The Analyst (Monrovia)

24 March 2014

Liberia: Bernard Proposes 'Owner State' Model

Monrovia — With geological data pointing to the possible availability of crude oil deposits in commercial quantity off the Liberian coast, comes the headache of explaining just what exactly that means and requires.

Rank-and-file Liberians, now drawn into the debate by the National Legislature through a series of public consultations, have no doubt the discovery opens a new door into the Liberian economy that will end poverty. Informed Liberians agree; but they are adamant that such a window will open wide enough to let everyone in, only if stakeholders pass the relevant reforming laws. One such informed Liberian is Estrada Bernard, III. The Analyst has been looking at his presentation at the just-ended Liberia's Oil & Gas Roundtable Consultation hosted by the House of Representatives in Monrovia between March 10 and 14, 2014.

A precocious US-based Liberian teenager says Liberia can capture its resource revenue effectively, salvage its extractive and productive industries, and speed up its postwar infrastructural development by earnestly adapting the Alaskan model of resource management.

The precocious Liberia, Estrada Bernard, III, conceded that both states existed on different continents, have different climates, and different exposures to technological development.

But the South Anchorage High School student said the strength of such adaptation would be found in the wealth of historical, cultural, and economic similarities between the two states and their desires to raise the standards of their ethnically diverse and immigrant pervaded populations.

Mr. Bernard made the observation when he made presentation during the just-ended roundtable consultation, which the House of Representative organized as precursor to plenary debate of the Draft Petroleum Exploration & Production Act of 2013 and the New NOCAL Act of 2013.

The US-based Liberia youth brought to the consultation, according to organizers, credits for being widely read and for authoring, for the Institute of the North (a public policy forum), a paper titled, "Resource Management in Sub-Saharan Africa: Alaskan Parallels with Liberia." He reportedly began his study of resource management during Anchorage School District Gifted Mentorship with Malcolm Roberts, founder of Malcolm B. Roberts & Associates, a firm with expensive experience in working on issues of natural resource management.

"But just what is the Alaskan resource management model and why does Bernard believe it is applicable in Liberia where the government and people appear resigned to corruption? In what ways are conditions in Liberia and Alaska similar such that a model from that state is deemed applicable here?" are the questions many are asking.

Comparing Liberia and Alaska

Bernard said though worlds apart in location, climatic conditions, customs, land mass, and population, the two states bear striking similarities that allow easy transfer and exchange of experience and the adaption of laws and practices that spur socio-economic development.

Geographic considerations aside, the US-based Liberian precocious teenage, using impeccable available statistics, said both states have in common very diverse populations, abundant natural resources, histories of economic control and resource exploitation by outside forces, and promising futures.

He saw Liberia's 16-tribe ethnicity and culture, its irregular settler population, and its budding immigrant population as miniatures of Alaska's over 200 federally recognized native tribes and an immigrant population that comprises Asians, Pacific Islanders, Mexicans, Africans, and Central and South Americans.

"Students in the Anchorage School District [alone] speak over 100 languages," Bernard said perhaps to give insight into Alaska's cultural and linguistic diversity, despite of which the state is fast become an economic hotspot of the United States' northwest.

Mineral wise, according to him, the two states are different only in diamonds, iron ore, and rubber - in Liberia's case - and copper, zinc, and silver for Alaska. They both possess timber, gold, and petroleum deposits, though the similarity in petroleum deposit is yet to be translated into numbers in Liberia's case.

The US-based Liberian youth said the similarities - which must kindle Liberia's interest in the Alaskan model for resource management - do not end with resource comparisons. Rather, he said, they extend to other aspects of life in both countries, including historical mishaps.

Historically, according to him, citizens of both states have not always benefitted from the use, development, and sale of state resources.

"Exploitation by self-interested individuals and multinational corporations has been an issue in Liberia. Resources have been shipped outside of Liberia for processing, taking with them jobs and industry," the well-read South Anchorage High School student observed.

This picture of corporate exploitation and obvious state complicity, according to him, is not very different from that of Alaska.

"Alaska's rich resources have been exploited by self-interested individuals and multinational corporations in the past. The people of Alaska received few benefits from the use, development, and sale of resources before statehood," he said.

The owner state

The difference between the two states however, he said, was that Alaska did not throw its hands into the air in despair and in self-pity in the face of the historical anomalies: it met the challenges resolutely. That, he said, it did by adopting a state constitution in 1958 that established the citizens' ownership of their resources and ensured that they would benefit from the resources' use and development.

The state constitution mandates the legislature to provide for the utilization, development, and conservation of all natural resources belonging to the state, including land and waters, for the maximum benefit of the people.

It also mandates the state government to utilize, develop, and maintain on the sustained yield principle fish, forests, wildlife, grasslands, and all other replenishable resources belonging to the State.

The 1958 constitution, basically, announced the dawn of the "owner state" model of statement resource management.

With the owner state principle as module, the Alaskan model of resource management ensures that common wealth from natural resources benefits the common person. It allows the Alaskan governing authorities to use wealth from natural resources to fund education, public health, public safety, and infrastructure projects.

According to Bernard, the owner state model has made Alaska the only state with constitutional provisions for natural resource use and management.

As the result of its uniqueness, the US northwest state promotes the constitutionally mandated idea of the owner state, which forbids the state government from allowing outsiders to extract resources and encourages it to retain them for the good of its entire population.

The state is accordingly operating on the principles that resources must accrue some benefit to the people and that critical to the Alaska model is the idea of the commons.

According to Bernard, the commons is an idea that some forms of wealth belong to all citizens; and that therefore, the government must actively protect and manage all community resources for the good of all.

Under the model, Bernard told his roundtable audience, the federal government controls 60 percent of the total land of the state, the state government controls 28 percent, the natives, and the private sector control a combined 13 percent.

"State lands and resources are owned in common by the Alaskan people," he said, noting that the state leases its resources for development by the private enterprises.

He noted further, "The State's share is one-eighth of the oil produced. Seventy-five percent of royalties go into the state's budget and 25 percent goes to the Permanent Fund."

The permanent fund, Bernard said, is a US $50.0 bn savings account that the state established in 1976 to benefit present and future generations of Alaskans. It contains deposits from mineral lease rentals, as well as oil royalties and pays annual dividends to every citizen of Alaska.

"Last year, every Alaskan citizen received a dividend of $900, the only one of 65 sovereign wealth funds worldwide which pays out dividends to its citizens," Bernard observed perhaps in efforts to present the scope of the fund and its part in lifting Alaskans economically.

In addition to the dividend, he said, state uses its resource revenue to provide free education from kindergarten to grade 12 and to fund public health, public safety, and infrastructural development.

Challenges of the "owner state" model

Bernard said even though the Alaskan Model of Resource Management offers a clear, smooth path to speedy economic recovery and to put an end to poverty in Liberia, it comes with challenges.

Under the model, workers, property owners, and businesses are active taxpayers, not mere idle entitlement recipients, or tax manipulators. In Alaska, for example, the government levies 35 percent severance tax, 2 percent tax on the value of property used in development and 9.8 percent tax on oil revenue. "All taxes go into the State's budget," he pointed out.

This is why, he said, the government and the people, under the model, must cooperate and collaborate at all levels of governance to achieve national success.

The citizens, according to him, cannot remain complacent and sycophantic - and yet fussy about their welfare - and expect to break loose from poverty. They must advocate for the wise use and development of resources, lobby for transparency, cause the enactment of strong ethics laws, protect freedom of the press, and be intolerant of corruption, Bernard told his audience.

"[In] Alaska, nearly a dozen public officials have been accused of corruption, and several have gone to prison," he said, perhaps to efforts to warn that the model is unlikely to work well in the prevailing culture of impunity in Liberia.

Meantime, he said, the government must operate with transparency and be accountable to the people as it encourages free enterprise to develop the wealth of the commons and to promote employment and job growth.

Under the model, the private sector will have to be responsible in its use and development of the commons and remain accountable for its actions.

The Alaskan model holds that people and nature depend on each other and therefore requires that stakeholders to optimize the "owner state" by sustaining the commons.

"Renewable resources," such as timber, fresh water, fish, and wildlife he said, "must not be over-harvested. Non-renewable resources (minerals and petroleum products) must be developed with a keen sensitivity to the environment."

Along with the domestic adjustments, the precocious youth said, the state must move toward solution by adopting the African Commons Amendment of the 2009 Global Campaign for the Commons launched in Durban in South Africa.

Mr. Bernard has meanwhile called on stakeholders to Liberia's postwar economic recovery and infrastructural development to adopt responsible resource use in efforts to benefit the people and change lives.

"The commons must be protected and managed for the good of all citizens. The government, the public, and the private sector all have responsibilities to make the model work successfully. With collaboration, great rewards are possible," he said.

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