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Posted August 28, 2006
The Rise Of "Foreign
Minorities" To Economic Power In Liberia
When the Lebanese Israelis conflict started a
few months ago, I had family and friends calling me to vent their
frustrations about not being able to get some necessary items due to the
closure of many Lebanese, Indian, and other foreign owned businesses and
stores for about a week, to protest Israel's actions against Lebanon. So for
a week, according to my friends and family, "we suffered because we could
not get the things we needed". The recent controversy with George Haddad and
the Commerce ministry moved me to write this opinion piece on the domination
of foreign minorities in the Liberian economy, and things we as a people and
the government of Liberia can do to encourage self reliance and
entrepreneurship in Liberia.
Rice has always been "king/queen" in Liberia,
and the history of Rice has gone hand-in-hand with Liberia's ties to
Lebanese businessmen. In 1963, President William V.S. Tubman launched
Operation Production as the benchmark for his "Open Door Policy." The
program was geared toward making Liberia self-sufficient in rice
production. Over forty years later, Liberian businesses have still not
risen to the level of their Lebanese counterparts. The nation and Liberian
owned businesses have instead grown to become more and more reliant on them
(Lebanese, Indian and foreign owned businesses) for virtually everything
they produce, eat, drink, wear, and sell. We all know that foreign
businessmen have a notorious reputation for using people of influence to
their advantage. For over forty years these businessmen have used bribes to
successfully entrenched themselves within the Tubman, Tolbert, Doe, Taylor
and Gyude Bryant administrations.
The sad part about the current ordeal taking place in
Liberia is that to date, the price of necessary commodities is at an
all-time high. The price of rice, cement, building materials, and other
miscellaneous items has never reduced, it has instead, continued to go up,
wreaking more havoc along the way and continuing to cause pain and suffering
for the Liberian people. An important economic indicator is the CPI, or
Consumer Price Index. It is a price index that tracks the prices of a
specific consumer goods and services, providing a measure of inflation. The
Consumer Price Index (CPI) is a measure of the average change in prices over
time in a market for goods and services; and in short, the CPI is a
considered a cost-of-living indicator.
According to data from the Central Bank of Liberia,
Monrovia's consumer price index (CPI), as of April of 2006 is 185.1% for
food items, 208% for drinks, 321.8% for fuel, 181.8% for rent, and 195.6%
for all items. In January of 2004 the CPI was 147.4% for food items, 155.1%
for drinks, 128.3% for fuel, 131.5% for rent, and 157% for all items. When
compared to January of 2004, consumer price index has increased 38.8
percentage points, indicating that cost of living has increased, and
Liberians are paying way more for food and other items than they did two
and half years ago. To put these numbers into perspective, the Consumer
Price Index for all urban consumers and all items in the United States as of
July of 2006 is 4.5%. Whether or not the current economic trend in Liberia
continues, it'll depend on how much the Liberian people want economic
change, and how much they are willing to pressure their leaders – not just
the president - to reverse some of the economic practices that continue to
strangle the Liberian economy.
Hoarding of cement/rice, and other important commodities,
and price hikes have become a frequent occurrence in the country due to the
inability of CEMENCO, Bridgeway, K & K Corporation and others to adequately
meet the demands of the Liberian people. For Liberia to allow two major
importers of rice, the Lebanese-owned businesses Bridgeway and K & K
Corporations to have a complete monopoly over a commodity such as rice is to
the detriment of all Liberians. For instance, the need to open Liberia's
market for cement is crucial to the reconstruction of Liberia's war-ravaged
economy. One cement plant has a virtual monopoly and the price is strictly
controlled; yet, the country's demand for cement is not met. Opening the
cement industry, rice and other markets to competition will affect supply
and price, limit shortage of these products, and benefit Liberian consumers
in long term. Restrictions on market access to these areas have led to
continued fluctuation of wholesale and retail prices and blocked consumer
access to these commodities at global free-market prices.
George Haddad has made millions off the Liberian people;
it is time to give others a chance at fair competition that will benefit the
Liberian people. For years, most of these businesses have inflated prices
and embedded with Liberian leaders, but never once using any of the income
generated from Liberians for domestic investment, choosing instead, to send
all of their profits back home to Lebanon, India, or foreign banks. Don't
get me wrong, I am not advocating the alienation of enterprising minorities
in Liberia, instead I am advocating that our policy focus needs to shift
away from the monopolistic business environment encouraged by past leaders
toward creating a better business environment that will not only allow
competition, but also facilitate the growth of small Liberian businesses and
other competitors within some of the monopolistic sectors.
Although I applaud the Minister of Commerce for her
effort in trying to change how business has been done in Liberia, and agree
with the commerce minister that the importation of rice should be
competitive as to prevent one company from dominating the market, I disagree
with the commerce minister in her proposed solution. Yes, the monopolistic
powers of Haddad and Bridgeway must be minimized, but minimizing the power
of one monopoly and giving it to a future monopoly is a step in the wrong
direction that will take us right back where we started.
Recommended actions to be taken:
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The implementation of sound macro- and micro-economic
polices that will create price stability |
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The commerce ministry and Central Bank of Liberia need
to investigate circumstances surrounding the constant increase in the
price of the commodities such as cement/building material, rice, and
petroleum |
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Encourage foreign companies/businesses to partner with
locals in establishing rice and cement processing factories and other
businesses, thereby breaking the monopoly which had been enjoyed in the
country for many decades |
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Persistent government promotional campaign that
stresses reliance on private initiative/self-help. These ideas must be
strongly promoted by not only the president but all sensible Liberians. We
cannot allow a small group of business people, regardless of nationality
to dominate the Liberian economy |
| Nurturing Liberian owned small business
is where the innovations in our economy will take place. Therefore the
creation of a small business administration to help and support Liberian
businesses and entrepreneurs will promote and inspire the spirit of
entrepreneurship, and self reliant within the Liberian economy
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Writes,
Nyankor Matthew
nyankorm@gmail.com
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