Mueller’s speech at Liberian diaspora conference

Michael Mueller (first from left), Vice Chairman of the Board of the European Federation of Liberian Associations and  Co-Chairman the All Liberian Conference for Dual-Citizenship, speaks at the conference in Silverspring, Maryland, USA, on December 7 
Photo: Front Page Africa

Liberia, a country heavily depending on Foreign Direct Investment, remains a fragile, post-conflict country with weak capacity and limited physical and human capital accumulation. But first, let us together take a closer look at the critical element attracting FDI. One of the first key elements is:

Political stability

Political stability in connection with Foreign direct investment plays a major part of the risk for any Investor. Countries with an uncertain political situation will be a significant disincentive. Economic crisis, combined with economic sanctions, will be a major factor in discouraging foreign Investment.

On Sanctions; Liberia is currently on the sanction list of the Office of Foreign Asset Control of the Treasury Department of the United States of America.

Also related to political stability is the level of corruption and trust in institutions, especially the judiciary and the extent of law and order.

Other FDI elements are Tax Rates, Transportation, Infrastructure, Commodities, among others.

So, my dear Sister and Brother, after hearing all of this and putting yourself in the shoe of an Investor, will Liberia really be your first option to choose to invest your money?

Before we answer the question, let us look back into our history.

Liberia has always tended to give long term concession right to multi-national corporations in extracting our natural resources without visible benefit to the overall economic growth, respectively, without creating a human capital brain gain.

The opposite happened and this reality in still taking place into today’s economic environment. We created an economic environment with cheap labor and with the sole benefit of the authority and the multi-national corporations.

In contrast, offshore companies were established without knowledge to the public to back channel additional cash for the ruling elites.

With our vast national resources; Iron ore, rubber, mining industries, precious wood, etc., an economy build on bankable asset respectively finished products, are indispensable to grow our marketplace as well as our labor skills.

Now fast-forward to the Ellen Johnson Sirleaf and George Weah regimes, respectively:

President Sirleaf was blessed been elected after a devastating civil war and the peace agreement signed by the international stakeholders who provided the highest ever number of UN peacekeepers deployed worldwide.

With the peacekeepers on the ground also a lot of other international organizations followed, creating job opportunities for Liberians.

This situation stands steady throughout her government ship. Economic studies place UNMIL’s total local expenditure at over USD 550 million, with a cumulative local impact exceeding USD 850 million.

Additionally, to the UN, one should also not underestimate the remittances from us, the Liberians in the Diaspora, which still is a constant factor in supporting Liberia’s GDP growth.

With the than given political “stable environment” and international support, the Sirleaf government was able to attract billions of Foreign Direct Investments. But also, under her watchmen ship, what happened in our past economic history continued.

With the inflow of money, the government gave long term concession rights to multi-national corporations.

Greed, abuse of resources and the lack of transparency and accountability were on the daily agenda, but Sirleaf’s government managed more or less very well keeping it all under the carpet professionally.

Sirleaf`s Government having easy money to their disposal forgot to transform our economy to a robust economy driving by bankable assets and finished products.

As power transferred from Ellen Johnson Sirleaf to George Weah in January 2018, the UN estimated that over 90 percent of the GDP lost during Liberia’s 14 years of conflict was regained.

But as the last troops were leaving in June 2018, the annual economic growth forecast was slashed from 4.7 percent to 0.4 percent.

When the mission left, that speculative economy dissolved and revealed huge structural issues in Liberia’s actual economy.

Such problems, which include inadequate access to credit, a lack of infrastructure to support sector growth and the dominance of a concession model where the government allocates large swathes of land to foreign companies for resource extraction, especially rubber, palm oil and iron ore. Such actions leave no potential for local value addition to the again detriment of the local workforce.

The Weah government did not do well when it comes to economic planning. Whatever assumption the Weah government made before taking power is best known to them.

The facts are that before taking over from the Sirleaf government, the prices on the international markets for Liberia’s export commodities were already in the downturn.

The missing USD 100 million and another USD 25 million from the Central Bank of Liberia shortly after President Weah took office were also not helpful for the economic development of Liberia.

To date, the current government has not given a full account of these monies, which accumulated to the reasons for the lack of confidence in the government by the international investor community.

Meanwhile, Weah has reportedly constructed or reconstructed over 49 personal buildings for himself.

Though the government launched its Pro-Poor Agenda for Prosperity and Development focusing on physical and human capital accumulation, policy uncertainty and slippages, however, imposed a significant toll on the economy over the past two years.

Notably, higher fiscal deficits and accommodative monetary policy have led to the rapid depreciation of the Liberia dollar and increased inflation, eroding the purchasing power of the already poor.

The near-and medium-term outlook under the baseline scenario is very, very challenging.

The IMF is now emphasizing on significant fiscal adjustment. They underscored that efforts should focus on mobilizing domestic revenue and rationalizing spending, especially the wage bill, while securing needed space for social and capital expenditure.

The government needs to formulate realistic budgets and to implement a sound borrowing plan that ensures debt sustainability while advocating caution in engaging in non-concessional borrowing.

They also called for further progress in public financial management reforms to improve the quality of spending in the resource-constrained environment.

Additionally, and notwithstanding the economic engagement with the Liberian Diaspora is essential underlining the diaspora’s first call to be addressed in the form of Dual-Citizenship, which will be taking up in detailed during today’s forum.

Right now, as we speak, it is still the Liberian Diaspora assistance that offers one of the only chances of survival. USD 433 million representing 31% was contributed to Liberia’s Gross Domestic Product according to the World Bank information for 2018 alone.

With the current situation on the ground and unemployment staggering at a rate of over 80%, Liberians returning from abroad with access to foreign capital will increase the strength of Liberian competition in the business arena.

Dual citizens would create various forms of capital and infrastructural development, including land improvement and development within the private sector.

Liberians in the diaspora’s role in the economy could provide thousands of jobs for the unemployed Liberians. Some studies have shown the African diaspora send more money to their respective countries than all foreign aid combined.

In all of these, I have yet to hear any concrete argument suggesting how the proposition of a “real” Dual Citizenship could hurt the Liberian economy.

The discussion of the implementation of the proposed form of Dual-Citizenship will be open later.

Looking at others accept of economic development for the future:

Another area of development is the entire digitalization, as we have seen how introducing smartphones have been acquired.

Imagine innovation in areas such as health-tech and edu-tech. Opportunities of the digital age can be the greatest – if the right decisions are made without delay by leaders across all sectors.

The importance of equipping people of all ages and walks of life with 21-century skills, both through online courses and changing national educational curricula cannot be overemphasized.

We need this to ensure our schools teach, both the digital skills and the soft skills that the world needs, and automation can never replace.

We must ensure that education both for young people and those who need upskilling and reskilling is available. Affordable, inclusive, and focused on jobs of the future.

The young people I know are especially ready and eager to seize the opportunities of the digital age. Our role is not to give them hand-outs but rather the tools and opportunity to learn so that they can invent new and better tools for future generations.

In conclusion: We must rethink our economy and all side effects of it but also understand that the real Dual-Citizenship putting in place will have a major impact on our economic development as well as handling the pending issue of war crime which is also a topic on our agenda for today.

Any Country with a strong dependency on Foreign Direct Investment with war criminal steering political affairs and with an unstable governmental environment will lack in attracting international investors.

So, my dear people let us be wise as we elect people going forward to know in detail their economic plans and how they want to pay for it respectively implement it.

It is very easy to call out our problems as we are all updated on them and to say I AM THE ONE TO FIX IT without addressing how.

In closing let me use a statement of one of Africa Nobel Prize Winner Professor Akinwade Oluwole Babatunde Soyinka

Only in Africa will thieves be regrouping to loot again and the youths whose future is being stolen will be celebrating it….”

Many thanks for your attention and God bless Mama Liberia