The Current Economic Situation and Elections 2003

By John F. Josiah, Esq.

The Perspective

January 23, 2002

As the country prepares for another round of elections in less than two years, we must begin to demand from political parties and candidates, policy blueprints on the direction they wish to take the country. We must also begin to provoke debates on matters that are salient in forging a sustainable democracy in Liberia. It is necessary to do so because never in the history of our nation, do we need to unite on very crucial issues than now.

When we dialogue and exchange views, regarding matters that concern the building of a democratic culture, and elections 2003, the better we will be in galvanizing a formidable united force against anti democratic elements of our society. A debate of this kind and a subsequent one should particularly be of interest to the "seventeen presidential" aspirants who have directly and indirectly expressed their interest in contesting the coming general elections. It will be of interest to them because of two major reasons, (1) To begin challenging the candidates' own ability and mental readiness for the presidency, (2) The more we engage our aspirants, and leaders on critical issues that are fundamental to our social, political, economic development, the better we will understand their positions on key issues that are critical to the well-being of our people and the nation; (3) A healthy intellectual debate helps to prune most of those who are incompetent from the race of the presidency.

The process of elimination must begin with us now by scrutinizing these myriad presidential candidates through vigorous exercises in all areas. Only then will we be able to quietly remove those who think of the presidency as a place of retirement. In addition to testing the positions of various candidates on critical issues, it is equally important for those who are officials of government in waiting, to commence preparing and presenting blueprints of future government's modus operandi through a forum of this nature. Failure to craft new alternative policies, will lead us to inherit and adapt failed existing policies.

It is in this light, I wish to provoke a national debate by introducing one of those critical issues of our time. "The current economic situation and elections 2003 with the hope that we may fully discuss this topic prior to elections 2003, and beyond. There are several questions this topic suggests, however, a comprehensive analysis of this topic is impossible to exhaust or treat fairly in few pages. Therefore, I will limit my discussion to three basic areas.

1. The impact of the current economic situation on elections 2003.

2. The role Liberians must play to have the necessary economic environment that is required for an intelligent decision as voters.

3. Who is to benefit from elections 2003 when the current economic situation remains unalleviated by a minimum percentage?

This brings us to the Economy.

The Liberian economy is one that has adopted a heavily centralized fiscal policy, with a tradition of an incompetent rubber stamp legislature who dare question the chief executive on budgetary appropriations and expenditures. The checks and balances necessary for our fiscal and monetary policies provided by the constitution are completely lacking. This fiscal system does not allow for improvement in governance, and it allows wealth to be concentrated in the hands of the very few who rule the nation. It leads to excessive control of fiscal and monetary policies by the central government. In the end, it severs local government participation in the decision making process of the economy.

Most Liberians will agree that the current economic system, and all of the institutions responsible for administering this - are entirely controlled, and managed by Charles Taylor. Consequently, the economic situation in our country is defunct. It is an economy caught in a vicious downward spiral, surging unemployment to 87%. The poverty level is now at 80%. Illiteracy has increase to a little over 40%. The national per capita income is one of the lowest on the continent of Africa. The necessary infrastructures for economic development are non functional and in some cases non-existent. Only 40% of our school going-age has access to formal educational facilities. Over 80% of the nation's population, have no access to electricity or safe drinking water. Agricultural production is at its lowest ebb in history. Salaries to Civil servants are paid every nine months for one month. The financial institutions are in a state of fragility. Moreover, there is a high rate of capital out flow with no substantial inflow for investment, and the economy lacks coherent fiscal, monetary, and exchange rate policies.

With this general overview of the economy, let us examine both the rural and modern sectors.

Rural Economy
The rural economy of our nation is predominantly agriculture, and presently it is excessively underutilized. In some rural areas, farming and other agricultural activities no longer exist due to the ongoing war. Consequently, in those non-farming areas, poverty has reached to an unimaginable proportion. Our rural inhabitants are without health facilities, no access to electricity or any type of lights except that, which is provided by nature. There is no safe drinking water, and daily meals are not certain for most households. The mortality rate in the rural areas has increased to an alarming rate. Out of every five children, only one may see his or her first birthday.

The wild life of Liberia is fiercely competing over bush yams, wild fruits, and other uncultivated plants, which are not consume under normal conditions. The rural economy of the country is completely demarcated from the modern sector of the economy, because farmers are no longer producing for marketing purposes. In addition, their skills and other services do not match up with the modern sectors of our economy.

Modern Sector
The modern sector continued to be paralyzed by the wrong economic policy of the government. The government of Liberia like many governments of the world is the biggest buyer of goods and services of the economy. Therefore, government's policies have substantial impact on the entire economy. It is due to this correlation between government policies and the entire economy that makes government policies very essential for sustainable economic development. Therefore, the economic policies of the government must be productive, coherent, and responsible in order to have sustainable economic development.

Never in the history of our nation has there been a greater need for good governance and justice than now. Both good governance and justice are bedrocks for economic development. But most of Liberia's economic problems stemmed from the poor governance and the non-democratic nature of the Taylor government.

The global Economy
Today, the world has developed into the biggest market system one can ever imagine. In this market system, there are buyers and sellers. Nations perform both the buying and selling roles. When nations were the only players in this world market, the market was referred to as "international economy" but because there are other non-governmental participants in this world market, it is now referred to as global market. During the last quarter of the last century, the net outcome of all of the transactions among the many nations and other non-governmental participants, realized a growth by 3.5% per year. What this means is that on an average, every country that participated in this world market contributed to the goods and services consumed nations of the world. However, the pattern of growth has been rather uneven among countries and within countries. A significant number of developing countries did realize broad-based economic growth and thereby reduced poverty by an encouraging percentage. Why then Liberia continued to experience a downward trend in her economy? Did we not participate in this global market? We did - to a substantial level. As a matter of fact, we did cross borders to steal other nations' resources to add on to ours and sold them on the global market. With all the stealing from our neighbors, together with what we exported from our own territory, why is Liberia becoming poorer and poorer each day? In order to attempt to answer this paradoxical question, it is prudent to briefly view our participation in this global market during the last three years.

Liberia's Exports
In 1999, Liberia's own diamond exports were reported to be 8,500 carats, valued at $900, 000. The Minister of lands and mines and energy, of Liberia Mr. Jenkins Dunbar, of course refuted this report as a gross underestimate of what actually left Liberia. In the year 2000, it was reported that Liberia exported a little less than 500 million dollars diamonds. The steep increase in the export of diamonds from 1999 to 2000 could be attributed to the criminal activities of Mr. Taylor and his government in Sierra Leone. According to the Forest Development Authority Report, between January and June of 2001, round log production exported 679,253 cubic meters valued at $462 million dollars. Note however, that these figure are underestimation of the real export by 20% to 50% because of tax evasion by companies and wide spread corruption by government officials.

This is the minimum level at which Liberia participated in the global market for a three-year period.

Where is the source of our poverty problems?

The source of our poverty is Mr. Taylor's incompetence, couple with his criminal activities in and outside Liberia. His poor governance and mismanagement of the economy can be clearly stated as follows:

1. The major source of our poverty is Taylor's unquestionable power to expend revenue not within budgetary guidelines. Between 1999 and 2000, 60% of government revenue occurred outside the budgetary process. According to an IMF report, certain timber concessions, government public corporations, and revenue collection agencies undertook massive expenditure on behalf of government and recorded them as "non-cash" revenue with an offsetting outlay on goods and services. Most of the goods consisted of arms and ammunition.

2. Taylor and his partners' monopoly on essential goods such as rice, gas, and cement also serve as a major contributing factor for the downward spiral of the economy.

3. Lack of security for the rural farmers to carry out their farming activities without any molestation, looting of farms, and confiscation of farm produce by government's armed bandits is another contributing factor.

4. Failure on the part of the government to pay salaries and national debts owed the business community; the outstanding national debts amounting to over one hundred twenty million United States dollars is another, while the country's international debts is little over three billion dollars.

5. Certain government control Banking institutions failed to pay depositors funds. According to the 1999 Banking reports, approximately $450 million is yet to be paid to depositors by these non-functional Banking institutions.

6. Absence of democracy and other key factors are responsible for escalating the Liberian people's poverty. In the absence of democracy, the Liberian people are not allowed to freely choose their leaders and make free and intelligent decision. Without a free decision making process, the people can not fully utilize their potentials. As a result, skilled professionals leave the country for better opportunity elsewhere.

7. Reintroduction of the hut tax by the government is another policy in the wrong direction. In a country where there is practically no income for the rural inhabitants, the imposition of the hut tax is to take from them, what they do not have. This leads the government to garnishing future remittances from family and love ones. Consequently deepening their poverty.

8. Introduction of the Strategic Commodity Act by Taylor's government prohibits legislative approval of all concession's agreement between the government and foreign companies, and bestows plenary power to the President - to negotiate and signed all concession agreements, including the process by which tax and other financial obligations are paid by these companies.

9. Lack of incentives for foreign and local investors; the security problem in the country, purposely created by Taylor's government is a serious one. The government makes it difficult for foreign as well as Liberian nationals to invest in the country. The habit of requirimg investors to give a share in their business or pay up front a bribe before commencing operation is discouraging . Furthermore, there are too many armed bandits in the streets; too many checkpoints guarded by hungry armed youths; too many bureaucratic tips at the top, and armed robbery that are still of concern to potential investors.

10. Infrastructure and other services conducive for investment are completely lacking.

Election 2003

Having analyzed the prevailing economic situation in Liberia, I find it practically impossible for free and fair elections to be held in 2003. If election is to be held, it will not be free and fair, because the voters are infected by abject poverty. When voters are infected by poverty at the level that exists in Liberia, they tend to choose the one who provides for them the most during the day before election, ignoring five years of neglect, by the very candidate who now provides for them.

On the other hand, communication with the voters will be one-sided, since the one with the deepest pocket especially in a political system where there is no limit to campaign financing - Lies and misleading information will go unchecked. Critical issues will not be fully debated. In the absence of balanced information on critical issues through a healthy political debate, voters have the tendency to believe the person they hear, see and shake hands with. With a country that has no good roads, and poor means of transportation, the candidate with the deepest pocket is the only one to fly a helicopter to remote villages and towns. And in a country where every natural resources, as well as government revenue, is at the disposal of the President, the President will have the advantage. Why? This is due to the fact that he has at his disposal public funds that he will use for campaign purposes.

With Mr. Taylor having absolute power and control on the natural resources of the country, which amount to a little over twenty million dollars a month. He is certainly the most financially viable candidate come Elections 2003.

What are our alternatives? It is anyone's guess. My recommendation is to boycott the elections unless certain fundamental issues, such as the full implementation of the Abuja Accord, are fully addressed. And other elections laws are amended in order to create a level playing field. If such demands are constitutionally impossible, let us pool our resources and support the most viable contestant. The multitude of candidates, some of whom are equally poor, as the voters themselves, must step down. All democratic loving Liberians must suspend their ambitions for now for the sake of the country. Contribute that ten thousand dollars they have accumulated for their campaign to the one candidate we will nominate. One should not go into the race alone with that amount of money, because ten thousand dollars can only purchase 400 bags of rice. 400 voters will not win you the smallest district in Liberia not to mention a county. If you are seeking the presidency as a pretext to be considered for a cabinet position, your 400 bags of rice will not put you on the list of consideration because you have not commanded any substantial number of people to warrant for you to become a minister. Remember, while the voters are wretched, the Chairman of the elections Commission is terribly a poor man, who is also a beggar. He is not only destitute, he lacks consciousness, and his moral is of no use. All of these and his despicable character will not allow him to listen to complaint of elections fraud, when in fact he has been the one responsible for elections irregularities. Why will you complain to a conspirator for a conspiracy for which he is a party?

In conclusion, the Liberian economic situation is in doldrums, everybody is poor, except for the few who are robbing our resources. Our people will not listen to political promises; they will be looking for politicians who will respond immediately to their hunger, illness, and perhaps free their love ones from prison and other financial bondage. Let all of us come together for once and pool our resources behind a particular candidate that all of us will be comfortable to live with. That person should be able to create an enabling environment for every Liberian to fully utilize their talents. He or she should be respected internationally, and should respect and protect our constitution.

Once we pool together, the stronger we will become against Mr. Taylor who continues to steal our national wealth, mortgage our country, and abuse us. Failure to unite and pool our resources together will benefit Mr. Taylor and our misery will continue.

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