By: J. Yanqui Zaza
It is clear that the inability of the Sirleaf government to provide social programs is largely due to government not receiving fair share of the profits of Liberia’s resources. In 2009, the Government, for example, only received $35 million. One of the reasons investors, Liberia Firestone, did not only give a minimal royalty income of $10 million; it also paid daily slave wages ($3.19) for a tapper to tap 600 trees per day. Interestingly, the parent company, Bridgestone, the recipient of Liberia Firestone’s finished goods (latex), reported record profits in 2009, while the supplier (Firestone) of the latex reported a loss in the same year.
Unfortunately, this transfer of Liberia lucrative assets to profiteers indicates that the issue of “resource curse” is, once again, knocking at Liberia’s doorstep. It is disheartening because it was the looting of Liberia’s resources by investors (FIRESTONE, LAMCO, BONG MINES, ETC) that bred the fourteen-year civil war.
What is “resource curse?” Experts say it is a direct result of the mismanagement of a country’s resources that proliferates ignorance, poverty, disease, chaos, etc instead of prosperity. Why, and how? Investors, using “Plantation Economy,” remit minimal royalty income or taxes, thereby, leave the government with limited funds to finance education, and the construction of hospitals, roads, etc. More so, investors pay slave wages and impede the growth in employment.
What is “Plantation Economy”? The Plantation Economy is historically associated with slavery and indenture servitude. It benefits the large countries to which the raw materials, including diamond, latex, iron ore, gold, etc are exported. The raw materials are used in the manufacturing of finished goods and traded back to the host of the “Plantation Economy.”
What would happen if Sirleaf’s “Plantation Economy” were institutionalized? The answer is chaos. Why? A high rate of unemployment, slave wages and limited social programs would increase poverty and ignorance, the root causes of instability. A writer stated that the stability of a society largely depends on how it responds to the extremes of human behaviors. (www.write.com/essay). He added that it is the society’s undeniable duty to protect the people living in it by providing education, good-paying jobs, etc if society is to preserve peace and stability.
David From, commenting on stability argued in the NY Times Magazine dated for 11/12/10 that it was not because of compassion that the United States enacted laws to provide social security, unemployment insurance and other benefits for the helpless. Rather, society intended to create an environment where investors would conduct business and make profit free of violence.
Wouldn’t the idea of receiving reasonable share of the profits of our resources be a hot topic in Liberia? Or is President Ellen Johnson Sirleaf unaware of the consequences when investors are allowed to loot a country’s resources? Of course not! Okay, if she is unaware, why not create a forum for Liberians and other foreign experts to provide some advice? I guess she believes that educating the citizenry on how and why Liberia is continuing to receive minimal royalty income from its resources might disclose that when profit increases, poverty increases.
This relationship between private profits and people’s poverty is evidenced in both Sierra Leone and the United States of America where profiteers dictate economic policies. According to public report, Sierra Leone is one of the poorest countries despite its huge natural resources and its continuation of the blueprint of the World Bank. In the great Unites States of America, where the first black man was democratically elected, private interest has reduced Americans dream, and the pursuit of happiness.
For majority of the American people, the American Dream has become unachievable, says, Bob Herbert, a columnist of the NY Times. He stated that the unfettered “free market system” (what Prof Dew Mayson call “Plantation Economy in Liberia”) has created an environment for one percent of the U.S. population to get super rich, for America to owe $13 trillion debt, for foreign born workers to gain 656,000 jobs while native-born workers lost 1.2 million jobs, for manufacturing jobs to be relocate outside the U.S, for landlord to demand $450,000 for a house now that was priced at $150,000 in 1985, etc.
Similarly, Liberians are feeling the economic pain, and our opposition politicians are focusing on the pending 2011 elections. But the entrance of Prof Mayson in the presidential race has changed the debate. His opposition to “Plantation Economy” is a challenge to President Sirleaf’s failed economic policy.
A “non-Plantation Economy” as Prof Mayson has defined his choice of economic policy would help Liberia to prosper. How? Among numerous benefits, majority of the workforce of “non-Plantation Economy,” would have to acquire advanced skills to operate a diamond cutting factory, iron ore steel factory, tire making factory, etc. Food production, another major economic activity such as breeding and raising lives stocks or animal husbandry, would reduce the high rate of importation of daily food.
Besides the increase in education, and an increase in government revenue in-take from newly hired workforce and added valued products, it will entice other good-paying investors to relocate in Liberia in order to sell their goods and services to the newly hired workforce. Just imagine the additional revenue President Sirleaf government would have received in 2009, if Liberia were to produce tire for Bridgestone, Firestone’s parent. Tire sales made up about 82% of Bridgestone’s $23 billion gross revenue in 2009. (Bridgestone, 2009 Annual Report).
Adding value to diamond, gold, iron ore, before selling is the kind of pro-people policies Professor Mayson is propagating. However, he faces a herculean task. While he has already introduced a new way of looking at our economic system, hence, helping to challenge both investors and consumers to rethink the different economic policies, profiteers are tenacious in fighting to preserve their interest. Undoubtedly, they will use their profits from the ownership of Liberia resources and international connection to protect their turf. Most importantly, Liberians’ high taste for imported goods coupled with their desire to live beyond their reach will make the task even more difficult for Prof Mayson.
As a law-abiding citizen, I assume, Prof Mayson will respect the laws of the country, including concessionary agreements. And the government could collaborate with other investors to build a tire factory, a diamond cutting factory, steel factory, and crush rock factory in Liberia without abrogating any of the concessionary agreements. For instance, does the agreement between Firestone and Liberia prohibit a third party from buying the latex from Liberia Firestone to make rubber products in Africa? I don’t think so.
Professor Mayson has indicated that if policies are dictated or influenced by profiteers, as per the evidence in Sierra Leone and America, government will receive miniscule revenue, workers will earn Slave wages, and the rate of unemployment will rise. While on the other hand, President Sirleaf believes that profiteers, using their capital, including money and technology, can spur economic activity and generate more revenue for the government to invest in social programs.
If Sirleaf’s vision were correct, America wouldn’t be what Bob Herbert has eloquently described. Therefore, I say welcome professor Dew Mayson as an advocate and an enforcer of economic justice.
© 2010 by The Perspective
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