Liberia in Transition: A Discussion With the UN Panel on Liberia

On December 12th, the Woodrow Wilson Center's Africa Program joined the Open Society Institute in sponsoring an event to discuss the destabilizing impact of conflict during the 90s and the early years of this decade on Liberia. Members of the UN Panel of Experts on Liberia discussed the impact of Liberia's resources on West Africa's wars, how effective sanctions were in shutting down the conflicts and whether it is time to restore control of the country's natural wealth to the newly elected national government. Panelist included Tim Hetherington, Photographer and Film Maker, Art Blundell, Timber Specialist and Chair of the UN Panel, Caspar Fithen, Diamond Specialist and UN Panel Member and Steve Radelet, Senior Fellow, Center for Global Development and Economic Advisor to President Ellen Johnson Sirleaf. Steve McDonald gave introductory remarks and served as moderator.

Art Blundell opened the discussion by providing some background on the UN's decision to sanction Liberia. Blundell recounted Liberia's history, outlining major events since its founding by freed African American slaves and independence in 1847. The privileged African American elites took control over the distribution of resources and, according to Blundell, created a rift with ethnic Liberians who were shut out of power and access to wealth. This rift exists until the present and lay behind the coup by Samuel K. Doe in 1980 and the subsequent struggles for power and privilege, the civil war in 1989 in which Charles Taylor ascended to power and his final overthrow in 2002.

Liberia's timber and diamonds were first sanctioned by the UN in 1992 to prevent the flow of weapons used to fund the civil war. In 1997, Taylor emerged victorious in the presidential elections and began launching expeditions into neighboring countries. As a result, further sanctions were applied to prevent Taylor from gaining control of diamond areas in Sierra Leone that were used to fund Revolutionary United Front (RUF) rebels. Blundell noted that UN sanctions were intended to control the flow of diamonds and weapons to Taylor; however the UN failed to sanction other parties which enabled Liberians United for Reconciliation and Democracy (LURD) rebels to ignite their campaign to overthrow Taylor.

In the mid 1990's Taylor collected upwards of about $10 million per month from mining and rents from other resources such as diamonds, gold, timber, and rubber. Ironically, with Taylor's ascension to the presidency in 1997, his ability to extract resources was diminished as the war interrupted diamond extraction. Taylor had to rely on revenues gathered from the shipping registry and timber production, which totaled about $20 million. Blundell noted that in the timber industry, Taylor created a "system of balkanization' in Liberia, where different timber companies controlled different parts of Liberia, each with its own militia to provide security for logging companies. Taylor maintained an illegal logging network, with each "franchise" loyal to him. These companies, such as the Maryland Wood Processing Industries and the Oriental Timber Company were linked to militias and accused of heinous crimes against the Liberian population and involvement in illegal arms trade. Blundell remarked that this situation ultimately provoked the Special Representative of the Secretary-General (SRSG) and the U.S. Ambassador to consider canceling timber concessions after Taylor's departure from the scene.

However, the decisions was made to instead set up legal standards under which timber companies would be allowed to continue operating in Liberia. Under this criteria timber companies should have:

• Legal contract ratified by the legislature;
• Business license;
• Articles of incorporation; and,
• The ability to post a performance bond.

Of the 70 companies then operating in the timber industry in Liberia, none were able to meet these minimal legal requirements.

In sum, Blundell feels that the goal of the international community in Liberia should not be to allow the lifting of timber sanctions, but to break the existing patronage system and devise, along with the Liberian government, a plan for good governance in the forest sector.

Tim Hetherington reinforced Blundell's point that Taylor regionalized power and maintained control of resource areas through the use of logging militias. Further, he remarked, Taylor fostered a system of economic criminality and patronage to guarantee his hold on power, a system that would continue to flourish after Taylor was defeated.

Hetherington noted that in rebuilding Liberia after the Comprehensive Peace Agreement that brought an end to the war in 2003, the international community had placed greater importance on rebuilding its capital, Monrovia. In doing so, other parts of the country were ignored, left in ruins and became increasingly unstable and "up for grabs," with different militias taking over large "swaths of land." He said that sanctions in Liberia were targeted National Patriotic Party (NPP) structures, Taylor's political party. After the establishment of the National Transitional Government of Liberia (NTGL), other parties were able to divide up the patronage. For instance, officials from LURD were appointed to almost all the management posts of the National Port Authority. These divisions of power were replicated across all the ministries.

Likewise, because rubber had not been sanctioned by the UN, the plantations became a worthy prize for all the militias, with Movement for Democracy in Liberia (MODEL), ULIMO-J and LURD all occupying some or parts of some plantations, a situation extant until very recently. Also, these loose economic criminal networks flourished across political party lines and existed all over the country. As an example, ULIMO-J fighters were involved in sharing patronage with LURD and MODEL, who had been rivals during the war. This inability or unwillingness to target sanctions at groups other than the NPP has prolonged the instability and corruption.

Hetherington concluded by urging the international community to remain involved in Ivory Coast; given its proximity to Liberia and the strong economic links between the two, its welfare will impact greatly on the stability of Liberia in the months and years to come.

Caspar Fithen reviewed the history of the international community's involvement in the Liberia's diamond industry. Beginning in May 2003, the international community began to explore means of interdicting illegal diamond shipments from Liberia through Sierra Leone, Ivory Coast and Guinea. In its attempts to make Liberia comply with the Kimberly Process regulations, the following factors were noted:

• Liberia's diamond deposits are located in very remote areas, often helicopters are needed to access diamond mines. Three key areas are currently being exploited: counties surrounding the Loffa River towards Robertsport, Nimba County, and Buto Oil Palm Corporation (BOPC) areas next to Greenville.

• The UN and the new Liberian government have not been able to stop the illegal production of diamonds which is currently worth $10- $15 million a year. By contrast, Sierra Leone generates $250 million a year in diamond revenues.

• In 2003, the UN spent most of its time logging illegal mining sites with the goal of establishing sector reform policies. This was a problematic and lengthy process due to lack of funding and the disarray and corruption of the NTGL. By 2005, the UN stopped its sanctions activities due to its inability to work with the NTGL.

• Factors such as inclement weather, lack of infrastructure and expert capacity have all impinged on the process.

Fithen said, however, that corruption was probably the biggest factor impeding the ability of Liberia to comply with the Kimberly Process. In early 2005, the West African Mining Corporation (WAMC) scandal exposed an illegal agreement between WAMC and the Ministry of Lands, Mines and Energy. The Ministry had agreed to provide WAMC with an exclusive purchasing arrangement for the production and purchase of minerals in two- thirds of the country. This deal would have enabled WAMC to use local diamond diggers essentially as slaves, control extensive mining areas, and, along with exploiting the fields it controlled, collect revenues from the sale of diamonds by independent diggers operating in these designated areas. However, this deal was exposed by the Kimberly Process Center Review Team.

Fithen noted that various components need to be established to create a Kimberly compliant system of internal controls that accurately tracks diamond production from mines in very remote areas to the point of export at the government diamond office in Monrovia. Currently there has been steady progress, although they are 3-4 months away from having the system up and running. There is a need for hiring and training more personnel, building infrastructure in remote parts of the country, and establishing a system of regulations and a certification process for diamonds before they are exported to the international market.

Fithen concluded by noting that the Liberian government is working very hard to comply with the Kimberly process given its intention to submit a formal application to join the Kimberly Process sometime next year. The Kimberly process has become increasingly sensitive to the quality of its processes in various West African countries. This is due in part to the release of the movie "Blood Diamond" which discloses the illegal mining of diamonds in war zones used to fuel conflicts.

Steve Radelet concluded the panel discussion by contextualizing the extent of destruction in Liberia over the past 15-20 years. He revealed some telling statistics to expose Liberia's dire state. Liberia's ruinous civil war affected every facet of human life. Today Liberia's income per capita is one-sixth of what it was in 1979. One- third of the population is either dead or clinging to refugee status. The production of diamonds, timber, agriculture and rubber has dwindled over time. Most of the villages are not linked by working roads; and have remained without piped water or electricity for the past 15 years. Unemployment is rampant, especially among Liberian youth, many of whom are former combatants. At a human capacity level, Liberia has lost a lot of its population to brain drain. The country's infrastructure is ridden in ruins.

In spite of the country's economic ruin and humanitarian crisis, Radelet applauded the UN for bringing the war to a close, enabling the disarmament and demobilization of warring factions, providing security and assistance for the transition, and seeing Liberia through two rounds of successful elections. President Ellen Johnson Sirleaf, he felt, had assembled a very capable cabinet, but capacities are "very thin" under the cabinet officer level. With a very long agenda before her, Mrs. Sirleaf has taken "firm steps" since taking office. She compiled a one hundred and fifty day action plan and about three-quarters of the tasks on the list were accomplished, despite very limited capacity. During her time in office revenue has jumped about 20-25% due to effective financial controls, and will be up 50% this year. Radelet stated that Liberia's total budget for 2006 was about $80 million and in 2007 will rise to about $120 million.

Radelet stated the four main pillars of Sirleaf's government are:
• Enhancing security;
• Revitalizing economic growth;
• Strengthening governance institutions; and
• Improving basic services and infrastructure.

Radelet emphasized that Liberia still faces the risk of returning to a failed state. This risk poses not only a regional threat, but threatens the national security of the United States. According to Radelet, Liberia will test the international community's strategy for engaging with failed and fragile states. Efforts by the U.S. in Liberia have been reasonable; however more efforts are needed at the diplomatic and financial level. The timber and diamond industry need to be revitalized in order to increase employment and investment and improve security. He feels that the timber industry is ready for sanctions to be lifted but urged caution on the diamond industry.

Radelet cited three examples of states in Africa that have emerged from their status as failed states:

• Mozambique, in 1991 was undergoing a similar humanitarian and political crisis, however in recent years the country has enjoyed 7-8% growth rate and has held four peaceful elections.
• Uganda, after facing an economic crisis in the early 80's, emerged from an economic disaster and, while democratic governance is still problematic, it has stabilized.
• Rwanda's economy has grown steadily since the genocide of 1994 with stability and good governance.

These examples serve as models of success for Liberia. With support from the international community and hard work by the Liberian government, Liberia has the potential of realizing a 7-8% growth rate over the next decade. To close, Radelet said that "we can make it work here" because of the small scale and relative small amount of resources needed and the lack of endemic religious differences. This state can be "rebuilt."

During the Question and Answer period that ensued, several important issues and relevant facts came to light:

• Timber sanctions are now fully lifted and there has not been widespread deforestation. If Liberia is able to manage its timber exploitation in a sustainable way, it should be able to realize revenues of $100 million annually.
• Over the next twelve months, the most critical issues facing Liberia are the lack of investment capital, lack of capacity in government, corruption and patronage that still exist, lagging judicial reform, job creation, road reconstruction, and agricultural rehabilitation.
• The Government of Liberia only gets 2-3% return on diamond earnings at present.
• Security remains a primary concern, including the personal protection of the President, particularly now that Dyncorps body guards have stopped providing a presidential guard.
• A World Bank spokesperson said that the Bank is constrained in what it can provide by the arrears of the Liberian government. It will provide about $35 million a year. The European Commission will also be providing about $35 million a year. There will be a "Partners Forum" donor conference in Washington in February to look at aiding Liberia's recovery.
• A State Department spokesperson said the U.S. was providing $200 million in total aid in FY 06 along with $500 million in peacekeeping costs. The top priorities are health, education, infrastructure rehabilitation, private sector engagement, and urban transportation.
• A Liberian present stated that Liberians want all sanctions lifted. They have no input on timber or diamond exploitation or policy that governs it and need to be better informed about international intentions. The media needs to be more active in laying out these issues.

A photography show, shot and produced by Tim Hetherington during the fighting in Monrovia in 2002 was projected prior to the panel discussion.

Drafted by Doreen Chi and Steve McDonald.