Liberia
Interim Poverty Reduction Strategy Paper

Liberia’s Interim Poverty Reduction Strategy (iPRS) sets out the emerging process and framework for recovery and reconstruction in the context of post-conflict Liberia. The iPRSP sets out the national socio-economic context, the preparatory process, dimensions of the emerging policy, capacity-building and program choices and priorities for poverty reduction and development, as well as anticipated implementation challenges. It also represents a further opportunity for deepening Liberia's development partnership. Liberia needs to be rebuilt at all levels of the public sector, private sector, and civil society.

Abstract

Liberia’s Interim Poverty Reduction Strategy (iPRS) sets out the emerging process and framework for recovery and reconstruction in the context of post-conflict Liberia. The iPRSP sets out the national socio-economic context, the preparatory process, dimensions of the emerging policy, capacity-building and program choices and priorities for poverty reduction and development, as well as anticipated implementation challenges. It also represents a further opportunity for deepening Liberia's development partnership. Liberia needs to be rebuilt at all levels of the public sector, private sector, and civil society.

PART ONE CONTEXT, FOUNDATION, AND FRAMEWORK

CHAPTER ONE From Conflict to Development

“Failure to do the nation’s business differently will slip the country and its people back into conflict and deeper poverty” 2

1.1 Introduction

This chapter presents the overall policy context of the Liberia Interim Poverty Reduction Strategy (iPRS). The case for a conflict-sensitive, anti-poverty strategy is made, beginning with the root causes of the Liberian conflict and the relationship between conflict, poverty and human rights.

The chapter also provides background information and underpinnings of the emerging strategic agenda, policy choices and specific interventions the government will be implementing over the iPRS period while it continues to work with other stakeholders to develop a full poverty reduction strategy. A case for a structural change is also made, while highlighting ongoing plans to break with the past in order to consolidate peace, enhance security and substantially reduce poverty.

1.2 Origins of the Conflict

The origins of the Liberian conflict can be traced to two broad factors.

Marginalization

Significant portions of society were systematically excluded and marginalized from institutions of political governance and access to key economic assets. For example, the founding constitution was, arguably, designed for the needs of the settler population with less consideration and involvement of indigenous people. Political power was concentrated essentially in Monrovia and primarily at the presidency. This political system bred corruption, restricted access to the decision making process, limited civil society participation in governance and fueled ethnic and class divisions and hatred. Early-established land and property rights for the majority of Liberians were severely limited.

Marginalization was perpetuated by urban-biased policies of successive administrations and most infrastructure and basic services were concentrated in Monrovia and a few other cities. Marginalization of youth and women, mismanagement of national resources and inequalities in the distribution of benefits were significant problems. The consequence was high levels of resentment towards the ruling elite, which led in part to a bloody military coup in 1980 with initial support coming from the majority of people. Unfortunately, the military and successive governments failed to correct social ills and in many cases simply exacerbated the problems.

Economic Collapse

Liberia’s economy posted steady economic growth averaging 4 to 7 per cent, per year through the 1960s, largely a result of the 1944 Open Door Policy and Unification Program introduced by President William Tubman. At the core of these policies were the granting of major concessions to foreign interests to exploit reserves of iron ore, harvest timber and expand rubber plantations, the latter of which was pioneered by the Firestone Tire and Rubber Company. Thanks to the high prices of iron ore and rubber on world markets, Liberia witnessed a period of economic boom.

Over time however, the economy could not sustain its impressive record. Prices of primary goods fell, which together with a decline in capital investment precipitated a sharp decline of the economy. Gross Domestic Product (GDP) growth rate fell from 5 per cent in the early 1970s to less than 1 per cent in mid-1980s. This was compounded by an increase in inflation and soaring unemployment3. Liberia’s external debt burden rose from 750 million United States Dollars (USD) in 1979 to 1.4 billion USD in 1985. Official development assistance plummeted from 131 million USD in 1985 to 75 million USD in 1988.

Traditional systems of governance broke down; the economy crashed; local currency depreciated significantly, from parity with the USD to over 60 Liberian Dollars to 1 USD; illicit trade in diamonds and timber flourished; and a massive exodus of skilled and talented people from the country took place. The economic hardship created an active setting to enlist young people in rebel groups and, as conflict took hold, commercial and productive activities ceased as various warlords looted and vandalized the country’s resources. All of this contributed to a precipitous economic decline and with it, the spread and deepening of national poverty.

1.3 The Current Economic Context

Today, Liberia a nation that had achieved middle income status in the 1970s and was food secure – is a shell of its past. In 2005 prices, GDP per capita declined from 1,269 USD in 1980 to 163 USD in 2005 – an 87 per cent decline. Exports of about 486 million USD in 1 978 declined to about 10.3 million USD in 2004. Throughout the 1980s and 1990s, the decline was consistent across the board: agricultural production dropped precipitously as people fled their farms and supporting infrastructure collapsed; mining and timber activity essentially ceased; rubber plantations closed; manufacturing dropped sharply; and the service industry ground to a halt. The economy only began to stabilize and rebound in 2004, with growth of 5.3 per cent experienced in 2005 and an expected 7–8 per cent growth for 2006.

Public spending is not an engine of growth. Total government expenditure, including grants, has not exceeded 85 million USD since 2000, translating into per capita spending of about 25 USD, one of the lowest in the world. The 2006–2007 budget is projected at 130 million USD, a 60 per cent increase over the previous year, with at least 1 5 per cent devoted to pro-poor targeted activities. Inflation, which jumped to 15 per cent in 2003, subsequently subsided to around 6 per cent, although there are new pressures from rising prices as the economy rebounds.

Years of mismanagement have left Liberia with a huge external debt burden, estimated at about 3.7 billion USD as of mid-2005, equivalent to an astonishing 800 per cent of GDP and 3,000 per cent of exports. Domestic debt and non-salary arrears are estimated at about 700 million USD, a significant part of which is owed to the banking system (including the Central Bank of Liberia).

The decimation of the economy has led to very high levels of unemployment and ex-combatants, returning refugees and internally displaced persons (IDPs) are struggling to find work. Formal sector employment is currently estimated at about 1 20,000, with some 50,000 to 60,000 employees in the public sector following recent efforts by Government to remove ghost workers from public payroll and reform the civil service. The majority of the population works in agriculture (subsistence farming), the informal economy (trading) and petty production. Other coping mechanisms include significant reliance on external remittances from relatives abroad and spin offs from donor-funded investments, especially in rural communities. Almost without exception, Liberians are far worse off today than they were 25 years ago.

Figure 1.1:
Figure 1.1:

The evolution of per capita GDP over time

Citation: IMF Staff Country Reports 2007, 060; 10.5089/9781451822922.002.A001

Note: GDP per capita data is based on World Bank, WDI 2004 series; GDP is measured in constant 1995 USD.

1.4 Characteristics of Poverty: Income Dimensions

A critical challenge facing Liberian policy makers is the absence of up-to-date nationwide information and data on population and poverty. What is the population size? How is it distributed by sex, age and socio-economic characteristics? Who is poor? Where are they? Why are they poor? What are their coping mechanisms?

The last population and housing census was conducted in 1984. The last comprehensive poverty profile of Liberia, undertaken by the United Nations Development program (UNDP) in 2001,4 indicated that 80 per cent of all households in Liberia suffer from income poverty. While data constraints make it difficult to fully quantify the problems, the impact is felt in both rural and urban areas and across genders and ages as described below:

Rural Poverty: At least 56 per cent of the population lives in rural areas and over 80 per cent of those are subsistence farmers with little or no cash income. According to the 2001 UNDP Liberia poverty profile, 86 per cent of rural households are estimated to be poor and 64 per cent live in severe poverty.

Urban Poverty: In towns that used to be prosperous from mining and rubber concessions of the past, 85 per cent of households are poor and 60 per cent are living in severe poverty today. In county headquarters, which received the bulk of internally displaced people during the war, 75 per cent of households are poor, while 40 per cent live in extreme poverty. In Monrovia, about 50 per cent still fall below the poverty line while 22 per cent live in severe poverty.

Gender Disparities: Beyond the rural-urban dichotomy, there is also a gender gap in poverty. Women are particularly vulnerable as a result of exclusion, marginalization and gender-based violence. Men, women, boys, girls, youth, elderly and female-headed, child-headed and male-headed households experience poverty differently, have different and varied opportunities, capacities and resources to cope with, reduce poverty and/or create wealth.

The 2001 UNDP poverty profile indicates that 78 per cent of male-headed households live in poverty (55 per cent in severe poverty) compared to 69 per cent of female-headed households living in poverty (42 per cent in severe poverty). This available research is limited to male- and female-headed households and does not take into account the gender dimension for every grouping in all areas and at all levels. It is also important to note that these income poverty statistics do not include the non-income aspects of poverty and the special vulnerability of children and women in an environment of lawlessness and war, especially the high likelihood of exploitation and violation of their human rights.

1.5 Characteristics of Poverty: Non-Income Dimensions

1.5.1 Food Insecurity

Food insecurity is a challenge in the current post-war Liberia with critical implications for peace and security, economic revitalization and poverty reduction. Estimates indicate that Liberia loses at least 1.2 per cent of GDP annually due to vitamin micronutrient deficiencies. A joint Food and Agriculture Organization (FAO)/World Food program (WFP) Crop and Food Security Assessment carried out in January/February 2006 found four major causes of food insecurity in Liberia: agricultural production constraints; poor infrastructure and limited access to markets; poor biological utilization of food due to lack of access to health services, safe water and sanitation facilities; and lack of household labor and social support caused by a general disruption of traditional social networks during the war.

In March/April 2006, the Government of Liberia carried out a countrywide Comprehensive Food Security and Nutrition Survey (CFSNS), which found that:

  • 11 per cent of the rural/semi-urban population are completely food insecure with a maximum of 28 per cent in the area that was mostly affected by the war and displacements;

  • 40 per cent are highly vulnerable and 41 per cent are moderately vulnerable to food insecurity. Only 9 per cent are completely food secure dropping to almost 0 per cent in five counties;

  • All 15 counties have high to extremely high chronic malnutrition rates. Of children below five years old, 39 per cent are stunted, about 27 per cent are underweight and 7 per cent are wasted, though in some areas this is over 10 per cent or what is considered to be ‘emergency’ level. In Liberia, 14 per cent of all women have a low body mass index.

Food Insecurity: A Recommended Approach

In transitioning from emergency to recovery and finally to development, the following interventions are recommended to achieve food security in Liberia:

  • Distribute free seeds, tools and food resettlement packages to farmers; food-for-work and training activities should focus on population groups that are highly vulnerable to food insecurity.

  • Intensify interventions and capacity-building in animal pest control, crop diversification, horticulture, improved preservation and storage techniques and improved processing and marketing systems.

  • Restock livestock and promote small-scale businesses and post-harvest industries and services.

  • Strengthen education programs, provide food-for-education programs and improve access to basic health care services and to clean water and sanitation. Nutrition and health programs should be implemented with a focus on child feeding practices, food preparation, dietary diversity, immunization, micronutrients and HIV/AIDS.

  • Enhance institutional capacity to manage interventions and resources devoted to improving the food security and nutrition situation, including the development of an institutional policy framework and a food security monitoring system.

  • Implement sustainable land management practices.

Source: Government of Liberia in collaboration with FAO, Humanitarian Information Center Liberia (HILC), United Nations Children’s Fund (UNICEF), United Nations Mission in Liberia (UNMIL), WFP, World Health Organization (WHO), Catholic Relief Services, World Vision, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) and Liberia Non-governmental Organization Network (LINNK): Comprehensive Food Security and Nutrition Survey (Preliminary Results), October 2006 and WFP World Hunger Series (2006).
1.5.2 Weak Infrastructure

Schools, hospitals and clinics – virtually all public infrastructure are severely damaged and in need of rehabilitation. Most government buildings are in shambles and there was no electricity or piped water in Liberia for 1 5 years until the new government turned some on in Monrovia in July 2006.

Many roads are impassable, which seriously constrains peacebuilding efforts, hinders economic activity in agriculture, timber and mining and undermines basic health and education services. Expanding peace, revitalizing the economy and reducing poverty will be next to impossible without a significant improvement in roads.

Electricity: It is estimated that less than 10 per cent of the current population of Monrovia has access to electricity; there is substantially less access outside the city. Where available, electricity is produced by privately owned generators resulting in limited availability and very high costs.

Transport: Roads and bridges are severely damaged, with only about 700 kilometers of damaged paved road surface and 1600 kilometers of unpaved roads. Farm to market access is difficult and parts of the country are isolated during the rainy season. Most of the railway network has not functioned for nearly 20 years. Civil aviation is limited to Monrovia with only United Nations flights operating upcountry. The port of Monrovia is the only operational port in the country.

Telecommunications: Virtually all the assets and equipment of the fixed line system operated by the Liberia Telecommunications Corporation were destroyed or stolen and service ceased completely in February 2005. Private sector investments in mobile telephone operations and Internet have helped meet the communications demand of both the public and private sectors.

Housing and shelter: Liberia is experiencing substantial housing and shelter shortages. The war sparked massive internal displacements and rural-to-urban movements, with Monrovia hosting the majority of IDPs. There is a huge mismatch between the number of urban dwellers and available social services, leading to overcrowding, deteriorating living conditions and the growth of slums and illegal home occupation. Shortage of suitable housing is a major constraint to getting professionals such as doctors, nurses and teachers into rural areas.

Water supply and sanitation: Water, sewerage and treatment facilities are out of operation, except for a limited supply of water in parts of Monrovia. Garbage collection is minimal to non-existent. Recent estimates indicate that only 32 per cent of households have access to safe drinking water and only 24 per cent have access to sanitary facilities (CFSNS 2006). Many urban areas get by with well water. Fortunately no large scale waterborne diseases have been prevalent.

1.5.3 Poor State of Basic Social Services

Health: Only 41 per cent of Liberians have access to health care facilities. Of the 325 health facilities which existed before the war, about 95 per cent were partially or wholly destroyed. Only 10 per cent of communities surveyed reported having a health facility within the community (CFSNS 2006). There are only 43 Liberian physicians and 21 nurse midwives to cover public health needs.

Liberia’s health indicators are amongst the worst in the world. Infant and under-five mortality rates are 157 and 235 per 1,000 live births, respectively. Malaria remains the leading cause of child morbidity (42 per cent), with diarrhoea accounting for 22 per cent and Acute Respiratory Infection (ARI) for 1 2 per cent. Maternal mortality rate was estimated at 578 per 100,000 live births (LDHS 2000) and the HIV/AIDS prevalence rate has risen to an estimated 5.2 percent.5

Education: Over half of Liberian children and youth are estimated to be out of school. The war destroyed about 70 per cent of existing school buildings and in the process, created a generation of people with very limited exposure to formal education. Liberia is one of the few countries where the current generation has less educational attainment than the previous one. There is a substantial gender-differential and rural-urban gap in education. Illiteracy is estimated at 70 per cent nationally. In spite of the government’s Free and Compulsory Primary Education (FACPEL) initiative, ‘fees’ are levied to partly provide for learning and teaching materials. Only 35 per cent of boys and 27 per cent of girls starting grade one reach grade five (Liberia Millennium Development Goals Report, 2004). The higher education system has remained paralyzed and the technical and vocational education and training system is still in disarray due to the looting of training equipment during the war.

1.5.4 Poor Governance

Almost all facets of governance in Liberia have suffered severely over the past two decades or more, essentially crippling national life and contributing greatly to deepening poverty.

Weakened institutions and human capacity: Liberia’s once-considerable human capital and institutional capacity has been significantly eroded. No national institutions escaped the impact of war, including ministries, state agencies, the private sector and civil society organizations. The interruption of education essentially halted the process of new capacity formation, including civic leadership skills, which was further compounded by a lack of essential tools and logistics necessary for institutions to function.

Devastated Statistical Generating Capacity: Before the war, the periodic production and dissemination of social and economic statistics was institutionalized within the Department of Statistics of the Ministry of Planning and Economic Affairs (MPEA). The war years essentially ended data collection and analysis which are pre-requisites for sound policy analysis and formulation, and it will take years to rebuild capacity. The Liberia Institute of Statistics and Geo-Information Services (LISGIS) is now charged with the responsibility for the collection and publication of official statistics under the Chairmanship of the Minister of Planning and Economic Affairs.

The lack of reliable data is one of the critical challenges faced by post-war Liberia. Hence, it is essential to achieve a National Statistical Development Strategy (NSDS) for Liberia as soon as possible. Today, there is very little data available in Liberia to inform the drafting of the iPRSP. The population census is more than 20 years out of date, economic statistics are extremely limited and restricted to Monrovia. Routine data systems in service delivery Ministries and Agencies have collapsed. Health information exists for 1999/2000 from the Demographic and Health Survey (DHS) and more DHS data will be available in 2007 survey which is now ongoing. Data on poverty levels are not available. Some data exists from 2000 when a poverty profile was produced with UNDP support. A Core Welfare Indicator Questionnaire Survey (with a consumption module) is also planned, which will generate required information that are consistent with international standards for poverty measurement.

Responding to the Governance Crisis

The Governance Reform Commission (GRC) was established as part of the Accra Comprehensive Agreement in August 2003 to promote the principles of good governance in Liberia. Its mandate includes examining existing systems and structures, making appropriate recommendations and undertaking interventions to strengthen institutions and practices to facilitate good governance and foster a good relationship between the state and society.

The GRC focuses on three key areas: public sector reform, local governance reform and defining the future of Liberia. Public sector reforms include streamlining the civil servants roster to right-size and remove ghost workers, strengthening the capacity of the civil service agency, harmonizing civil service rules and procedures and streamlining the mandates and structures of government ministries, public corporations and autonomous agencies. Local governance reform initiatives are to facilitate decentralized political and socio-economic structures and systems with emphasis placed on empowering communities.

The GRC organized nationwide consultations with the support of the Ministry of Internal Affairs and the United Nations Mission in Liberia (UNMIL) to solicit views on governance and to build a consensus on needed reforms. It is also engaged in state reform through the review and revision of the mandates of public institutions and structures. The GRC has also consolidated and harmonized the code of conduct for the public sector, organized capacity-building programs and is about to launch a consultative process to develop a shared national vision.

Despite some delays due to resource constraints, the GRC has made significant progress. The government has presented a bill to the national assembly that will transform the GRC into an independent body to be called the Governance Commission and continue working toward a national response to the governance crisis.

Limited rights and access to information/role of media: Presently, Liberian media laws do not protect the independence of the country’s media and require reform. Access to public information within public bodies is limited. The print media market in Liberia is plagued by a myriad of problems that undermine its capacity to contribute substantially to the reconstruction and democratization process in Liberia. Beyond Monrovia, access to media and information is very limited.

The national broadcaster, the Liberia Broadcasting System (LBS), fell into disrepair and barely survives on meager resources. The LBS needs to be transformed into an independent public service broadcaster. Female media professionals constitute less than 20 per cent of the media population in the country. The two main training institutions the Mass Communication Department of the University of Liberia and Liberian Institute of Journalism are both in need of massive support. Despite the years of conflict and repression, the main association of media professionals in Liberia, the Press Union of Liberia, has managed to retain a relatively coherent and unified approach to addressing the challenges.

Weakened civil society: Liberia has a long history of vibrant civil society groups, including tribal associations, sports groups, women’s organizations, interregional development associations and community based associations.6 With the war, many of these initiatives gave way to better-financed non-governmental organizations (NGOs), which emerged to address problems. The result has been the monetization of civil society organizations. Their sustainability is doubtful, as demonstrated by the closure of several when donor funding dried up.

Civil society organizations also face a lack of individual, institutional and societal capacity as well as a lack of operational funds. A 2004 United Nations Development Fund for Women (UNIFEM) capacity assessment of local women’s NGOs and groups revealed serious gaps; many did not have a member or staff person with gender training, adequate skills in management, proposal writing or fund-raising and advocacy and they had limited access to funds for the necessary advocacy for gender justice.

Significant policy gaps: Capacity for conducting quality diagnostics, identifying appropriate policy options and agreeing upon and complying with specific policy formulation has been severely lacking in almost all national institutions and agencies. This has contributed to excessive, hasty and poorly designed policies and laws, which is further compounded by limited (or total lack of) reliable data. In this regard, social sector policies in the areas of education, health, environment and governance have been particularly hard hit.

1.5.5 Relatively Weak Security Situation

To feel safe and secure is a basic human right (Box 1.3). Like in any post-war situation, anxieties about personal safety in Liberia run high. The crime rate is increasing, easy access to firearms is prevalent, there is widespread gender-based violence, particularly rape, and ex-combatants with no jobs and no proper mechanisms for reintegration into society are commonplace. With the breakdown of social capital, significant efforts in rebuilding will have to take place around social norms and the criminal justice system.

Peacekeeping in Post-Conflict Liberia: The Role of the United Nations Mission in Liberia

Following the signing of the Accra Comprehensive Peace Agreement in August 2003, the United Nations Security Council deployed UNMIL with a mandate to stabilize the country and assist the National Transitional Government of Liberia in its efforts to establish new democratic order. With 1 5,000 military personnel and more than 1,000 police personnel, UNMIL has assured a secure environment by disarming warring factions and maintaining public order.

UNMIL has provided considerable support for the successful conduct of presidential and legislative elections, as well as for the restoration of state authority and infrastructure. It is also heavily engaged in restructuring and retraining the Liberia National Police, provides assistance and support to the judicial and corrections systems, the Truth and Reconciliation Commission and the Governance and Economic Management Program. Currently, the mission is working with the government to help it meet the criteria for lifting sanctions on timber and diamonds while also assisting national authorities to restore proper management of other natural resources, such as rubber.

The continued presence of UNMIL affords Liberia valuable support in pushing ahead with its ambitious program of reform and renewal. UNMIL is expected to maintain a robust security presence until the national security agencies complete the restructuring, recruitment, training and re-deployment of their forces. Using the framework established by the Liberia Reconstruction and Development Committee, UNMIL in collaboration with the government, the United Nations Country Team and other partners will track key benchmarks in order to align future operations of the mission with progress on the ground.

CHAPTER TWO Breaking with the Past and New Beginnings

After more than two decades of misrule, violence and economic collapse, the Liberian people are now taking the first steps on the long road to recovery and sustained economic development.

2.1 Introduction

This chapter gives a glimpse into Liberia’s new beginning by highlighting the initial progress made by the recently-elected government. It also provides key elements of the future vision, policy choices and overall direction in the efforts to build a more prosperous and promising Liberia.

2.2 A New Vision for the Future

Government desires to build a new Liberian nation that is peaceful, secure and prosperous. This will require policies that resulting economic recovery and political stability that are mutually reinforcing. A strong economy with robust job growth is key. This is best done by restoring the traditional engines of the Liberian economy rubber, timber, mining and cash crops to full growth potential. The revitalisation of economic and social infrastructure is critical to the achievement of these goals, with the private sector playing an active role.

Consolidating peace, enhancing justice, deepening democracy, ensuring food security, promoting human development and setting the nation on a path for long-term growth and development are the foundations of this vision. The agenda for the new Liberia is focused on empowering people by enlarging their choices, building a genuine democracy and entrenching a democratic culture in Liberia. Human development in the new Liberia necessarily includes total elimination of insecurity, the restoration of peace, reconciliation and protection of human rights. Additionally, it will require the building of a new security and police force sufficiently strong to keep the peace while resting firmly under democratic civilian control. The new Liberia aims to do away with divisions, marginalization and exclusion that were common in the past and, instead, replace them with inclusiveness and empowerment through decentralization and grassroots engagement in governance. Part of this vision entails a shift of power to the counties and communities, so they will be empowered to effectively participate in decision making and take control of local issues and development processes. The goal is an inclusive and highly participatory democracy in which rights are respected; people are engaged in governance; national resources are used to benefit all people; and effective democratic institutions are built. This will require human and institutional capacity-building to ensure good governance and proper checks and balances among the three arms of government. Also significant is the need to give media and civil society space to develop and to be a force for national development.

The future also requires a strong economy with robust job growth, led by a recovery in the private sector, particularly agriculture, mining, minerals and forestry (including rubber), stronger social services and infrastructure, renewed investment and increased trade with competitive Liberian firms exporting to the region and beyond. This encompasses building and empowering a new class of Liberian entrepreneurs. The national agenda is for an economy that is relatively open, with low tariffs and minimal government intervention, except where necessary to make markets work better.

Preliminary efforts are already underway to articulate the shared national long term vision and formalize the framework to make that vision a reality.

2.3 Doing Government Business Differently

2.3.1 Developing a Conflict-Sensitive Poverty Reduction Strategy

In Liberia, it is essential for the government and society to respond appropriately to post-conflict challenges to avoid a recurrence of future conflict. Bearing this in mind, Liberia needs a conflict-sensitive development strategy so it can better anticipate the potential for events to exacerbate or create conflict and design development institutions that address the root structural causes of the conflict and contribute to peacebuilding. (Box 2.1).

The Links Between Conflict, Poverty and Human Rights

Conflict, poverty and human rights violations are closely interconnected through negative cyclicality. Poor countries are much more likely to experience conflict and human rights violations. A country with a per capita income of 500 United States Dollars (USD) is about twice as likely to have a major conflict within five years as compared to a country with a per capita income of 4,000 USD.7 Once conflict begins, it inevitably deepens and exacerbates poverty. A country affected by civil war typically has one third the per capita income of a peaceful country with similar characteristics.

Liberia’s civil war not only took the country significantly backwards, its legacies will continue to present challenges for years to come. For example, research on the gender impact of armed conflict suggests that women and children suffer disproportionately through exposure to sexual violence, limited access to essential services, deprivation, absence of any social protection measures and widowhood, among other factors. It will take years to fully reintegrate the population, reconstruct basic infrastructure and rebuild institutions of governance. The Liberian war essentially ended human capital formation and resulted in the mass exodus of skilled workers, thus depriving the country of its development resource. Current estimates show that about 400,000 Liberians are in the diaspora, mainly in the United States, Canada and the United Kingdom. More importantly, constant conflict and poverty provide fertile grounds for the abuse of human rights.

Liberia’s conflict makes achieving the Millennium Development Goals (MDGs) a daunting challenge. As a result of the interrelationships, it is highly unlikely that Liberia will attain any of the MDG targets within the specified time frame of 201 5. For Liberia to achieve the MDGs by this deadline, growth in excess of pre-war rates is required, as is progress more rapid than anywhere else in the world. The challenge for Liberia derives from the fact that the MDGs were established in 2000 with 1990 benchmarks and targets for 2015. Most countries achieved 10 years of progress between 1990 and 2000, when the goals were set, but in Liberia there were significant losses. All indicators were worse in 2000 than they were in 1990. Thus, to reach the goals Liberia must make larger gains in much less time.

The government has resolved to avoid recreating pre-war Liberia, in either its governance or economic structures, and do business differently in order to move the country from conflict to peace and on to development. It is determined to build a new economy with opportunities for all and not simply for the elite or a select few Liberians. Key efforts in this regard will include addressing the needs for national healing; reintegration and resettlement of refugees and internally displaced persons (IDPs); rebuilding social capital; reintegration of ex-combatants; and expanding employment and livelihoods for all (Box 2.2).

Why Liberia Needs a Conflict-Sensitive Anti-Poverty Strategy

Where the root causes of conflict are not addressed, a return to war is common. Liberia’s conflict history exemplifies this reality and several factors must guide the development of conflict-sensitive policies and programs to guard against a return to the past. These include:

Returnees and Resettlement: The return and reintegration of the estimated 250,000 refugees and 350,000 internally displaced persons presents great challenges, as most communities are yet to be revitalized after years of destruction. Land and property disputes will escalate as those that fled find new settlers where they once lived and the absence of basic sustainable livelihoods will create challenges and tensions.

Social Capital: The Liberian conflict traumatized people and eroded social capital, including trust, traditional norms and customs, social cohesion and networks within communities. Without healing and strong social capital, implementation of national programs and policies in rural Liberia is likely to be thwarted as communities fail to rise to the challenge of exercising collective ownership, initiative and cooperation.

Ex-combatants: Successfully reintegrating ex-combatants into Liberian society is one of the greatest challenges in the post-war period. Failure could lead to security threats, which have already included rape, armed robbery, reprisal murders and other criminal activities. Successful reintegration requires community-level reconciliation processes.

Regional Dimensions: The causes and effects of the conflicts in Côte d’lvoire, Liberia and Sierra Leone are intimately linked. Restoration of a durable peace in the sub-region requires that a number of key issues be addressed at the national and sub-regional levels.

Natural Resources: Mismanagement of natural resources has fueled and sustained civil conflicts in Liberia. Proper administration of natural resources is essential to ensure equitable distribution, which leads to sustainable peace and stability.

Employment and Livelihood Opportunities: The severe lack of employment and economic opportunities continues to be a pervasive issue in Liberia. If not solved, this could pose a threat to the existing peace.

Addressing the long tradition of centralization and misuse of power by the state, the dual and weak justice system, the social economic disparity based on identity and the lack of a shared national vision will also be critical. Past mistakes will be corrected through emphasis on separation of powers, decentralization and community empowerment, the transformation of legal structures to ensure a rights-based approach to development and the supremacy of the rule of law. Policies that favor human development and create opportunities for all and the formulation of a national vision – one that is truly shared by the nation will also be pursued. Additionally, the government will be working with countries in the region to deal with the regional dimensions of conflict.

Since poverty is a by-product of the denial of human rights, pro-poor strategies must be implemented within a participatory, accountable and transparent framework. This means placing focus on individuals and groups that are socially excluded, marginalized, vulnerable and disadvantaged, including women, youth and the disabled.

2.3.2 Enhancing Effective Governance in a Post-Conflict Setting

Working alongside its partners, the Government of Liberia has already taken several key steps to create institutions that will address conflict-related legacies of the civil war. These steps are bolstered with associated policies and programs that are conflict-sensitive and that continue to address the underlying factors perpetuating both income and non-income poverty in Liberia. Amongst those efforts are:

Public Accountability and Transparency: Ensuring accountability and transparency at all levels and enhancing public financial management are crucial steps in breaking with the past; the government has taken several key steps in this area. It has begun to implement the partner-supported Governance and Economic Management Program (GEMAP) as a tool to strengthen public financial management, reduce corruption and build public sector management capacity in state-owned enterprises (Box 2.3). These efforts are yielding steady and positive results, although ensuring effective capacity-building for sustainability remains a challenge. The government has developed a new public Code of Conduct, by which political leaders and civil servants must abide. All public office holders must now publicly declare their assets. The president is leading by example, declaring all her personal assets. In support of transparency, the government will publish public resource flows and utilization on a quarterly basis and is setting up a way to monitor development progress by tracking the use and outcomes of public funding. The Public Procurement and Concessions Act (PPC) and the resultant Public Procurement and Concessions Commission (PPCC) are key elements in re-establishing good governance in Liberia. The PPCC is a vital institution working actively to curb corrupt practices in the public and private sectors.

Fighting Corruption: Corruption in Liberia has shown itself in practically all forms from bribery, embezzlement and fraud to blackmail, clientelism, nepotism and money laundering. Over the years, an expectation has emerged whereby any government official who fails to acquire wealth during his or her tenure is considered foolish. However, corruption has not been limited to the public sector only; a substantial level of corruption exists in civil society.

Many faith-based institutions, civil society organizations and community-based organizations are reported to be rife with misappropriation of funds, bribery, favoritism and other acts of corruption. Even the media and other watchdog agencies are reportedly engaged in these activities. Local and foreign private sector players are also seriously involved, constituting the single most important segment of the supply side of corruption in Liberia. Limited financial reporting, weak tax administration and other factors limit access to, and knowledge of, the scale of corruption in the private sector. In the past, few people who committed corrupt acts were punished. Instead, many seemed to have been rewarded with jobs, expanding their opportunities to practice corruption.

A founding principle of the government is zero tolerance for corruption. With the support of its partners, the government is putting in place systems and structures to control and monitor expenditures and accounts to ensure no slippages. Results so far have been positive revenues are up and slippages are down. The government is doubling its efforts by deploying new tools, such as the anti-corruption strategy (about to be enacted) and strengthening institutions such as the PPCC. A key part of the anti-corruption effort is stamping out the culture of impunity. Anyone engaged in corrupt practices will be prosecuted in the courts, subjected to the full weight of the law and, if found guilty, punished appropriately.

Governance and Economic Management Program Within the 150-Day Action Plan

One of the major successes during the 150-day action plan period, which must be consolidated during the interim period and beyond, is the implementation of the GEMAP. Steady progress was made in the implementation of the GEMAP. The Cash Management Committee based in the Ministry of Finance, with representation from the core economic ministries/agencies, is functioning well. Despite some teething issues, it is clear that the Cash Management Committee process is already enhancing financial discipline in overall budgetary execution and control, but equally in expenditure management by spending units.

The budgetary execution and resource mobilization units in the Ministry of Finance are being strengthened. Working with the Ministry of Finance, the Bureau of the Budget did a credible job in the preparation of the 2006–2007 budget. The PPCC is functioning, with most of its board and staff in place. Implementation of public procurement guidelines within the framework of the new Procurement Act has already begun. All international financial experts to be seconded to the Liberia Petroleum Refining Corporation (LPRC), the Forestry Development Authority, Robertsfield International Airport and the National Port Authority are now in place and are working closely with the senior management of each of those State—Owned Enterprises. Budgetary management and control in the Central Bank of Liberia has already improved noticeably following the appointment of a new Executive Governor and Administrator, the latter a GEMAP appointment. For the first time in many years, the central bank is balancing its operational budget.

Filling the Capacity Gap: The government has embarked on innovative transitional human resources measures to address immediate problems of capacity weakness and poor morale of the civil service and to support service delivery and advance wider reform efforts. A key example of this is the Liberia Emergency Capacity Building Fund, used by the government to bring back high-profile teams of Liberians, mostly from the Liberian diaspora. Some have been included in the government cabinet; people whose employment will reinvigorate the public sector, bringing new ideas, experiences and professionalism in support of the reform process. In the same vein, under the Transfer of Knowledge Through Expatriate Nationals (TOKTEN) program, the government is bringing back qualified expatriate Liberian professionals for short periods of time to contribute to the reconstruction of Liberia. Using GEMAP, the government is taking full benefit of the presence of internationally recruited experts in order to facilitate human and institutional capacity-building for economic management.

Empowering Local Governance: The government is clear on its commitment to decentralize decision making and resource allocation to county and municipal governments. A key element of this is empowering and engaging communities, especially the poor and vulnerable within those, in the reconstruction process, in local governance and in addressing the root causes of conflict. This is seen as critical for rebuilding social institutions, community-level social capital (such as trust) and capacity for collaborative action. Additional efforts include: broad-based representation and participation in local development decision-making processes; participatory planning and implementation in local development; accountability in project management and implementation; and strong coordination with line ministries and local authorities. The aim is to build trust between the government and the governed; to ensure this and successful decentralization happens, emphasis will be placed on building county and local government capacity.

Protecting Human Rights: Protecting and promoting human rights is integrally linked with pro-poor development and the consolidation of peace. Approaching poverty through the prism of human rights lifts it from the status of a social problem to a clear imperative. As a positive step, Liberia has ratified existing international human rights treaties, including the Covenant on Economic, Social and Cultural Rights, and as such the government shall ensure that every citizen enjoys social, civil, economic and cultural rights.

2.4 Policy Choices and Directions

Given the challenges facing Liberia, policy choices for the government are quite clear: prevent the nation from sliding back into conflict, build on the current peace to create an enabling environment for prosperity and forge strategic and constructive partnerships internally and with external partners to build a desirable future for the people of Liberia. Broad national policy directions therefore are:

  • Consolidating national peace by strengthening key institutions for national security and completing the process of demilitarization, demobilization, reinsertion and reintegration.

  • Increasing investment in human capital and human development focusing on health, education and poverty reduction to ensure that all citizens, without discrimination, are able to participate and make use of expanded opportunities for self-development.

  • Ensuring a broad-based economic growth, by promoting the rehabilitation of the private sector, expanding trade and investment, rehabilitating forestry, rubber, coffee and oil palm and revitalizing the mining sector.

  • Ensuring food security by expanding food production and distribution, making food accessible and affordable and improving food absorption.

Specific priorities for the iPRS period (June 2006 June 2008) are presented in Box 2.4.

Key Priorities for the iPRS Period, June 2006 June 2008

  • Consolidate the peace by advancing the reform of the security sector through the development of sound overall policy and legislated institution restructuring.

  • Revitalize agriculture by stimulating traditional export sectors such as rubber and tree crops and laying the basis for national food security by supporting resettlement of farmers and providing seeds, tools, and a revitalized extension services.

  • Rebuild the economic and social infrastructure, with emphasis on the nation’s road network.

  • Promote good governance and the rule of law by enhancing public financial management systems, and strengthening the pillars of integrity as a means of fighting corruption and improving systems of accountability.

  • Strengthen the environment for private sector growth through reform of the tax and incentive systems and by minimizing red tape, and unnecessary regulations.

2.5 Initial Progress

Implementation of the new government’s cornerstone 150-Day Action Plan, introduced in January 2006 and covering the period ending June 2006, led to noticeable changes and achievements. Peace is in place, Liberians are beginning to feel optimistic about the future and the government is engaging with local stakeholders and international partners to build a better society.

The government acted immediately on its agenda of transparency and sound economic management on its first day in office. It cancelled all forest concession contracts, signaling a major break from the past. It enforced laws on tariff collection on the ports and revenues immediately shot up by 1 8 per cent over the previous year. It set out to begin providing electricity and water service and, in late July 2006, it restored power and water services to parts of Monrovia for the first time in 1 5 years – a first step to reestablishing these services more widely. In September, the government passed the Forestry Reform Law of 2006.

Several other early wins can be credited to the government: revising the civil service code; cleaning up procurement processes; introducing internal controls; overhauling financial management procedures; introducing measures aimed at fighting corruption in the public sector; creating employment opportunities for youth; and increasing financial support to social sectors.

Significant successes are also emerging from the government’s resolve to restore civil authority, foster local level recovery, promote development by enhancing the capacity of counties and districts to exercise their mandate (thereby improve their planning capacities) and coordinating and delivering essential services at the local level.

Although more challenges remain (outlined in later chapters). Box 2.5 highlights some of the key achievements of the 150-Day Action Plan.

150-DAY ACTION PLAN: KEY ACHIEVEMENTS AS OF 30 JUNE 2006

150-Day Action Plan: Key Achievements as of 30 June 2006

Peace and Security

Building a credible, capable and democratically accountable military force and strengthening national security institutions.

  • Completed severance and retirement payments to former Armed Forces of Liberia (AFL) personnel.

  • Advanced the processing of new recruits, including training.

  • Commissioned a new brigade headquarters at Camp E. B. Kessely.

  • Demobilized and reintegrated ex-combatants.

  • Deactivated about 75 per cent of the almost 1,000 Special Security Services personnel.

  • Completed Very Important Person (VIP) protection training for 100 security personnel in the United States.

  • Deactivated some eligible police officers; Completed recruitment and training of 300 police officers; additional 207 officers under training at the police academy.

  • Repatriated 21,000 refugees and 314,000 IDPs.

Economic Revitalization

Revitalizing the economy for growth, job creation and poverty alleviation.

  • Established sound public financial management and budgeting systems through computer/electronic flag receipt system at the Ministry of Finance (MoF) and Central Bank of Liberia (CBL).

  • Set-up fully functioning Cash Management Committee at MoF.

  • Tabled bill to national legislature limiting the power of the executive branch of government to affect major changes in the budget.

  • Increased government revenues by 18 per cent and balanced the budget.

  • Ensured legality of concession and contracts; cancellation of all forest sector concessions, Global Security Seals, Limited container park contract and LPRC and Mechanical Engineering Group contracts; initiation of review of all contracts and concessions entered into during the National Transitional Government of Liberia.

  • Strengthened institutions, including “rightsizing” of 500 employees and collapsing of the governance structure at LPRC – reduced from six levels to four; completion of a revised budget of the CBL in line with accepted international norms; reactivation of a money management committee at the CBL; introduction of CBL foreign exchange auctions; full empowerment of the Bureau of Inspection Valuation Assessment and Control (BIVAC) to execute its pre-shipment/destination inspections; completion of management studies to determine support needs of Civil Service Agency and Government Auditing Commission.

  • Enhanced public revenues and strengthened expenditure controls with clarification of customs and excise duties/tariffs rates and enforcement of legal rates; increasing revenues from taxes on international trade by 15 per cent through improved enforcement; recruitment and installation of international financial comptrollers, technical experts, advisors and administrators at key parastatals under GEMAP.

  • Distributed to over 32,884 beneficiaries a total of 41,500 tools, 20.5 million tons of seed rice and 223 packs of vegetable seeds.

  • Established a Joint Rubber Task Force, headed by the Ministry of Agriculture.

  • Obtained a commitment of 1 million USD to Liberian businesses from the United States African Development Foundation for 2006, in addition to an agreement to establish an office in Monrovia and fund Liberian businesses to the tune of at least 1 million USD each year for the next six years.

  • Obtained Overseas Private Investment Corporation and Global Plan of Action funding.

  • Initiated steps for consideration under the African Growth and Opportunity Act by the United States government.

Governance and Rule of Law

Strengthening institutions to promote good governance and the rule of law.

  • Implemented steps to reduce corruption, including declaration of assets and publication in newspapers by all ministers; completion and submission to the president of a code of conduct for public officials; finalization of anti-corruption strategy by Governance Reform Commission (GRC).

  • Initiated the process of civil service reform, including reactivation of 1 9 out of 21 ministries; completion of the civil service census, initiation of four pilot projects in four ministries to determine the appropriate number of personnel required for each ministry; Ministry of Planning and Economic Affairs, Ministry of Internal Affairs, Ministry of State, MoF

  • Strengthened the monitoring of the governance reform process, including completion of GRC management study, reestablishment of institutions to strengthen the judiciary and protect the rule of law.

  • Inaugurated the Truth and Reconciliation Commission.

  • Completed rehabilitation of prisons in Gbarnga, Buchanan, Harper, Zwedru, Kakata, as well as in Monrovia.

  • Strengthening the legislature, including the establishment of Women Legislative Caucus for both upper and lower houses.

  • Formulated a national multi-sectoral gender-based violence plan of action.

Infrastructure and Basic Services

Rebuilding the socio-economic infrastructure and basic services.

  • Reconditioned the road between Voinjama and Foya; grading of critical sections of the Zorzor-Voinjama-Mendocama road; opening of culverts in the Fiamah-Matadi road; and the completion and inauguration of the Barclayville bridge;

  • Increased employment throughout the country by initiating Food for Work initiatives, aimed at community development and 5,000 beneficiaries with 162 projects; construction of 30 community-level projects (including school buildings, clinics, marketplaces and bridges); establishment of seven community credit unions (savings and loans) in Saclepea, Suakoko, Jorquelleh, Kpaai, Panta, Salala and Zota; 212 small-scale projects completed and functioning.

  • 300 community projects aimed at peacebuilding established to enhance the capacity of peace councils and community development committees.

  • Provision of electricity to Monrovia, including the procurement and installation of two generators and 1,200 light poles in the process of being installed street lights now in some parts of town; launching of tender for assessment for the transmission of electrical power in the Monrovia area and rehabilitation of the substations in New Kru Town and Congo Town.

  • Rebuilding and repairing schools and increasing educational quality with the completion and inauguration of Zwedru High School, seven other schools in Nimba, Bong, Cape Mount, Bomi, Margibi and Montserrado counties through the United Nations Office for Project Services Quick Impact Projects; fabrication of 2,000 school benches by the Ministry of Education, in addition to 10,000 being produced through the assistance of the United Nations Educational, Scientific and Cultural Organization; enhancing school attendance to 570,000 pupils and 24,000 school staff in 14 counties.

  • Repair and rehabilitation of government buildings.

A performance review of the 150-Day Action Plan suggests that good progress overall was achieved on most of the targets – about 70 percent of deliverables were completed, while about 28 per cent were initiated and are still ongoing, to be dovetailed into the Interim Poverty Reduction Strategy (iPRS). This is a very strong record for a new government in a difficult post-conflict setting.

While the government is proud of its accomplishments, it is also mindful that it, along with its partners, fell short of implementing 100 per cent of the targets identified in the action plan. Factors limiting attainment of original targets seem to be related to governmental units, specifically: capacity constraints; slow draw downs of funding on account of a steep learning curve in new financial management and procurement procedures; over-ambitious initial targeting; unforeseen tasks that came up in the course of the period; and less-than-expected disbursements by donor partners. There were also some methodological problems in the measurements, especially of the large volumes of qualitative tasks that were not fully appreciated at the outset. These lessons, internalized and discussed by the national cabinet and key partners, are being fully factored in the design of the benchmarks and targets for measuring iPRS interventions.

CHAPTER THREE The Interim Poverty Reduction Strategy Process and the Transition to Sustained Development

3.1 Introduction

The design, formulation and drafting of the Interim Poverty Reduction Strategy (iPRS) comes as a result of a bottom-up consultative approach. The process has been inclusive and participatory, involving key sectors and stakeholders across a wide spectrum of Liberian society, right up to the national cabinet. Views and inputs were solicited from all counties, line ministries, superintendents and development superintendents, academia, civil society organizations (CSOs), tribal leaders, donors, non-governmental organizations (NGOs) and grassroots organizations.

3.2 Interim Poverty Reduction Strategy Preparatory Governance Framework

An all-inclusive governance structure for preparing the iPRS was adopted (see figure 3.1). The framework has six main hierarchical but interactive components. At the apex is the cabinet, which took responsibility for the final endorsement and ownership on the part of the government. Below the cabinet sits the Liberia Reconstruction and Development Committee (LRDC), chaired by the president, which provides a donor-government partnership framework for coordinating the national reconstruction and development agenda. The LRDC provided overall policy guidance and assured the necessary political will in the preparation and drafting processes (see figure 3.2). The LRDC is also responsible for coordinating and monitoring the implementation of the iPRS.

Figure 3.1:
Figure 3.1:

Interim Poverty Reduction Strategy Paper Drafting Process

Citation: IMF Staff Country Reports 2007, 060; 10.5089/9781451822922.002.A001

The foundation has been laid for ensuring a more comprehensive participatory process for the full Poverty Reduction Strategy (PRS).

A PRS Preparatory Committee (PPC) was established to assure the quality, policy coherence and strategic coordination of the process and strategy, chaired by the Minister of Planning and Economic Affairs. Members were drawn from the LRDC to act as pillar chairpersons, the legislature, CSOs, private sector organizations, youth and women’s groups and other development partners to reflect and represent critical stakeholder interests. A Technical Support Team (TST) was established, chaired by the Deputy Minister of Planning and Economic Affairs and comprised of staff from the Office of the President, Ministry of Planning and Economic Affairs (MPEA), Ministry of Finance (MoF), Ministry of Agriculture (MoA), Liberian Institute for Statistics and Geo-Information Systems, the Central Bank of Liberia (CBL), the European Commission, the World Bank, the International Monetary Fund (IMF), the United Nations Mission in Liberia (UNMIL), the United Nations Development Program (UNDP) and CSO and NGO representatives. The TST provided technical support and advice to the PPC on progress of the Interim Poverty Reduction Strategy Paper (iPRSP) and UNDP and the World Bank provided dedicated technical support and advice.

The pillar working committees were responsible for galvanizing inputs from sectors and cross-cutting groups and for conducting technical consultations. Each pillar working committee had to describe the existing post-conflict situation, reform problems and inherent structural weaknesses. Committees were also requested to propose strategies to deal with the problems. These inputs were expanded during stakeholder consultations and then passed to the TST. In each case, national actors drove sector-level work.

Figure 3.2:
Figure 3.2:

The Liberia Reconstruction and Development Committee Organizational and Management Structure

Citation: IMF Staff Country Reports 2007, 060; 10.5089/9781451822922.002.A001

3.3 The Participatory Process

The process of participation and consultation, which began on 12 May 2006 and ended in November, provided important opportunities for Liberians to contribute to the formulation, implementation and monitoring of a policy to reduce poverty. Specific objectives of the consultative process were to:

  • Inform the population, donors and other key stakeholders of the process, their role in its formulation and consequently enhance their participation in the entire process;

  • Generate information on the dimensions, coping mechanisms and trends of poverty; and

  • Get first hand information on the impact of past and present government policies.

Participatory discussions were conducted at all levels, involving administrative and technical persons, elected leaders, women and youth representatives, representatives of CSOs and NGOs, the private sector and the donor community. In all, 15 counties, county and development superintendents and tribal and clan chiefs conducted discussions to capture experiences, concerns, values and aspirations to help shape the strategic priorities of the iPRS. This built upon earlier, broad-based consultations led by the Governance Reform Commission (GRC) and in the preparation of the Results Focused Transitional Framework (RFTF). The following consultative sessions were held:

A Partners’Retreat – held on 12 May 2006 in Monrovia, attended by key stakeholders, including the United Nations Country Team, the World Bank, CSOs, youth and women’s groups, and the government. The session was chaired by the MPEA, with moderators drawn from civil society. Key decisions were taken on the framework of the iPRSP and the consultations strategy.

A Civil Society Consultative Session – held on 20 May, attended by county superintendents, development superintendents, representatives from CSOs, NGOs, business groups, local associations, women’s organizations and several cabinet ministers (Ministry of Internal Affairs, MPEA, Ministry of Gender and Development and Ministry of Information, Culture and Tourism). Heads of some state-owned enterprises and representatives from the donor community also participated.

A Technical iPRSP Working Session – sponsored by the World Bank and facilitated by the government, this was conducted on 27 May in Monrovia. The workshop brought together technicians involved in the drafting process. The objective was to do a sensitivity analysis on the content and data requirement for the strategy paper and learn from other experiences in the preparation and message of such papers. Resource persons from the government, the World Bank, the United Nations and other key donor partners participated in the working session.

Regional and County Level Consultations – held nationwide in 14 of 1 5 counties on 29 May under the leadership of the county superintendents. Consultations in the remaining county Grand Kru were held on 31 May.

A Preparatory Committee Working Session – held on 5 July. Members of the Senate and House of Representatives Standing Committees on Planning and Economic Affairs attended the session, along with heads of development partner agencies, CSOs, NGOs and institutions of higher learning. The meeting provided an opportunity for PPC members and other guests to review and provide comments on the initial draft of the strategy.

A Partners’Meeting – held on 12 and 13 July, attended by major donors, cabinet members, legislators, CSOs and United Nations agencies. The iPRSP was presented and additional comments and suggestions were received, which helped improve the substance of the document. Particular emphasis was placed on policy coherence and specificity of planned interventions.

First Working Session of Cabinet – was held on 14 July focusing on the need to ensure that sector and pillar priorities were realistic and consistent with the 2006–2007 priorities and fully reflected in the policy matrix. This was followed by periodic cabinet briefings, discussions and a final endorsement in late October.

Working Session with Political Parties – organized on the draft iPRS in November. Members of all political parties were present and it provided an opportunity to build consensus on the key axis of the iPRS. Earlier in August, copies of the draft iPRS were sent to political parties for review and comments.

A nationwide validation exercise – undertaken for all 1 5 counties in November involving county superintendents, the development superintendents, county education officers, county health officers and major NGOs. The validation provided the opportunity for the draft iPRS to be debated and consensus built among the civil society around the key pillars and agenda for the iPRS period.

Second Working Session of Cabinet – held 1 December. The final draft, incorporating final comments, was considered and endorsed.

3.4 Main Consultation Messages

During the consultations, participants were asked to clearly articulate their main concerns and propose reforms to respond to the development challenges in Liberia. There were many similar views relative to the reduction of poverty, but some differences did emerge based on the location and circumstances of counties. A review of the outputs of the various consultations suggests that certain policy inferences can be drawn, including the need for capacity-building, wider participation irrespective of region, ethnicity, age and gender, a robust private sector and a sound macroeconomic policy environment. Box 3.1 sets out the key messages heard with respect to each of the four pillars. A summary of views from each of the 1 5 counties can be found in Annex I.

Key Messages from the Consultation Process

Security Pillar

  • Ensure recruitment into national security agencies is quality based and reflects regional, ethnic and gender dimensions.

  • Ensure training and refresher courses for the new army, national police and other statutory security agencies reflect democratic principles and the elimination of corrupt practices through concrete reform measures.

  • Increase youth participation in development programs to minimize their idleness and reduce the risk of youth involvement in criminal activities.

  • Strengthen the presence of coastguards and the Bureau of Immigration and Naturalization to prevent illegal activities along border posts.

Economic Revitalization Pillar

  • Encourage private sector investment to create more employment and organize and provide micro-credit to petty traders, especially women, who make up a large segment of the informal sector.

  • Provide training and capacity-building opportunities for owners and workers of small and medium scale enterprises.

  • Facilitate access to financing (loan schemes) to start businesses by those traditionally left out, such as women.

  • Reduce the impact of the dual currency situation, which undermines the Liberian Dollar and increases financial risks and insecurity.

  • Strengthen and improve the broad macroeconomic policy environment.

  • Facilitate the development of Liberian entrepreneurs and their meaningful participation in the economy.

Governance and Rule of Law Pillar

  • Conduct periodic workshops, seminars and/or refresher courses for local government officials, staff of line ministries and agencies, legislators and judicial officials.

  • Strengthen rule of law processes and systems and the administration of fair and accessible justice.

  • Instil transparent and accountable practices in the national police force through procedural and legal reforms and independent oversight.

  • Prioritize transparency and accountability in the government.

  • Decentralize the functions, decision making and operations of the government.

Infrastructure and Basic Services Pillar

  • Prioritize the reconstruction of infrastructure in the areas of farm-to-market roads, health, education, communication, providing safe drinking water, electricity and county administrative offices and so forth.

  • Sensitize the population to engage in community development initiatives in such areas as road construction, farming and education.

  • Establish and promote outreach programs for cholera, diarrhoea, malaria and HIV/AIDS preventions.

  • Build the capacities of government offices with trained personnel and logistical support, including at the county and district levels.

3.5 The Bridge Between the 150-Day Action Plan Implementation and Beyond

The iPRS uses the 150-Day Action Plan as a launch pad consolidating and building on the progress made during the first 150 days, and identifying and prioritizing actions for the government between June 2006 and June 2008. Moving beyond short-term emergency planning, the government has embarked on its poverty reduction strategy as a tool towards achieving the Millennium Development Goals (MDGs) and the iPRS represents the beginning of a systematic and strategic approach for development management, which promises to transform the economy and society of Liberia.

Crossing the bridge to sustained development, the Government of Liberia will continue to design and implement targeted strategies and programs for poverty reduction while increasing emphasis on broader national development within the framework of a shared national vision. To this end, the 2006–2008 iPRS will be followed by an MDG-based poverty reduction strategy, covering the period 2008–2012. This will be followed by a socio-economic transformation strategy (SETS) aimed at ensuring sustained growth and development. It will also provide targeted programs to further address the structural constraints that contribute to the persistence of poverty. As seen in figure 3.3, SETS will cover the period between 2012 and 2015 and emphasize social and economic transformation, specifically developing high growth sectors and a globally competitive economy to provide the basis for ensuring widespread prosperity in Liberia.

Figure 3.3:
Figure 3.3:

National Development Planning Process

Citation: IMF Staff Country Reports 2007, 060; 10.5089/9781451822922.002.A001

3.6 Pillars of the Short and Medium Term Strategy

As an overall framework, the government has prioritized key development issues into four pillars in order to provide core areas of strategic intervention to address poverty in all its dimensions, including income and non-income poverty. The pillars enhancing national security, revitalizing economic growth, strengthening governance and the rule of law and rehabilitating infrastructure and delivering basic services formed the targets of the 1 50-Day Action Plan and will also extend through the iPRS and the full PRS (see figure 3.4).

Figure 3.4:
Figure 3.4:

The Four Pillars as a Strategic Framework

Citation: IMF Staff Country Reports 2007, 060; 10.5089/9781451822922.002.A001

In fact, these pillars form the essential building blocks for the realization of an MDG-based recovery, reconstruction and development process and the ongoing fight against poverty. In a post-conflict environment of extreme and widespread poverty with a very weak economy, absence of employment opportunities, little or no socio-economic infrastructure and high household dependency rates, everything is important and at worst, urgent. Yet financial resources and capacities are very limited.

As acknowledged by the President of Liberia, sustainable peace will largely depend upon the ability to deliver basic social services in urban and rural areas. Similarly, without basic infrastructure and rule of law, investments needed to fuel growth will not be forthcoming. Governance and the rule of law provide the institutional base for strong economic performance and poverty alleviation and, justice is what’s needed to ensure that grievances are settled through dialogue within the political system, rather than through violence. This mutual reinforcement provides the strong basis and justification for focusing on these elements and represent, in military parlance, the soft ‘underbelly’ of the Liberian post-war challenge.

Only careful prioritization and a robust sequencing of actions will help the Government of Liberia reach key medium-term priorities. These include:

  • Completing the reform of the security sector;

  • Revitalizing agriculture to ensure growth that is favorable to the poor;

  • Rebuilding the nation’s road network;

  • Accelerating human resources development;

  • Strengthening the environment for private sector growth;

  • Creating jobs;

  • Promoting good governance and the rule of law.

As the linkages in Figure 3.4 suggest, success in addressing issues within the four pillars is expected to facilitate job creation and improve service delivery, representing an organizing framework to make progress on other issues as well. Broad-based economic growth, with a direct focus on job creation, capacity-building and service delivery are interconnected and mutually reinforcing, laying the foundation for peace, security and development.

The framework will be further developed and strengthened during the PRS process. Preliminary results of the 2008 population and housing census along with additional data and inputs gathered through participatory poverty and program impact assessments will be used to enrich the analysis during the PRS process. For now, a critical effort during the iPRS period will involve building a socio-economic and demographic database to ensure the formulation of a robust poverty reduction strategy. Key objectives and actions for each pillar during the iPRS period are described in detail in the next four chapters.

PART TWO COMPONENTS OF THE STRATEGY

CHAPTER FOUR Pillar One: Enhancing National Security

4.1 Major Challenges

Over the years, security forces have been used to terrorize the population and intervene in the political process without respect for due process or law. Today, the security sector in Liberia is dysfunctional due to several key problems: lack of professionalism; absence of democratic control; absence of accountability to the rule of law; weak oversight mechanisms; and inadequate resources. A complete overhaul of the armed forces, police force and other security forces following the devastation of the civil war is required to help enhance national security.

Another major challenge is completing the process of reintegrating refugees and internally displaced persons (IDPs), ensuring they are back in their communities with productive livelihoods. Liberian youth, which account for nearly half the population, were subjected to marginalization and various forms of exploitation before and during the war and this has created a highly militarized youth population. Lack of interest in the value and promise of education is contributing to the growth of illiterate youth; economic opportunities for trained youth remain very limited. These challenges, coupled with the breakdown of traditional values and norms, make the youth situation a highly volatile security challenge. Ex-combatants and youth do not have access to job and employment opportunities, increasing the risk of a return to violence.

Gender-based violence (GBV) remains prevalent in Liberia and is a special security concern. A GBV task force has been established as part of the 150-Day Action Plan. The United Nations has also put in place additional measures and mechanisms to deal with sexual exploitation and abuse.

There are strong interrelationships between security, chronic poverty, justice and peace. The past has shown how vicious and symbiotic the cycle of poverty driving conflict and conflict driving poverty really is. Considering this, the approach of the government in addressing key sources of conflict, including poverty, will be holistic, taking into account the multidimensional nature of peace and security.

4.2 Initial Responses

The government’s immediate objectives were to launch a reform process to ensure the various security services serve the population and that all Liberians live in a stable and peaceful environment. First efforts by the government, as outlined in the 150-Day Action Plan, focused on:

  • Building a capable and democratically accountable military force by completing the demobilization of ex-combatants, recruiting the first 2,000 Armed Forces of Liberia (AFL) troops and initiating new training programs.

  • Strengthening national security institutions by undertaking a reorganization of all national security agencies, completing a national security review, developing a national security plan and demobilizing a significant portion of the Special Security Service (SSS).

  • Continued strengthening of the Liberian National Police (LNP) through completion of severance payments to non-qualified police personnel, continued recruitment of qualified personnel, re-equipping and logistical support to the LNP, restructuring and reform of the institution and opening women and child protection units in four LNP stations.

  • Facilitating the return of refugees and IDPs to their homes.

  • Aiming to achieve 20 per cent representation of women in the LNP recruitment process, in line with the draft gender policy. Training at the police academy also has an integrated gender component to address human rights abuses and GBV.

  • Establishing a GBV task force, which is now functioning and chaired by the Ministry of Gender and Development with representation from the Ministry of Justice, LNP, the United Nations Country Team, the United Nations Mission in Liberia (UNMIL) as well as international and local non-governmental organizations (NGOs). A national action plan on GBV will be launched before the end of 2006.

  • Ensuring that returnees are not discriminated against and have access to sustainable, basic services to ensure conditions of safety and dignity.

4.3 The Emerging Medium-Term Agenda

The government cannot take for granted current improvements in the security situation. Therefore, its medium-term approach is to develop a national security strategy to guide security sector reform, extend national security actions to ensure national safety, security and peace as well as build national security capabilities. These are especially important given the need for Liberia to take responsibility for its own security after the departure of UNMIL. Key elements of activities that the government will be pursuing are:

Reforming the security service

Intensifying ongoing efforts to reform the security service will include a comprehensive longer-term operational and institutional security reform agenda with national and regional implications in order to rationalize various security forces, facilitate a change in culture of the security forces, define clear missions and tasks and ensure there are no duplications, overlap or conflicts of interests between security agencies. Reforms will also take into account issues of security around natural resource-rich areas.

Ensuring gender balance, the integration of gender perspectives in the armed forces and police through representation at all levels and gender equality and human rights training is seen as a key reform component. Strong health programs for security forces with prevention and awareness campaigns for communicable diseases including HIV/AIDS will be undertaken, as well as programs to prevent environmental degradation by security agencies.

Strengthening national safety, security and peace

In its efforts to continue maintaining the peace, the government will begin implementing the next phases of the demilitarization, demobilization, reinsertion and reintegration process to help ex-combatants, demobilized soldiers and deactivated police reintegrate into communities and the economy. The government will also be addressing the needs of youth by ensuring that ex-combatants, especially those who do not qualify for enrolment in the new AFL and LNP, have access to opportunities for training, empowerment and reintegration. Juvenile and young offenders will also have access to real rehabilitation through the corrections system. The government will continue to protect returnees from discrimination and provide access to sustainable, basic services for a safe and dignified return.

Building national security capabilities

Ensuring that the new security agencies can maintain the peace following the departure of UNMIL is a key preoccupation of the government. As a consequence, efforts to train and rebuild the security forces will be intensified. Other key priority areas are: ensuring a smooth transfer from international peacekeeping to national security institutions in assuming the role of maintaining peace and security in Liberia; strengthening the judiciary and completing ongoing reform measures to enhance peace, human rights and justice, deepen democratic values in Liberian culture and substantially reduce gender-based violence; and building and implementing a conflict early warning system to monitor and respond to threats of uprisings/insurgencies, as mandated by the Economic Community of West African States for all national governments in the sub-region are the focus of the Government.

4.4 The Interim Poverty Reduction Strategy Agenda

The agenda for the Interim Poverty Reduction Strategy period, focused on maintaining peace and security, is presented in Table 4.1.

Table 4.1

POLICY OBJECTIVES AND EXPECTED RESULTS FOR ENHANCING NATIONAL SECURITY FOR THE PERIOD JULY 2006-JUNE 20081

Broad Policy Goal: Maintain and consolidate peace and facilitate the national healing process.

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Additional deliverables will be produced as they emerge, or at the request of the president, with the availability of time and funding.

CHAPTER FIVE Pillar Two: Revitalizing the Economy

5.1 Major Challenges

A quarter century of crisis coupled with decades of fiduciary mismanagement has left the Liberian economy substantially deteriorated. Today, Gross Domestic Product (GDP) is one eighth of 1980s pre-war levels and, as productive sectors such as agriculture and forestry, mining, manufacturing and construction collapsed, so too did social and economic infrastructure. Economic management capacity weakened dramatically, infrastructure collapsed and the economy became dominated by a large informal sector characterized by low productivity and lack of innovation. Although there is a deficiency in up-to-date and reliable data for economic management and monitoring, major macroeconomic imbalances – reflected in large external and domestic debt overhang – have left the debt/export ratio of Liberia in excess of 3,000 per cent.

Designing appropriate policies and building critical economic management capacities to revitalize the economy (Annex 2) and create sustained employment opportunities are major challenges for the government. Unemployment in the formal sector, according to one source, is estimated at a staggering 80 per cent.9 High levels of unemployment amongst youth undermine poverty reduction and significantly contribute to security concerns. The collapse of infrastructure, agriculture, manufacturing and, to some extent. United Nations Security Council sanctions have all had a major impact on employment. Collapse of the timber and diamond trade are estimated to have lowered GDP by 31 per cent10 and resulted in losses of 25,000 jobs in timber and 1 2,000 jobs in diamonds.11 The deterioration in rubber production has shrunk 50,000 jobs down to 10,000.12 Agricultural incomes in the crop sector have also plummeted, with productivity for cereals falling from 1,290 kilograms per hectare (kgs/ha) in 1998 to 917 kgs/ha today.13 Crop production is still below year 2000 levels.

Sustainable use of natural resources and strong environmental management is crucial for enhancing broad-based growth, creating meaningful jobs and reducing poverty. Proper natural resource management is also critical in reducing corruption and exploitation of resources to sustain conflict. A poorly utilized and polluted environment results in land degradation, which will not be suitable for agricultural productivity, human settlements and environmental sustainability. Although environmental laws and regulations are in place in Liberia, specific standards have not been set to monitor activities and enforcement capacity is weak. Guidelines for conducting environmental impact assessments or sustainable use of natural resources are yet to be established. Additionally, there are major policy deficits regarding land use and tenure, with significant implications for growth in agricultural employment.

Significant inequities in income and assets exist and a significant gap regarding women’s access to and controlling of land, economic information and credit. Although women make up a large percentage of small-scale traders in the markets around the country, no policy exists to support small-scale enterprises.

A lack of reliable and timely data is a critical issue faced by post-war Liberia. Reliable data are required for policy formulation and implementation and is necessary to monitor progress and promote accountability and transparency in decision-making processes. Decades of abandonment have left Liberia’s capacity for information and statistical gathering, analysis and management in a serious state of disrepair. Strengthening the national statistical system and information management of the government will mean considerable investments in human capital, development of a national information technology policy, investing in an information technology infrastructure, logistics and finance.

5.2 Initial Responses

The government’s short-term objectives have been to stabilize the economy, create jobs and restore the government’s credibility in using the country’s scarce resources efficiently and effectively. To guide its actions, government quickly finalized and embarked on a Staff Monitored Program in conjunction with the International Monetary Fund (IMF) in order to strengthen economic management and establish the basis for further progress under a successor fund program and eventual debt relief under the enhanced Highly Indebted Poor Country (HIPC) initiative and ultimately the multilateral debt relief initiative. Simultaneously, the government introduced key components of the Governance and Economic Management Assistance Program (GEMAP) and formulated and implemented a set of targeted interventions within the 150-Day Action Plan. Of critical importance was the government’s quick establishment of a functioning budgetary process, which covered preparation, execution, internal and external controls and reporting. The government is also in the process of strengthening the main revenue-generating agencies and working to make the operations of the Central Bank of Liberia (CBL) and the banking system fully market-based and transparent. Key achievements to date include:

  • Successful implementation of an ambitious IMF Staff Monitored Program, resulting in greater focus on reforms needed to revitalize the economy and move Liberia on the path of orderly relations with financial institutions;

  • Implementation of measures to strengthen tax compliance, leading to a significant increase in revenues between February and October 2006;

  • Re-establishment of the cash management committee and implementation of related expenditure policies and financial management rules to contain spending within available cash revenues;

  • Measures to clean up the civil service payroll of ‘ghost workers’, resulting in substantial budgetary savings;

  • Settlement of a substantial part of civil service salary arrears, accumulated by previous administrations;

  • Verification of domestic debt and vendors’ arrears accumulated by the previous administrations and development of a resolution strategy aiming to bring order and confidence to the financial relations between the private and the public sectors;

  • Increased transparency in fiscal management through regular publication of fiscal reports;

  • Initiation of the review of concessions and contracts granted under the National Transitional Government of Liberia (NTGL);

  • The creation of the public procurement and concession commission to curb corruption in procurement and concessions processes by the private and public sectors;

  • Reform and improvements in CBL operations focusing on making the banking system fully market-based and transparent;

  • Preparation and publication of the monetary policy framework paper;

  • Rebuilding of main revenue generating agencies Robertsfield International Airport, National Port Authority, Liberia Petroleum Refining Corporation, Forestry Development Authority (FDA), and Bureau of Maritime Affairs (BMA);

  • Cancelling non-compliant forestry and port concessions;

  • Provision of seeds and tools to at least 14,000 farmers, supplies for 1,800 fishermen, training assistance for at least 2,000 ex-combatants and food assistance for about 16,000 families through food-for-work programs;

  • Launching the Liberia Emergency Employment Program (LEEP) aimed at engaging more than 17,000 young people in some quick employment projects within the next year to two years.

With regard to environmental and natural resource management, the Environmental Protection Agency (EPA) is now institutionalized thanks to the establishment of its policy council and board of directors. The Forestry Reform Monitoring Committee (FRMC) was established to tackle commercial conservation and community aspects of the forestry sector, though the commercial aspect has been the main focus thus far. The passing and enacting of the Forestry Reform Law of 2006 will not only help ensure that the sector is managed in a sustainable manner, it was a requirement for fully lifting sanctions on timber. A United Nations/Government of Liberia Rubber Plantation Task Force was also instituted to ensure proper administration of state owned plantations.

A major constraint on effective policymaking has been the dearth of reliable data and statistics. Before the war, the Ministry of Planning and Economic Affairs (MPEA) regularly collected data price indices, trade, industrial production and energy consumption and conducted specialized surveys on, for example, agriculture, demography, population, labor force and employment. With the establishment of the Liberian Institute of Statistics and Geo-Information Services (LISGIS) by an act of legislation in November 2004, Liberia now has a dedicated national agency responsible for the collection and publication of official statistics.

A substantial amount of investment is needed to approximate pre-war capability. Targeted programs will be developed in collaboration with partners to build LISGIS’ capacity in order to be able to collect, analyze and disseminate statistics on national accounts, consumer price index, trade, environment, food security, and to conduct population and housing censuses as well as demographic and health surveys.

LISGIS is presently conducting the 2006-2007 Liberia Demographic and Health Survey and presented the roadmap of the 2008 Liberia Population and Housing Census to partners. Investment is needed to successfully carry out the key phases of the census, which will provide vital, up-to-date socio-economic and demographic information with benchmark data disaggregated by sex, age and economic/social characteristics. The cartographic work, which is expected to start in January 2007, will help build a new sample frame.

5.3 The Emerging Medium-Term Agenda

A key objective is to rapidly accelerate the pace of economic growth as the foundation for poverty reduction and sustained development. Areas that show the greatest promise for a rapid rebound are agriculture (including fisheries), forestry, wood processing, diamonds, iron ore, rubber and urban services. Manufacturing is also expected to contribute to growth, starting with simple products such as furniture and beverages. Later, agro-processing and light manufacturing products could be developed to service local demand and export competitively in the region, Europe and United States. On the basis of governmental policy reforms, the gradual rebound of exports as remaining United Nations sanctions are lifted and donor-financed reconstruction activities, GDP growth is expected to approach 7-8 per cent over the next year, a rate which the government will aim to sustain over the medium term.

Fiscal policy and management

Building on the progress achieved in its first 11 months, the government will implement several measures aimed at broadening the tax base and increasing revenues, including: expansion of the pre-shipment inspection program to rural ports; expansion of the computerized bank payment slip revenue collection system to cover miscellaneous taxes, the Port of Monrovia and Robertsfield International Airport; increasing the excise tax on beer and cigarettes; reducing import tax exemptions, including through better management and monitoring of non-governmental organizations and religious organizations; redefinition of the base of the goods and services tax, in line with the provisions of the 2000 Liberia Revenue Code (LRC); rigorously implementing a program to collect overdue tax/duty obligations; and strict enforcement of Executive Order Number Three, which centralizes revenue collection in the Ministry of Finance (MoF).

The government will advance work on the comprehensive import tariff reform to move Liberia towards the Economic Community of West African States (ECOWAS) Common External Tariff and begin implementing other recommendations from the May 2006 IMF tax policy mission (for example, on the income and goods and services tax). A key focus will be to uproot corruption in revenue administration, in particular by addressing weaknesses in the large taxpayers’ and customs units and restructuring the revenue department, including the possible outsourcing of customs with support from the European Commission.

The government will continue the effective operation of the cash management committee to ensure that spending is contained within the actual monthly revenue envelope and follows prioritized cash plans. With technical assistance from the IMF and World Bank, as well as from other partners, the government will work to strengthen public expenditure management capacity through the implementation of an interim commitment control system and full implementation of a new public procurement and concessions act. A substantial expansion of technical assistance and capacity-building under the World Bank-financed resource management unit will further strengthen financial management and policy making at the MoF, which includes automating processes.

To ensure more efficient management of an important revenue source, the government has submitted legislation to integrate the BMA into the MoF. Similarly, the government has submitted legislation to integrate the Bureau of the Budget (BoB) into the MoF, with a view to improving budgetary processes. A key element of these legislative changes is limiting the authority of the executive branch in effecting budgetary transfers without legislative approval. Further, the government has eliminated the practice of a parallel ‘development’ budget, thus ending the fragmentation of the budgetary process and allowing the exercise of an integrated oversight of resource allocation.

Recurrent expenditures aimed at restoring the orderly functioning of public administration still dominate the budget, limiting the scope for shifting resources into more spending for the economic and social sectors, which together only account for about 30 per cent. While such a pattern of spending is understandable in a country emerging from prolonged conflict, the government is committed to containing personnel-related spending in order to facilitate the financing of programs with visible, on-the-ground impact. Efforts to remove ghost employees from the payroll and to facilitate the departure of redundant and retirement-age staff have progressed well. As a first step in addressing the grossly inadequate civil service pay levels, the budget includes an envelope to increase civil service salaries while cleaning up payroll irregularities as a means of containing personnel spending.

Monetary and exchange rate policy

The main objective of the CBL will be to maintain price stability, as its monetary policy role is limited due to the extreme ‘dollarization’ of the economy. The current system of foreign exchange auctions will continue as a way to manage the pace of increase in domestic liquidity. Efforts will be made to build up foreign reserves consistent with the objective of maintaining stability in exchange rate. Strengthening the capacity of the CBL will give it the ability to manage liquidity and supervise the banking sector to facilitate development of the financial sector. Notwithstanding the projected widening of the trade deficit, external reserves are expected to increase slightly. Inflation should remain modest at around eight percent, underpinned by a relatively stable exchange rate.

The Liberian economy continues to operate under a dual currency system United States Dollars and Liberian Dollars. A range of reforms to pursue credible macroeconomic policies, develop Liberia’s financial system, improve the health of the banking sector, strengthen governance and secure peace and stability will, in due course, allow for a market driven ‘de-dollarization’ of the economy.

Management of state-owned enterprises

While unlikely to be accorded high priority during the implementation period of the Interim Poverty Reduction Strategy (iPRS), initial thinking will be further deepened with respect to the management of a number of state owned enterprises, presently benefiting from direct support by the government. The principal objective would be to reduce, as quickly as possible, the dependence by most of these entities on the public treasury, primarily through processes of capacity development involving their staffing and systems. The government is also committed on a one-off basis to absorbing significant liabilities inherited form previous governments in any of these enterprises, with a view to assisting them to move to commercial feasibility as quickly as possible. Most state owned enterprises are already under strict monitoring and restructuring within the GEMAP framework, with many already showing positive signs of enhanced fiscal and operational performance. Once the state owned enterprises are stabilized, clearer national strategies would be formulated in respect of their longer term practicality, either through privatization of their management via contracts, concessions or outright equity, or other financial restructuring options.

Revitalizing agriculture

Prior to the war, Liberia achieved over 50 per cent food self-sufficiency (mainly rice and cassava). It also produced cash crops (rubber, cocoa and coffee) from which farmers earned income and the government received tax revenue, foreign exchange and other benefits. Poor governance and civil wars all but wiped out these gains, leading to even lower labor and land productivity and minimal economic returns that characterize the smallholder sub-sector where the majority of Liberians earn their livelihood.

The government recognizes the major role the agricultural sector could play in economic recovery. Agriculture is the largest productive sector historically and can provide a proven and reliable base for transitioning Liberia’s war-affected people and communities from relief to recovery and eventually development. The ‘Statement of Policy Intent for the Agriculture Sector’ and associated ‘Action Plan 2006-2007’ provide a strategic framework for beginning to overcome obstacles to agricultural development and revitalizing the sector in the context of the iPRS.

Bearing this in mind, specific attention will be paid to the redevelopment and expansion of agricultural exports, especially in traditional areas of rubber and forestry products. Partly within the framework of the African Growth and Opportunity Act (AGOA), progress in the accession to full membership is already underway and related efforts will be made to revitalize production of other crops such as coffee, palm oil and cocoa for exports, with an emphasis on adding value domestically in secondary processing.

An important element of the strategy for agricultural revitalization and development is reenergized management and administration of private rubber plantations; activities at many were severely impaired during the civil war. Consequently, enormous tracts of lands previously acquired for rubber production have since been abandoned or are now being inefficiently hoarded or put to less economic uses. Using all necessary tools at its disposal, including taxation where necessary and through a more comprehensive review of land tenure and management arrangements, the government will move decisively to end inefficient practices to assure enhanced economic benefits from these plantations and other areas of inefficiency. An active policy of land tenure will be formulated to respond to situations of this nature. In addition, unlike practices in the past, public officials will no longer be permitted to procure from the state and speculatively hoard extensive holdings of private real estate property.

Revitalizing mining and forestry

Through increased government revenues and job creation, these sectors’ contributions will have important implications for rebuilding social services such as health care, schools and water and sanitation critical to the reduction of non-income poverty. Moreover, the multiplier effects of these sectors will provide a major boost for the economy. To remove uncertainty for private investors and rapidly pave the way for Liberia to start tapping into the benefits, the government will expedite decisions on the recommendations of the review of contracts and concessions signed during the NTGL period.

The government will also take advantage of the newly lifted forestry sanctions within the provisions of the recently enacted Forestry Reform Law of 2006. In addition, the necessary steps to meet international requirements and obligations to remove diamond sanctions will betaken.

The government is committed to adopting relevant international protocols and ensuring that earnings from extractive industries are used in an accountable and transparent manner to develop the economy for to benefit all Liberians. To help in this process, the government has solicited the assistance of the Extractive Industries Transparency Initiative secretariat on its plans to join the initiative.

While working to restore traditional sources of growth (mining, rubber, timber), the government will promote diversification in order to reduce the extreme vulnerability of the economy to international commodity price fluctuations. To do this, it will work with the private sector in identifying potential new sources of growth and on the development of related sector strategies. During the iPRS period, sector studies will be undertaken to identify opportunities within the global marketplace, examine market requirements and identify constraints.

Natural resource and environmental management

A key objective over the medium term is to strengthen natural resource and environmental management. Although the focus of the FRMC has been to tackle commercial, conservation and community aspects of the forestry sector, the latter two have not yet been adequately addressed to promote sustainable use of land and other natural resources.

Revitalizing and empowering the EPA is also considered a key step to effectively monitor and enforce environmental protection and management. Subsequently, necessary guidelines and standards such as for the environmental impact assessment and pollution control will be formulated and implemented. It will also allow relevant line ministries and agencies to face key issues emerging in the environmental sector.

Enabling private sector recovery and development

The economy of Liberia has traditionally been private-sector based and the country was once renowned for its open door policy towards foreign private investment. The government believes that the private sector must remain the main engine of growth in Liberia, propelling investment, creating jobs and facilitating the delivery of basic services. Growth led by the private sector will come mainly in the agriculture, mining, forestry, urban services and smaller manufacturing sectors at the formal and informal levels. But the private sector in Liberia also faces several policy, infrastructure and capacity constraints. During the iPRS period, the government will begin to address critical structural constraints and impediments to private investment and economic activity. These include:

  • Large informal sector – Liberia has an exceptionally large informal sector, currently generating as much as four times more employment than the formal sector. While it originally helped cushion the impact of an economic collapse, informality has significant economic costs, including high levels of tax evasion. The challenge for the government will be to implement programs and policies to help improve productivity and working conditions in the informal sector and correct credit market failures to enhance access to capital. As such, government interventions will focus on providing training and skills upgrading, enterprise support activities and enhance available credit facilities through micro finance and small and medium scale enterprise funds. In designing these interventions, special attention will be given to the obstacles faced by women and youth in gaining employment and starting businesses.

  • Access to energy – A lack of electricity in most of Liberia has come as a result of the destruction of the public national power grid; public energy generation and grid supplies are only now beginning to re-emerge in parts of Monrovia. Most energy will be fueled by private generators. Restoring generation capacity and grid distribution to ensure regular power supply to the country is critical and the management of fuel costs in production structures of enterprises will therefore continue to be major challenges in the coming years.

  • Access to finance – Limited access to finance, especially for women is a major economic constraint. Liberia’s financial sector is still rudimentary, dominated by an oligopoly of commercial banks, most of them weak. Desperately required micro-finance needed to kick start smaller businesses is only embryonic and supply remains well below demand for these services.

  • Land ownership and tenure – Land issues are a major bottleneck and reform is needed that includes changes in the traditional land tenure system to ensure more private ownership as well as land distribution to reduce long tenured excessive holdings and enhance land use.

  • Tax policy – The corporate income tax rate of 35 per cent is on the high end of the range in West Africa. The government will consider reducing it to 30 per cent in the context of the 2007-2008 budget in order to providing adequate incentives to investors and eliminate the need for special tax concessions. Likewise the government will also consider reducing the presumptive 4 per cent turnover tax applied to small traders and businesses to 3 per cent, in line with prevailing rates in the region, which are anywhere from 2-3 per cent.

  • Investment code – The current investment code has been in effect since 1956 (amended in 1975. It is out of date and inconsistent with the 2000 LRC. It needs to be revised to remove all references to tax issues, so that all tax laws are covered only in the LRC and instead, focus on non-tax factors inhibiting investment (for example, the discriminatory legal framework for Liberian versus foreign investors).

  • Telecommunications – The telecommunications market needs modernized laws and regulations with a clear separation of policy, regulatory and licensing functions. The government will soon submit legislation to address these issues and pave the way for further expansion in service provision and tax revenue, as envisaged in the budget for the fiscal year 2006-2007.

  • Administrative and Regulatory Issues – A host of administrative and regulatory barriers severely limit the ability of businesses to operate effectively. These include excessive business inspections by public officials, cumbersome work permits and other bureaucratic procedures, visa difficulties, unclear investment procedures and regulations and informal tax and customs procedures and charges.

The MoF, Ministry of Commerce and Industry (MoC&l) and the National Investment Commission (NIC) are initiating work with the Liberian Chamber of Commerce, Liberian Business Association and other professional associations to address these issues in the context of forging a stronger public-private partnership. A mini-diagnostic study of the local business environment, conducted by the Foreign Investment Advisory Service of the World Bank, presented a number of options for addressing the constraints in the enabling environment for private investment. The government has already taken steps to implement some recommendations and will implement most of the others in the course of the next year.

Employment and job creation

One of the government’s most important objectives during the iPRS period is to promote the rapid creation of significant numbers of jobs. Given the severity of the post-conflict unemployment situation currently confronting Liberia, rapid job creation is central to maintaining security (especially jobs aimed at ex-combatants and youth), jump-starting the economy, rebuilding infrastructure, generating income and fighting poverty. The challenge is to shape the revival of the growth process to promote to the fullest extent possible creation of productive, remunerative and decent employment for both men and women. This requires emergency short-term measures for immediate job creation as well as the establishment of an enabling socio-economic environment over the medium term to permit the private sector to lead the way in generating sustainable and productive employment. Expanding productive employment opportunities represents the core exit strategy from poverty.

The majority of jobs will be in the private sector: agriculture, mining and minerals, forestry, urban services and some light manufacturing. However the public sector, in cooperation with partners, has a key role to play, especially through public-private partnerships focused on labor-intensive infrastructure projects, urban sanitation and clean-up projects and other related initiatives. The government has already launched one employment initiative and will be implementing specific steps in the coming months to generate further employment (described in box 5.1).

Response to the Employment Crisis

A strategy for employment creation in Liberia launched by the president on 15 July 2006 provides for immediate emergency employment creation and lays the foundation for a longer-term sustainable employment strategy. It reflects a phased approach where the immediate concern is quick job creation, while simultaneously moving towards an employment program for sustainable development.

The strategy is composed of 5 key initiatives: (i) Boosting employment in public works investments; (ii) skills training; (iii) facilitating the graduation of the informal economy and boosting the small and medium enterprise sector and cooperatives; (iv) delivering credible labor statistics and labor market information and analysis; and (v) promoting social dialogue and strengthening labor administration. Work plans, based on additional data and analysis for each initiative, will be further developed and reflected in the full Poverty Reduction Strategy Paper (PRSP). Attention will be given to ensuring that women have access to employment in public works projects and skills training, and that labor statistics are disaggregated by gender.

While the iPRS focuses on the short term quick ‘wins’, the link with sustainable employment needs to be nurtured early on. Given the urgency of quick job creation, in particular for youth, the government has put together a National Public Works Program (NPWP) for the next six to 1 2 months and set up LEEP. Under the leadership of the Ministry of Labor (MoL) and in close coordination with the MoF and the MPEA, a LEEP/Liberian Employment Action Program (LEAP) unit was established to introduce coordination on job creation, maximization of employment in infrastructure and other investment, as well as to promote planning and integration of various employment creation programs. Local Box structures will be closely involved as the operationalization of the strategy must take place at local level. The LEEP/LEAP unit will act as a facilitator, managing the flow of information, avoiding duplication, integrating project interventions and enabling the development of regional economic development plans.

Against this background, a short term, quick win public employment creation program, supported by interventions aimed at stimulating productive activities in the private sector, will be pursued and implemented. Among the initiatives which would be taken at multiple levels are:

Decentralized Community Reconstruction Efforts – Ongoing community driven development initiatives by the government include the 15 County Plan (previously known as the 100 Villages Plan), the National Community Based Recovery initiative, the Liberia Agency for Community Empowerment and the Country Support Teams. In addition, there are a host of community projects that need to be strengthened and coordination improved to enhance their contributions to employment opportunities at the village and district levels. Successful pilots and best practices will be replicated to the extent possible.

Urban Services – An improving security environment, political stability, public finance stabilization efforts, expanding donor programs and the presence of United Nations peacekeeping troops are already contributing to employment growth in the service sector in Monrovia. Job opportunities are expanding in retail trade, restaurants, hotels and construction. The strategy is for the government to maintain stability, remove bottlenecks and delays associated with startup and the costs of doing business in the service sector. This should help provide employment opportunities for some urban-based retrenched government and security personnel and the large pool of unemployed.

labor-intensive public works – About 20,000 quick-impact and infrastructure-related jobs have been created since January 2006 through collaboration between the government ministries and agencies (public works, labor, defence, water and sewer) and partners. Through December 2006, a number of job creation initiatives will be supported by partners focusing on rehabilitation of roads and waste management. The shift beyond Monrovia is essential to encourage return to rural areas and reduce heavy overcrowding in Monrovia.

Short-Term Revival of Agricultural Production – Even in the short-term timeframe of the iPRS, the best prospects for widespread job creation is restoration of agricultural production through public-private partnership. To support this, the government will continue to ensure security and support the provision of seeds and basic implements to farmers, including women. The private sector will also be encouraged to establish post-harvest industries and services to create off-farm employment opportunities that will play a major role in supporting rural livelihoods. The government will also continue to support measures, including jump-starting concession arrangements to revive rubber production.

Statistics for development

Since a major challenge in economic analysis and policy formulation stems from the absence of reliable and timely statistics, the government will continue making sustained efforts to ensure national capacity for information gathering and dissemination is strengthened.14 A strategy for the development of the national statistical system will be prepared, with LISGIS at the core. Key surveys for poverty analysis are the foundation for policy formulation and planning of interventions.

Ensuring that adequate data and statistics are collected on issues pertaining to youth, gender and environment is particularly important. Gender-based economic planning is made difficult by the lack of gender disaggregated data and information. Government planning and policymaking processes, before the civil war and currently, are based on gender-blind data and statistics. Changing this will necessitate revising the approach to data collection by governmental ministries and agencies to ensure they are gender disaggregated. The World Bank, the United Nations Development Fund for Women and other partners have agreed to provide assistance in this regard. In addition, it is crucial to develop a national capacity to monitor and evaluate environmental information, which would be used to track progress on achieving the Millennium Development Goals (MDGs). The capacity to monitor water quality standards is the most glaring of the relevant examples.

Unfortunately, LISGIS lacks the technical skills needed to operate various stages of the data management process. In order to operationalize the agenda of the government with respect to data and statistics, capacity will need to be built within LISGIS. Also, the capacity to collect data and undertake analysis for monitoring and evaluation as part of the implementation of the iPRS and full PRSP will be developed.

5.4 The Interim Poverty Reduction Strategy Agenda

During the iPRS, period activities under the pillar for revitalizing the economy will focus on more efficient management of national resources, raising economic growth and creating jobs. These activities are presented in Table 5.1.

Table 5.1

POLICY OBJECTIVES AND EXPECTED RESULTS FOR REVITALIZING THE NATIONAL ECONOMY FOR THE PERIOD JULY 2006-JUNE 20081

Broad Policy Goal: Promote efficient and transparent management of national resources, improve the investment climate and accelerate growth and the creation of sustainable employment.

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Additional deliverables will be produced as they emerge, or at the request of the president, with the availability of time and funding.

CHAPTER SIX Pillar Three: Strengthening Governance and the Rule of Law

6.1 Major Challenges

The series of crises that besieged the Liberian nation over the last quarter century from war and mismanagement to human rights abuses and deepening poverty – can be blamed largely on bad governance. The war years were a low ebb in the history of Liberia, leading to widespread human rights violations and abuses such as deliberate and arbitrary killings, disappearances, torture, forced child soldiers, targeting of civilians, rape and sexual violence against women and children. Persistent bad governance practices have given rise to challenges that must be faced in the Interim Poverty Reduction Strategy period and beyond, including a change in the value systems and mindset of Liberians as well as a restructuring and strengthening of central and local governance institutions, systems and processes.

Women and children suffer from violence and abuse and do not enjoy the same rights as men. Traditional laws and practices that discriminate against women remain operational and, while the pivotal role of women in restoring peace to Liberia is widely known, few women’s organizations have the capacity to engage in policy making and fully participate in the new democratic environment in Liberia. The cohesion and political awareness women gained as a result of their role in the peace process is a significant opportunity to build upon and strengthen women’s organizations and engage them in the process of reconstruction.

6.2 Initial Responses

Since the signature of the Comprehensive Peace Accord and as part of the recently completed 150-Day Action Plan, the Government of Liberia has begun to address challenges and lay the foundation for good governance to restore hope in the justice system. Responses were designed to:

  • Redefine and refocus the mandates, structures and functions of public institutions;

  • Develop a comprehensive anti-corruption policy, strategy and implementation framework;

  • Define a successor body to the Governance Reform Commission (GRC) to continue monitoring the governance reform agenda and process;

  • Establish the Truth and Reconciliation Commission (TRC) and the Independent National Commission for Human Rights;

  • Develop a more professional and efficient civil service commission and cadre;

  • Initiate discussion on the relationship between the central and local governments.

The government has made significant progress in these areas. Hope is being restored. The anti-corruption crusade has begun (Box 6.1) and efforts thus far have been yielding positive results. Transparency and accountability in public financial management at all levels has increased and continues to improve, as indicated by the sharp increase in revenues and the operations of the cash management committee.

Combating Corruption in Liberia

Present efforts at combating corruption are substantial, particularly when compared to the past. Previously, most government operations were shrouded in secrecy; today they are open to the public. For example, a good number of civil society organizations were consulted and participated in the preparation of the national budget. The National Bar Association was consulted in drafting the constitution of the new Supreme Court of Liberia, while a broad cross spectrum of civil society was consulted or involved in determining appointments to other national bodies.

The government has also started to reform the public sector, beginning with reviewing and streamlining mandates, operations and procedures of agencies. Some progress is being made in investigation and prosecution of corruption. This is significant as it shows Liberians and the international community that it is no longer business as usual when taking up the fight against corruption. The government is working to strengthen the institutional base to fight corruption. Among efforts undertaken so far are the Governance and Economic Management Assistance Program (GEMAP) program, the enactment of the Public Procurement and Concessions Act (PPCA), the establishment of the Public Procurement and Concessions Commission (PPCC), and the adoption of a code of conduct for Liberian public servants. The government is also committed to joining the Kimberly Process Certification Scheme and the extractive industries transparency initiative to promote accountability and ensure that the nation’s resources are used for the benefit of the people.

Source: Government Reform Commission (2006), National Anti-corruption Strategy of Liberia (Draft).

The government, along with its international partners, has also established institutions to address conflict related legacies of the civil war and that will make the Liberian context more responsive to development interventions. Four of these stand out.

The TRC was established and has begun work to account for atrocities committed between April 1979 and October 2003 as well as to foster reconciliation within and between Liberia’s polarized communities. The GRC is working to restore and reform institutions of government and to ensure democratic self-governance that is inclusive, participatory and just. The Independent National Commission on Human Rights was established to fight a culture of impunity and protect and promote human rights, including economic, social and cultural rights. The University of Liberia established a Center for Conflict Transformation which aims to undertake research, offer courses and give policy advice. The capacity of Liberia’s civil society in this area has noticeably increased; there are at least 20 national non-governmental organizations (NGOs) that focus on peacebuilding initiatives and conflict sensitive development issues across the country, as well as many faith-based organizations and community-based organizations that undertake peacebuilding and conflict resolution in a variety of forms.

With respect to gender inequities, some progress has been made. Women in the legislature account for about 1 5 per cent of the entire body while about 33 per cent of county superintendents are women. Women constitute 31 per cent of the cabinet but it is estimated that they constitute only 4 per cent in the formal sector, often in the lower cadres of employment. Women are grossly under-represented in the judiciary with an estimate of 1 per cent in this sector. A gender-based violence (GBV) plan of action has been finalized. Its implementation will improve coordination of GBV interventions and address the multi-dimensional facets of GBV prevention and response. However, owing to the effect of conflict, there are serious institutional and technical capacity gaps to adequately addressing gender equality issues.

6.3 The Emerging Medium-Term Agenda

The key objective of the government is to strengthen governance and the rule of law to ensure Liberia does not witness conflict and gross violations of human rights again. Its aim is to lay the foundation for a new democratic culture, creating balanced development and promoting a culture of accountability. The purpose of governance will be to strive to meet the collective aspirations of the people. As such, the respect of rule of law in all spheres of national life, provision of equal opportunities and better economic and natural resources management to benefit all will be the cornerstone of the national agenda.

Government efforts will be aimed at unleashing the potential of each and every Liberian, ensuring good economic governance to lay the foundation for a strong economy that is sustainable and growing rapidly, as well as rebuilding national institutions to guarantee rights assured to all Liberians by the constitution. Transparency, accountability and the rule of law will be the watchwords of governmental policies. Key elements of the emerging short to medium term agenda are highlighted below.

Reforming and rebuilding the public sector

The destruction of public institutions is a critical constraint on which the government will be focusing attention. Political patronage and the effects of war mean that Liberia’s current civil service disproportionately reflects high numbers of unskilled workers with little technical capacity necessary to deliver services. The dysfunctional public sector is in need of both short-term change management as well as more comprehensive reform. Ongoing reforms will be deepened to ensure the public administration becomes an agent for change, development and socio-economic transformation. Efforts will also be focused on creating operational and institutional capacities for public sector management, service delivery, public policy analysis, formulation, implementation and monitoring. The government will also seek support to equip government ministries and agencies with the hardware needed to make them functional and effective. The government will also be exploring with bilateral and multilateral development partners the broader parameters of capacity-building needs in Liberia.

Reducing corruption

Rampant corruption in Liberia has prevented national development and contributed significantly to the pervasiveness of poverty. The government has therefore declared war on corruption and will use all conceivable legal resources to tackle it forcefully and effectively to recapture state resources for national development. The government has therefore adopted a zero tolerance policy to be implemented within the framework of a comprehensive anti-corruption strategy and law (Box 6.2). In addition to the anti-corruption strategy and act to be passed and implemented, GEMAP will be used to develop systems, institutional mechanisms and to build capacity for the fight to eliminate corruption in Liberia.

The Draft Anti-Corruption Strategy

The overall objective of the strategy is to seriously fight corruption in a holistic, systematic and sustainable manner that promotes the effective participation of all Liberians and other stakeholders. The objectives of the strategy are to:

  • Break the aura of impunity that has contributed to massive corruption;

  • Fight corruption at every level of society and by each member of society;

  • Build and sustain an environment that deters and punishes corruption and promotes accountability, integrity and transparency at all levels in all institutions;

  • Ensure that the fight against corruption is informed by the inputs of all Liberians to facilitate ownership;

  • Create public awareness of the causes and effects of corruption and the role each Liberian can play to prevent and eradicate corruption;

  • Ensure that the fight against corruption is driven by the political will of all branches of the government, and supported by the donor and international community;

  • Ensure transparency so that everyone knows when, how and by whom specific measures will be taken in fighting corruption, thereby preventing suspicions and charges of witch-hunting;

  • Effectively monitor through oversight bodies and mechanisms that involve the participation of civil society; and

  • Encourage all stakeholders to contribute towards the formulation, implementation and evaluation of this strategy, while providing them the opportunity to develop and implement individual strategies.

Key elements of the strategy for an effective fight against corruption include: poverty alleviation through implementing pro-poor policies; public sector reforms; development and implementation of a national system of integrity; expeditious enactment and rigorous enforcement of anti-corruption laws and rules; creation of an anti-corruption commission; strengthening of oversight institutions and watchdog bodies and mechanisms; public awareness/education on the destructive effects of corruption; and prevention.

Source: Government Reform Commission (2006), National Anti-corruption Strategy of Liberia (Draft).
Decentralizing political governance and social responsibilities

Linked to national reform efforts will be a strategic program to decentralize and disperse power from Monrovia in order to bring it closer to the people. The design and implementation of the decentralization program will be guided by a strategic review within a full participatory process and sound legal framework. When designed and implemented, it will be accompanied by strong capacity-building, institutional development programs and resource allocation to ensure that local authorities understand and can manage the new responsibilities.

Another key priority will be developing strategic responses to promote national, regional and local inter-group reconciliation, as well as to resolve key conflicts that undermine national security and poverty reduction. While a particular ministry or government institution might take the lead on training, capacity-building or even the identification of strategic responses to conflict, innovative inter-ministerial responses are likely required in order to properly address protracted, multi-faceted conflict factors.

Strengthening the rule of law and respecting human rights

The Government of Liberia will promote and defend the rule of law and human rights with attention focused on strengthening core institutions such as the police, prosecution, judiciary and corrections service, the legislature and civil society through training, capacity-building and infrastructural improvements. The government will also strengthen programs for increased access to justice and legal literacy for all Liberians, with a special focus on women and children.

A thorough review of Liberian laws, including traditional laws, alongside international obligations and human rights standards will help identify existing gaps and required law reforms. The government understands the importance of educating future judges, prosecutors, public defenders and lawyers and will work to strengthen law schools and legal education in Liberia. Also vital to promoting a democratic culture and strengthening the rule of law are institutions such as the Independent National Commission on Human Rights. Reforms embarked upon by the government will enhance the balance of power and ensure the three branches of government can provide checks and balances needed for democratic development as well as judicial independence.

Conflict-sensitive policymaking and conflict management

Though significant efforts to address the conflict legacy of Liberia are already being made, the need for policymaking and planning to be conflict sensitive and for conflict management capacity to be enhanced at all levels of government is critical to poverty reduction. To achieve this, training and capacity-building focused on analytical and evaluative skills for conflict-sensitive development will be given to representatives in all ministries and local government institutions. Training in conflict management and resolution will also be conducted and mechanisms put in place within ministries and local government institutions to resolve conflict.

Addressing gender inequities

The government is committed to developing new mechanisms and systems of gender mainstreaming in the design, implementation, monitoring, evaluation and reporting of all policies, plans and programs. To guide this process and to advance the agenda for gender equality, a national gender policy will be developed to provide a legal framework and basis for various efforts to ensure gender-based development. Efforts will include filling institutional and technical capacity gaps to adequately address gender issues, including equipping the Ministry of Gender and Development (MoG&D) to lead governmental efforts at ensuring gender equity. The Ministry of Justice (MoJ) and MoG&D will jointly develop and carry out a program to strengthen gender justice. Given the absence of data, information and analysis on the situation of women in Liberia, a key emphasis will be information gathering, data collection and policy analysis. A national gender assessment, on which to base gender-responsive interventions, will be undertaken as available data are obsolete. The gender study will highlight disparities, including those between male and female-headed households, in an effort to understand the constraints and dynamics at work between individuals and household types. This would allow the systematic integration of gender equality into national programs, including national plans, policies and annual budgets.

Strengthening the environmental rules and regulations

The lack of interest and weak technical, administrative and institutional capacity has affected proper environmental protection and management programs in Liberia. Due to lack of good governance and rule of law, natural resources were used by various warring factions to fuel civil conflicts. The government will strive to ensure that all activities are initiated within the framework of environmental sustainability. Mechanisms will be developed to enforce and monitor the environmental rules and regulations.

Involving broader participation in the governance process

Governance is a collective endeavor and not just the domain of government, especially in Liberia following a quarter century of crises. The Government of Liberia will continue to engage the public and international partners in its rebuilding and reconstruction efforts. This is particularly important because broad support from local and international partners is needed to ensure the success of government programs.

In engaging the public, the government will strive to support the development of a strong civil society that fully participates in governance and a media that is open, free and impartial to allow journalists to promote dialogue and ensure that officials/leaders are accountable to the public for their actions. Civil society and the private sector will be challenged to advance and defend the interests of the people and to help in finding solutions to social, economic and political problems as well as provide a forum for free expression and collective action. The government is committed to creating strong partnerships with civil society organizations (both nationally and internationally) and the private sector to collectively fulfil the needs of the people. The government will create an enabling environment for civil society organizations to operate, close the regulatory vacuum and collaborate with development partners to provide capacity-building programs for civil society organizations and the media in an effort to better fulfil their roles in building a new, democratic Liberia. The government will also ensure that Liberia continues to be a good neighbor in West Africa and that it maintains good international relations. Given the massive cost of reconstruction, the social needs and the unsustainable debt burden (including domestic debt), closer cooperation with the donor community and multilateral financial and development institutions is a high priority for the government.

Enhancing youth development and involvement in the development process

The new national youth policy highlights the need for youth to be institutionally included in decision making. Next steps will begin with the institutionalization of the national youth policy through enactment into law by the legislature, committing the government to policy formulation and budgetary allocation to positively impact youth in a number of key areas, especially education and life skills, economic governance and HIV/AIDS, among others. Approaching youth issues in a holistic manner would include enabling the implementation of the national youth policy action plan, which maps out strategies for the implementation of the policy.

A critical area for Liberian youth over the medium and longer term is expanding participation in sports. Considering how many young people are not fully or gainfully employed at the moment, opportunities abound to tap into the enormous national potential from sport. Sport could serve as a safety valve for over-zealous unemployed or underemployed young people who otherwise fall prey to demagoguery and political exploitation. Sport could also be an avenue for limited labor absorption if appropriate means are used across the nation to structure sport training and other activities.

6.4 The Interim Poverty Reduction Strategy Agenda

In addressing these elements during the iPRS period, the government will focus on building effective institutions that are able to support democratic governance, justice and human security. Targeted activities and results to be achieved during the iPRS period are presented in Table 6.1.

Table 6.1

POLICY OBJECTIVES AND EXPECTED RESULTS FOR PROMOTING GOVERNANCE AND THE RULE OF LAW FOR THE PERIOD JULY 2006-JUNE 20081

Broad Policy Goal: Facilitating effective institutions that will support democratic governance, justice and human security

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CHAPTER SEVEN Pillar Four: Rehabilitating Infrastructure and Delivering Basic Social Services

7.1 Major Challenges

The Government of Liberia came to power in January 2006 and inherited infrastructure that was in a total state of disrepair as a result of the war and years of neglect. Roads, telecommunications, water and sanitation, schools and health care facilities were, for the most part, devastated. Today, the task before the government is to rehabilitate the infrastructure to create necessary conditions for broad-based growth and poverty reduction. Health, education and other services must focus especially on youth and women who too often are marginalized from such services. Health activities must concentrate on malaria, HIV/AIDS, diarrhoea and other major diseases that kill many Liberians. Increasing school enrolment, offering more access to and higher quality of training opportunities as well as providing more recreational and sporting activities will help improve the security situation, strengthen the foundation for growth and poverty reduction and train a new generation of leaders for Liberia. Mobilizing the substantial financial and human resources required and, in some cases, relocating people from one location to the next are core to the inherent challenges.

7.2 Initial Responses

The 150-Day Action Plan of the government set out a number of short-term objectives that were pursued, including:

  • Beginning the rehabilitation of several hundreds of kilometers of roads as well as a few bridges;

  • Rehabilitating about 36 high schools, 39 clinics and four community health facilities around the country;

  • Using 1 million United States Dollars (USD) from improved tax collections to finance community projects in the 1 5 counties of Liberia;

  • Beginning to rebuild the electricity grid with an initial goal of restoring power to some parts of Monrovia by 26 July;

  • Revitalizing the national strategy to fight HIV/AIDS, providing 5,000 bed nets in malaria endemic communities and medicine for 300 new cases of tuberculosis;

  • Rehabilitating water pipelines in parts of Monrovia and constructing 100 new water points and 52 new boreholes around the country;

  • Initiating major reforms in the education sector, while undertaking major physical rehabilitation in a number of schools and government educational facilities;

  • Initiating school curriculum review;

  • Implementing data collection from all schools in the country;

  • Drafting a new national youth policy with strategic areas of interventions relative to youth development programs and activities;

  • Launching a new girl’s education policy;

  • Increasing budgetary outlays for health (8.7 per cent) and education (8.6 per cent), far above previous levels and the largest share of outlays in the budget.

The government worked hard to ensure that these objectives were met as planned. However, these interventions fall far short of what is required to meet Liberia’s needs and people’s growing expectations.

7.3 The Emerging Medium-Term Agenda

In the short term, the aim is to restore basic services to facilitate economic activities and combat poverty. Without adequate infrastructure, the ability to reduce poverty is severely hindered and increases the likelihood of a return to conflict. Reconstructing infrastructure will provide thousands of jobs for youth and will have substantial multiplier effects on the economy and poverty reduction, facilitating the delivery of health and education services. with this in mind, the government is committed to rebuilding infrastructure in collaboration with local authorities and communities, working closely with the international community and securing private sector participation in rebuilding efforts. Key goals being pursued by the Government of Liberia regarding infrastructure and basic services are detailed below

Rebuilding and refurbishing the postal system and telecommunications

The government is planning a comprehensive upgrading of the sector. The postal system will essentially require rebuilding and reforms. The Global System for Mobile Communication (GSM) sector is among the few experiencing competition equilibrium, expanding market coverage and declining prices with high positive effects on the overall economy However, there is a need to rehabilitate the fixed line system, provide better oversight of existing GSM and put into place an enhanced regulatory framework. A telecommunications act currently being prepared will provide the regulatory environment and oversight for GSM operators. This act will be completed and passed in 2007.

Restoring transport facilities and services

The main objective of the government in the medium term is to restore the road network through maintenance of paved roads, upgrading primary roads and rehabilitation of secondary and feeder roads. This is critical for getting agricultural outputs to market and for improved economic activities throughout the country. In addition the government is planning to rehabilitate air travel in Liberia and one of the first actions of the government was the establishment of the Liberia Civil Aviation Authority (LCAA) to facilitate development in the sector. Efforts to improve sea ports will be initiated and increased over the Interim Poverty Reduction Strategy (iPRS) period. Moreover, the government will be working on developing a vision and policy for the transport sector, including strategies to get private sector participation.

Restoring electricity

Rebuilding the power network is crucial for economic reconstruction and recovery. The immediate goals of the government are to continue to aggressively pursue the process of facilitating private sector participation in the sector and rebuild the capacity of Liberia Electricity Corporation in order to restore power to major parts of Monrovia as well as some parts of the key economic centers around the country.

Providing water and sanitation

In this sub-sector, the overall objective of the government is to increase safe drinking water and improve sanitation (healthy environment) for all in urban and rural areas. The government and its partners will promote sustainable management of water and sanitation facilities and sensitize communities on hygiene promotion in an effort to ensure a reduction of waterborne diseases. The community management of water supply and sanitation services will also focus on employment creation and income generation. Key actions will include the re-establishment of the National Water Resources and Sanitation Board and development of a comprehensive institutional reform plan for the sector. Efforts will be made to provide water for industries so as to reduce stress on household drinking water supply. Likewise, water and sanitation management will be linked to achieving food security through priority actions, including: rejuvenation of the hydrologic monitoring network and re-establishment of rainfall and stream gauges in agro-ecological zones of the country; research on the national irrigation needs and the water management requirements in upland swamp cultivation; and development of a national policy and strategy. Furthermore, the development and implementation of an integrated water resource management and waste management policies, along with the accompanying enforcing legislation, will be a focus given the gaps in the country’s environmental management at the moment.

Enhancing investment in education to expand accessibility

Education plays a central role in all developmental pursuits, including improved health awareness, human resource development, awareness of human rights, better participation in civic responsibilities, improved gender balance and productive capacity. Considering this, the plan of the government is to embark upon policies and enhance investments to improve access to as many children as possible, especially from poorest families, and to provide skills development for adolescents and adults.17

A multi-faceted approach towards improving enrolment and keeping children in school will be devised. As a start, the government needs to increase access by providing new schools in population centers where none exist, reconstructing those damaged during the war and making school materials available to ensure teachers do not levy unofficial fees from parents Another way of supporting school enrolment and attendance is through school feeding and addressing the gender gap and early drop-out rates of girls. The government is also committed to developing an information and communication technology policy for education and integrating information technologies into the educational system to enhance delivery and expand opportunities. Educating youth should also be shaped by a holistic approach not just ensuring literacy and skills, but exposing young people to peace studies and civic education. Special attention must be given to implementing the new girl’s education policy and ensuring equal opportunities for girls. High rates of illiteracy among women owing to social, cultural, economic and conflict factors severely undermines the prospects for poverty reduction and therefore, must be addressed. The reconstruction and reopening of teacher training institutes is also important to ensure the training of a new generation of teachers and a steady supply of qualified personnel for the school system.

To realize these goals, the government will pay attention to mobilizing the needed investment to support a comprehensive education policy reform, curriculum review and development and in improving the strategic capacity of the educational administrative system through effective civil service reform. Local communities will also be called upon to play important roles in the provision of educational services, including volunteers and community contributions. The government will also pay attention to reform of the higher education sector to ensure appropriate human resources are developed to meet the needs of the nation.

Strengthening health and nutrition delivery systems

The provision of basic health and nutrition services is a major priority for the government. With assistance from its development partners, the Government of Liberia will strive to improve the health status of the population, especially the rural and urban poor. As a first step, it will formulate and disseminate its overarching national health and social welfare policy and plan. It will ensure that by December 2008, 70 per cent of all health facilities are providing an equitable, affordable and integrated basic package of health services to individuals and communities, with particular emphasis on reaching women and children, especially the poor and vulnerable. The government plans to decentralize health systems planning and management to the county level to more fully engage communities and local partners in the health development process. As such, it will strengthen the capacity of county health teams to plan and coordinate health services and improve and ensure the equitable distribution of health facilities by December 2008. The government will also strengthen financial management and procurement systems to international standards by November 2007 and reconstitute and implement the National AIDS Commission (NAC) by June 2007. Other major priority areas include:

  • Building the human capacities of health workers and health managers;

  • Ensuring a financially sustainable primary health care system;

  • Re-establishing an efficient health referral system;

  • Reducing maternal, infant and under-five mortality rates;

  • Reducing malnutrition among infants, children and pregnant/lactating mothers;

  • Sustaining immunization rates at 80 per cent;

  • Implementing strong programs to fight malaria, tuberculosis and HIV/AIDS (see box);

  • Establishing early warning systems for epidemic response and disease control;

  • Develop national social welfare policy and plan.

Fighting HIV/AIDS

Since the first case of HIV/AIDS in Liberia was reported in 1986, it is estimated that the HIV/AIDS prevalence rate had risen to 5.2 per cent.18 The advent of the war led to the spread of the virus and the destruction of health infrastructure undermined the provision of treatment and care for people living with HIV/AIDS, voluntary counselling and testing, safe blood and prevention of mother to child transmission. Several factors add to the spread of the disease: Liberia’s high rates of poverty, cross-border movement of people and cultural risk factors such as female genital mutilation. Less than 5 per cent of people living with HIV/AIDS are currently on antiretroviral drugs and less than 5 per cent of the population has access to voluntary counselling and testing.

The initial response of the government to the HIV/AIDS epidemic was the creation of the National HIV/AIDS and STD Control Program in 1987 to facilitate inter-sectoral coordination and the scaling-up of responses nationwide. Unfortunately, the civil war undermined these efforts. The first real post-war initiative came in 2000 when the National AIDS Commission (NAC) was established and a national HIV/AIDS strategic plan was developed. Despite this, the NAC has not been very active. Even though the national HIV/AIDS strategic plan was updated in 2004 and fully endorsed by stakeholders, it is not the basis for all funding contributions.

Major efforts in recent years have come through an 8.7 million USD grant form the Global Fund to Fight AIDS, tuberculosis and malaria, beginning in late 2004 and administered by the United Nations Development program (UNDP). Public sector response to the HIV/AIDS crisis has been mainly through the Ministry of Health and Social Welfare (MoH&SW), but other ministries including the Ministry of Gender and Development (MoG&D), Ministry of Defense (MoD), Ministry of Education (MoE) and Ministry of Labor (MoL) are gradually mainstreaming HIV/AIDS awareness and responses into their work and programs. Community and civil society commitment is still low, but action by some community-based organizations focusing on awareness raising and condom promotion is visible in the field, especially targeting youth. An assessment of the situation of orphans and vulnerable children to HIV/AIDS has been completed. In addition, awareness raising, condom distribution and voluntary counselling and testing activities are ongoing among international peacekeepers.

Noting the low knowledge levels of the population as well as among HIV/AIDS service providers, the government will embark on a nationwide HIV/AIDS awareness campaign. In addition, health service providers will undergo training in HIV/AIDS knowledge, universal precautions against HIV, voluntary counselling and testing (VCT), prevention of mother to child transmission, antiretroviral therapy management and home-based care. A legal framework to address stigma and discrimination against people living with HIV/AIDS as well as punishing those that deliberately infect others with HIV is vital. programs aimed at HIV/AIDS prevention and care will be introduced in the workplace and in schools.

Efforts will be exerted to capacitate NAC to formulate and implement an HIV/AIDS policy which takes into account gender-based vulnerabilities and risk factors for both men and women, direct and coordinate multi-national sectoral activities in the fight against AIDS, as well as mobilize and allocate resources. Additional efforts will be exerted to curtail the spread of the epidemic through strengthening safe blood supply, waste management and preventing mother to child transmission. Longer-term strategies will be needed to ensure that the fight against HIV/AIDS is approached in an integrated manner, with HIV/AIDS prevention programs operating in communities and all work places, institutions of learning, places of worship and the informal sector. Attention will also need to be given to the care and welfare of the increasing numbers of orphaned children.

Community-driven development program

One of the government’s key strategies for building small infrastructure, strengthening schools and clinics and developing stronger youth programs is through community-driven development programs in which local communities and counties are given grants to address their own highest-priority issues. Several programs are already under way in cooperation with major partners and non-governmental organizations (NGOs), and the government is adding to these efforts through its 1 5 County Plan (previously known as the 100 Villages Plan). These programs need to be strengthened and extended to ensure more vital services are delivered at the local level.

7.4 The Interim Poverty Reduction Strategy Agenda

During the iPRS period, emphasis under Pillar IV – rehabilitating infrastructure and basic social services – is placed on improving livelihoods and service delivery for all. Table 7.1 presents the planned interventions.

Table 7.1

POLICY OBJECTIVES AND EXPECTED RESULTS FOR REHABILITATING INFRASTRUCTURE AND BASIC SOCIAL SERVICES FOR THE PERIOD JULY 2006–JUNE 20081

Broad Policy Goal: Facilitating the improvement of productive livelihoods and service delivery.

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PART THREE IMPLEMENTING THE STRATEGY AND FULL POVERTY REDUCTION STRATEGY PAPER ROAD MAP

CHAPTER EIGHT Implementing the Strategy

“Formulating the strategy is an essential step for reviving hopes, but implementing the strategy for results is what will uplift the poor from poverty.20

8.1 Introduction

Although the poverty crisis and many of the other development problems predate the war, the realities of Liberia as a post-conflict nation pose tremendous challenges for the formulation and implementation of anti-poverty measures. The capacity crisis and the unemployment problem underscore the intricate nature of the challenge. To add meaning and turn the hopes of Liberians into reality, it is important to have the necessary political will, build strategic partnerships, establish robust monitoring and evaluation procedures and ensure that implementation risks are identified and appropriate measures taken to minimize them. These issues, together with a strategic management framework regarding the implementation of the Interim Poverty Reduction Strategy (iPRS), are highlighted in this chapter.

8.2 Manifesting Strong Political Will

Demonstrated credible intent of politicians at all levels and a commitment to carrying out an agenda with all the resources at the disposal of the nation is a precondition for the successful implementation of the strategy. Without such a commitment, the articulated strategy shall be ineffective. Fortunately, a key strength of the new Liberia is demonstrated political will at the highest leadership level, demonstrated in the initial 10 months of its program implementation, including an aggressive fight against corruption, mismanagement of public resources and bogus concession agreements (Box 9.1). The enhanced performance in financial management and improved control of public finances has already reduced graft and improved the budget of the government. The Government of Liberia intends to continue building on this strength during the iPRS period and beyond.

Expression of Political Will against Corruption

“Corruption, under my administration, will be a major public enemy. We will confront it. We will fight it. Any member of my administration who sees this affirmation as mere posturing, or yet another attempt by yet another Liberian leader to play to the gallery on this grave issue should think twice. Anyone who desires to challenge us in this regard will do so at his or her personal disadvantage. In this respect, I will lead by example. I will expect and demand that everyone serving in my administration leads by example.21

On this basis, the government took quick action to publicize the declaration of assets by public officials, commissioned a series of public audits, drafted a code of conduct for public officials and civil servants and initiated the development of an anti-corruption strategy. In addition, the government has demonstrated strong political with its determination to put the nation’s financial house in order. This was evidenced by the speed with which it concluded a staff monitored program with the International Monetary Fund (IMF), endorsed the Governance and Economic Management Assistance Program (GEMAP) and reviewed and cancelled non-compliant concessions and contracts, where needed.

Efforts will be made to generate the required political will in all branches of government and at all level