Issue, Main Menu, World — December 8, 2010 at 2:56 pm

Liberia’s Next Top Model?

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In July 2005, less than two years into its tenure, members of NGTL, Liberia’s post-conflict transitional government, were found traveling the impoverished streets of Monrovia in brand new Jeep Grand Cherokees. When civil servants, whose salaries had been frozen for the past 18 months due to lack of government funds, found that the NGTL had spent $2 million buying each of its members a new Jeep, they held a strike that lasted three days; domestic discontent ran rampant as the international community watched with disapproval.

Within the same year, in an atmosphere pervaded with public fury and international outrage, the European Commission released an audit of the Liberian state in a report that was “so dramatic… that the EC did not immediately release them for fear of the reaction they might provoke.” The final report showed evidence of such extensive and damaging corruption practices that members of the international community, including the World Bank, International Monetary Fund, and the United States, decided it was time for intervention.

Thus emerged Governance and Economic Management Assistance Program, an anti-corruption program designed to combat economic and political mismanagement by placing foreign experts in strategic administrative positions within the Liberian government. For such an interventionist approach in the unstable West African region, it is surprising to see how little debate the situation has garnered.

This is especially important in the case of Liberia, a state that has been a de-facto American protectorate for much of its existence, and a country with such low levels of economic development that the failure of new, risky endeavors could propel the country back to war and unrest.

In the global community, few argued against such a “trusteeship approach,” and many even saw it as the only path left for Liberia. In the five years since the institution of GEMAP, Liberian performance in various corruption indices has jumped from dismal to mediocre: Its annual government revenues have greatly increased; its per capita income, while still low, continues to make gains; and its political structure shows signs of moving towards greater inclusion and accountability. While this trusteeship approach to economic governance has succeeded by some measures, its long run sustainability is questionable. GEMAP effectively turns the task of rebuilding Liberia into a foreign concern, leaving open the larger dilemma of what will happen when the interests of the international community shift elsewhere.

Since the closing of GEMAP in September of this year, all of Liberia’s financial institutions and state-owned enterprises have “graduated” from the program and are preparing for state-led audits in the coming months. At this point, an analysis of its limitations and potential future replicability is both informative and necessary. While invasion of state sovereignty is an important issue, the problem – along with its surrounding political theory – is an issue too large and complicated to be effectively tackled in this article. In focusing on GEMAP, this article does not seek to address the question of whether it should have been implemented in the first place, but to explore the political landscape that allowed its implementation and the necessary changes in political and economic governance that would continue the spirit of GEMAP reforms.

In order to understand why corruption became such an intractable part of the Liberian state, it is important to put the country in historical context. It is especially important to outline the origins of the Liberian patriarchal state and to keep in mind that the only aspect of this state that has changed over the decades is the roundtable of beneficiaries that reaped the profits when they came into power.

In the early 1800s, before the arrival of freed American slaves, the West African area that became the modern day state of Liberia existed as a loose conglomeration of 16 distinct indigenous groups. After former slaves had settled in the region, they declared Liberia a republic and instituted a governance structure that enslaved large portions of the populations. Those that were not enslaved were completely alienated and disenfranchised by a policy that specifically excluded them from voting and running in elections. This newly formed state ruled the native population through a colonial system of district commissioners and local chief. Thus, the Liberian state existed as an apparatus for a small group of politically active American-Liberians and a co-opted group of native elites.

But after 110 years of Americo-Liberian rule, the government was overthrown. In 1979, Samuel Doe and his movement, the People’s Redemption Council, instigated a coup to overthrow the ruling party. For the first time, Liberia was governed by people of native descent, and many openly welcomed Doe’s rule, regarding it as a moment for potential reform. The Doe regime would not live up to these expectations. It began its rule by publicly executing leading officials of the previous regime. Following this show of violence, it quickly reverted to ruling along ethnic lines. During the 1980s, Doe heavily favored his own ethnic group, the Krahn, and killed thousands of civilians from the Mano and Gio ethnic groups.

Due to unilateral support from the United States, which was willing to overlook the government’s questionable tactics, illegal procurements and sizeable corruption problems in order to keep it an ally during the Cold War, Doe’s regime was able to maintain and entrench the patrimonial state power for almost a decade. In 1989, a guerilla force led by Charles Taylor challenged the regime and plunged the country into a 14-year civil war that devastated the country. What little remained of Liberia’s economic and political infrastructure was destroyed in the ensuing bloodbath. In the 1997 elections, Taylor campaigned on the infamous slogan, “He killed my ma, he killed my pa, but I will vote for him,” to induce Liberians to vote for him by making clear that he would resume the war and engage in mass killings if he did not win the election. By the time Charles Taylor, currently being tried at The Hague for crimes against humanity, fled, the Liberian state was in a state of complete anarchy. At this point, the United Nations, among others, stepped in and paved the way for a transitional government that would not only end the cycle of wars and anarchy in Liberia but also, with guidance, change the patrimonial and exclusionary culture of the state’s institutions.

Throughout the historical narrative of Liberia, there had been some twenty odd attempts by the international community prior to the establishment of GEMAP to intervene in the domestic economic affairs of Liberia “for its own good.” The earliest occurrences, in 1906 and 1912 resulted in the appointment of foreigners to administrative positions within the Liberian government in order to ensure timely repayment of massive development loans.

In the 1920s, the League of Nations even recommended that the country be put under “capable white administration.” More recently in the early 1980s, the Reagan administration attempted to institute the Operational Experts program involving an appointed committee tasked to oversee the country’s finances. The experiment failed during negotiations, and Liberia continued its unstable accumulation of debt, a figure that stood at $4 billion in 2006.

As disarmament progressed, however, it was becoming increasingly clear that the corrupt political practices that had characterized Liberia’s past had not ended with the war. The promblem was compounded by the very composition of NGTL, which was made up in large part of the very rebel forces that had been responsible for many of the murders and rapes of thousands of Liberians during the Second Civil War. As NGTL’s corruption practices came to light, a frustrated international community began to formulate a new, drastically different humanitarian intervention strategy based on a “trusteeship approach” to oversee the reconstruction process through tackling systemic corruption. Thus emerged GEMAP.

Involved in the drafting of GEMAP were the United Nations, the European Union, the World Bank and the United States. GEMAP, under the support of the African Union, was signed into effect by the NTGL (an unelected government) and affirmed under Ellen Johnson Sirleaf’s new government when it came into power through electoral mandate in 2005. Under GEMAP, the Central Bank, the Ministry of Finance, various other economically relevant public institutions and five SOEs are all required to have their financial and operational budgets approved and co-signed by non-Liberian international experts placed by the IMF. What exactly does this entail? Specifically, international non-Liberian experts were placed in key administrative positions for a minimum period of three years. For example, the executive director of the Bank of Liberia, the state’s central bank, was deemed to need a foreign onlooker. The foreign expert placed in this position has co-signatory and even counter signatory authority on all operational and financial matters. This in no way implies that this IMF-placed foreign expert has any control of the monetary policy of the Liberian state (the IMF, through its loan attachment policies, already controlled much of that in any case). Rather, it means that, once the monetary policy is set, he or she ensures that it runs smoothly and effectively by setting deadlines, regulations and procedures. In the words of one Liberian expert, however, this “in principle, turned Liberia almost into an economic mandate area for the international community.”

While the initial time frame of GEMAP was set at 36 months, the Heavily Indebted Poor Country (HIPC) program of the World Bank and IMF that Liberia is a member of requires that the program cannot be terminated until the country reaches “completion point,” – a nebulous term defined by the IMF as having been achieved once the country establishes a financially sound track record. Former Liberian finance minister Byron Tarr spoke frankly on this loophole, calling it “total baloney… we won’t do that even if hell freezes over.” In hindsight, Tarr’s words were completely true: The end date for GEMAP was, without much hindrance, delayed to September 2010 under these guidelines. However, GEMAP’s set expiration date caused many to complain that it would only lead corrupt officials to lie low until the foreign experts had finished their tenure in Liberia.

By many of the usual economic yardsticks, the initial success of GEMAP is lukewarm. 80 percent of Liberia’s 3.8 million people, still live on less than $1 a day, placing the country among the world’s poorest nations. However, Liberia’s per capita income is forecasted to grow from $129 in 2008 real dollars to $141 by 2011, which translates to mediocre growth rates. The un-employment rate stood at around 85 percent in 2003, a problem that is further exacerbated by underinvestment in the country’s battered education sector, but has not been projected to decrease significantly. Liberian government revenue doubled in a dramatic increase from $80 million in 2004-2005 to $180 in 2007-2008- an overwhelming success by any standards. The current government, in conjunction with the IMF developed a comprehensive Poverty Reduction Strategy that is now the basis of Liberia’s economic development policy.

Since domestic sources of revenue cannot cover the full cost of implementing PRS, international donors such as the EU and the U.S. stepped in with nearly $408 million in just 2009. Since GEMAP was set in place to address the clear desire of donors for strong externally monitored measures to curb corruption, renewed confidence and giving to Liberia can no doubt be partially attributed to the launch of GEMAP.

Most importantly, Transparency International’s corruption index showed that Liberia is now the fourth least corrupt country in West Africa. While not exemplary, this shows that the Liberian state’s performance has become considerably better.

GEMAP was possible in Liberia precisely because of its label as a failed state, since this label allowed the international community much more power over its internal affairs. Although the Liberian government did reject the initial precursor to GEMAP that required foreign intervention even in its judiciary system, Liberia had few other options and was in a poor position to argue the terms of its reconstruction.

Future applications of such a program would clearly not work in states with strong, sovereign structures, regardless of how corrupt or mismanaged their economic procedures and assets may be. For example, Argentina has obtained the dubious distinction of being one of the most corrupt states in Latin America. While serious economic and political management measures must be introduced, it is highly unlikely that the “trusteeship approach” would go down well with Argentina. It may very well be then that such a program could only be implemented feasibly in post-conflict, transitional countries.

GEMAP’s most egregious pitfall lies in its failure to incorporate public participation of Liberian civil society. To allay fears of transgressions of sovereignty during its construction, GEMAP created a council chaired by the Liberian president and filled with representatives from both the international community and the Liberian government. Notably, only one seat was designated for a representative from Liberian civil society. A representative from a Liberian nonprofit complained that “we are not even able to criticize its implementation because we don’t know what’s supposed to be done at what time.” Given the historical tradition of exclusion in the Liberian state, this was a poor path that GEMAP continued to follow. Increased public participation, awareness and debate would not only have provided public support and legitimacy to the program, but also helped create a culture of democracy based on shared national goals rather than ethnic divisions. Public and media participation could also have provided an additional check against corruption in helping to create an anti-corruption culture not driven only by external agents.

If the GEMAP model is going to make sustainable, lasting change, it must also give increased importance to many pillars of reform, rather than focusing only on increasing the effectiveness of financial management. When reforms come before capacity building, as it did in Liberia under GEMAP, the best of intentions, systems and procedures are bound to fail. In order to ensure that a culture of democracy takes root and expands within Liberia’s institutions, it is important not only to train administrative officials, but also to alter the ministries and SOEs such that they become more cohesive organizations that offer long-term career rewards and legitimate incentives in the forms of advancement opportunities. A United States Agency for International Development report on GEMAP activities acknowledged that the lack of human capital led to the “perception that the ministries are overwhelmed and lack adequately trained staff for financial or asset management.” This did not bode well for the sustainability of those activities that either began late in the GEMAP phase or were not completely institutionalized before the project end date.

In its final evaluation of GEMAP, USAID asserted that while GEMAP did not eliminate corruption, it did establish clear processes and practices that made the practice of corruption more difficult, and, by doing so, set a template for initiating reform in other fragile states. In order to ensure that Liberia does not revert the cycle of violence and corruption that has so heartbreakingly characterized much of its history, the spirit of GEMAP reform must continue and expand. An anti-corruption expert stated that “the probability that this scheme will remain sustainable when donor interest shifts elsewhere is almost zero.” In order to avoid this in Liberia and elsewhere, it is imperative that other such programs make long-run sustainability a core principle. As a stand-alone measure, the GEMAP model is bound to fail. GEMAP is an example, even a training pod, for how economic and political development must occur but it must be followed by changes in political structures and the creation of checks and balances. It must be targeted, and, most often, it requires reform in the simplest and smallest of ways.

But for this to translate to long-run GDP growth rates, the spirit of reform, once sparked, must continue to develop and expand. This requires a balance between sustaining international interest and ensuring domestic adherence to reform, and the results may well prove to be extraordinarily useful for other Liberias similarly wrecked by war and corruption.

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