LEGAP Is A Trusteeship But It Is Good For Liberia (Part II)
By John S. Morlu, II
July 18, 2005
First and foremost, Liberians should look at LEGAP in a broader context. A large portion of LEGAP’s application is similar to a Financial Control Board like the U.S. Congress established in the 1990s to oversee the city council in Washington, DC; America’s Capital city was plagued by patronage and financial mismanagement under the leadership of former Mayor Marion Barry. The United States government set up the Financial Control Board to not only act like a watchdog group but to rein in corruption and financial mismanagement. In Liberia, as it was in the case of Washington, D.C., there was almost zero accountability and people lost total confidence in the government of Mayor Marion Barry. So also like Washington, D.C., I believe LEGAP will help Liberians foster economic growth and prosperity by building public accountability and public confidence. These are the two most salient beneficial effects of LEGAP.
LEGAP: BUILDING PUBLIC ACCOUNTABILITY
In my judgment, the fears and concerns of those opposed to LEGAP is ill-conceived and untenable. The current situation is appalling. The interim government is rife with corruption and incompetence. Maintenance of the status quo does not serve the best interest of the people of Liberia. Forget about fancy labels such a as “good governance,” “transparency,” “fiscal management,” among others; all of them have one simple foundation - Accountability.
In layman’s terms, accountability in government means identifying revenue streams, projecting revenue intake, collecting those revenues, prioritizing programs, setting performance benchmarks, spending those revenues wisely and prudently on those identified national program priories, and reporting the expenditures and results to the public. How many Liberians can really say with a straight face that the government—past and present—has implemented a real accountable government which can account for revenues and expenses? None!
In January of 2000, I visited Liberia to attend the funeral services of my late father. While in Liberia, I had the opportunity to meet the Finance Minister of Liberia. He is now a candidate for the presidency of Liberia, a fine man with enormous intellect. The Finance Minister was frustrated with respect to the state of fiscal management in Liberia. He complained bitterly that he did not have a clue about the revenue intake from important revenue generating agencies such as the Bureau of Maritime (BMA), National Port Authority (NPA), the Forestry Development Authority (FDA), and Roberts International Airport, among others. The Finance Minister informed us that former President Charles Taylor had allocated revenues from these agencies without allowing them to show up on the books; an established in Liberia. According to the Finance Minister, commissioners and directors of those agencies refused to even discuss much less tell him the annual revenue of their agencies, limiting his ability to project government revenues.
It was rude awakening for me. I live in America. I studied economics and finance. I understand government financial management. I know that the Secretary of the Treasury (Minister of Finance) is like the Chief Financial Officer (CFO) of the government. As CFO, he or she is responsible for projecting and collecting revenues and approving payments consistent with current laws and budgets. The Finance Minister is also the main caretaker of macro-economic policy making to foster growth in productive output and job creation. Furthermore, he or she is responsible for fully reporting the financial activities of the government and country. In America, I am told that the Treasury Secretary knows, on a daily basis, how much revenue has been collected and major account balances, which is far from the case in Liberia.
Sadly, the situation that existed in 2000 still exists today. Many Liberians have read various reports from the U.N. Panel of Experts concerning revenue leakages from several agencies and a total lack of financial oversight. Mr. Charles Bennie, the former Revenue Chief, even went as far showing the public the estimated seven million dollars that was being collected but disappeared in thin air. We have read several reports about how the interim government spends funds outside of budgetary parameters without seeking congressional approval. We have also read how the interim government spends more on security, luxury cars and payroll than on programs such as health care and education. We have read so many scandals concerning shaky concession contracts - iron ore deals and telecommunications debacles are two that come to mind. I could go on and on fellow compatriots. But the jury has reached a verdict and the Liberian government is guilty of all things corrupt, financial mismanagement and wasteful spending.
But the critical question is how do we go forward as a country under such a scenario and still call ourselves a nation? LEGAP is a stopgap measure as Brother Dukule asserted. It is not a panacea for decades of problems in Liberia. But we need this stopgap measure. It is our best shot at ensuring accountability in revenue collections and prioritizing expenditures at least in the short run. I am sure many Liberians want to know how much is being collected and spent from our two main sources of income: Domestic Revenues (natural resources, royalties, taxes, fees, etc), and Donor Contributions (handouts from the rest of the world). Many Liberians also want a capable judiciary. By the way, how can anyone expect the international community to lift the embargo on diamond and timber as well as give us more money when we cannot account for the little they have allowed us to control? The Liberian leadership cannot be trusted, period. Even those opposing LEGAP know that. And this is a good transition point to my next point—building public Trust.
LEGAP: Building Public Confidence
Liberians are going to the polls to elect a President and members of Congress to reshape the future of their country. I am sure there are a few Liberian presidential candidates with real plans to change Liberia. But Liberia is in a crisis of confidence that even an election cannot fix, because ordinary Liberians don’t believe that any of those presidential and congressional candidates will muster the “political will” to bring about meaningful changes that will benefit them. Each successive administration has failed to account for the county’s financial resources and deliver needed services. Liberians now mock the phrase, “I will end the business as usual mentality.” That statement does not mean a damn thing any more for many Liberians.
Chairman Bryant’s administration and many others before him have engaged in an orgy of corruption. Some people now even think that Chairman Bryant’s administration makes Charles Taylor’s look “squeaky clean”. Well Chairman Bryant did “end business as usual”. It is always an appropriate thing to give credit where credit is due. Instead of stealing 60 cents of each dollar, Chairman Bryant and friends take the whole dollar. They have also successfully replaced the infamous ten percent rule with the hundred percent rule. A great success? You bet!
In Economics, we are taught a theory called rational expectation. If people expect—high confidence—that the economy is going to boom in the future, they will go out and spend money. On the contrary, if people believe—low confidence—that the future looks rather bleak, they will save the little they have earned. The most widely followed measurement tool in America is called the University of Michigan’s Consumer Confidence Index. Even investors watch this index because a high consumer index is an indication of business expansion because American consumers constitute nearly two-thirds of GDP. The more consumers spend because of the confidence they have in the future of good things to come, the more businesses profits invariably grow increasing stock profits and returns along with it. Essentially, many things in life are more or less a game of feelings and perception…what people think will be the likely outcome.
In taking the pulse of the Liberian nation, Liberians are rightfully apprehensive of what lies ahead. Like an investor, Liberians do not want to bet their money on a country with a shaky past and uncertain future. If that was not the case, we would not have Liberians calling for structural reforms to tie the hands of the next government. Liberians have hosted two separate national conferences to propose just such reforms. Recently, a group calling themselves “Prominent Liberians” led by Dr. Elwood Dunn called for yet another national conference prior to the elections. Former Interim President Amos Sawyer also has lent his voice to the call for another national conference in addition to the one he attended in the United States. It seems rather obvious that Liberians are afraid that the next government will not make good on its promises, raising the bar for another potential round of fighting over limited resources.
Unfortunately, it is not only Liberians who are worried about the country’s future and the lack of confidence in the leadership to build a prosperous nation. The donor community is frustrated over the massive corruption in Liberia. The United States and England forgave about $40 billion of debt owed by 18 poor countries (14 in Africa). Rampant corruption and blatant financial mismanagement made Liberia ineligible for such generous debt forgiveness. The Group of Eight Industrialized countries (G-8) met last week in Scotland to further consider debt forgiveness and the need to increase foreign aid to poor countries to combat poverty and disease. But many in the developed world are worried the money will not reach the targeted people—the poor and destitute.
Sadly, the developed countries have tried all kinds of incentive driven economic measures, the proverbial carrot on a stick approach, to rein in corruption and implement sound fiscal management, but to no avail. For example, the IMF structural adjustments in the 1980s that imposed stringent financial conditions and austerity programs on recipient countries did not work. The World Bank and IMF sent experts to Liberia in the 1980s to help Liberia streamline its revenue collection and institute an accountability system. That venture into Liberia was a total failure because Samuel Doe’s government did not fully cooperate. Last year, the U.S. Assistant Treasury Secretary visited Liberia and warned the Liberian government to begin reining in corruption in exchange for some debt relief, but that again fell on deaf ears in Monrovia. Poor fiscal mismanagement and serious corruption are rampant problems in Liberia.
Now look at what has happened. The donor community’s patience has worn out on Liberia; they have lost total confidence that the leadership will do right by the people. Any reasonable person would agree that Liberia has crossed the breaking point, so the donor community has no choice but to take bold steps and fight rampant corruption in Liberia for the Liberian people. I believe strongly that without LEGAP to set things straight in that morally bankrupt country of ours, we can kiss foreign investment and increased aid goodbye. The only businessman or woman who will make an investment in Liberia under the cloud of corruption and a weak and incompetent judiciary is someone like Charles Taylor’s confidante and business partner Gus Kouwenhoven, an indicted war criminal and owner of Oriental Timber Company (OTC) and Hotel Africa.
The government has lost the Liberian people’s confidence. It has lost the donor community’s confidence. And it has lost the confidence of clean and uncorrupt business people. Liberia needs to restore confidence. LEGAP is a choice. LEGAP is the answer.
Liberia is a poor country that depends mostly on handouts from the international community. Limited state resources are squandered by a small group of kleptomaniacs. Corruption was a contributing factor of the war. Corruption has put Liberia in line at bankruptcy court. Corruption has siphoned limited state resources depriving a large number of people of the benefit of a decent education and health care. How can we continue as a nation under such limitations? In light of all this Liberians should look at LEGAP as a measure designed to help their country, much the way the United Nations already provides us security, a critical state function.
Yes, we have qualified, capable and highly educated people in Liberia who can do the job. While it would be nice for Liberians to run the show, ordinary Liberians and the donor community have lost total confidence in our past and current leaderships. They are rightfully uncertain of the next one to come in this year’s election. It seems rather clear to the common man that Liberians not willing to chance their future on an untested post election government, especially when they have been burned more than once? Nor are Liberians willing to see massive human suffering and degradation in favor of a blanket argument for sovereignty?
For me, this is a matter of dollar and cents; a matter of sovereignty versus the suffering of the common people. I will always side with the common people over some textbook argument about sovereignty. This is just my own two cents worth of opinion. It is your right to differ with me. Borrowing a phrase from a famous presidential candidate, I have no regrets for joining into this debate of significant national import. If it is good for the common people, for me that is good enough.