Liberia: Is GOL Kicking the Can Down the Road?

opinion

"Kicking the can down the road" according to the MACMILLIAN Dictionary, is an expression that means to delay dealing with a serious problem in the hope that it will go away. It says for example you can't solve a debt problem with more debt. That is just kicking the can down the road.

"Kicking the can down the road" can aptly describe the Weah led government's approach to solving the current economic difficulties, particularly the liquidity crunch.

The situation is exacting quite a toll on ordinary Liberians who are experiencing extreme difficulty meeting their daily needs. In the face of threats by civil servants to begin "go slow" action should government fail to pay their salary arrears by December 15, 2019, the President Pro Tempore of the Liberian Senate Albert Chie has declared that printing new banknotes to pay civil servants is the way to go.

This is the same line pushed by Minister of State Nathaniel McGill in an interview he held with James Butty of the Voice of America recently on the Day Break Africa program. In the interview, the minister argued that other Central Banks around the world are printing money as part of their functions and so the printing of new Liberian dollar banknotes should not be considered abnormal. In the eyes of these officials who find themselves pressed for answers to the economic crunch, printing new banknotes is desirable in order to pay civil servants.

It is the opinion of this newspaper that the printing of new Liberian dollar banknotes will send inflation spiraling beyond control. Already, this government faces a problem of accounting for the L$16 billion worth of Liberian dollar banknotes printed and brought into the country sometime before the November 2017 elections and after the inauguration of President Weah. At the moment some former CBL officials are on trial facing criminal charges related to the printing of the L$16 billion Liberian dollar banknotes.

Without accounting for the missing banknotes, proposals are now being advanced to print new banknotes. Most troubling about this affair are reports that new banknotes have already been printed and brought into the country and will be put into circulation shortly. This is indeed worrying because huge amounts of the banknotes are being held in private homes of officials of this government and this change of currency will provide a perfect opportunity to trade in their illegally held billions for new money. And most Senators, according to insider sources at the Capitol have allegedly received payments of US$36,000 each to approve the printing and introduction of the new bills.

And in view of ongoing developments, this newspaper must warn of the consequences of printing new banknotes (worthless paper as some describe it) to pay civil servants. In other words, a quick fix solution is being derived to deal with a complex problem. In the opinion of the Daily Observer, what this government needs to do is to adopt measures to stimulate productivity. The over reliance of government on taxes from which about 60 percent of its total budget is derived, rather than from exploitation of the country's huge natural endowment of resources is self-defeating.

Government cannot not tax its way out of recession.

The President Pro Tempore, apparently desperately trying to sound upbeat, encouraged Liberians to believe that help from the international community, particularly the International Monetary Fund (IMF) will be forthcoming not now but in February. Truth be told, help may come but with conditions and prime amongst those preconditions likely to be imposed will be a demand to bring down inflation levels in order to receive the desired assistance requested.

But with the penchant for extravagant spending by officials at the highest levels of government, it appears unlikely that government will be able to meet those benchmarks which could compound the situation even more. And it should not be lost on officials of this government that the patience of the people will be severely tested and there is absolutely no guarantee that assurances of better times ahead as promised by Senator Albert Chie (Senate President Pro Tempore) will prevent people from taking to the streets in popular protests.

Recalling the experience of the 1979 Rice Riots, it appears more likely than not the security forces will be out in full force on December 30 to forestall or quell any street protests. And as Deputy Defense Minister-designate Davis aka Zoely Zoe has promised, he is prepared and will kill any street protester, particularly those "messing with" his properties. But just what the reaction of the people to such potential show of force remains unclear and to what extent the country's fledging military will be impacted by any likelihood of a breakdown in law and order Monrovia also remains unclear.

The 1979 Rice Riots and its aftermath provides some clues because it left the Tolbert Government hanging by a thread and made certain its demise only a year later. This government will do itself well to avoid being drawn into any provocation and to studiously avoid overreacting, lest it may find itself in similar straits as did the Tolbert Government in 1979 and, who knows, no body knows just what may happen.

As the old adage says, "an ounce of prevention is better than a ton of cure".

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