From Africa Recovery, Vol.12#1 (August 1998), page 26

Donors back Liberia's reconstruction

Governance and refugee resettlement high on the agenda

By Ahunna Eziakonwa

Expressing support for Liberia's national reconstruction efforts, bilateral and multilateral donors pledged $230 mn at a special donors' meeting held in Paris on 7 April 1998. The pledges, which fell short of the $438 mn requested by Liberia for its two-year national reconstruction programme, came as a contribution towards rebuilding the country's infrastructure and revitalizing its institutions after a seven-year civil war that left more than 150,000 people dead and sent nearly one-third of the population fleeing to neighbouring countries.

Co-chaired by the World Bank, UN Development Programme (UNDP) and Netherlands' Ministry for Development Cooperation, the meeting was a major follow-up to the Fourth Ministerial Meeting of the Special Conference on Liberia, held at UN headquarters in New York, last October. It was part of a continuing effort to provide political and economic support to Liberia following completion of the peace process led by the Economic Community of West African States Cease-fire Monitoring Group (ECOMOG).

Since the inauguration of the government of President Charles Taylor on 2 August 1997, fighting has ceased in Liberia and refugees are gradually returning home. The UN High Commissioner for Refugees, Ms. Sadako Ogata, announced at the end of May that at least 26,000 Liberian refugees had returned home from Ghana, Guinea and Côte d'Ivoire since December. However, the country now faces the daunting task of reconstruction, which severely taxes the capacity of a government that inherited a virtually empty treasury. Finance Minister Elie Saleeby reported in November that Liberia's total external debt is now in excess of $3 bn, with payment arrears to multilateral institutions alone standing at over $1 bn. According to the International Monetary Fund (IMF), for the period 1990 to 1994, debt service due to multilateral and bilateral creditors averaged 11 per cent of Liberia's GNP, while debt service actually paid averaged 0.8 per cent. The government is also burdened with a domestic debt of $200 mn.

The donors' meeting in April marked an important opportunity to focus international attention on major post-war reconstruction issues, including governance and civil service reform; economic management; repatriation and resettlement; social sector rehabilitation; agriculture and rural development; and infrastructural needs.

Several participants emphasized the links between peace, security and development. UNDP has earmarked up to $5.8 mn to support the country's reconstruction, including resettlement and reintegration, with a focus on poverty-reduction; capacity building; and promotion of good governance. The UNDP programme also emphasizes providing basic social services and restarting production activities in eight of Liberia's 13 counties, primarily in small towns and villages.

Stating its commitment to democracy, the rule of law and development, the government said it had established a "government of inclusion," as well as several commissions on good governance, human rights and national reconciliation, and banking and finance. Due to better collection, government revenue was up from $1.05 mn during the first seven months of 1997 to about $125 mn over the subsequent five-month period. Other achievements included the establishment of a transitional five-month, cash-based and balanced budget; payment of all public sector salary arrears; and a decision to formalize the use of both the US and Liberian dollars as legal tender based on market-determined exchange rates.

Adherence to democratic standards

Donors agreed that substantial external assistance is required for the government to achieve its goals. However, there was consensus that such aid should serve as a temporary catalyst rather than becoming a source of continuous dependence. Donors also made clear that Liberia's adherence to the standards of democracy, human rights and the rule of law, as well as transparency and accountability, was key to sustaining their support. Safeguarding press freedom and eliminating police brutality were specifically cited.

Many speakers stressed that economic activity will remain seriously constrained until adequate security is restored in the country. They urged the government and the Economic Community of West African States to agree quickly on an arrangement to facilitate the continued presence of ECOMOG in the country, as a means of further consolidating peace and security. Following the donors' meeting, the government and ECOMOG signed a formal agreement on 5 June, giving ECOMOG a new and more defined mandate in post-war Liberia. ECOMOG will help the government in providing security throughout the country, and in maintaining law and order. The sub-regional force also will assist in restructuring Liberia's army and police.

Noting that Liberia's rehabilitation will require a coordinated long-term response, donors said they would periodically assess the country's reconstruction and development needs and its compliance with the benchmarks for democracy. They also decided to hold a comprehensive discussion on Liberia's debt problem, with a view to finding innovative solutions. The next donors' conference is tentatively scheduled to take place in December 1998, to be chaired by the World Bank.

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