Pro-Poor Agenda In Liberia: Pre-conditioning Perspectives For President George Weah
By Musa Dukuly (Ph.D.)
Contributing Writer
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| President George Forky Klon Jlaleh Gbah Ku GbehTarpeh Manneh Weah |
Poverty is endemic and multifaceted in all segments of Liberia (rural and urban). According to UNDP (2015), the leading contributors to poverty incidence (54 percent) include the difficult living standard (51.4 percent), low level of education (25.6 percent) and limited access to health (23.0 percent). About half of the country’s 4.2 million people living below the poverty line of US$2 per day are unable to meet their basic food and non-food needs (LISGIS-Household Income and Expenditure Survey, 2014). Lack of access to farming inputs, low credit facility and poor quality health and education remain the key drivers of poverty. Unstable macroeconomic climate also fuels poverty, as the recent commodity shocks heightened inflationary pressures via exchange rate pass-through effect.
This commentary is motivated by the aforementioned indicators and recent discussions hovering around all segments of Liberia about the emerging development agenda of President George Weah led government, emphasizing Pro-poor. Pro-poor Agenda, which seeks to improve the country’s appalling development profile, is usually defined by the characterization that varies from one country to another. In Liberia, it is expected that the Agenda will be defined by an increase in the income of the poor more proportionately than the non-poor (International Poverty Center). The burning unanswerable questions are: What are the preconditions for the successful pro-poor program? Is the Pro-poor Agenda going to be directed at poverty targeting mechanism where specific impoverished elements are captured through direct cash transfers or inclusive poverty scheme that considers all segments of the poverty enclaves?
Institutional pre-conditions
Contextualizing President Weah’s inaugural message, one can pre-empt the government’s ambitious desire of embarking on inclusive poverty targeting policy (Pro-poor). The Pro-poor Agenda could be a model aimed at setting the roadmap for real and inclusive socio-economic transformation in Liberia. The achievability of this Agenda will significantly depend on how impartial and participatory it evolves through a broad base consensus relating to social, economic and political issues. The conception of pro-poor mechanism in Liberia is a great inception necessary to track the basic development phases for the current and future generations. But it will be more appealing for the Agenda to be wheeled by sound political and socioeconomic pre-conditions through an excellent leadership, institutions, programs, and policies. The alignment of relevant people behind the strategies and effort to empower individuals to take- off the Agenda are inevitably imperative.
Laying a strong socioeconomic foundation by creating requisite pro-poor structures, improving reforms and reducing the pervasive slum settlements are what the Agenda should focus on. Over the years, it has been difficult to hold any specific institution or agency accountable for the design of an appropriate poverty and slum eradication strategy because of the cross-cutting mandate. This sector is critical for workable pro-poor programs. Thus, it is innovatively worthy for the President to consider the creation of a ministry or agency which could be named: Ministry of Poverty Reduction, Slums Eradication, and Social Welfare or new department could be created at the Ministry of Finance and Development to initiate, coordinate, advocate for and implement measures towards improvement in social welfare and eradication of poverty and slums.
Unveiling the blueprint for Liberia’s agenda will reflect an important milestone for genuine transformation. President Weah led government should be clear with measurable and achievable pro-poor goals and targets as well as respect deliverable timeline.
The idea of pro-poor is a positive step whose expected outcomes are not impossible to achieve. However, trust, legitimacy, and confidence in public institutions should definitely be some of the catalysts that will ensure the realization of poverty reduction. It will be difficult, if not impossible, to realize tremendous gains in the implementation of the proposed Agenda without initially instituting the requisite socio-economic preconditions to take-off the Agenda. Beside the socio-political preconditions (national identity, reconciliation, unification) as outlined by Dr. Elwood Dunn in his 2012 Independence Day Oration, the socio-economic and political preconditions should hinge on further improvement in social infrastructure (electricity, housing, water supply, road network, national health insurance for all, food security, increased support to all public schools), strengthening institutions (human capital, information, Communication and Technology, etc), improving political and economic governance (reducing power of the executive as well as the tenure of legislators, job creation, eradication of corruption, etc), and improving the culture of competitiveness amongst Liberians.
Liberal, transparent and accountable governance system is essential to propel a viable Pro-poor Agenda. At the moment, the governance system still calls for serious reflection to unlock other aspects of systemic institutional weaknesses. Strengthening the governance system may prevent the recurrence of strike and institutional lapses that usually impede development. Implementation of a realistic Pro-poor Agenda will entail the removal or merging of ineffective agencies/ ministries through legislation and replacing the relatively “political class system” by a section of competently “low and middle class”. This is workable by setting a limit on terms, through legislation, that puts age and tenure limit on ministers and candidates from contesting specific electoral position for a given number of time(s). This policy could help minimize struggle for power and replace “mediocrity” with “meritocracy” by encouraging the culture of excellence to achieve a stable political environment necessary for poverty reduction. A well-organized governing system can minimize public sector constraints and help the private sector to take advantage of productive economic space to increase the living wage for the vulnerable workers,
Encouraging a culture of excellence and tapping on talents is necessary to propel the Agenda through first class mentality and improved service delivery. Another way out is to start engaging the country’s tertiary institutions (University of Liberia, Cuttington University, African Methodist Episcopal University, United Methodist University, and others) and technical/vocational institutions to serve as a pivot in driving the Agenda through quality instruction, policy advice and research initiatives for increased productivity. Prioritizing such initiatives in the development model could minimize expenditure on consultancies and ensure the production of competitive human capital. The Agenda should give priority to the development of pro-poor exemption policy through strengthening/developing legislation for scholarship, technical and vocational educational training bill, youth empowerment bill, national health insurance bill, social protection bill for women, children and the elderly.
Psychological pre-conditions and pro-poor programs
A critical prerequisite for successful Pro-poor Agenda is the creation of a pro-poor mentality. The cultural mindset to access or use quality social services (housing, schooling, medical, etc) has not been strongly imbued in the poor of Liberia. It is evidently visible in Liberia where the actions, behaviors and lifestyles, especially the poor, do not often exhibit strong mentality to escape poverty. It is important to orientate the poor engaged in activities such as artisan mining, car washing and commercial motorbike commuting (pehm-pehm) that a sizeable number of the youth perceive as empowerment to escape poverty. Such ventures are self-defeating to sustainable drive to pro-poor. The social consequence induces high family dependency due to early marriage by most of those in these ventures. It, therefore, seems that in the long run these principals or their direct beneficiaries are likely to revert to poverty, thereby promoting the vicious circle. Promoting ideological transformation through the provision of quality services, counseling, and technical training would serve as an important milestone for elevating the psyche of the poor away from poverty lifestyles and break the vicious circle of poverty.
Building strong market linkages can help the poor. Many impoverished groups or regions seem to operate outside the market. Some of these also include SMEs, crop farming, animal husbandry, fishing, low artisan mining etc. Pro-poor strategies require that the vulnerable workers are inclusively brought into the realm of markets and protected from perennial social economic constraints (low income, limited assets, low education, low calories food intake). It is necessary to upgrade the operations of these groups to wealth creation level. The government should, therefore, identify and strive to remove barriers that make it hard for the poor to accumulate income generating assets. Any appropriate reform policies should enforce the prohibition of foreigners from setting up petty trade and either directly or indirectly raise the wages or employment rates of unskilled workers. This calls for making the minimum wage policy functional to protect vulnerable workers in support of the inclusive poverty scheme.
Overcoming development contagion will be a difficult challenge to drive a successful Pro-poor Agenda in Liberia because the neighboring countries (especially Guinea and Sierra Leone with huge impoverished and unemployed population) may not likely favor the Pro-poor Agenda of President Weah led government due to possibility for huge migration: China and its surrounding Asian neighbors are classic examples where proximity to China significantly explains rapid development of its neighbors. However, the incentive for Liberia to get out of the underdeveloped web requires perseverance and nationalistic courage by efficiently allocating resources to inclusive growth sectors that enhance poverty reduction.
Macroeconomic Pre-conditions
The direct implications of macroeconomic policies on poverty remain a debate, in terms of reinforcing inflationary pressures, widening budget deficit and inducing other unfavorable macroeconomic indicators. At the moment, Liberia is still grappling to set the enabling economic stage to ease poverty, as the macroeconomic fundamentals are still fragile mainly due to limited buffers to hedge the economy from exogenous shocks and infrastructural deficit. However, the precondition of the pro-poor from the macroeconomic context should be directed at addressing critical structural constraints: slow economic diversification, limited human capital, erratic electricity and water supply, poor roads leading to neighboring countries and rural communities, limited housing and weak health sector. Any achievable pro-poor program should be accompanied by mitigating the challenging macroeconomic climate (budget deficit and inflation, high taxes, low private credit to manufacturing and agriculture sub-sectors, external account imbalances and rising debt level). The macroeconomic development should also be tied to programs that promote enhanced equity, wealth creation for the poor (especially the youth). These are viable projects that could get the economy on a smooth socio-economic trajectory for a thriving private sector. But this would require a combination of concerted efforts and dedicated minds, creating an open governance system and equitable social justice, strategies and cohesive continuity across the private and public sectors for an inclusive growth.
The aspiration for high economic growth is fantastic for accomplishing the Agenda. Nevertheless, it is just a necessary, but not sufficient condition for economic development. Inclusive and sectoral growth in economic activities of the poor is the mantle for any realistic pro-poor development. For the time being, it is economically prudent to devote a lot of our country ’s resources to social and development goals involving “shared economic growth” strategies. Sacrificing the desire for high growth in the short to medium term by concentrating on the attainment of wider development and social goals may immensely payoff and buttress the drive to high “inclusive” economic growth in the medium to long-term. As a case in point, Cuba (1960-2008), Brazil (2003-2010) and China experienced modest, but shared and inclusive economic growth in large part, with major redistribution of income, education and other benefits in favor of the poor. In addition to the aspiration of improving the road network and creating access to social infrastructure, maintaining monetary and price stability is a vital pre-condition for investment and to minimize constraint on the income of the poor. Investors will hesitantly put money in an economy that pay-off is highly uncertain if, in the short run, the unfavorable macroeconomic climate could lead to failure of the projects.
The most crucial phase of achieving the Agenda is financing, which requires an appropriate mixture of domestic and external resources. Optimizing domestic resources and tapping on concessional finance are efficiently the “first best”strategy of accomplishing key aspects of the Agenda, instead of vitally anchoring it on the donor or foreign aid. Launching of the capital market that is already on the verge of take-off would also be of immense help to galvanize some of the resources necessary to drive the Agenda. Besley and Burgess (2003) in their article, 'Halving Global Poverty' point that aid from developed countries will always fall short of project target. Thus, aid is inevitably a necessary option for enhancing Liberia’s Pro-poor Agenda, but it also an insufficient requirement for putting the Agenda on a pro-poor growth trajectory. Some of Liberia's vital development deliverables during the last regime could not be achieved as planned mainly due to untimely/ failed commitment of pledges from donors. This is suggestive that heavy reliance on donors as pre-requisite for meeting the set target of the proposed Pro-poor Agenda should be done with high-level caution.
Conclusion
To infer, a nationalistic posture and ideology are imperative to successfully implement the Pro-poor Agenda in the context of enhanced social, economic and political governance. Embracing the development agenda, let’s understand that it is a complex exercise that requires dedication and single-minded direction across every fabric, inclusive of the private and public sectors. A prosperous agenda is accompanied by appropriate financing strategy and emphasizing the right blend of socioeconomic preconditions that put the economy on the “inclusive” growth trajectory for improved quality of life. Henceforth, everyone must be cognizant that the implementation process is never smooth as external (high commodity prices) and internal shocks (strike, demonstration), could create possible drawbacks along the way. Liberians should never allow internal shock (war/violence) to interfere or discontinue development programs and policies if we truly intend to keep the drive of President George Weah’s Pro-poor Agenda on the course.
The Author: Dr. Dukuly currently works as Principal Economist for the ECOWAS West Africa Monetary Agency (WAMA) in Freetown, Sierra Leone. Views expressed here do not represent WAMA