Poverty Reduction Strategy Debate: World Bank Between Big Business And Fair Remittances, A Potent Weapon To Reduce Poverty
By J. Yanqui Zaza
May 10, 2010
Surely, had Liberia received $100,000,000.00, ($100.00 @ 1,000,000 acres of land) or persuaded Firestone to build a tire factory, we would have reduced poverty. Why we failed? To understand the reason(s), one needs to analyze the economic system that protects and sustains the interest of the elites, and the profit motives of Bridgestone as well as the role of the World Bank to protect the interest of big business.
Firestone was not the only investor that remitted minimal royalty income. According to the 2nd Report of the Liberian Extractive Industries Transparency Initiatives, Liberia received $35,284,234.00 for fiscal period July 1, 2008 through June 30, 2009 from investors who managed seventy-one (71) different natural resources. Firestone, part of the nine (9) agricultural farms, paid $10 million; Liberian Agricultural Company paid $4 million; and Salala Rubber Corporation paid $3 million. The forestry industry reported twenty (20) entities, with Buchanan B.H.P Billiton Wood paying $1 million. There were thirty-eight (38) mining companies, with Arcelor Mittal paying $7 million. The oil industry was comprised five (5), with two companies paying $1.6 million each. (LEITI 2nd Report, dated 2/20/10). (www.liberia.com/index).
Liberia got only $35,280,234.00 from 71 investors because of sweetheart deals? Is giving sweetheart deals to investors a new concept? No. In fact, prior to April 12, 1980, investors managing the country’s resources remitted minimal dividends to the Liberian coffer. Liberia Firestone Rubber Plantation was once the largest rubber producer in the world, but its host country got minimal benefits. Within the mining sector, Liberia was the first iron ore producer in Africa and fifth in the world in 1976. Again, Liberia has little noticeable infrastructure. President Sirleaf has acknowledged that insufficient funds to finance education, infrastructure, bridges, healthcare services, etc bred the violent overthrow of the True Whig Party on April 12, 1980.
So, why is her government maintaining an economic system that does not create an environment that would generate a potent force to combat poverty? Guess what, to perpetuate the rule of the elites. To do otherwise would result into empowering the majority of the population.
Therefore, it is no surprise why President Ellen Johnson Sirleaf has embraced an economic system and policies of the World Bank that generate miniscule revenue. Besides embracing the failed system, she and her advisers do give the impression that big business is reliable and less corrupt than government. They also assert that profit motive and the concept of continuity usually guide big business to transact fair business transactions. Further, they argue that big business is honest because unfair practices by big business invite competition, risk of elimination and unwanted market forces. Is that true?
As part of the economic arrangement, the World Bank serves as an agent between Liberia and big business, allowing the elites to sell our resources on the cheap to big business without blame. How?
Although, the World Bank is funded by its shareholders (i.e., countries such as US, Japan, Germany, etc), it borrows monies from big business such as Bridgestone to lend to poor countries. The borrowed money is so significant that big business becomes a de facto shareholder. With such a leverage, big business dictates to the World Bank on the kinds of projects and, or amount of loan a country can borrow. So, even if the World Bank intended to protect the interest of a poor country, by assisting a country to get a fair deal, big business will punish the World Bank by declining to purchase bonds issued by the World Bank. So, even though the World Bank might preach the idea of poverty reduction, however, its policies are structured to provide an environment conducive for big business to get higher profits, which result to minimal royalties for poor countries.
Madam President, if you institute economic policies that create an environment conducive for big business to generate huge profits, no amount of seminars, town hall meetings or power point presentation will reduce poverty, even with the best of intention. This is because Liberia cannot finance programs without money. Alternatively, if you intend to educate the public on how your advisers concluded the Firestone’s decision, for instance, then her government should say so. Also, if you believe that you can reduce poverty without receiving reasonable share of the profits from the management of our natural resources, then you should publish such an idea on the Internet.
If I may ask, are those who will cast their ballots during the pending elections residing in Liberia? If yes, why should government officials focus on non-voters in the United States, if the inference is citizens residing in Liberia are pleased with the Poverty Reduction Strategy?