Chinese investment in Liberia brings risk
Eric Witte August 23rd, 2008
The Economist provides a nice overview of Liberia’s gradual recovery under President Ellen Johnson Sirleaf*, who took office in January 2006. While she has tackled corruption and sought to spur economic growth to the advantage of average Liberians, Liberia has received substantial aid from the United States and Europe, as well as benefitted from mounting international investment. As The Economist notes, China is among the countries putting cash into Liberia:
The Chinese are getting involved too. They have resurfaced the decrepit William Tubman Boulevard, Monrovia’s main artery, named after the country’s longest-serving president, and will take on similar projects throughout Liberia.
China’s influence across Africa is growing, which has rightly sparked concern. In such places as Sudan, Chinese investment serves as a crutch for dictatorial (and in Sudan’s case, genocidal) regimes. By contrast, Chinese investment in democratic Liberia seems unproblematic at first blush. Yet it still poses a potential risk.
If Liberia’s fragile new democracy were to falter, there is a decent chance that western aid would be used as leverage to keep democratic governance on track. The response of the United States and European Union to the August 6 coup in Mauritania, for example, could eventually create real pressure for the restoration of democratic order in that West African nation. It is evident that Western defense of democracy in the region (and beyond) is far from guaranteed. Witness, for example, the West’s appalling, passive acceptance of outright dictatorship in Liberia’s bauxite-laden neighbor, Guinea, or its cozy diplomatic relationships with the despots of oil-rich Gabon and Equatorial Guinea.
While use of the established democracies’ leverage cannot be taken for granted in pressing for democratic change or seeking to prevent democratic backsliding, it is clear that China doesn’t care about democracy or good governance at all. As long as natural resources from African countries continue to fuel China’s rapid economic development, Beijing will maintain support for the most odious of regimes. To the extent that China becomes a major player in Africa, potential leverage from established democratic governments for maintance of human rights and democracy declines.
Liberia remains one of the poorest countries in the world and obviously cannot afford to turn up its nose at any aid or investment. But China’s no-strings-attached approach to investing in Africa raises the stakes for Liberia by cutting away part of the safety net under President Johnson Sirleaf’s impressive high-wire act.
*Most media organizations - including The Economist - hyphenate her last name, but in interviews President Johnson Sirleaf has said that it isn’t hyphenated.
Taking the Initiative
Here in Monrovia, Liberia’s capital, having been here three consecutive years, there are signs of an economic awakening. There is construction going on in many parts of this city. Roads are being paved, merchants are selling their wares everywhere and the new elite are driving new their brand new SUVs on the streets of this city. Those lucky to have a job wait on the side of the highway coming into Monrovia for transportation to get to their places of employment.
The Monrovia to Ganta highway is busy with traffic in both directions. These are sign that the economy is beginning to show signs of growth after years of negative growth primarily due to civil war. and poor governance during and immediately after that conflict. There seems to be an awakening of the Liberian entrepreneur spirit; evident by so many street merchants and vendors selling their wares everywhere in downtown Monrovia.
The major players such as , the United States, China and the European Union are continuing to assisting the country at this crucial juncture giving the economy a boost having written off millions of dollars and by an infusion of new investments by majors international Companies. this will benefit the Liberian people. I suspect that in the very near future there is going to be a massive infusion of additional investments and Capital by these players. There is potential for lucrative contracts with these investors and tremendous benefit to the Country by awarding contracts for investments in natural resources in areas such as: Forestry, Mining, exploration of a potentially lucrative oil grid off the coast in the gulf of Guinea, Gold and Diamonds. In the Agriculture sector, that more money will have to be invested in food production, especially rice. I believe our friends are willing to assist in this critical area by providing farmers with hybrid seeds that yield bigger harvest.
The key question now is whether those that govern now and others waiting in the wings prepared to address these and other issues pertinent to moving the nation in the right direction mentioned above? Another question is who has the credibility, knowledge of what the Nation must embark on to provide JOBS,JOBS,JOBS, provide education to the thousands of Children who want to be educated, improve public health by providing latrines, reinvigorating the legal, medical and other institutions destroyed during the civil war? The International Community and Investors are ready to pour in millions, or for that matter billions of dollars in Liberia, but they want to know that business environment is safe and there are no risks to their investments. The choice of leadership is important because they are seeking stability, security, and continuity.
There is criticism of the status quo because some pundits believe those that have allegedly violated their trust “seem” to do it with impunity, and get away with it .So in some quarters there is grumbling . Something must be done about this condition.
For the present Administration, they face a formidable task. They need to devise a strategy that will provide a better standard of living to a large segment of the population. For that matter they must attract the poor, the middle class, and those earning high incomes together in a coalition that will be in position to govern, inspire and improve the standard of living of all Liberians. What methodology should they employ to retain the advantage they will need going into the next election? The key is forming a team of some of the brightest and most knowledgeable professionals to devise a plan/strategy for victory in the next election. It’s never too soon to begin to discuss the issues and document their strategy. The Plan should stress the achievements of the current Administration; they must present a plan for economic growth, development and prosperity that will improve the wellbeing of the people. This new initiative must be clearly explained to all Liberians in English and all the dialects so they know what is going on and what’s in the package for them. Waiting for next year is not an option. If there are things in the pipeline, the Administration must not wait anymore “take the initiative” during the second half of 2010, gradually divulge to the people how their lives will be better off going forward by supporting this Administration. .
For those on the other side of the road, they also see opportunity. I am certain that they are cognizant of the problems the Country is presently facing. Obviously there is room for improvement So many systems need to be addressed. The task is formidable. They will criticize and point fingers, but must come up with a constructive plan of their own. A plan clearly stating what kinds of initiatives they will be taking and clearly outlining exactly what they intend to do to improve the living standard of the Liberian people. This group will need to convince the international community and investors that they are capable of leading and moving the Country in the right direction if they have a Plan they too must communicate their plan to the People. .
Look there is great potential in Liberia today. The nation in on the verge of its own “Great Leap Forward”, but there are many constraints and huddle that must be negotiated. A nation can not move ahead and become successful with a high illiteracy rate of 90%. For tactical and strategic reasons more money will have to be allocated in the budget for education. Right now investors are prospecting for Iron ore, Gold, and Diamond. Once those companies come on line, there will be a need to employ thousands of people which will put money in the economy. There is a sense of cautious optimism in Liberia, but the key to this transition is stability.