By: Sir-George S. Tengbeh
Introduction
Liberia, a country with a unique historical relationship with the United States, was established by the American Colonization Society in the early 19th century as a settlement for freed African-American slaves.
This shared history has created a complex dynamic between the two nations, characterized by periods of cooperation and exploitation. The current state of Liberia’s governance, particularly under President Joseph Nyumah Boakai, reflects both the external pressures from this historical relationship and internal challenges, including corruption and mismanagement.
This article critically examines these two facets, focusing on the economic and political dimensions of the USA-Liberia relationship and the governance issues plaguing Liberia under Boakai’s administration.
Phase 1: Historical Context and U.S. Exploitation of Liberia
In this phase, I reviewed the historical relationship of the US government and the impact it has on the economic and geopolitical areas of Liberia. The idea to review this historical relationship is in response to my previous article (The Flag of Convenience, the Liberia Shipping Registry, and the Firestone Agricultural Rubber Company of Liberia).
Interestingly, the most notable and notorious if not one of the best July 26 oration ever in Liberia by Dr. Pailey induced my decision to research and have more facts surrounding the US – Liberia relationship.
The Foundations of Liberia’s Special Relationship with the United States
The relationship between Liberia and the United States has always been asymmetrical. While Liberia was founded as an independent nation, its establishment and early years were heavily influenced by American interests. This influence extended into the economic realm, where American companies, notably Firestone, have played a significant role.
Firestone’s presence in Liberia dates back to 1926 when it signed a 99-year lease for one million acres to cultivate rubber, a vital resource for the American automobile industry (Dunn, 2009).
The lease terms were highly favorable to Firestone, with minimal benefits to the Liberian state. The company’s operations became a microcosm of the larger exploitative relationship between Liberia and the United States. Firestone not only extracted rubber but also exercised significant control over local politics and economics.
The rubber company’s dominance highlighted the broader pattern of economic exploitation that characterized much of Liberia’s interactions with the United States throughout the 20th century (Steinberg, 2001).
Financial Discrepancies: Liberia vs. Beneficiaries
Liberia has endured significant financial discrepancies due to the operations of the Liberia Shipping Registry, Firestone Agricultural Rubber Company, and USAID-funded projects. The Liberia Shipping Registry, although one of the largest in the world, has been a source of controversy regarding revenue generation and distribution.
Critics argue that the income generated from the registry, which theoretically should support national development, is instead siphoned off through opaque financial arrangements and offshore accounts, depriving Liberia of much-needed funds for infrastructure and public services (Pailey, 2024). This lack of transparency has significantly hindered the country’s ability to harness this substantial revenue stream for its socio-economic growth.
The Firestone Agricultural Rubber Company, operating in Liberia since 1926, has also been a focal point of financial exploitation. Despite Firestone’s massive rubber exports and profits, the benefits to the Liberian economy have been minimal. The company has been criticized for poor labor practices, including low wages and inadequate working conditions, which do not reflect the high value of the resources extracted.
Moreover, the financial agreements often favor Firestone, allowing for significant tax breaks and profit repatriation, leaving Liberia with environmental degradation and limited economic development. This imbalance underscores a broader issue of unfair concession agreements that fail to equitably distribute wealth generated from natural resources.
Liberia’s maritime registry generates about $20 million in revenue each year from LISCR. Under the current circumstances, for example, LISCR supports Liberia’s development with 10% tithes in total of $20 million.
This pales in contrast to the economic benefits enjoyed by other countries. The United States, for example, benefits significantly from corporation taxes and the economic activity generated by its shipping industries. Regarding Corporate Profits, major American shipping businesses have saved billions of dollars in operating costs by registering their vessels in Liberia.
These savings increase company earnings, resulting in higher tax collections and economic growth in the United States. According to ITF research, FOC registers allow shipping companies to save up to 30% on operating costs, resulting in yearly savings of billions of euros. Also, the Economic Impact of these actions is ridiculous.
These savings have a broad-reaching impact in the United States, creating jobs, investing in infrastructure, and increasing trade activity, far outweighing Liberia’s 10% tithes. For Liberia, the 10% tithes generated from the shipping registry is less than 1% of its GDP, a tiny sum that can NEVER meet the country’s developmental needs by 20%
Economic Exploitation Through Corporate Interests
The economic ties between Liberia and the United States have often been skewed in favor of American interests. The Liberia Shipping Registry (LISCR), managed by a U.S.-based company, stands as a prime example of this imbalance.
Established in 1948, LISCR has grown to be one of the largest maritime registries globally, generating substantial revenues. However, the benefits to Liberia from this lucrative sector are disproportionately small compared to the profits retained by foreign stakeholders.
According to a report by Global Witness, the Liberian government receives a mere fraction of the registry’s earnings, with the majority funneled to the managing American corporation (Global Witness, 2018).
The concept of “flags of convenience,” wherein foreign-owned ships are registered in Liberia to exploit lower tax rates and regulatory standards, further exacerbates this disparity.
While this system benefits global shipping companies by reducing operational costs, it leaves Liberia with minimal financial gain and significant regulatory challenges, including issues related to labor rights and environmental standards (Mulligan, 2017). The exploitation of these flags of convenience has led to international criticism, as it often involves the evasion of stricter regulations imposed by more developed countries.
USAID and Conditional Aid: An Unequal Partnership
The United States Agency for International Development (USAID) has been active in Liberia, particularly in the post-conflict reconstruction period following the end of the civil war in 2003.
While USAID has funded various projects aimed at rebuilding infrastructure and improving public services, these projects often come with conditions that benefit American companies and consultants.
A significant portion of the aid is used to pay high salaries to American expatriates and consultants, limiting the funds available for local development initiatives (Dunning, 2004).
For instance, the USAID-funded Liberia Education Assistance Project was criticized for allocating over 60% of its budget to administrative costs, including salaries for American staff.
This allocation left less than 40% of the funds for direct educational improvements, such as building schools and training local teachers (Foster, 2016). Such practices have been widely criticized for perpetuating a cycle of dependency rather than fostering sustainable local capacity.
Moreover, the conditional nature of this aid often ties Liberia’s economic policies to the interests of foreign donors, undermining the country’s sovereignty.
Power Asymmetry and Discriminatory Practices
Despite Liberia’s historical ties to the United States, the relationship has been marked by a clear power imbalance.
One of the most visible manifestations of this imbalance is the strict U.S. visa policy towards Liberians. Unlike citizens from many other countries with similar or lesser historical ties to the United States, Liberians often face stringent visa restrictions.
For example, while Sierra Leoneans frequently receive five-year visas, Liberians are typically granted much shorter durations, if at all (New York Times, 2022). This disparity not only limits opportunities for Liberians but also highlights the broader discriminatory practices embedded in U.S. foreign policy.
Furthermore, the influence of American corporations on Liberian politics exacerbates this power imbalance. U.S. companies have often leveraged their economic influence to secure favorable conditions, sometimes at the expense of Liberia’s national interests.
A case in point is the pressure exerted by the U.S. government on the Liberian authorities to grant mining rights to American companies, despite concerns about environmental degradation and insufficient local economic benefits (Human Rights Watch, 2019). These actions reflect a broader pattern where economic and political pressures are used to maintain an unequal relationship.
Phase 2: Governance Under President Joseph Nyumah Boakai
In this phase, I have considered reviewing the output of the Unity party government under the stewardship of President Joseph N. Boakai. The idea is to review the workings of the government for 6 months of leadership and grade its functions following deliverables as per their campaign promises and in close consideration with their predecessors.
As a political commentator and labor analyst, the first six months of President Joseph Nyumah Boakai’s administration reveal a concerning trajectory of bad governance, characterized by inefficiency, corruption, and a failure to meet key performance indicators (KPIs).
Despite campaign promises to root out corruption, Boakai’s government has shown a lack of decisive action. The establishment of a special anti-corruption task force has been largely symbolic, as it has yet to deliver substantial results.
Reports of investigations have surfaced, but without concrete outcomes or high-profile convictions, it appears more as a façade of accountability rather than a genuine attempt to tackle corruption. Compared to countries like Rwanda, where President Paul Kagame implemented stringent anti-corruption measures and restructured government oversight mechanisms, Boakai’s efforts seem feeble and ineffectual, failing to inspire confidence among the populace.
The economic front paints an equally bleak picture. Boakai’s economic policies, including tax incentives for small and medium-sized enterprises (SMEs) and infrastructure development plans, have been poorly executed.
The sluggish progress in these areas highlights a lack of administrative capacity and strategic planning. Unlike Ghana, where President Nana Akufo-Addo’s early tenure saw swift implementation of the “One District, One Factory” initiative, sparking job creation and economic growth, Liberia under Boakai remains mired in economic stagnation.
The delays in infrastructure projects not only stall potential economic benefits but also squander public resources, further burdening an already struggling economy. Unemployment remains high, and there is no tangible evidence of economic recovery, demonstrating a failure to capitalize on early momentum.
Social services under Boakai’s leadership have also suffered. Despite increased funding for healthcare and education, the outcomes have been lackluster. The government’s attempts to improve these critical sectors have been marred by poor planning and execution. In comparison, Botswana’s government, within the first six months of President Mokgweetsi Masisi’s administration, effectively enhanced healthcare delivery and educational reforms, leading to improved public service accessibility and quality.
Boakai’s administration, however, has failed to address fundamental issues such as healthcare infrastructure and educational inequality. The continuation of these inadequacies indicates a disregard for the well-being of the citizens and a lack of commitment to meaningful reforms.
When graded against best practices from other developing countries, the Boakai administration’s performance can only be deemed as failing, meriting a (D) grade.
The government’s inefficiency, coupled with a pervasive culture of corruption and mismanagement, starkly contrasts with the progress seen in other nations. There is a distinct lack of innovative policies and a reactive rather than proactive approach to governance.
Where other leaders have swiftly set transformative agendas and shown tangible progress within a similar timeframe, Boakai’s government appears directionless and stagnant. This comparison underscores the critical need for a reevaluation of strategies and an urgent overhaul of governance structures to avert further deterioration of the nation’s socio-economic landscape.
Corruption and Mismanagement
Since taking office, President Joseph Nyumah Boakai’s administration has struggled with significant issues of corruption and mismanagement. Despite the optimism that greeted his presidency, Boakai has faced accusations of nepotism, embezzlement, and misuse of public funds.
The Transparency International Corruption Perceptions Index consistently ranks Liberia among the most corrupt countries, with public officials often implicated in scandals involving the misappropriation of state resources (Transparency International, 2023).
One of the most troubling aspects of Boakai’s administration has been its handling of public procurement processes. Numerous contracts for public projects, ranging from infrastructure development to health services, have been awarded without proper competitive bidding processes, often to companies linked to government officials.
This lack of transparency not only undermines public trust but also leads to inflated costs and substandard work (African Development Bank, 2022). The mismanagement of public funds and resources has had a detrimental impact on Liberia’s development, diverting crucial funds away from essential services like healthcare and education.
Tribalism and Favoritism
In addition to corruption, Boakai’s administration has been criticized for fostering tribalism and favoritism.
These practices are particularly evident in the public sector, where appointments and promotions are often based on ethnic and political affiliations rather than merit. This approach has not only undermined the effectiveness of government institutions but also exacerbated social divisions.
In a country as diverse as Liberia, where ethnic tensions have historically contributed to conflict, the promotion of tribalism within the government is especially dangerous (International Crisis Group, 2023) (Tengbeh G.S, 2024).
Favoritism and Tribalism are at the peak of this administration as is seen clearly in many ministries and sectors of Liberia.
The Ministry of Defense has an appointee from Lofa country which compromises the peace of the country, the newly appointed Central Bank Governor is a long-time friend and close relative of the president while other staunch members appointed by the president are strong friends and all family members of current lawmakers.
For that reason, the Ministry of Labor is reluctant to stop the high level of corruption, nepotism, and tribalism at the Ministry of Labor. The Ministry of Labor, for example, has been accused of favoring individuals from the same ethnic background as key government officials, leading to a lack of diversity and representation.
Such practices limit the pool of talent and undermine the effectiveness of public administration. Moreover, they erode public confidence in the government, as citizens perceive these actions as a betrayal of the democratic principles of fairness and equality (BBC News, 2023).
Human Rights Violations
The Boakai administration’s track record on human rights has also been a significant concern. The use of excessive force by security forces during protests and civil unrest has resulted in numerous casualties, including deaths.
The government’s failure to hold perpetrators accountable has created an environment of impunity, where security forces feel emboldened to act without fear of consequences (Amnesty International, 2023).
In addition to these abuses, there have been reports of the government’s crackdown on freedom of expression and the press. Journalists critical of the administration have faced harassment, intimidation, and even physical attacks.
This repression has stifled dissent and reduced the space for public discourse, undermining Liberia’s democratic processes. The International Federation of Journalists has documented several instances where media outlets were shut down or journalists were detained for reporting on corruption and human rights abuses (International Federation of Journalists, 2023).
The Impact of International Aid and Debt
Liberia’s reliance on international aid and loans has further complicated its governance challenges. While aid can provide critical support for development, it often comes with conditions that limit the government’s ability to implement policies independently.
Moreover, the accumulation of debt has placed a significant burden on Liberia’s economy, with a substantial portion of government revenue going towards debt servicing rather than essential public services (World Bank, 2023).
The Boakai administration has faced criticism for its handling of international loans, with concerns about the lack of transparency in the negotiation and allocation of these funds.
The International Monetary Fund (IMF) has raised concerns about Liberia’s rising debt levels and the potential for fiscal instability. The government has often resorted to borrowing to finance budget deficits, leading to a cycle of dependency and financial vulnerability (IMF, 2023).
Supposition (Wrapping up)
The intricate and historically loaded relationship between Liberia and the United States has profoundly influenced Liberia’s political and economic landscape. While the United States has provided significant aid and investment, these have often come with conditions that prioritize American interests and perpetuate an exploitative dynamic.
This asymmetry is evident in the economic sectors dominated by American companies, such as aid, rubber, and shipping, and in the restrictive visa policies that limit opportunities for Liberians. Domestically, President Joseph Nyumah Boakai’s administration has been marked by corruption, mismanagement, and a disregard for human rights.
The persistence of tribalism and favoritism within government institutions cannot be overemphasized. Let me point out that, since its inception, Boakai’s government has failed to address systemic issues that have plagued Liberia for decades. Liberia stands at a crossroads, facing the dual challenges of external exploitation and internal mismanagement.
Addressing these issues requires a comprehensive and radical approach that reimagines what it means to be Liberian and prioritizes the well-being of all citizens. By learning from other nations and implementing robust reforms, Liberia can overcome its challenges and build a future defined by dignity, justice, and prosperity.
Corruption remains rampant, with public funds being siphoned off by officials instead of being used for development projects. The administration’s inability to renegotiate exploitative concession agreements and enforce labor laws has left many Liberians in precarious employment situations while foreign corporations continue to operate with impunity.
We need not remind the president that the rule of law is the cornerstone of any democratic society, ensuring that all citizens are subject to the law’s authority equally. Under Boakai’s regime, however, the rule of law has been systematically undermined.
Judicial and integrity institutions remain weakened and compromised by political interference and corruption, fostering a culture of impunity where high-level corruption goes unpunished. On Foreign relationships for which we need to re-examine, countries like Botswana and Norway have successfully navigated foreign relationships to benefit their economies and citizenry.
Botswana’s strategic management of its diamond resources, through partnerships that ensure significant local benefits and reinvestment, has transformed it into one of Africa’s most stable and prosperous nations. Similarly, Norway’s sovereign wealth fund, financed by oil revenues, has ensured long-term economic stability and high living standards for its citizens.
These examples highlight the importance of equitable and transparent foreign policies that prioritize the host nation’s development.
To address these challenges, Liberia must embark on a radical agenda for reform and development. This includes redefining Liberian citizenship to foster a sense of collective responsibility and belonging, tackling structural violence and unfreedoms, and prioritizing nation-building alongside state-building.
Redefining Liberian citizenship is in the holistic form of redefinition where we must emphasize more on rights, responsibilities, and relationships. This involves incorporating citizenship education into national curricula, implementing a national youth service scheme, and mandating civics training for public officials. Such measures can foster a sense of national identity and collective responsibility among Liberians.
The government must focus on reducing poverty and inequality by shifting from an extractive economic model to one that prioritizes industrialization and value addition. This includes developing the manufacturing sector, investing in education and skills training, and promoting creative industries.
By creating jobs and improving living standards, Liberia can break the cycle of poverty and underdevelopment with fewer foreign interventions and ties.
The oration of Dr. Pailey is valid on grounds that Liberia can only improve if we REIMAGINE the true definition of who are and what we aspire to be. It will also create the chances of building strong relationships between individuals and institutions for national cohesion.
This will involve fostering a culture of integrity, accountability, and transparency, and ensuring that government officials are held to high ethical standards. Strengthening civil society organizations and encouraging citizen participation in governance can also enhance democratic practices and promote social cohesion.
Leveraging Natural Resources should be considered the most important element of the government of Liberia because it has the propensity to improve or demote nation-building. The legislators must be in the interest of the people to negotiate/renegotiate concession agreements to ensure that they benefit the nation and its people.
This includes ensuring that foreign companies adhere to labor laws and environmental standards and that profits are reinvested into local communities. By retaining more value from its natural resources, Liberia can finance its development and reduce dependency on foreign aid.
Strengthening the Rule of Law starts with the empowering of our judicial system to provide impartial functions to the people of Liberia. Judicial and integrity institutions must be empowered to operate independently and effectively.
This involves prosecuting corruption, enforcing existing laws, and creating new safeguards to prevent abuses of power. Strengthening the rule of law can restore public trust in the government and attract foreign investment, fostering economic growth and development.
References
- Dunn, D. E. (2009). The Firestone Tire and Rubber Company in Liberia: 1926-2007. Liberia Studies Journal.
- Steinberg, D. (2001). Liberia and the United States during the Cold War: Limits of Reciprocity. Palgrave Macmillan.
- Global Witness. (2018). Catch Me if You Can: Gaps in Financial Management and Oversight in the Liberia Maritime Authority. Global Witness Report.
- Mulligan, S. (2017). “Flags of Convenience: The Impact on Liberia’s Economy and Environment.” Journal of International Maritime Law, 23(2), 150-170.
- Dunning, T. (2004). “USAID and Conditional Aid: The Impact on Liberia’s Economic Policies.” Development Policy Review, 22(4), 473-490.
- Foster, C. (2016). Education in Liberia: An Assessment of USAID’s Impact. USAID Report.
- New York Times. (2022). “Disparities in U.S. Visa Policies Toward West African Nations.” New York Times, June 15, 2022.
- Human Rights Watch. (2019). “Liberia: U.S. Influence and Environmental Impacts of Mining.” Human Rights Watch, April 5, 2019.
- Transparency International. (2023). Corruption Perceptions Index 2023. Transparency International.
- African Development Bank. (2022). Governance and Corruption in Africa: The Case of Liberia. African Development Bank Report.
- International Crisis Group. (2023). “Ethnic Tensions in Liberia: Analyzing the Role of Tribalism in Politics.” International Crisis Group Report, March 2023.
- BBC News. (2023). “Liberia’s Government Under Fire for Nepotism and Tribalism.” BBC News, January 10, 2023.
- Amnesty International. (2023). Liberia: Human Rights Violations and Abuses. Amnesty International Annual Report.
- International Federation of Journalists. (2023). “Press Freedom in Liberia: Challenges and Threats.” IFJ Report, May 2023.
- World Bank. (2023). Liberia Economic Update: Managing Public Debt. World Bank Report.
- International Monetary Fund (IMF). (2023). Liberia: Article IV Consultation Report. IMF Country Report No. 23/78.
- National Oration, July 26, 2024: Robtel Neajai Pailey: https://www.robtelneajaipailey.com/events/2024/6/27/a-radical-agenda-for-re-imagining-liberia
- https://frontpageafricaonline.com/labor-matters/liberia-dismissed-labor-employees-describe-dismissals-as-illegal-and-wrongful/?fbclid=IwY2xjawEWElxleHRuA2FlbQIxMAABHXLOXyU2bMk9ZlaHSp-CONbJD4CAE8mDKw70gsekAdtaOO84jhZtlY87Mw_aem_xsivx8of2ZwRMB-EQimvKQ
- https://frontpageafricaonline.com/front-slider/liberia-infighting-rocks-ministry-of-labor-as-minister-cooper-kruah-accused-of-flooding-institution-with-incompetent-kinsmen/?fbclid=IwY2xjawEWElpleHRuA2FlbQIxMAABHQPYLzIMC3purOK4i4Fsp4fe26dZajOomrucUp-oWeB2F_QzggwMSTHlrQ_aem_vtDm-dI_LBoEfycEP77sZQ
George S Tengbeh is a Labor relations, policies, and governance commentator.