke some debates especially among our politicians, bankers, businessmen and civil society organizations. Only by debating these issues can we formulate policy that put Liberia first in any attempt to have our collapsed economy recovered and begin to set the basis for a prosperous future in which our people are the primary beneficiaries of the resources we are told are in abundance.