allAfrica.com: Liberia: Gemap - A Model for Economic Management in Conflict-Affected Countries (Page 1 of 4)

Improving economic management after almost two decades of violent conflict and civil unrest has been a top priority of Liberian President Ellen Johnson Sirleaf's reform agenda since her January 2006 inauguration.

In April 2008, her administration could point to appreciable improvements in fiscal performance and economic progress, signs that the desired enhancements in economic management may have started to materialize. Many observers speculate whether these developments could be attributed to the country's multi-stakeholder Governance and Economic Management Assistance Program (GEMAP). If so, what lessons could be learned for other post-conflict countries?

At an April 9, 2008 USIP event on the subject, the Liberian Finance Minister, the Honorable Antoinette Sayeh, reflected on GEMAP's impact, highlighted some challenges and discussed its applicability as a model for other countries. While recognizing the program's contributions, she emphasized that it is only one component of a much broader framework of reforms initiated since 2006. Sayeh also underscored the vital leadership role that President Sirleaf has played in the design and implementation of Liberia's public expenditure reform program.

Responding to Sayeh's remarks were Eric Nelson, principal associate at Nathan Associates (Virginia, USA) and Raymond Gilpin, director of the Economies and Conflict Center of Innovation. Daniel Serwer, vice president of the Center for Post-Conflict Peace and Stability Operations, moderated.

GEMAP Overview

After assuming office in 2003, the National Transitional Government of Liberia (NTGL), established under the Accra Comprehensive Peace Accord, failed to control public expenditures, generate adequate revenues or utilize the country's resources in a judicious, transparent manner. Mindful of the centrality of sound economic policies and governance in peacebuilding, a consortium of regional and international stakeholders initiated a process of consultations with the NTGL to design a mechanism to ensure that donor and national resources are used efficiently and effectively.

Following months of difficult negotiations, concerns about perceived infringements on Liberia's sovereignty, the release of a comprehensive audit report on public enterprise financial mismanagement in Liberia (funded by the European Commission), an investigation of corruption within the office of the NTGL Chairman (funded by the Economic Community of West African States (ECOWAS)) and threats of major donors to withdraw all support, the NTGL signed the GEMAP agreement on September 9, 2005.1 GEMAP's main focus areas are listed in Box 1.

The most prominent feature of the program involves imposing rigorous controls on public expenditure by placing internationally recruited experts with co-signature authority in key ministries, agencies and state-owned enterprises. Many analysts consider GEMAP to be one of the most innovative experiments in economic intervention in recent history. The Economic Governance Steering Committee, chaired by the Liberian head of state with the U.S. ambassador to Liberia as deputy chair, provides oversight for GEMAP's implementation.

Finance Minister Assesses Progress in Economic Governance

In evaluating the impact of GEMAP in Liberia, Sayeh discussed the program's successes and challenges within the context of much broader governance reforms instituted by the Sirleaf administration since 2006. She underscored the administration's "extraordinary commitment to reform," emphasizing that GEMAP has been complementary to national efforts to reduce corruption, improve fiscal performance and build capacity, while promoting peace and prosperity for all Liberians.

"Since the inauguration of President Sirleaf's administration, Liberia has witnessed substantial progress in many of the areas targeted by GEMAP," Sayeh said. "However, it is difficult to disentangle which and to what extent progress has been a result of GEMAP's measures or of the administration's own commitment to significant public financial management reform, of which GEMAP has been one part."

Some Progress

* Spending Controls. Perhaps GEMAP's most visible and substantial contribution has been the strengthening of financial controls over public spending. The plan achieves this by assigning internationally-recruited experts to key financial institutions: the Liberian Central Bank, the Ministry of Finance in support of the inter-ministerial Cash Management Committee, and the Bureau of the Budget, among others. These experts are vested with co-signature authorities in public expenditure processes, going beyond the traditional "advisory" roles of technical assistance projects.

* Transparency. Transparency of financial processes has improved significantly. The government's budget along with quarterly and annual reports on financial and budget results are posted on the Ministry of Finance's website and printed in local newspapers. Additionally, the presence of a multilateral governance structure has opened Liberia's public expenditure processes to greater scrutiny than ever before. These developments bode well for the ongoing anti-corruption efforts.

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