Sustaining Liberia’s New Economic Growth Model and its Rippling Effects


By: Samuel K. Goteh


The Perspective
Atlanta, Georgia
February 13, 2015

                  



 
 
 
 

 

The current pursuits of economic diversification, industrialization and rejuvenation in post-Ebola Liberia should be strategic and holistic, thus considering a careful cost-benefits analysis for sustainable growth and infrastructure development. The new shift in economic policies has been precipitated by the rapid decline of oil price from US$ 128 per barrel in 2014 to US$29 in 2015. What is perplexing about policy makers and architects of the economy in this government and past regimes is whether they have not heard about the “Dutch Disease’ before for which they built the economy on natural resources (oil, rubber and iron ore). How were the Harvard’s trained economists reading the economic growth variables over the years? Since the Harvard or western model of economic development was not working for Liberia, why they could ask the Chinese economists as to how they managed to move China towards a diversified market economy that exposed the country to rapid industrialization and technological development? Failures and challenges emanating from implementation of past trade and concessionary agreements and other economic policies should teach us strong lessons and give state actors the impetus to restructure the economy in which its dividends will benefit all citizens and advance infrastructure development and provide adequate social safety nets.

In this new economic model, keen attention and energies must be directed at quality implementation for tangible results and not just the numbers of concessions we opt to endorse as a government and nation. In post-Ebola economic recovery and stabilization efforts and based on global recession in the prices of crude oil and natural gas, diversifying the economy for sustainable economic growth and development, high moral judgment and consciousness has to be employed by the Sirleaf's administration in trade negotiations with foreign investors and companies. With the rapid decline in oil price globally, expanding the economy and opening up other sectors is a welcoming endeavor from this government. As mentioned in my past article (http://www.theperspective.org/2015/1227201503.php ), it is one of the keenest steps and visions amongst others that this government has envisaged over the time periods, but implementation and measurable impacts to enliven poverty stricken Liberians remains blur without ensuring that the ripples from these economic activities would spread to everyone equitably irrespective of ethnicity, socio-political affiliation and social class difference.

Following the Sirleaf’s government late move to open up and adopt new economic model, there have been influxes of trade delegations and investment corporations expressing their interests in various sectors of the economy in order to enhance government’s post-Ebola economic recovery and stabilization agenda. Recently, the government of Liberia and China signed a “letter of intent” on January 19, 2016 to boost the agriculture sector or agro-processing and manufactories. In the same vein, on 19 January 2016, a trade delegation from Belgium was received and wholeheartedly welcomed by President Sirleaf and her political entourage at her Foreign Affairs Ministry’s office. During the meeting with the trade delegates from Belgium, Madam Sirleaf expressed optimism of an "economic rippling effects" that the country stands to benefit from doing businesses rather than relying on oil and rubber, thereby opening up and diversifying the economy especially in agro-processing, manufacturing, eco-tourism, electricity and other un-explored sectors of the Liberian economy. She further expressed her "government willingness to work with companies in bringing economic relief to the country and pledged that her administration will do everything to ensure investors are protected". However, protecting investors and companies against physical threats (both internal and external) and insecurity are cardinal to driving sustainable economic growth, foreign direct investment and infrastructure development. But, in my views, trade and investment negotiations between state actors and foreign investors should be based on fairness, equity and high level values judgment in which the short-and-long-terms economic ripples from such transactions or investments would benefit the ordinary citizens or the larger Liberian society. More so, the government and relevant stakeholders should this time focus more on protecting our people and natural resources for the betterment of Liberians and the country at large rather than the protection of “corporate thefts and looters of the nation’s wealth” and state actors should stop doing everything to protect investors" over the general interests of the country. This government like any other past regimes has played major roles to holding back the sustainable growth and development of Liberia.

Furthermore, our national stakeholders including the house of parliament, judiciary and executive branches of government through their actions or inactions have significantly facilitated the wholesale looting, and plundering of this nation’s wealth and natural resources. The economic values of what have evaporated off the shores of Liberia are immeasurable and far more than what the nation has received in return from the “insider and outsider plunderers” of its raw materials or natural wealth. The theft of Liberia’s wealth has taken many forms and shapes including political marginalization of the indigenous people, oppressor-oppressed relationship, corruption, concentration of power in few hands, lack of social and infrastructure development and provision of human capabilities and political freedoms.

The plunderers and thefts of our nation’s wealth are not only our colonizers or foreign corporate entities, but we ourselves as insiders and state actors. We are yet to reap the benefits of the US$16 billion in foreign direct investments (FDI) that this government has bragged about overtime. The discovery of oil in the country and the manner in which it has been optioned to foreign companies is just another fiasco. The forms in which those oil blocks were given out for exploration and the ensuing bankruptcy of the National Oil Company (NOCAL), I doubt that the economic ripples from exploring the oil will spread to ordinary Liberians and the nation in general, especially the hinterland and to connect the country through roads, metro system, and reducing the harken rate of rural poverty. Furthermore, during the ‘Liberian miracle’ period of the double digits economic growth beginning the 1950s, there were barely any tangible, and extensive social and infrastructure development and in the post-open door policy period, it was unimaginable that one could not even see the impacts of the fast speed economic growth.

Therefore, in this new dispensation for economic restructuring, I suggest with sincerity that this government and its partners should firstly wage war on corruption by establishing robust institutional frameworks, policies and regulations that promote quality implementation to ensure that companies and investors live up to trade agreements and deliver tangible benefits or sustainable development to the affected concession communities and the country at large. In addition, all trade agreements, concessions and foreign direct investment (FDIs) should be carefully reviewed, research, analyzed and publicly discussed for local people’s inputs in order to capture and reflect their holistic needs and to spur sustainable economic growth, social and infrastructure development. Although post-Ebola economic recovery and stabilization are key priorities amongst others to this government, it has to fight all vices and barriers that hinder and undermine implementation of its development policies and yielding of tangible and lasting impacts on the country and lives of its people. The government must develop systems and muster the political will and courage to fight corruption and prosecute corrupt public and private officials (for example anti-corruption fight in Rwanda, Nigeria and Tanzania) that would serve as deterrents to subsequent perpetrators. Meanwhile, state actors should look far above individual selfish interests or greed thus eradicating nepotism, favoritism and cronyism and prioritize national interests for holistic national development and delivery of adequate social services.

Employability and Human Freedoms- the new economic model to drive ‘market economy’ must provide employability and income utility to reduce the high levels of suffering and poverty in the country. Promoting income-based poverty reduction strategies will redeem and values to the lives of the 84% of people that survive on US$1.25 per day in Liberia. If people are provided with quality education, access to good healthcare and social services and more importantly socio-economic utility or employment, they will lead the kind of live they so value. However, the declining oil price in the global market is also leading to huge cuts of staff at leading oil and extractive companies in Liberia and other countries in Africa.

Also, the sudden outbreak of the Ebola virus disease (EVD) which overwhelmed the healthcare system led to the closure and suspension of several concession companies and businesses in Liberia, thereby igniting a drastic downturn in the economic outlooks and subsequent layoff of employees in both public and private sectors. For instance, recently there has been report that ArcetorMittal Steel Company in Liberia has begun to cut of large numbers of its staff members due austerity strategies. This has potentially increased suffering, food insecurity and income poverty levels in Liberia. Hence, this new economic normal or restructure should prioritize reduction of the widespread income-poverty, suffering, unemployment, human incapability and on the overall provide infrastructure development and adequate healthcare, education and basic social services. Strong infrastructures including electricity, road connectivity, accessible transport system, institutional frameworks and rule of law are core drivers of sustainable development with inclusiveness and people’s participation.   


About the Author: Samuel K. Goteh is MA Candidate, International Development and Public Policy, Beijing Normal University, China
+8618401651787, sgoteh029@yahoo.com

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