There is a perception within the local business community that Liberia is being unfairly treated. Is Liberia the scapegoat pointed out by the international community to justify its inability to solve regional issues?
We have to look at the situation in the context of our own crisis. I am speaking about the civil war. Following the civil war in Liberia, unlike other civil wars, global wars like World War II where you had the Marshall Plan, or whether we are talking about Mozambique where there was massive assistance, I am beginning to feel that we have been unfairly treated. We have had to do practically everything that was expected of an emerging democracy - from a human rights perspective, rule of law, free speech, free press for instance - without any assistance from the international community. No country emerging from a war will ever survive when there is no assistance. We have had no real bilateral assistance except for Taiwan. Multilateral agencies have brought forth all kinds of conditionalities. We have not had the opportunity to get assistance to really begin the type of infrastructure development that is necessary when emerging from a war. Politically, we have tried to build a stable environment. Our political parties are all a part of the government; we have done everything.but I guess we have just not been lucky.
Lucky..?
What else can I say? I guess when you do all the right things and you don't get the results, somewhere, somebody has not turned on the lights yet.
How do you explain that the level of assistance has not been up to the expectations?
I guess some of them would have to answer. It eludes me. As a politician, that's a second profession, but as an economist, we have tried internally, if you were to look at where we came from before the war. The out-going government had a budget of about half a billion dollar, of course I must be quick to add that about 30 to 40% was in direct grant and aid. Therefore, we are talking about an annual revenue intake of about three hundred million dollars. Now we've come from this to a budget of under one hundred million dollars, and I am talking about a budget and not actual revenue intake.maybe about 10 to 15 % below that. Vital infrastructure, social programs cannot be funded, so I don't see why we have not received assistance.
You are said to be media conscious. How do you perceive the role of the international media in their coverage of Liberia's political, economic and social environment?
There's a big word now - globalization. Depends on who controls the media. Liberia's a small country and with the advent of the Internet, the global superhighway, it is a matter of those areas to relay the information out; it's expensive, believe me. There are massive opportunities here. I know you have heard of the OTC, a mainland Chinese-based company, it is about the biggest investment in Liberia. They have invested maybe a little over a hundred million dollars in the economy, but they are now been unfairly portrayed, which I don't understand. In fact an interesting point that came out based on the UN report, is that OTC's roads have been constructed as a means of getting arms into Sierra Leone. You will find out that roads being built by OTC don't go that way. The roads being built by OTC run to the east towards cape Palmas and the Ivory Coast, while Sierra Leone is towards the west. So how do you justify that sort of accusation. I guess small countries suffer all the time.
Liberians are going through hard times. What's your assessment of the country's economic growth situation?
Giving the fact that we have not been able to put into place any external assistance so far and considering, unlike some other countries, the importance of the informal sector within the economy it is difficult to give you an accurate figure. One way to get control of that sector is encouraging investors. Liberia had a policy called the Open Door Policy, which invited investors in and allowed them to do whatever they wanted to do. We have tried to moderate this logic into what we call the Strategic Windows Investment Policy. Our aim is to provide as many opportunities as possible for small and medium entrepreneurship to develop. We believe this approach is going to help us to get that informal sector working more to solve some of the many issues facing the country.
Is Liberianization an extension or a dysfunction of the Strategic Windows Investment Policy ?
Most countries have had to take control. Some countries have a policy where no matter who comes in, a particular percentage must be home-based. They say for instance you can have 51% to be foreign owned and 49% for locals, but we don't do that. We leave it open to investors. However, we do realize it is important for Liberians to begin to take charge of their economy. The Strategic Windows Investment Policy gives people the opportunity to come in, but realizing that some of the requirements they looked for before were not reasonable. That is why we grant incentives. We make sure that certain things are done. There was an investment law some years ago according to which 25% should be made available to Liberian entrepreneurs. But if you were to buy shares in a major mining company here at 25%, it would mean several hundred millions of dollars. Liberians cannot afford that kind of money. We have to move away from that kind of process to talk about interests as you have in South Africa and in some other places in the gold mining areas. We require carried interest of small percentages that are automatic and then the rest can be paid for through the resale of maybe that interest.
What makes Liberia unique as an investment destination when comparing with neighboring countries?
Liberia is the oldest independent African country. As far as structures, we still have some of the best structures here. There are no limits placed on repatriation of ones profits. One of the other issues, Liberia is about one of the countries on the continent of Africa that has the United States dollar as legal tender. We have dual currency - the United States and the Liberian dollar. We have very long-term investment incentives as far as interest rates are concerned, and how profits are applied back into the economy. We have no open demand on repatriation as some countries do. So you can come in, invest, make profit and repatriate it without the harassment that you would find in other countries. The bureaucracy that we have in the system is much better because we have always tried to model everything we do after the United States because of our long history. Liberians are a little different, if you want to admit, from the rest of West Africa. Our people are very cordial, understanding, very sentimental and we just all around a very nice country. Except for our civil crisis, we've remained. There are no lights here yet, there is no water.but you drive down the streets and you see money exchangers and you don't see anybody running around here with guns hijacking, skyjacking, robberies and that kind of attitude. You would wonder a country just coming out of war being able to stabilize even with some of the factors that confront us. People are very stable here. We have had a crisis and should be given an opportunity now to show that we are able to go forward because of the level of stability that we have.
| When do you expect the privatization process to take place and which entities should be concerned?
To begin privatizing public corporations, we must privatize through an act of Legislature. I have been concerned as President to develop a product. Following the war, with the total destruction of infrastructure, trying to privatize some of these corporations would have been virtually close to a handout. The first step to take is to develop a product at an appreciable level in order that when an investor comes in, there would be a product that he can look at. The main agency will be the National Investment Commission. Once we get the authorization to begin discussions about privatization, whether it is electricity, telephone or water, we are going to go into all of those areas to see if we can get interested parties to come in and see how discussions can go. If we are not considering total privatization, maybe a joint venture process might be more adequate, but generally speaking the discussion is opened.
Which would be by?
The Legislature should know that we are serious and we hope to get it through as quickly as possible.
The NIC sponsored the coming of Brenda Fassie to Liberia to facilitate small loan schemes. What has been the return on investment?
I don't know yet as she just left yesterday, but it's a good program to try to raise money loan to small-scale businesses. I believe that no economy has ever made it relying solely on the public sector. Our private sector must get the medium and small-scale businesses moving. It is through the medium and small-scale businesses that you can begin to develop a very important area of society that is the middle class. Most African countries only have, if you may call it, an upper and lower class, no middle class. And so I think it is a very good venture if this can continue.
To what extent are you interested in developing further relations with Asian economies?
Right now our interest is in Asia. I attended the Euro-Africa meeting in Cairo and I said the new frontiers are Asia and Africa. Liberia has vast resources. We are beginning to find oil, natural gas, diamonds and so on. I think we have more diamonds than any other country in West Africa, even though they are trying to make it appear if Liberia has never had diamonds. If you had been to Omega tower just outside Monrovia you would have seen people digging diamonds right in the city. Liberia may also have one of the largest reserves of gold. Unfortunately, the country has never been able to develop the necessary amount of capital to propel its own economy. The iron ore mining companies came, they dug the iron ore and took it out. They were not required to re-invest in any shape or form. Re-investment was never on the card. What we would like to do in partnership is to see how those countries that have gone through the same quagmire, such as Malaysia once solely depending on rubber, have moved into major industrialization. A public company came to look at the potential of gold mining; they found out that the amount of gold per square kilometers was three to five times more than what one would probably see in other countries. It did not work out because they could not raise the 10 to 15 million USD necessary capital on the stock exchange. There are opportunities for Japan, for example in iron ore, or other countries for gold or diamond mining. We have also discovered not less than five kimberlitic sites. We are completing the mapping on the offshore oil, and it is shown that West Africa may be now holding the world's largest reserve in oil. Liberia is strategically located; the shortest link between Africa and South America is between Liberia and Brazil, it takes about four hours.
When will the results of the mapping TGS-NOPEC be released?
They are now concluding, and what I can say is that they are as elated as I am. According to what they are seeing, a lot could happen. I don't know the details, but we are looking forward to the publication.
What would you say has been your most challenging and rewarding experience?
How the world has changed; how to deal with globalization is a real challenge. I am anti-globalization and I wish I could have gone to Brazil to join the anti-globalization campaign. I don't know what is going to happen to small countries in the future, if this whole present trend continues. So, the challenges have been how to deal with some of these issues when you know someone is out there telling you just forget about what you are thinking you are going to do it our way. That is challenging for most Third World and small countries. Regarding the most rewarding experience, I would say being able to come to this office, understanding our people and being able to work to change the situation in Liberia for the better, as well as to see changes taking place. There is freedom of speech; political leaders and journalists are not in trouble. I can see that a difference is being made or at least a difference is in progress.
What would be your message to our half a million readers, potential investors who are looking towards Liberia?
They need to understand that Liberia has gone through a terrible civil war like many countries. We are instituting a regime of peace and security. The international community has to understand that Liberia has a stable environment. Liberia welcomes investors and the terms of investment are very adequate in terms of incentives. They should understand that investments are protected here; their assets and profits can be taken away at will. We have no strings attached; we have a very strong independent banking system that has just developed. Under my administration, we established a major central bank that is independent of government. Investment in Liberia means very heavy returns. And these investments would be protected. |
