IMF and the Problem with Liberian economists: Utopianism!

International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas

By Chorpie Charlie [email protected]

I am not an economist and this is not an attempt to demonstrate knowledge about economic theories. Rather, as a student of organization development, I feel confident to inject myself into the discourse of economics, given the recent IMF scoring of Liberia’s GDP and attending debate.  This is not a critique but unraveling thoughts in support of the  Pro-poor Agenda. 

There have been mixed review about how to fix the Liberian economy. However, these clashing views consolidate around a misunderstanding of the IMF readings, and what Liberia needs to do. The fact is, there is no easy and short term solution to the deep economic freeze Unity Party left behind. But Liberia ‘s economy is not difficult to fix: the problem lies more in the intolerance growth mindset and welfare behavior of Mis-educated professionals and Hostile intellectuals. Liberian economists  continue to rely on alien constructs that does not align with sustainable solutions. For example, the reading of the IMF findings, which should never be surprising, continue to narrow the debate on inflation  of the U.S.Rate: Utopainism! This is a false positive thought process. The question of the U.S. Rate cannot be adequately address without gaining Pareto optimality, focusing on agro-manufacturing and export activities. This is a fundamental misunderstanding which has consistently shepard the mindset of Liberian economists, to attempt fixing a broken economy by reducing the U.S.Rate. 

Given our role as a Policy Officer of the CDC before the 2017 election, the CDC conducted many policy forums and fully understood the challenges any future government would face, resulting from the bad governance and mis-management by Unity Party. So the current economic depression should not be a surprise to the CDC. Liberian government cannot fix the U.S. Rate  because market forces are more powerful and would continue to determine the value of U.S. Rate, since  Liberia lack basic export potential, and cannot provide reasonable self sufficiency. We articulated at the inception of this administration, allow the economy to go into a free fall, because it will create social Darwinism and automatically reset based on the business cycle. In the short to medium term, government would focus on an agro-economy approach; doing large scale farming, NOT MECHANIZED but manual labor, to increase jobs while producing daily consumables, cash corps, and rural roads connectivity. 

Bang! Government intervened into the market place by giving away revenues, not to stimulate the economy but to take away money from national development. Thus, revenues were waived to BIG BUSINESS, not mom and pop businesses. The goal was to reduce the  import burden of Big Business for trickle down effect on reduction of the U.S.Rate, which was expected to caused a multiplier effect for economic growth. Trickle down economics have not worked even in advance and developed economies due to the lack of Coarsian factor- pareto optimality: 

The fact is, Weah’s government met the economy in terrible conditions, a deep economic depression, which was expected given President Sirleaf’s mis-management. Thus, government needed more money, especially U.S. Dollars. So it beats my imagination how reducing revenues in U.S. dollars, and at the same time increasing the  wage bill was a beneficial economic strategy. I am still struggling here to understand such dynamics. 

Lifting Liberia out of economic depression demands the highest virtue of tolerence – long term patience. There is no easy way and quick fix solution here. Thankfully, President George Manneh Weah has realigned focus to an agro-economy, which demonstrates quality leadership on the part of the President, to apply different approaches to lifting Liberia out of Unity Party’s depression. Moreso, recent comments by Finance and Development Planning Minister Samuel D. Tweah, on state radio, concerning an economic paradigm shift of center-piecing agriculture with rural road  connectivity inspires hope that the Pro-poor Agenda is correctly path taking. Food security is equally national security! This latest move by President Weah is a departure from utopianism, and anchors disruptive economics for Liberia’s progress.

On the altar of Jehovah, I pledge undying resistance to economic depression. Excuse me while I throw out.

NB: The author is a social political commentator residing in the United States of America.