Economic Paradigms Of President George Weah: Expectations, Concerns And Policies
Motivation Over the years, Liberia’s economic woes have really been attributed to poor governance system, including economic mismanagement and corruption as well as the weak patriotism and nationalism (See President Weah’s Speech, 2018; Reeves, Economywatch-2012). This commentary contributes to ongoing concerns, expectations and policies of the new government in the context of economic inclusivity or personal enrichment. The aim is to admonish the government to intensify its focus on the economics of happiness with emphasis on key fiscal, monetary and external sector policies that put human life at the center stage, instead of self-enrichment-the real threat to democracy.
As the new government assumed power, there is urgency for critical assessment of where the country has gone or/ is going wrong in order to swiftly map out a comprehensive strategy to tackle the problems. The questions are: would the poverty reduction strategy be misdirected at personal enrichment through continued ‘integrity violation’ practices or directed at national human development agenda? Can this government adopt a different approach to governance by anchoring its development agenda on the pursuance of gross national happiness (GNH) where each Liberian is given the economic freedom, instead of gross domestic product (GDP) which is often contradictory to existing social realities?
Headwinds of the Government
It is an indisputable fact that the government is being ushered at the time most of the country’s socioeconomic indicators are unfavorable and the macroeconomic fundamentals are shaky, fueling economic unhappiness. The current Finance Minister of Liberia also alluded to the challenges, indicating ‘no quick fix solution’ can be proffered to reverse the economic downswing.
Reflecting on some of the country’s vital statistics based on UNDP 2016, Liberia’s human capital is within the lowest quantile of global rank, evidenced by human development index of 0.427 (ranked as 177 out of 189 countries). Life expectancy has improved to an average of 61 years, albeit the health sector remained challenged by limited specialized medical practitioners and outdated medical facilities to provide health services. Access to safe drinking water and sanitation remains elusive in most parts of the country. Youth unemployment is high, as vulnerable unemployment hovers around 80 percent (LISGIS, 2010). Shamefully, the country’s renowned knowledge producing institution, University of Liberia, is ranked 11,948 in the world and outside the top 200 universities in Africa (World University Ranking, 2017: www.4icu.org). Erratic energy supply stands as serious socioeconomic constraint for a thriving investment climate. On the macroeconomic side, the country’s policy experts are grappling to achieve high real GDP growth, contain the continued upswing movements in inflation and depreciation of the exchange rate as well as ballooning budget deficit and external sector imbalances. Amidst all of these, implementations of national policy were sometimes based on “allocative extravagance”, including increased spending on fuels, luxurious cars, travels as well as other goods and services.
The challenge for this government is to twist the page to ‘allocative productivity’ for the attainment of the yearning development miracle to achieve happiness of the people. This will entail having a grip on the continuous increase of recurrent expenditure and refocusing budgetary allocation to the productive sectors.
Expectations and concerns
It is indeed preemptive that the country will be confronted with the challenge of achieving ‘development miracle’, given the multiple resource constraints. Methinks the expectations of the post 2017 electoral process do not significantly deviate from the expectations of the 2011 when I immediately released a cautionary piece of development article titled: Liberia’s Post 2011 Electoral Developmen t Paradigms: International appeasement, self – enrichment or national development priority (Dukuly, 2011-Perspective-USA) with the thematic emphasis of managing the conjectural expectations about the performance of the government in terms of preference for international appeasement, national development or self-enrichment. Below is an excerpt from the article to aid the focus of leaders and manage expectations of the people::
“Our conviction is tied to those whom we have elected on the basis of confidence and optimism, that they are leaders of ideas and positive change to implement and execute sound policies and laws. It must not be an astonishment to see the opposite of our conviction, but continuity of Liberia must never be compromised because of possibly ill – performance of those voted in.
By the unpredictable nature of human behavior, let’s not be over excited with the belief that a genuine human development and transformation and transformational change could automatically be achieved through the officials-elected in Liberia. Possibly, we could go another six years with many new thoughts, misconceptions and controversies, especially pertaining to the issues, seeking, neglect for youth development and employment as well as women empowerment. The new challenges dictate put ting things in perspective for our work to be connected to our own struggle. Everything may not necessarily be done, but some pressing needs must inevitably be undertaken to keep the hopes of Liberians alive”.
In view of the foregoing excerpt, the discussions in every corner of Liberia center around assessments of the appointed and elected officials- weak and strong, experience and unknowing, corrupt and transparent, functionally educated and merely educated. Regardless of the different interpretations of the elections, fair or not, contestable or accepted, peaceful or violent, the 2017 elections are gone, but the ‘hope for change’ expectations will remain frequently indelible in the minds of the people.
In this regard, the burning concerns of the people pertain to the promulgation of innovative socioeconomic policies and strategies to foster progress and transformational change. It is now time for Liberia’s development to be a priority by all in reference to the inaugural message of the president; especially those assuming the mantle of power to redistribute the resources for shared benefits and opportunities. In the face of the appalling social imbalances, and the fact
that the elections are over, the general interest is whether the distributive process of Liberia’s resources takes the path of personal enrichment or national development priority.
Liberia, under the new dispensation, should cautiously focus on meeting international benchmarks such as high reserves, real GDP growth or high per capita income or notable World Bank rank at the expense of achieving significant trickled-down development effect. This argument should not be misconstrued to mean that impressive economic benchmark is trivial.
Methinks such achievement is meaningless in the absence of economic inclusivity that puts the people at the center stage of development. It is paradoxical to brag about huge endowments of natural resources or high reserves or high GDP growth in the face of looming gross economic unhappiness everywhere, as people go with minimum calories food consumption or lack access to basic necessities.
This government should understand that the new development paradigm focuses on gross national happiness, instead of mere gross domestic product or per-capita income that often contrasts contemporary social development realities. Any development rationalist would be in concurrence with the idea that the fight to attain inclusive development and strong policy institutions for effective state management, go hand in hand, but social protection reinforces strong institutions for sustainable development.
Tailwind policies direction Sustainable development in Liberia should be seen as a “generational challenge” anchored on promulgating innovative policies and strategies to induce peaceful and inclusive society. It is therefore expected that the distributive process of Liberia’s resources under this government would take the direction of effective social protection services. This requires critical mass of viable policy decisions similar to other African countries. Botswana and Mauritius are Africa’s two leaders, where their development paradigms are significantly aligned to economic happiness, emphasizing human development and social protection mechanism. Recently, Rwanda and Tanzania intensified efforts aimed at threading this same path. It is hoped that Liberia, under this new dispensation, prioritizes genuine development agenda using bottom-to-top approach with special focus on the poverty enclave sectors: public schools, vocational institutions, public hospitals, low cost housing estates, slum settlements, low costs transportation and increased agricultural programs, which are indeed the fulcrum for economic empowerment of the people.
It is imperative for the newly appointed and elected officials to confront the problems of the current and the image reflected therein with an unbiased decision. The people of Liberia expressed their voices for sustainable development and the power should therefore be used efficiently to move the country out of the severely underdeveloped box by allocating resources for improved economic happiness. Our officials must be cognizant that any aspiration to tremendously reduce poverty would depend on exhaustively tackling priorities that trigger economic happiness: infrastructure (road, energy, housing, etc), education, health, security and agriculture. A strong social protection programme is necessary to absorb the extent of the impact of the lingering commodity shock on the economy.
On the macroeconomic front, fiscal policy under the government should ensure that the budget and attended execution be reflective of programs and projects gear towards reducing poverty, including strong social protection services and modernized infrastructural development. Taxfriendly policies are encouraged for the outgrowth of private sector whilst recurrent expenditure should be aggressively rationalized by adopting a uniform procurement for state officials as well as support for bill to establish salary allocation commission to determine the salaries of all government workers (president, legislators, etc). Long term debt instruments are inevitable with the aim of increasing income generating capital investment (eg. linking Gardnerville directly to sinkor with toll gate system).
Monetary policy should prioritize non-conventional strategy through financial inclusion and deepening, mainly targeting the agriculture enclave because the transmission mechanism of traditional monetary policy instruments is challenged by structural bottlenecks.
Remittance flows can help to ease pressure on the foreign exchange challenge. With the gradual decline in foreign aid and weakening external demand, the government could think about strengthening diaspora strategy and policy to harness contribution of the diaspora beyond merely the finances and skills of individuals. This is workable through establishment of‘ ’solidarity fund’ to leverage on the huge Liberian population abroad and friends of Liberia to donate to the fund in order to increase happiness in areas like sport or girls education or vocational programs. Rwanda recorded success through such initiative.
The main inference is that this government will be fighting one critical war -ECONOMIC UNHAPPINESS, which is simply translated as POVERTY. National development priority under this new regime should override personal enrichment through effective reforms, social protection and adherence to fundamental macroeconomic norms. Priority for self-enrichment is bound to further exacerbate the already appalling macroeconomic conditions. Increased budgetary allotment should be integrated to national development focusing on increased capital investments, including quality education, health, improved road networks, housings, agriculture, transportation and security. The officials should use the entrusted power as a development frontline to promote economic happiness, which is the recipe for economic confidence. Any egoistic desire to use public fund for personal enrichment shall only expose Liberia to more political woes, because the vulnerabilities of the country’s social fabric still linger.
About the Author: Dr. Dukuly works as Principal Economist at the ECOWAS Monetary Agency (WAMA) in Freetown , Sierra Leone . The views expressed in this commentary do not represent WAM A.