Liberia’s Minister of Finance Samuel Tweah has called on multilateral institutions to start thinking about ways to assist fragile states after the COVD -19 pandemic.
He made the call when he served as one of panelists that was screamed via Zoom platform on the topic: “Conflict and The Pandemic: Tackling COVID 19 in Fragile Settings” The event was organized by the World Bank.
“The economic challenges we face today are COVID induced. They are not part of the normal business economic circle. The work we started before COVID-19 will slow down. There is a natural slowdown and secondary pressure on the economy.”
He continued; “COVID induced economic weaknesses with aggregate African debt vulnerability. As minister of Finance, this is the biggest headache I am dealing with here. Liberia’s moderate debt is stressed. But we have a huge stuck pile of concession loans in the last 12 years and that is eating up substantial space. So, the space to expand and get concessional loans are now limited. Coming out of COVID to make that big jump, is going to be difficult.”
He said, it has been difficult for fragile countries, which Liberia is a part; have not been able to structure their deficits. “We have not been able to domesticate the resources of production historically. This COVID needs a paradigm shift.”
With this shock the pandemic has brought on fragile states, he thinks it was about time for the world bank to start and other multilateral institutions to start thinking about ways to help them with some level of debt relief program; which will help jump start the economies. Once this is done, he thinks it will avoid problems in the future.
“The conversation around debt forgiveness is important. I am not going to say a new HIPIC-(Heavy indebted counties) rounds. But some kind of smart thing coming out of COVID, knowing the difficult situation that fragile countries going to be dealing with, it has to be the order of the day. I think we are bringing that conversation to the World Bank, I hope we need to press that.”
The current debt of many fragile countries is unknown, but global economists say it is huge and may not be able to service them soon in the absence of some interventions.
According to him, the Liberian government is working with the World Bank local office. “We are working with the bank here so that creating way, we can look at the full spectrum of the country’s debt. We can start financing to really have impact.”
His message to fragile states are to strengthen the health system so as to avoid or minimize any future health threat that may occur. “We need to strengthen the health system not just worry about the emergency. We are learning from EBOLA, that the focus on emergency can come at the cost and we do not want to repeat that mistake.” Mark Lowcock, Under Secretary-General for Humanitarian Affairs, United Nations, Madam Nancy Lindborg, President and CEO, United States Institute of Peace, Axel van Trotsenburg, World Bank Managing Director of Operations and Madam Lamis Al-Iryani, Head, Monitoring and Evaluation, Social Fund for Development, Yemen.