Liberia’s Development Conundrum – some of the issues : With Dr. James F. Kollie, Jr.

Dr. James F> Kollie, Jr.

We looked at the numbers this morning again and all we could do was laugh. We are harmonizing payroll and trying to fit within our domestic resource envelop. It is my understanding that our payroll is approximately 11% of GDP (maybe about 65% of our total annual budget) and this is too high, by economic index. I don’t disagree because “they” say that we are the highest in the sub-region and this is bad. There have been times when I have asked them about the nominal numbers. Sometimes the indices are misleading and the truth story might be in the nominal figures. When the base is small, some very small numbers can represent a higher percentage of that small base.

But be that as it may, I think we need to look deeper. There are some fundamental questions that we need to answer in order to arrive at some workable solutions. Can our country develop and achieve the transformation we are looking for on the basis of domestic revenue? In my honest opinion the answer is NO. However, if we make the necessary investments in the infrastructure (power, ports and roads), we might be able to expand the economy and then raise the resources we need to transform. But how do we make the investment? And without the investment, the base will not enlarge.

For example, the report (Africa Infrastructure Country Diagnostic) by Vivien Foster in 2010 clearly highlighted Liberia’s infrastructural deficit and proposed that we needed to invest at least US$250 to $500 million per year for the next decade in order to be able to catch up with other countries. At that time, it was estimated that we were spending US$90 million per year and under such condition, it would take us 40 years to get there.

(https://openknowledge.worldbank.org/bitstream/handle/10986/27770/623900WP0P12420ry0report0Image0Bank.pdf?sequence=1&isAllowed=y)

I am not sure but if we are operating on a US$500 million per year budget and we are paying about US$300 million on salary and then have to run the regular operations of the government, how we can cure the infrastructural deficit? And if we don’t cure the infrastructural deficit, how we can transform this place?

Let’s think about it. I am sure the Economic Dialogue will provide some answers…

Debt, China and Africa’s Development

When I listened to the commentary by Dr. James Jonah on Nightline Africa last night (9/1/2019) (https://www.voanews.com/episode/nightline-africa-4001221), I began to think that if Africa is not careful, it might miss out on the opportunity to develop its infrastructure and move its people out of poverty. Even the richest countries in the world today are still taking debt and raising their debt ceilings to finance their development but then they frighten poor African countries with the “mantra” of the “debt trap.”

These western countries which are threatened by China’s move into Africa have found a way to scare the devil out of us that if we take Chinese loans, we will be falling into a debt trap. Well, even they are taking Chinese loans and developing their infrastructure and enhancing the growth and prosperity of their people. If the loans are good for them then why aren’t they good for us? I think we need the loans even more.

Can you imagine if we had not taken the loan from China and the Arab lenders to do our airport what would be its state today? The World Bank and IMF were pretty okay with the status of our airport. I am remember we had to fight with the IMF to ensure that the we got the US$50 million from China to do the airport terminal and we also had to take a strong position on the European Investment Bank (EIB) to take their money from pot so that we could do the airport runway. The conditions on the EIB money was causing too much delay.

For me, it is simple: lets borrow and build our economic infrastructure so that our people can live in decency and prosperity. We will handle the debt issues later. Everyone is borrowing, including those who are warning us about the debt trap.

The problem is not with Debt but rather with what the money is used for. And today I see most of the debt resources are used to finance infrastructure, directly. The monies are not given to governments; the monies are paid directly to contractors for works that are done.

Let’s not be afraid to borrow. No one is going to seize our country because we borrowed. In fact, the infrastructure will help to enhance growth and improve living standards. Why should our people suffer or die simply because we are scare to borrow?

If you ask me, I will say let’s work with China and other countries that are willing to borrow us to develop our country and stop allowing the other borrowers to scare us about debt trap. What is the worse that could happen if we borrow? What I do know for sure is that if we don’t borrow, we are heading nowhere, period.

That story that you should finance your development from domestic resources is a farce; don’t fall for it. Our domestic resource base can’t produce the income we need to build our countries unless we develop the infrastructure. We can’t develop the infrastructure unless we borrow. It is not complicated!

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About Cholo Brooks 12922 Articles
Joel Cholo Brooks is a Liberian journalist who previously worked for several international news outlets including the BBC African Service. He is the CEO of the Global News Network which publishes two local weeklies, The Star and The GNN-Liberia Newspapers. He is a member of the Press Union Of Liberia (PUL) since 1986, and several other international organizations of journalists, and is currently contributing to the South Africa Broadcasting Corporation as Liberia Correspondent.