The Human and Economic Plight of a Nation

By Geepu Nah Tiepoh

The Perspective
May 4, 2001

Liberia continues to endure vast human and economic destruction under a Taylor factor forced upon it eleven years ago in the form of a false revolution that promised national progress but now delivers untold suffering and anarchy. The fact is that the Taylor regime has long recognized its own inutility to the Liberian nation, and yet, like previous regimes, it remains recalcitrant in refusing to abandon its grip on state power. Whereas it has failed to yield the necessary political and security environment for fostering socioeconomic development, it continues to tighten its jaws on the kernels of state power even as those jaws now bleed from blows thrown at them from everywhere, and as the Liberian masses die from armed violence, hunger, and disease. Hence, in another round, Liberia is being transformed again as a battlefield for competing armed interest groups. This time, however, the emerging imbroglio may be far too complex, as other more powerful forces allegedly underpin the configuration of the forces involved. It is unsurprising that men who sprang to power from the blood and carcasses of their fellow citizens are displaying such a callous irresponsibility to them. No amount of state power should be worth the blood of the people who were supposed to be uplifted by such power. The international community must be reminded that for almost twelve years now Liberians have suffered unprecedented human destruction and economic emaciation under the Taylor factor. Only a few countries of the world (such as Rwanda, the Congo, and Sudan), in the last decade, have experienced greater destruction of human lives. And perhaps no country has suffered greater economic deprivations.

This article offers a brief reflection on Liberia's human and economic plight in the last eleven years. Since 1990 when Taylor and his NPFL forces surfaced on the national political landscape, the country has been consigned to an unprecedented scale of human destruction, first during seven years of civil war that claimed 250,000 lives, and now during the current flow of anti-dissident violence, mystery deaths, disappearances, and extra-judicial killings under Taylor as president. This sheer demolition of human lives, needless to mention the attendant human displacements and physical and psychological disablements, constitutes the heart of the Liberian crisis. Even, as we write, such human devastation is continuing, especially in northern Liberia where armed groups from the Mano River Union triangle have engaged in sporadic battles since last year. The new waves of refugees accompanying this theatre are also growing, in their tens and hundreds of thousands, across the West African subregion.

The economic destruction of the country has also deepened. In the last eleven years, the Liberian economy has been deprived of every crucial opportunity and impetus for real growth and development. Consequently, macroeconomic and socioeconomic conditions of the country have been deplorable, at best. With no meaningful employment-generating investments and productive activities, except those confined to rubber farming and unscrupulous logging, unemployment and underemployment have remained over 80% and 70%, respectively, according to officials of the Ministry of Planning and Economic Affairs. Thus even though the economy, as reported by the International Monetary Fund and government sources, has shown impressive growth in the last few years (e.g. 23% in 1999 before dropping abruptly to 5.6% in 2000), such growth figures can only be considered as merely academic, since they do not capture the underlying social inadequacy of growth.

Climbing from the pit of only US$126 million into which war had driven it by 1996, the real Gross Domestic Product (GDP) expanded to US$410 million by the end of 1999, at an average annual rate of 52%, before suddenly slowing to 5.6% last year (GDP figures are quoted in 1992 constant prices). However, even at these 'impressive' growth rates, economic output has remained far below its 1989 prewar level of US$820. Thus, in spite of this much-gloated-about growth, per capita income has remained very low (at about one-third of its prewar levels). Moreover, as noted above, this growth has been unaccompanied by significant employment, as the key sectors of the formal economy (such as the plantations and the timber companies) have failed to absorb the labor forces, thus leaving the government sector to be the dominant employer (employing some 43,000 personnel in 1999). Even at such a low level of employment, and depressed civil service wages (US$20 per month), government has been unable to finance its payroll, leaving employees to often go without pay for months. Thus, as one prominent Liberian lawyer recently remarked, "You have people working in government and in private sector who do not take pay for months, and yet they beg to pay their way to work". In a society largely based on traditional extended family connections, where the few employed have responsibility to their relatives and friends, the negative social impact of such unemployment and delayed wage payment has been greatly amplified.

Although the Food and Agriculture Organization (FAO) and the Ministry of Agriculture had estimated that rural subsistence farming regained most of its prewar capacity by 1998 (for example, rice and cassava production reached 70% and 90% of their prewar levels, respectively), it is unlikely that such trends are continuing to this date. This is because, as the reports also indicate, most of the growth in rice and cassava production was due to tools and seeds provided by international agencies and nongovernmental organizations in the immediate postwar reconstruction years. Such international support might have already peaked. Furthermore, reports coming from certain parts of rural Liberia note a disturbing trend since the war. We are told that many able-bodied men in these areas are now largely engaged in gold and diamond digging for various mining companies, most of whom classified as illegal in 1999 by the then assistance minister for mines (Panafrican News, November 29, 1999). Insofar as these reports are true, then we might be witnessing a gradual diversion of rural labor away from subsistence production and food security toward fortune-hunting activities.

Another key element of the economic demise of Liberia under the Taylor plague has been the collapse of its international economic relations, rendering it impossible for the country to exploit its traditional sources of external finance and to reasonably manage its existing international financial obligations. Consequently, not only are the doors to new finance almost completely locked but also there is a loss of effective management of the country's existing external debts. Since the first half of the 1980s when Liberia sought and obtained four Paris Club and two commercial bank reschedulings, the national debt problem has virtually been pushed under the rug, with no effective government plan to address the growing debt burdens of the country. Consequently, according to an IMF Staff Country Report (April 2000), arrears on the external public debt quickly accumulated, reaching as much as US$50 million in 1984 and further rising to US$863 million in 1988. By 1988 the total external debt stock of the country had risen to US$1.8 billion (or 164 percent of GDP), from US$726 million (or 75 percent of GDP) in 1982. Over the same period (1982-88), the country's debt-service payments had ballooned from US$45 million (9 percent of export earnings) to US$197 million (40 percent of export earnings).

The outbreak of civil war in 1990 worsened the national debt profile, as successive interim and provisional governments virtually abandoned debt-service payments, resulting in the fast accumulation of arrears. Apart from the rare occasions, such as the grand payment of one million dollars made to the IMF in 1994 by the LNTG government, the country virtually avoided the debt problem. The Taylor government has been paying only US$50,000 monthly to the IMF. As a result, the external public debt rapidly accumulated and climbed to US$2.6 billion at the end of 1999. Current sources now put the country's debt at US$3.5 billion. The key fact to remember about the debt is that almost all of it (US$2.3 billion) represents accumulated arrears, and not new loans. This makes the debt problem even more urgent since it means that most of the debt is already overdue.

This level of external debt, given Liberia's low income, has made the debt indicators of the country worse than the average indicators of all sub-Saharan African (SSA) countries and those of the Heavily Indebted Poor Countries (HIPCs). For example, the country's 1999 debt-GDP ratio of 570 percent was five times the average debt-GDP ratio (111 percent) of all SSA countries, and it was more than 10 times that of the HIPCs (which was only 53 percent). Second, Liberia's external debt per capita of US$1,064 for 1999 (i.e. the external debt of each Liberian) was three times the average for either the SSA or HIPC countries. This level of per capita external debt is exceedingly high given the fact that Liberia's per capita income for 1999 was only US$187. Moreover, in terms of the amount of export earnings that debtors must commit to debt-service payments, Liberia is again in the worst situation. For 1999 her Debt Service-to-Exports ratio was 70.8%, compared with the averages of 28.9% and 10.7% for all SSA and HIPC countries, respectively.

For seven years (1990-96), war and political chaos deprived the country of available international debt management initiatives, including the most recent and current HIPC Initiative. While these international debt relief schemes are far from being satisfactory, some African countries have utilized and somehow benefited from them. Countries like Uganda, Mozambique, Cote D'Ivoire, Burkina Faso, and Mali have either reached their 'decision' or 'completion' points in the HIPC Initiative. Burkina Faso, whose current government is accused of sponsoring mercenaries of war and mineral theft in West Africa, has managed to extract some debt relief benefits from the international financial community, in the form of a 14% reduction in the net present value of its external debt. On the other hand, Liberia, whose current regime is said to be receiving protection from these mercenaries, has not even appeared on the HIPC horizon. Just last November, the Canadian government excluded the country from its debt relief plan as punishment for the Taylor regime not committing to "principles of peaceful development and good governance, including the protection of human rights". The lack of effective management of Liberia's external problem is a major aspect of its economic demise because huge external debt, combined with political inefficacy, not only prevents current development opportunities but also endangers the future direction of the country's economic policy.

In short, Liberia has already endured excessive economic and human hardships in the last eleven years. The current conflict among the Mano River Union countries must not therefore be allowed to escalate at the expense of the lives of the Liberian people. Human lives should never be treated as consumable raw materials for a political manufacturing industry, whereby lives have to be consumed in order to produce a national government. This is why Taylor must resign to save Liberia from further disorder, because the country can no longer afford any more human lives to keep him in power or to invest in new political manufacturing experiments.