Washington, D.C. — The following is a communique from the Liberia Partners' Forum, held February 13-14, 2007.

The World Bank President commended the Government for the bold steps taken over the past year to rebuild Liberia’s shattered economy, and he urged the international community to come together to support Liberia at this critical juncture.  The President noted that a solution to the country’s inherited debt burden is key to moving forward and pointed to the work that is underway within the multilateral institutions and among their shareholders to realize this as soon as possible. He noted that the World Bank plans to continue to make available exceptional support to Liberia with a program of assistance of about $60 million over the coming 18 months.

The UN Special Representative delivered the personal message of the UN Secretary-General.  In it, he noted that Liberia has made encouraging progress and is fast emerging as a pillar of stability in the region.  The Secretary-General confirmed that the UN will continue to assist the national authorities with security and public order while supporting the Government’s national reconstruction and development effort.

The AFDB President emphasized Liberia’s special circumstances, its enormous needs, and the very significant progress that has been made by the Government.  He stressed that Liberia’s stability is critical for the entire West African region.  He urged the international community to work together to support Liberia and stressed AFDB’s commitment to provide maximum support.  He requested flexibility from AFDB shareholders with respect to clearance of Liberia’s arrears to the Bank and other institutions to enable Liberia to re-engage with the IFIs.

The Objectives of the Forum were:

The meeting recognized the tremendous progress made by the Liberian government during the first year of President Johnson-Sirleaf’s administration and strongly supported the strategic priorities articulated in Liberia’s development strategy (I-PRSP).  Participants noted, in particular, that significant improvements have been made in the management of government finances and the economy, including revenue and expenditure management, strict adherence to a balanced cash-based budget, economic governance reforms, GEMAP, and improvements in central bank finances.  In this regard, Government reiterated its commitment to continue its fiscal and public financial management reforms, including refraining from undertaking new borrowing.

Participants also considered Liberia’s urgent humanitarian needs, ranging from health, opportunities for youth, social protection, and education.  In this context, they noted the challenges that Liberia faces in transitioning from relief to development.  They also reiterated that safeguarding progress in Liberia will require the active engagement of the international community to promote regional stability and noted concern about the current situation in Guinea.

II.         Participants discussed the strategic priorities outlined in the I-PRSP.

The meeting commended the Government for the participatory process that underpins the preparation of the strategy, making it a sound basis for promoting economic growth and poverty reduction priorities over the medium term.

Participants agreed on the importance of peace and security as a foundation for sustainable development and noted the need for funding security reform.

In the area of growth and economic revitalization, partners agreed with the need to revitalize traditional sources of growth, including agriculture, forestry and mining.  In this regard, the meeting endorsed Government’s focus on creating an enabling environment for the private sector.  The meeting recognized the risk posed by high youth unemployment and the need to create sustainable job opportunities.

They also emphasized the need to implement a comprehensive civil service reform program, including capacity building, and several partners agreed to support Government in realizing a well designed and sustainable approach that is tailored to the Liberia context.  In this regard, the meeting took note of the Government’s desire to fast track a Senior Executive Service.

Participants welcomed the contribution delivered on behalf of the Gender Symposium Delegates which underscored the critical role of Liberian women in the peace process.  They emphasized the need for ensuring that women are engaged fully in society so that Liberia can be a model for inclusive reconstruction.   The meeting also acknowledged the need for a clear focus on children and child protection.

The meeting acknowledged the urgent need to strengthen national statistics in order to provide a sound basis for evidence-based policy making and for the forthcoming PRSP.

Finally, the meeting recognized the high priority placed by Government on all aspects of good governance and underscored its importance in ensuring the successful recovery of the Liberian economy and in improving the livelihoods of the Liberian people.

III.       Participants discussed the financing needs and mechanisms associated with the implementation of key I-PRSP priorities.

Participants discussed the enormous costs of reconstruction in Liberia and committed to support Government’s efforts with higher levels of external grant financing over the coming 18 months as it implements the I-PRSP.

The meeting discussed the status of Liberia’s unsustainable external debt burden, including arrears to the International Financial Institutions.  Participants emphasized the urgency of securing financing to enable Liberia to benefit from the HIPC and MDRI-type debt relief mechanisms for which it is eligible.  In response to this need, the United States announced that, in addition to the bilateral debt forgiveness and to the $15 million that has been committed to the AFDB, it is requesting up to $35 million in debt reduction funds from Congress to help fund the cost of forgiving Liberia’s debt to the International Financial Institutions.  The United States added that, in consultation with Congress, it is also prepared to redirect more than $150 million in funds held by the IMF as a contribution to forgiving Liberia’s debt to the IMF.  Germany announced that it would forgive 100% of the 300 million Euros in bilateral debts owed in the context of the HIPC process.  The United Kingdom announced that it would provide 10% of the donor funding necessary to clear the arrears to the African Development Bank.  The meeting welcomed these new developments as strong signals of support for a solution to Liberia’s debt problem.

Participants discussed the importance of capturing information on donor flows and of ensuring its coherent presentation.  They agreed to better track donor resources so that Government could more easily incorporate external assistance into its own budgeting and planning processes.

The participants also agreed to explore more coordinated mechanisms for aid, and ways to accelerate the disbursement of already committed funds to critically needed programs. They agreed to continue discussions with the government on the possibility of establishing multi-donor financing mechanisms that could be used to scale up financing for priority infrastructure, agriculture, and social sector needs.

Finally, participants discussed the possibility of direct budgetary support to the government with a view to supporting key public sector reforms. In this regard, donors underscored the necessity of continuing public financial management reforms to ensure that resources are used effectively for their intended purpose.  They agreed to explore further a mechanism aimed at targeted budget support under which donors disburse in line with agreed benchmarks consistent with the I-PRSP.  To this end, the partners agreed to form a group dedicated to develop options for such a budget support mechanism.

IV.       Follow Up and Results

Participants agreed on the need to follow up on both the results of the conference and implementation of the I-PRSP.  The Liberian Reconstruction and Development Committee will continue to be the focal point of this effort, putting in place a robust results monitoring framework.

For their part, partners committed to better coordinate and harmonize their own programs to reduce the demands and transaction costs on Government.  In this regard, they agreed to track disbursements and projections of resources to help ensure a greater alignment between Government I-PRSP priorities, expected results, and available resources.  This effort should allow Government to more easily incorporate aid into its own budgeting and planning processes.

It was agreed that a follow-up meeting would be held in approximately one year’s time in Monrovia to review progress and the use of resources.  This meeting could further provide an opportunity for early consultation on the preparation of the full PRSP.