Jobless Rate Is 85%; Firestone, Ect Pay $5 Per Day, Yet Prez Sirleaf Promises To Create Liberia Middlle Class

By J. Yanqui Zaza

The Perspective
Atlanta, Georgia
February 10, 2011


Since the 2008 financial meltdown, leaders around the world, individually or collectively, are finding out the hard way to determine an economic system that creates good-paying jobs and promotes prosperity. Leaders of rich countries, interestingly, excluding the president of the United States, in Davos, Switzerland, besides addressing the issues of migration, debts crisis, etc, did try to reshape the economic system of the United States. (NY Times, 1/25/11)

They blamed the U.S. economic system for the 2008 financial meltdown that continues to bankrupt developing as well as developed countries. Apparently as part of a strategy to emphasize the importance of the need to reshape the American economic system, they had selected Mr. Dmitri Medevdev, the president of Russia, an archrival of the Unites States, to give the keynote address.

Guess what, leaders of Europe are not alone in arguing that the America’s economic system is to be blamed for the 2008 financial crisis. According to Sewell Chan (NY Times, 1/26/11, the U.S. Financial Inquiry Commission has blamed failures in government regulations, corporate mismanagement, and heedless risk-taking by Wall Street.

Pointing out mistakes or recognizing inefficiency within a system is not easy for some leaders, especially so when election is pending or if the issues might bite the hands that feed. Although Liberia has been declared the world most corrupt country by International Transparency, President Sirleaf has not evaluated Liberia’s economic system, neither has she investigated why Liberia’s borrowed economic system is blamed for bankrupting corporations on Wall Street and countries such as Iceland, Ireland, Greece, etc. In fact she has embraced this failed economic system, which, experts say, was partly responsible for breeding the fourteen-year old civil war in Liberia.

Amazingly, in the state of the Nation speech, she went beyond praising and embracing the economic system called “trickledown concept.” She explained that while a market-oriented system encourages profiteers to accumulate more wealth through privatization and deregulation, it does also create a middle class. By awarding concessionary agreements to investors, economic activities will spur and engineer the creation of a middle class, she added. Further, in defending her government’s decision to sell the country’s resources on the cheap, she said every country has embraced investment.

For the moment let us look at the economics and see if some Liberians can emancipate from poverty to a status of a middle class. Middle class status is possible when citizens receive good salaries and, or generate profits from businesses. In Liberia government is the largest employer, paying $100.00 per month to most of the employees. The concessionary sector, the second largest employer, is paying about, on the average, $5.00 per day, a slave wage. This kind of slave wage payment is possible because many of the workers are unskilled and mere rubber tappers, diamond diggers, iron ore miners, log cutters, etc. In addition to the slave wages paid by investors, they remit minimal royalty fees to the government, making it difficult for the government to provide electricity, safe-drinking water, education, etc. The government has yet to provide light and water to the residents of the commercial city, Monrovia because the so-called $16 billion dollar investors, for example, paid about $35 million dollars to the Liberian government as remittance for the period of June 30, 2008 through July 1, 2009. (Liberian Extractives Initiatives Transparency Institute Report).

Good profit making by small and medium size business is far from certain in Liberia. For small and medium size business (less than 100 to 500 employees) or large-scale size business (500 to over 1,500 employees) to make and sustain good profits, it needs a commercial population; meaning a sizeable population with money to spend. Liberia has a population of about 3.5 million people, and also with a jobless rate of 85%. With a slave wage economy, minimal royalty fees from investors, and a non-commercial population (majority of Liberians living on less than U.S. $1.00 per day), even if president Sirleaf were to award another concessionary agreement for $ billions the current economic conditions would not change significantly.

It is a good policy for a government to entice investment to a country, especially so, to bring U.S. $16 billion into a country that is recovering from a fourteen-year old civil war that left the country’s outdated infrastructure destroyed. Regrettably, Liberia has not received any tangible benefits from the U.S. $16 billion investment. Therefore, critics have a point to say that U.S. $16 billion is irrelevant since profiteers are taking our diamonds, gold, iron ore, timber, etc in exchange for minimal royalty fees and paying slave wage.

In case President Sirleaf has forgotten, let her be reminded that Liberia was the fifth iron ore producer in the world in 1976, yet Liberians became poorer. During the same period, Liberia was the largest producer of latex used in the manufacturing of tires. Additionally, diamond dealers and gold miners became rich while the country experienced one of the worst poverty conditions in the world.

Has President Sirleaf changed her views? If not, why should Liberians trust her promise to create a middle class when she and her boss were incapable in creating a middle class prior to April 12, 1980? They failed even though investors did use the same failed economic policy of the “trickle down concept.” Better yet, if chief executives on Wall Street, with all of the abundance of capital available in the United States, made the rich super rich, according to Mr. Bob Herbert, a columnist of the NY Times, how is it possible that investors, using the same "trickledown concept," will assist Liberia to spur the growth of a middle class?

So, forget about president Sirleaf’s promise to create a middle class. This is because investors such as Firestone will continue to maximize profits and cares less about remitting reasonable share of the profits to finance social programs. A good investment in social programs such as education advances societal prosperity. Ironically, education does not help investors to make huge profits. Why? A promotion of education by Firestone, for example, would radically reduce the source of its future workforce, since every one child that is educated does subtract one $3.19 per day employee of Firestone’s future rubber tappers.

However, an increase in wages of workers is possible when Liberia change from farm industry to factory industry. More so, factory industry does not only pay good wages, but it also compels investors to educate and train its workforce to remain competitive. And as the Chinese Ambassador to Liberia stated during last year Commencement Program at the University of Liberia, no country has transformed itself from poverty to prosperity without changing from farm industry to manufacturing industry. Therefore, instead of defending the institutionalization of plantation economy or "trickledown concept," president Sirleaf should seek new regulations to build factories and add values to the minerals before exporting them. The building of such factories would create an environment conducive for the building of auxiliary factories, the kind of economic activities that usually spur economic growth and spread wealth.

So folks, if President Sirleaf intends to create an environment conducive for some Liberians to emancipate from poverty to a middle class status, her government should invest portion of the U.S. $236 million dollars cash reserves into a manufacturing business such as diamond cutting factory, timber cutting and wood processing factory, rock crushing factory, etc. For Liberians to consider her promise, she should fulfill her initial promise by investing in electricity, safe-drinking water, roads, heath care and discontinue the practice of allowing her relatives and friends to receive excessive salaries, kickbacks received in exchange of sweet heart deals, etc.

© 2011 by The Perspective

To Submit article for publication, go to the following URL: