29 November 2010

Liberia: To Become a Middle Income Country by 2030 Growth Must Have a Broad Reach - Planning Minister

interview

Washington, DC — Amara Konneh recently returned to his post as Liberia's minister of planning and economic affairs and a member of President Ellen Johnson Sirleaf's economic management team, following a brief interruption in early November when the president sent her entire Cabinet on administrative leave. When Konneh was a young man, he fled Liberia after much of his family was killed during the civil war in 1990. He joined his sister in Guinea, where he started a school for refugees and eventually gained asylum to enter the United States. He earned a bachelor's degree from Drexel University and a graduate degree in Management Information Systems from Penn State University. He worked for a decade for the Vanguard investment group before playing a key role in Johnson Sirleaf's come-from-behind 2006 campaign.

Konneh served as the president's deputy chief of staff for public affairs before taking leave in 2007 to pursue a master's degree in Public Administration at Harvard's John F. Kennedy School of Government. He was named to his current post in August 2008 and was among the first ministers to be recalled as the Cabinet was being reformulated. On a visit to Washington in October, Konneh outlined how he believes the government's new development strategy, Liberia RISING 2030, will transform Liberia into a middle-income country in two decades. Here are excerpts from part one of the two-part interview:

The president has made poverty reduction a top priority and mandated you to lead the effort. How are you tackling the task?

The Poverty Reduction Strategy is our three-year development agenda running from 2008 to 2011 before the elections. The process involved consultations across the country - in towns and villages in all 15 counties. We had close to 600 consultations across the country - probably one of the most intense consultative processes in the history of the nation.

We were able to understand from the people themselves what they thought the government needs to focus on in these three years - roads, schools and clinics. And that became the Lift Liberia Poverty Reduction Strategy (PRS). We are in the final year of implementation.

What are some of the successes and what are the disappointments to date?

First, the progress we made on the PRS is enormous. We have laid the foundation to enhance our security environment. The abolishment of the old army and the creation of the new one was a poverty reduction intervention. In the consultation process, the people expressed clearly their distrust in the old army that was used to abuse their rights. And so the policy decision was made to dissolve the security apparatus, build a new one, beginning with the police and then the army. We have invested in the new police and the new army to provide security for the Liberian people - held democratically accountable to do that.

Our other success is on the economic front - the second pillar of the PRS, the economic revitalization pillar. The key issue in there was to get the huge debt burden off Liberia's back.

When this administration took office, it inherited an external debt burden of U.S.$4.9 billion dollars. Today, that burden is literally zero. So we embarked on an intense HIPC process, the Heavily Indebted Poor Countries Initiative, putting in place public financial laws and systems. Revitalizing the General Auditing Commission to ensure that we have transparency and accountability in the areas of public financial management. We reached the HIPC completing point in June of this year and got a debt waiver. We also went to the Paris Club [made up of the world's largest economies] and got a debt waiver.

We have taken measures to ensure that we were touching the lives of ordinary people. We are making the right investments with a very small budget.

On the health side, we have reopened all of our major referral hospitals. We have just built one in Tapeta to serve the population in the north and another in the southeast of the country. We have reduced the infant mortality rate, the malaria rates and the HIV rates in the country. We are still struggling with stabilizing the maternal mortality rates because most of the women are not going to the clinic and the health centers to deliver. They are using midwives and home delivery method which is a cultural issue.

Also, we are resuscitating agriculture, particularly the small holders and small-crop farmers.

The other success is in the area of infrastructure. All of the roads and the bridges in the country were out following the war. Today, we can boast about rehabilitating the primary roads in the country, the streets of the capital and the newly paved highway from Monrovia to Buchanan, which is a major economic corridor. We are also working with our development partners to do the feeder and secondary roads that lead to farms and other areas for people to move their crops.

In the area of basic services, we have restored some energy to Monrovia and its environs. We have restored pipe-born water to about 80 percent of the population of Monrovia, which is about 1.3 million. We have also restored running water in the cities of Kakata and Zwedru. All of this was part of the PRS program.

As a result of free and compulsory primary education, we have seen an upsurge in the education rate. You have more kids in school today than in 2004. We are now investing in teacher training with support from the government and the international community, so that we can certify our teachers and bring them up to West African standards.

What are your biggest challenges?

The biggest challenge is human capital. We still have not been able to create sufficient jobs, especially for the youth. We have about U.S.$18 billion in foreign direct investments in the pipeline from Arcelor Mittal, Sime Darby, Golden Veroleum, China Union, BHP Billiton and now Chevron is here as well. (See Government Signs Up Chevron as Oil Exploration Partner)

But they have not started operations at the level where they can begin to create direct jobs for Liberians. That will take some time. The war created a situation where there was a brain drain in Liberia. We don't have the capacity to implement relative to the potential that the country should have in terms of all of the goodwill that's coming from the international community so that's hurting us quite a bit.

Another challenge we have in the implementation of our development agenda is sector coordination or sector leadership. We have a situation where NGOs are implementing most of the programs with good intent. But some of them are not really aligned to the development agenda. The donors, because of this lack of capacity, are hesitant to infuse their support in a way that we will begin to see a dramatic improvement in implementation. We are going to use this experience as our lessons learned and begin to correct them through policy measures.

How does Liberia RISING 2030 differ from the PRS?

It's a long-term development agenda. The PRS was just for three years - a short term to lay the foundation for this long-term work - and it's going to focus on resolving some of the socio-political anomalies that we have had within our country. Also, to tackle some of the economic issues that will now leverage all of the investments that we have in the pipeline, the gains we have made. It puts the country on the trajectory to a middle-income status by 2030.

How do you make happen such a rapid rise from impoverished to middle income?

First, we need to step back as a country to look at our history. In Africa, we are a unique country by virtue of our founding. Because of the way we were founded, we have a huge division in the country amongst various groups. You have the issue of inequality, the issue of marginalization, the founding constitution.

What do you do about it? We have to think about where Liberia was in the early 60s to early 70s. We had about a decade and half of growth. When we got to the 1970s, we began to see turbulence in the economy until the economy collapsed in 1990. Why? Because the institutions for resolving conflicts, the institutions for managing property right, the institutions for decentralizing power from the center to the periphery were weak.

So we are not going to focus only on the hard economic issues of jobs creation and wealth creation for our people, but we will also focus on the socio-political issues that we did not take into account when we were in the 60s and 70s registering the growth numbers.

You want growth to reach a wider swath of the population?

Precisely. It has to be equitable. And it has to be distributed. We are anchoring this new strategy on a growth corridor concept that we have developed. Here's the concept: Currently in Liberia, you have about five economic corridors and they all originate from Monrovia. You have a large section of the country in the southeast that is not connected to this corridor, so they are outside of the whole economic spectrum of the country. We need to focus less on Monrovia being Liberia and focus more on the rest of the country being Liberia.

We are going to put a corridor in the southeast with the Putu Mining Company. We are going to use our extractive sector to start this corridor process and the agro-forestry sector as well. We have now put a mining concession in the southeast for the first time. And we have put a big oil palm concession in the southeast as well. And then we need to link them to the corridor that is originating from Monrovia. That is why the corridor from Monrovia to Buchanan is relevant.

And then you have a new corridor from Buchanan to Yekepa and the Guinea border through Mittal steel. That is going to link the south of the country to the north. The one in the southeast is going to be linked from Nimba all the way to River Gee, without going through Monrovia. What we are going to see over a 10-year period is the decongestion of Monrovia because there will be opportunities in the southeast of the country. And those opportunities will attract people to go out there.

We cannot forget the issue of land distribution - property rights. If we are going to get to middle-income country status, we are going to have to build the institutions that will ensure property rights are protected and conflicts are resolved. We don't have that in Liberia right now, but are working on it.

Another issue that the corridors bring into play is regional trade. Liberia has 3.4 million people – a very small market. But if you were to include Cote d'Ivoire, Guinea and Sierra Leone, easily, you have about 30 million people - a much bigger market.

The challenge for us as a government is what kinds of strategies we put into place to tap into the potential wealth of Guinea, using our infrastructure. The potential agriculture expertise in Cote d'Ivoire - even though they have a governance problem, they are among the largest cocoa and coffee producers in the world. And then Sierra Leone as well. The corridors are lined up to link to our neighbors, and regional trade is going to be key.

If you are seeing the development of resources as a key driver and you have an inflow of capital coming from outside, how do you ensure that benefits spread and that, for example, Liberia's own business sector is part of this growth strategy?

First, the way we have done mineral concessions is to negotiate the terms to include social benefits for the communities. We have established a fund where all of the concessionaires contribute for the building of schools, hospitals, clinics, market grounds and playgrounds for the kids in these communities.

The other thing included is infrastructure. When they build a power plant, we ensure that the excess energy is distributed amongst the population so they can tap into the benefits. We have also included the building of primary roads and reconditioning of roads. In terms of employment, we have insisted that Liberians be given preference. The companies are going to be creating 15-30,000 direct and indirect jobs, and this will begin the growth process.

In the PRS period we focused on attracting foreign direct investment. In the 2030 strategy, our focus is going to be on the Liberian private sector side, which I refer to as 'the missing middle' - the small and medium-size businesses. Our policies focus on giving Liberian businesses access to finance and access to capacity building in the areas of proposal writings, accounting, finance and marketing. They don't have that.

We have to look at financing - interest rates, payment periods, etc. - to make it easier for a local Liberia person to take a loan and do business.

In part two of the interview on Wednesday, Konneh talks about reconciliation, the role gender plays in boosting Liberia's stature and how Liberia RISING fits in ahead of the 2011 elections.

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