President Sirleaf; Adopt New Policies To Reduce Poverty

By J. Yanqui Zaza

The Perspective
Atlanta, Georgia
November 13, 2006


Would President Ellen Johnson Sirleaf’s visit to China lead to adopting economic policies that would move Liberians out of poverty? Many experts such as Thomas L. Friedman suggest that China’s economic system could end poverty. He reported in the NY Times (11/10/06) that China’s economic system has moved more Chinese people “…out of poverty faster than at any time in the history of the world.” On the other hand, he added that the America economic system (i.e., Liberia’s adopted economic system), has made many ordinary Americans poorer.

Another expert, Mary Walsh (NY Times, 11/06/06) describing Liberia’s adopted economic system, said America’s economic system has created major problems. She said the U.S. has a $3.1 billion dollar debt, $1.4 billion dollar health cost, $1.7 billion pension obligations, high cost of housing, high rate of high school dropout, etc. Oh yes, the Chinese economic system has flaws. In fact Chinese officials, during the Chinese Party annual meeting held in October 2006, did admit of many problems, but said those problems are manageable. Also, China has billions of cash in reserves to entice poor countries.

So beneath the fear of China’s aid and the rumors that the Ellen Johnson Sirleaf Administration is reluctant to accept 200 medical doctors from Cuba, U.S. officials have a different concern. They are fighting hard to keep Liberians from the opportunity to compare the current economic system to a new one. They have also reasoned that once citizens are exposed to a competing system, some citizens might gain knowledge, and probably also choose a preference.

Unlike corporations in the Western countries, those operating in Liberia or in many poor countries do not implement part of their business principles called “Social Responsibility.” (i.e., underwriting the cost of programs for the local communities). Joe Nocera (NY Times, 11/11/06) said that until Milton Friedman limited the definition of “Social Responsibility” to the realization of higher profits 35 years ago, companies in the U.S. did pay for program for the benefits of those communities they did business in. However, the Liberian rubber producing company, Firestone, since 1929, operates a single high school. And it also operates a semi-hospital and constructed huts without toilets or safe-drinking water for its underpaid workers. Similarly, those companies that operated iron ore in Liberia did not contribute to the developments of their respective communities.

Again unlike companies in the U.S. which pay significant royalties and taxes from high profits, corporations in Liberia do not report the correct profits (i.e., “Social Responsibility”) or even pay minimal taxes and royalties. So Liberia does not receive the correct remittances to invest in social programs such as schools, health, utility services, transportation, etc as the U.S government did in 1950s and 1960s.

Liberian government receives minimal royalties and taxes because big businesses have significant influence. They operate all major money-making activities and indirectly participate in electing decision-makers. Even after elections, elected officials largely depend on remittances (i.e., royalties and taxes) from profiteers to finance their budgets.
Additionally, since Liberia manufactures few items, elected officials are at the mercy of big businesses to import essential commodities for the voters.

Business executives do not only use their influence to violate Liberia’s law, but they have introduced a new culture. The systematic invasion and avoidance of taxes with impunity, the constant failure by corporate managers to adhere to contractual agreements and regulatory policies became a new way of doing things. Therefore, the focus on profits or individual’s prosperity at the expense of a community development has changed the attitude of many Liberians. In short, Liberians have exchanged the standard for judging people from decency, integrity, morality, family belongingness, community responsibility, etc to making more money, (i.e., profits).

Many peace-loving Liberians, including nationalist leaders were unsuccessful to reinstitute cultural values. Besides failing, they became targets of big businesses or on many occasions were replaced. That was a part of the reasons why many Liberian advocates, such as the Fahnbullehs, Tipotehs, Sawyers, etc. are still considered targets by big businesses. So by mangling or replacing nationalist leaders, corruption became rampant and the gap between the haves and have-nots increased.

Certainly, U.S. officials regret the role they indirectly play in increasing economic disparity. But are they willing to allow Liberia to change its economic system? And the fear that Liberians might look to another country is not an imaginary one. This is because voters in Brazil, Ecuador and Nicaragua recently elected candidates who preached genuine programs dislike by big businesses. Apparently, that was a part of the reasons why U.S. Ambassador to Liberia, Donald Booth held a press conference and laid out a $150 million dollars to cover anti-poverty projects. Joseph Kahn, in an article called, “China Courts Africa, Angling for Strategic Gains,” reported by the NY Times (11/3/06) said China’s flawed funds lending system has raised concerns among officials and owners of the World Bank, keys phrase for unspoken threads.

Sadly, President Sirleaf will not win the war on poverty if she is coerced by U.S. officials. This is true if we maintain the old system which big businesses rely on to increase their profits. Alternatively, to win the war, profiteers would have to end the practice of giving kickbacks to underpaid officials in exchange for deferring, invading and avoiding tax laws, regulatory laws, labor laws, environmental laws, etc. So, would President Sirleaf muster the political will and institute economic policies that put less emphasis on profit? That’s a good question since her economic advisors are, presumably, advocates or admirers of a profit-driven economic system. I surmise that ordinary citizens want assistance and services now, and nondiscriminatory economic policies that would prevent another civil war, even if it means that indoctrination comes from a country, other than the U.S.

© 2006 by The Perspective

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