Rethinking The Liberian Economy

By Tom Nimely Chie


The Perspective
Atlanta, Georgia
November 3, 2015

                  



 
 
 
 

Liberians nationwide are vulnerable to injustices ranging from issues of social, politics to economic. They are being deprived and denied of their rights to live a decent life which is a fundamental right to all human beings. People are struggling to access basic necessities in their lives. Food, clothing, and housing are not within the earning bearing of the majority. The situation has come out of proportion due to economic imbalance and instability, where depreciation of Liberian dollar has led to near hyperinflation. The low – income earners are made to swallow a bitter pill in order to survive due to price hikes of essential commodities. As if this is not enough, high tax has been imposed on basic items making prices even worse than before, thus increasing the miseries to almost every Liberian since salaries are stagnant.

The government is not doing enough to reverse the most “nose” – diving economy and the degenerating development of rural areas. It seems that instead of poverty alleviation, Liberia is experiencing poverty intensification. Liberians are deprived of essential services such as electricity, water, good health; a situation attributed to lack of basic infrastructure such as good roads and lack of railroads, corruption, inefficiency and ineffectiveness by government. This has provoked a lot of frustration from a once optimistic nation that had been promised socio – economic change in their standards of life with the advent of multiparty democracy. Currently, there is great pressure on government to eradicate hunger, inequalities in income, provide good housing for low – income earners, quality health and education services, safe drinking water, good road infrastructures, employment and many other services.

The plight of Liberians today is that most families of the population lived below the poverty line or belt; that means they have to do with less than one United States dollar a day. There is a serious need for income supplement and outright grants to lessen the burden of poverty for poor families and move many above the poverty line.  The question is, are Liberians going to be bailed out of these calamities???? The majority of Liberians tend to have fatalistic attitude to their future, in which case, they feel they cannot do anything about ‘status quo’ since they are only on the receiving end. They trust the explanation from their dear politicians, that all these calamities are a result of lack of resources.

However, a few are optimistic like me that the country has resources but we fail to utilize them effectively and efficiently. As a result, the economy has been in a slump as long as one can remember. Corrupt officials in every level of government and administration and their cronies have emptied key institutions’ coffers, block vital development projects and industries such as hydroelectric power and railroads as well as the normal running of the country, and let the infrastructure crumble. Why can’t we rise up to use what we have that is, land, labor and capital into production efficiently to benefit every Liberian? The economics is simple here; much seems to be lost in oblivion due to the lack of commitment from the government and the public. The donors are at our necks due to lack of commitment to priorities and lack of accountability. The common man is there awaiting his fate from government and the government is there awaiting its fate from the donors. The dependence syndrome will indeed kill us. The Liberia decentralization support program cannot materialize without commitment, trustworthiness, accountability and transparency embedded in good governance.

Rethinking??? Yes!  

Rethinking the Liberian economy in this context relates mainly to the neglect of rural areas. The most pressing concern or problem remains the neglect of rural areas. Neglect of rural areas stems mainly from the fact that Liberian political leaders grow up, live and die in urban centers even if they may be born in rural areas. They tend, therefore to be more attached to urban areas than to rural areas.
This tendency is reflected in development activities. Driven by their desire to have within easy reach a few “show pieces’ to point to when distinguished foreign guests visit our country and made complacent by their rather superficial knowledge of conditions in the rural areas, our political leaders devote most of their development resources to rural communities. But sound development and co -operation between government and people require that the common people should enjoy a sense of participation. That sense of participation cannot exist unless the political leaders initiate schemes which involve and improve the lot of rural population.

At rebuilding and reviving the country’s post –conflict economy, the government and private foreign investment should prioritize the actual development and transformation of the rural economy through agriculture as this approach could facilitate the gradual transfer of the Liberian economy into the hands of Liberians. Agriculture is the dominant activity and very promising sector in the rural economy. It provides jobs opportunities and livelihood for the majority of people in the country. Given its dominant position, this sector plays a central role in changes in the country’s level of overall economic performance. However, rural mutual infrastructures are yet to be built in the rural areas as part of the government’s poverty reduction effective strategy of engendering geographical balance in national development. The development of rural infrastructure includes the improvement of roads, installing electric supply to build and operate high industries for food processing, supplying piped boiled water and strengthening institutions such as local administration and security system, the adult education and vocational training network, building capacity of cooperative organizations or societies, etc. across the country. A good infrastructure provides the economic conveyor belt along which production and exchange flow. It facilitates quick communication, safety and the integration of national operations into a meaningful unit. Put differently, the rapid movement of people, commodities, factors of production, ideas and all sorts of services is contingent upon existence of a good infrastructure. However, years of total disregard to the rural economy show poor overall economic performance, often necessitating measures such as importation of basic goods and services, most specifically Liberian staple food (Rice).

Liberia has been importing more than its export, thus incurring a negative (or debit) trade balance from our experience. It means that our exports do not sufficiently pay for our imports and we have to seek other sources of finance to meet the difference. We have achieved this through external borrowing or grants or through voluntary foreign investment in our economy. Needless to say, with a debit trade balance, the country’s ability to invest abroad (that is, to build factories, buy real estate or financial assets abroad) is severely constrained.

To revitalize the rural economy will not be easy. The government must vigorously pursue a deliberate policy of dispersed location of industries in various parts of the country during the remaining two years of this administration as well as future administrations. Also there must be adequate budgetary support and promotion for the growth of small–scale industries, the empowerment of Cooperative Development Agency (CDA) and the reactivation and recapitalization of the Agricultural and Cooperative Development Bank (ACDB) to enhance Liberia’s rural economic development. Small–scale industries will be able to grow and indeed invest more only if the infrastructure connectivity across the country is brought to normal and internationally acceptable standards. Today, roads are in a pitiful state, power supply remains erratic, and import taxes are too high, thereby increasing the cost of production of domestic goods.  The added production cost means Liberian products are not competitive, even in the home market, flooded with sub–standard imports, chiefly from China and India as well as ECOWAS countries. Furthermore, many potholes have been filled, segments /sections of roads repaved, and new contracts awarded. With this type of attitude toward infrastructure improvement, it will take years before the road network and bridges will be back to normal in reality. That is, Liberia’s new government in 2018 will inherit a country crippled in its key infrastructure and institutions.  Similarly, huge sections of the main road connecting Monrovia to other regions or rural parts of the country need much more than cosmetic attention. And the major highways connecting Monrovia to the respective capital cities of Lofa and Nimba counties must be rebuilt. These thoroughfares connect the two major agricultural poles of Liberia and on these roads raw materials and goods are transported. Only a good network of roads connecting the rural economy to Monrovia will allow for increased commerce and employment opportunities.

The overall goal of rural – economic development is to raise rural incomes, raise living standards of rural families and lessen the need for people to migrate from rural areas to urban centers in search of paid employment and the more attractive urban lives. The balancing of rural and urban growth must thus be a major government development goal and this could manifest itself increasingly in the location of major industrial activities in the rural economy: rural electrification and piped water development and the efforts to raise farm productivity and incomes. The interdependence of rural economy and urban economy is thus a fact which cannot be ignored.

Education??? Yes!
Meanwhile, given the high rate of illiteracy among the rural population, an adult literacy and training program is a major input into rural economic–development strategy. It is an obvious prerequisite for the rural people participation in economic development activities. Adult education or training should be done through the adult literacy classes, farmers’ training center through the mass media, especially with the now increase of Community Radio Network/ stations in every corner of rural Liberia and through the vocational training institutions.

Conclusion:
The decentralization process provides room for a process of common responsibilities where people in the rural areas would carry their own fate, through participatory planning. They would decide what is good for them and how best to implement their plans. This process should certainly be allowed to get established broadly with the commitment of every Liberian. Through this program or system, Liberians will get direct benefits from what they have planned for, since they will be able to monitor its implementation. They would be more responsible to use whatever resources they possess in their respective local government areas, thereby making strides in their living standards.

A simple analogy of the government is that of the family in which every member has a role to play to contribute to the well–being of the family. The members of family are its stakeholders; any dysfunction would cause a lot of problems that may affect them all. The same should be the case with communities that comprise the family of the rural areas. Therefore, political leaders must launch community development programs for: (a) the construction of infrastructure or physical assets in rural areas; (b) the education of rural adults and children, (c) the participation of better farming methods and better health measures; (d) the promotion of handicraft and small–scale industries; (e) encouraging community greater participation in local government affairs; and (f) building of technical schools in rural areas. Over and above that, there is need for political leaders to realistically and practically familiarize themselves with conditions in which their rural compatriots live. Only such a familiarization will enable them to appreciate the urgency of the problem of rural development.  Development at local level would spearhead the development of this country at large.

Liberians are hardworking and peaceful and this attracts investors. Nevertheless, they have to invest in order to spearhead some agro-based, small–scale business that would turn the economy into an exporting one. All these are possible when organized well at the grassroots, forming democratic structures that are transparent and accountable. In this endeavor, Liberians have to show supreme and political will. Politicians shouldn’t capitalize on their positions to take advantage of the poor citizens. Common good should prevail over the individual. Only then can decentralization translate into meaningful rural development aimed at poverty alleviation. The realization of complete decentralization would mean local communities are entrusted to run the affairs of their respective local government through participation in decision making in rural areas; therefore, they must be responsible for their own policies. Otherwise, Liberians shall be singing the same old song the country is too hard.

About the Author:
Prof. Tom Nimely Chie is Former Chairman of  Economics at the AME University, Former Chairman, Economic Department, University of Liberia and Currently, Associate Professor at the University of Liberia and Cuttington University Graduate Schools and Professional Studies.
Contact:+231-886-569-200  Email:tomnimelychie@gmail.com

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