By J. Yanqui Zaza
Thanks to Fasukoi for the interesting comment made by him about the relationship between local facilitators (elected officials) and the real criminal enterprise (big business/IMF). The statement as to why IMF would loan millions of dollars to President Sirleaf who has not accounted for billions of dollars donated to Liberia could be viewed as protecting an interest.
I surmise the statement is based on his experience that any regular bank or lending institution would review the past activity of a loan applicant to determine the applicant's eligibility. However, the IMF is not a regular bank. It has other interest such as creating an economic and political environment for big business to make huge profit.
Therefore, experts at the IMF search and support the likes of President Sirleaf who can provide the economic policy and political cover that would permit big business to exploit a country's natural resources with impunity.
For instance, President Sirleaf is fighting hard to ensure that Liberia becomes a member of the World Trade Organization (WTO).
The World Trade Organization, a predecessor of the General Agreement on Tariffs and Trade (GATT), was launched in 1948 to resolve business disputes among countries and institutions. It has increased its membership from 23 to 151 countries.
Positive comments: Proponents argue that WTO
(1) increases consumer choices,
(2) enables countries to use resources more efficiently,
(3) leads to the introduction of new technologies,
(4)creates new industries,
and (5)promotes more rapid economic growth.
Negative comments: Critics maintain that the WTO:
(1) exposes vulnerable countries to economic and financial shocks not of their making,
(2) contributes to environmental degradation, which leads to unemployment and downward pressure on wages,
(3) big business will use the arbitration panels within the WTO to either delay or prevent renegotiation of concessionary agreements.
Liberia's major exports (latex from rubber tree and/or iron ore), for example, are sold to the parent of Firestone and Mittal Steel, therefore, the issue of receiving a fair price for Liberia's export is mute.
Also, Liberia does not benefit from the idea of technology transfer because many of our products are exported without added value. So, how does Liberia create new industries when the major would-be manufacturing investors do not carry out manufacturing activities to require the need for midsize manufacturing companies?
So folks, what is the real reason why President Sirleaf and big business want Liberia to become a member of the WTO.
I guess that big business is trying to prevent the frequent re-negotiation of concessionary contracts. And many opposition parties are promising to re-visit the concessionary agreements. But WTO offers the possibility that once Liberia becomes a member, re-negotiating any flawed concessionary agreements might be limited.
Let us look at the two cases in Ecuador and Venezuela to understand how WTO would prevent Liberia from re-visiting signed concessionary agreements.
Big business does not like any policy that reduces their profits, either by remitting additional revenue or implementing effective labor laws or environmental laws. For example, in Ecuador, Chevron refused to pay $8.5 billion, a portion of the $18 billion judgment. The Courts in Ecuador had fined Chevron $18 billion for violating environmental laws, but the government in Ecuador was willing to receive $8.5 billion and close the case. Aware of the possibility that WTO might not agree with the Courts in Ecuador, Chevron took the case to the WTO. The arbitration panel within the WTO, instead of enforcing the decision reached in the Courts of Ecuador, instituted a new investigation of its own. The arbitration panel asked Ecuador to allow Chevron to operate until its investigation was completed.
In another example, Venezuela is now opting to disengage itself from the WTO after the arbitration panel asked the country to pay $3.7 billion. The arbitration panel within the WTO levied the fine after Venezuela asked Exxon Mobil to renegotiate concessionary agreements. Arbitration Panel concluded that Venezuela's request to re-negotiate the concessionary agreement was delaying Exxon Mobil's business operation.
So brother Fasuekoi is right, but the IMF's decision is based on its interest, and not the interest of Liberia. This is because the IMF might get more benefit from the operation of big business under the Sirleaf regime than otherwise.