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Takeaways from February 2017 Liberia Development Conference

My first exposure to Liberians’ eagerness to discuss their country’s challenges and prospects was in 2007 and early 2008 when as Minister of Finance I led the team canvassing popular input and conducting outreach for our first Poverty Reduction Strategy. When we visited the remote isolated River Gee County, a number of people speculated: “You na deh minister mehn, we’ain never see any minister ‘roun here before!” In those early post-war years being asked for their views on development needs and policy priorities was a true novelty for the average Liberian. Once they got over the initial skepticism though, they clearly cherished the opportunity. This love of argument and debate should be better channeled and cultivated as it holds potential for instilling the culture of accountability sorely missing in Liberia.

Expecting cynicism and disinterest amidst the heated pre-election politics and following the Ebola and commodity price shocks, I was pleasantly surprised to see that such eagerness for substantive dialogue and sinking their teeth into issues still prevailed when I participated as keynote speaker in last month’s “Liberia Development Conference.” For me it was a welcome return to being vocal about Liberia’s challenges and policy choices after conflict of interest considerations precluded doing so during the eight years I led the IMF’s African Department. It was also a precious opportunity to hear first-hand the views of a new generation of Liberian thinkers.

Four interlinked themes for Liberia’s future progress

I used my speaking slot to lay out four inter-linked themes vital to Liberia’s future development progress and to pose questions for conference participants, including what Liberia’s development partners can do to leverage their support with stronger Liberian ownership and concrete enduring results. In this blog post, I summarize my speech’s four themes and attempt to give my thoughts in answer to the question I posed to others.

Addressing each of these four themes is important given their own significance but is also critical for sustained job creation—the great imperative that results from Liberia’s post-war inheritance and young demographics. For each I have adapted some of the comments I made to delegates:

  1. The need to strengthen resilience. Building buffers—or saving for a rainy day—is not the most exciting or interesting thing to remind policymakers about during an election year—in fact it sounds too much like the IMF! But nothing best illustrates the importance of having such buffers than a shock like Ebola. There is a need to balance channeling most resources into development projects today against reducing vulnerabilities to shocks tomorrow. In that regard, further improvements in natural resource management and steadfast implementation of reforms to support diversification are key.
     
  2. Fighting the deep-seated Liberian cancer of corruption by building stronger institutions and demanding greater accountability. Many steps have been taken in the past decade to put various commissions in place, all with the objective of fighting corruption and improving governance. So there’s the Governance Commission, the Anti-Corruption Commission, the Liberian Extractive Industries Transparency Initiative, and the Public Procurement and Concessions Commission, to name the major ones. But as laudable as their objectives may be, such autonomous institutions by themselves are not necessarily the answer. Indeed, they can often be superfluous, if not detrimental to the functioning of core ministries and institutions charged with managing and overseeing the use of public resources. With Liberia’s fiscal constraints, hard questions should be asked before establishing new institutions and more attention paid to improving the functioning of existing ones.
     
  3. Building human capital. The legacy of the war in the education sector is a large cohort of over-aged students, poor quality, and bad governance, for which “non-traditional approaches,” such as the on-going “Partnership Schools for Liberia” are seeking to find solutions. Assessment of this one-year pilot initiative will undoubtedly make for discussion at the next conference, but what is clear no matter its results is the need for continued head-on attack on governance and accountability issues, including payroll irregularities, absenteeism, and over (ghost)-staffing. The fiscal space thus created can then be used to increase the low share of government funding of primary education and progressively reduce donor dependence. In the health sector, another Ebola outbreak would be a major risk to the economic and social outlook, and efforts to prevent that should be a foremost priority. Such efforts must necessarily address major health system issues which are also needed in the broader focus on basic health service delivery. As in the education sector the heavy dependence on donor financing raises questions of sustainability, and the unequal distribution of resources across counties is a major impediment to equitable human development. Reforms in health financing, human resources for health, and governance will be critical to health system strengthening and quality service delivery.
     
  4. Working to reduce inequalities. The IMF’s October 2015 Regional Economic Outlook for Sub-Saharan Africa found that the region’s growth could be boosted by close to one percentage point annually if inequality was reduced to levels prevailing in fast-growing Asian economies. Beyond growth, earlier analyses have documented the role of inequality in sowing the seeds of conflict in Liberia. Without further reduction in income, gender, and inter-county disparities Liberia’s peace will remain a fragile one. Supportive of this is bringing to fiscal policy a focus on making the tax system more progressive and raising the progressivity of education and health spending. While the government’s commitment to reducing gender inequality has borne fruit in a strong legal framework and a number of successful initiatives, much remains to be done to break the major barriers to equality including gender-based violence and impeded access to productive resources.

What can Liberia’s development partners do to help?

Attempting to answer one of my own questions posed to conference delegates brings me deeper into CGD’s comfort zone: what can Liberia’s development partners—the rich country governments, powerful international financial institutions and private foundations of the world—do to leverage their welcome financial and technical support? Beyond rededicating themselves to the key tenets of the Paris Declaration/development effectiveness agenda, I see undertakings on four fronts to strengthen institutions, thereby supporting the durability of reforms and helping to reduce Liberia’s fragility:

  1. Be more demanding about accountability while resisting the tendency to mandate the establishment of new institutions to circumvent dysfunctional or poorly performing government ministries and agencies.
  2. Instead push to improve such ministries and agencies through more robust support for a civil service and institutional reform agenda that can leverage the contribution of partner-provided technical assistance to genuine institution-building.
  3. Be just as demanding of so-called “non-traditional” approaches in strengthening accountability and producing quality results in service delivery.
  4. Support continued informed public debate on development policy issues, both in the run-up to and following the October 2017 elections.

The foresight of the USAID mission, Sweden, the African Development Bank, the World Bank, and the University of Liberia in convening the February 2017 conference was spot-on. Although not explicitly stated, the hope was that an objective stock-taking of achievements and forward-looking discussion of policy priorities could help lower the temperature around person-focused politicking by pressuring candidates to address how their administrations would credibly address development issues. Deploying Liberians’ eagerness for debate in this way could be one small step towards instilling some accountability upfront in the electoral process.