The idea of using Liberia’s priority funds to pay rent arrears to domestic creditors (comprising pre-dominantly of Monrovia landlords) and, subsequently, to waive real estate taxes owed by the same landlords indicates that President Ellen Johnson-Sirleaf’s economic policy is set on the course to widen the gap between the rich and poor. Interestingly, within days of the announcement by the Government to pay arrears in rent and waive real estate taxes, the U.S. 2006 Human Rights Reports indicted the Liberian Government for failing to invest in education and the health of Liberia’s school-aged children. Additionally, the U.S. did infer that the Sirleaf education policy, “free and compulsory education” was meaningless since most students in Monrovia attend private-operated schools which are expensive and students who attend free schools are required to bring not only crayons and papers, but also desks and chairs.

Since Liberia’s independence in 1847, it has and continues to allow private people to operate every major sector of the economy, including food, education, health, housing transportation, and mineral resources such as diamond, iron ore, rubber, timber, etc. Government has assigned mainly, Monrovia residents at agencies such as Land and Mines, Forestry Development Authority, etc to monitor and enforce concessionary agreements. Instead, those officials, while portending to serve government’s interests, at the same time took on their self-serving mantle of serving as private consultants, lawyers, business partners, etc, of the same multinational companies, encouraging the raking of kickbacks in exchange for compromised enforcement of agreements.

Unlike the United States where illegal or corrupt monies are reinvested into the economy, Liberians invested their monies outside of their country. The Government, having miniscule funds, did not build the needed schools, vocational centers, health centers, roads, or affordable housing. Worst, not only did the Government fail to construct facilities to house its own functions, its officials also ended up being so grossly empowered as to enable them act in dual capacities, as landlords (owing the edifice of a government ministry) and as tenant(serving as the appointed head of the agency occupying the edifice).

Caught in this glaring situation of conflict of interest, the so-called landlords ended up serving landlords’ interest while betraying the Government’s interest by making sure that a “right to buy” did not get a foothold on lease agreements the term of which ran nearly half a century. Business practices dictate that long-term lease agreement of a property should allow a tenant to take ownership since the owner would have recouped his/her investment at the end of the agreement. This concept also allows owners of properties to pay less in taxes to the government since the replacement cost (i.e., depreciation expense) reduces taxable income. Therefore, properties placed in business for over forty years, such as building used by the Ministry of Defense, Justice, Commerce, Education, etc should either be government owned by now or should cost far less than what the Finance Ministry is paying annually. Or our government should have postponed the payment of rent arrears until it funded her priorities at this critical era of rebuilding.

One would take for example a critical mandate of this post-conflict government which falls in the area of building the institutions of democracy. It would seem paradoxical for a government that publicly declares its inability to carry out local, municipal, and chieftaincy elections due to the unavailability of funds to be overzealous in dishing out millions to so-called domestic creditors. This is particularly dumbfounding when one considers the fact that this creditor class represents a very minute percentage of the Liberian population. The policy can therefore be said to be intended to serve the purpose of rejuvenating and strengthening a domestic aristocratic class at the expense of tackling problems that will alleviate the conditions of the larger population of Liberians. What is also amiss is the silence of the domestic debt payment on the amount government owes the larger Liberian populace in the form of the long time ago imposed government savings bonds. Will the bonds be redeemed under this policy so as to give the holders some purchasing power?

Narrowing the gap between the rich and poor is one of the key reasons why some countries in Europe as well as other countries maintain ownership in many sectors of the economy such as natural resources. Until 2000, even Israel, a close ally of the United States of America, which is often vaunted as the beacon of capitalist democracy in the Middle east, operated many of its business ventures, such as manufacturing commercial airplanes, trains, etc, producing agricultural commodities, or building affordable housing. Antonia Juhasz, (NY Times, 3/13/07) said Kuwait and Saudi Arabia, two close allies of the United States, also maintained nationalized oil systems and have outlawed foreign control over oil development. Instead, they have hired international oil companies as contractors to provide specific services as needed. These countries acted against the interest of chief executives such as Kenneth Derr, former chief executive of Chevron, who asked in 1998 to seek control of Iraqi huge reserves of oil.

Well, Liberia could reduce the influence of landlords and other profiteers, not necessarily by following economic policies of Venezuela, Iran, Libya, Ecuador, China, Cuba, etc. Perhaps, it could employ what Saudi Arabia and other countries did 35 years ago when they stripped the ownership of the world’s oil from the hands of corporations of seven based in the United States and Europe and hired specialists. Based on our past experiences it would be ill-advised to rely on written clauses within the agreements, the honesty of our representatives and the good heart of chief executives of companies such as Mittal Steel, Firestone, Logging companies, oil exploration, etc, to assume that government would receive fair amount of taxes.

Would new monitors not become relaxed in enforcing concessionary agreements in exchange for kickbacks just as others did in the past? Astonishingly, why reward landlords who might have benefited from the spoils of our economic system? The government's use of funds to give tax relief and arrears payment of rent indicate that landlords do wheel a significant political and economic clout in Liberia. More so, their request, which shifted resources away from Liberia's priorities, indicates that they are determined to advance and protect their interest, even if such interests end up increasing the gap between the haves and have-nots. However, while one does not expect our newly elected, and obviously a weak ruling Party, to undertake unconventional policies, it could initiate and introduce new vision. More so, President Sirleaf could encourage her economic advisors, not necessarily to abandon market-oriented policies, but to embrace good ideas and invest in social programs. Hopefully, President Sirleaf should not hesitate to discipline advisors who insist on continuing their careers by serving the alliance of wealthy profiteers.

Further, the “Iron Lady” should not allow herself to be influenced by Monrovia landlords, and be isolated from the masses. Rather she should begin to counter the influence of profiteers by encouraging the building of a cohesive constituency that would bring the necessary pressure on her advisors to challenge the status quo. Unfortunately, by paying excessive amounts from government coffers to the rich and leaving our natural resources in the hands of profiteers, the “Iron Lady” is, inadvertently or not, creating an environment where few citizens (some of whom qualify as Liberia’s cavalier thieves) would accumulate more wealth at the expense of quality education, affordable housing, available health care, and the building of the needed rudimentary democratic institutions. That will not only be a huge recipe for disaster but also an unimaginable disappointment to many.

---

© 2007 by The Perspective
E-mail: editor@theperspective.org

To Submit article for publication, go to the following URL: http://www.theperspective.org/submittingarticles.html