George K. Fahnbulleh

There is an ongoing debate on the state of the Liberian economy. I am compelled to put aside sentiments, personal relationships, and political allegiances to enable me objectively respond to this debate. It is high time that we all did to prevent further decline of what we have all worked so hard to build and preserve. I also believe that it is my obligation (like many of you) even more so when I have all at stake as a Liberian entrepreneur. I fervently believe that being conscious of where Liberia has risen from over the last 8 years, significant progress has been made to normalize the socio-political and economic situation in the country; one only has to have lived in Liberia since 2005 to appreciate the levels of growth and development Liberia has experienced as well as the foundation of peace and goodwill Liberia enjoys through the savvy leadership of President Sirleaf.

Despite this, being an entrepreneur and a trade development professional, I must say that the economy is severely stressed. Unless those of us entrusted to safeguard the interests of the Liberian people begin to realize our limitations and except our mistakes with conscientious efforts to make changes, we are on a downward trajectory. Liberia experienced a surge in investment and commercial activities in the last couple of years of the first term. Government initiatives and programs conceived in the early years of the administration began to show fruition as the government began implementing areas of the national development agenda. This spurred private sector activities in diverse sectors for example, construction contracts were in abundance with the construction of roads, schools, and hospitals. The procurement of goods and services generally improved while other service sectors piggybacked. Opportunities for wealth creation were being visible and Liberia experienced an unprecedented emergence of a TRUE decentralized middle class. However, immediately before the elections, there was an impasse; the world held its breath to see how the elections would end, which was a major test to our resolve for peace and stability. The economy began to gradually recede immediately after the elections as investors and donors continued the ‘wait and see’ attitude due to the then brewing fracas over the election results. FDI took a plunge as with ordinary investment speculation. Hotels like mine experienced a drop in occupancy especially from business clients. This was exacerbated by a reshuffle that did not meet the expectations of the public and partners. Delays in completing and passing the budget had the most cataclysmal effect on the economy and nation as a whole.

Having served on the board of a commercial bank during this period, the banking sector immediately experienced widespread defaults on loans by contractors, suppliers, and service providers who had borrowed in anticipation of being paid by the government or like myself, in anticipation that the surge in commercial activities seen in 2011 would continue. There is a ricochet effect; in simple terms, when there is a budgetary crisis with long delays in disbursements (especially so when the government is the most dominant employer and purchaser of goods & services), government employees, services providers and suppliers of goods will not get paid; people go into defaults with their banks and banks performance ratios (such as loan to deposit) go out of balance and they in turn don’t lend; local entrepreneurs are not able to cover their overhead or obtain short term financing to keep afloat most often leading to downsizing or even closure. Consequentially, a bulk of the population (publicly and privately employed) cannot support their families and must curtail spending. Activities that parallel economic growth such as the building of new homes, starting of domestic enterprises, and increase in employment all systematically decline.

Equally challenging even to the most experienced leadership is, when the budget is over ambitious & concluded without capturing the inputs, programs, and strategies of the individual entities. As such, there is a disconnect between the agenda & work plan of the individual agencies and what they will end up being compelled to do with the scanty allocations they are spared. As a short-term fix, which we are experiencing now, the government will attempt to raise revenue at all costs thereby imposing further stress on businesses that already don’t have the incentives to operate and succeed. We forget to realize that when there are no counterbalancing measures put in place to circumvent budgetary lapses, the economy implodes.

We created phenomenal policies and strategies over the first 6 years of the administration, but have begun faltering in their implementation by developing ad hoc agendas to fit budget lapses. For example, the Ministry of Commerce to which I once served as Advisor to the Minister, developed through broad based engagements with the private sector and donors, contemporary Trade, Industrial, and SME policies. However, the ministry is unable to implement these without the budgetary support. Thus, even though there is an ambitious administration with revived interests and plan, there is not enough money to implement them or jumpstart programs that development partners might be interested in funding. In the case of many agencies, the Ministers might actually accomplish more if 80% of their staff just stay home and get paid. This way, the institution could conserve and use savings to implement a couple of tangible programs such as establishing a Value Addition Center to support light processing or a Trade Store to promote Made in Liberia products.

The President needs to intervene perhaps drastically to improve interagency cooperation at the Ministerial or top level (predicated upon a concerted national agenda); currently, there is an infectious disconnect that is unsupportive of her vision and is affecting productivity in various agencies. It is so easy to slip into the trap of shifting responsibilities and attempting to solve such situations with short-term individualized interventions that most often create artificial and formal barriers. There is another caveat, donors and partners a becoming weary due to lapses in the implementation of key planned activities and the unnecessary ongoing public debates and internal frictions. From experience, donors and development partners are very sensitive to poor coordination.

The government needs to realign the functions of the various institutions/ministries to resolve overlapping functions and the evolution of super bureaucracies.

We have made progress to liberalize trade through the development and implementation of World Trade Organization (WTO) compliant trade policies as well as alignment of our tariff system with the ECOWAS Common External Tariff. A key part of WTO commitments is reductions in tariff rates, and removing unnecessary nontariff measures. To effectively facilitate trade, Liberia is obligated to improve and simplify customs procedures, streamline and increase the predictability of the systems for doing business. Many short-term interventions to stabilize the economy might lead us to administer contravening measures that would raise concerns with our trading partners; these actions might not have to be systemic.

Let me use this medium to suggest few interventions that the Government needs to focus on to attain sustainable economic development:

1. Knowing that our comparative advantage lies in our natural resources, the Government must begin to fund programs that support the emergence of vibrant Small & Medium Industries (SMIs). Concomitant to this, quality improvement and standards must be prioritized to ensure the competitiveness of locally produced goods in order to access other markets. Liberia has been often classified as a Net Importer because we import almost all our consumables (such as sardines that is abundant in our waters or edible oils). By developing SMIs, we could make significant strides towards balancing our trade and avoid some of the effects of global trends that we might not be able to control. This also ties in to the current debate re increase in foreign exchange rate. Many factors affect the availability of foreign currency on the market. However, taking a look at our Balance of Payments and current trade flows we need to increase exports and retain capital in country. I don’t believe the export of raw/unprocessed resources by foreign companies would optimally improve our net foreign assets since these companies by virtue of their models expatriate profits and capital. Whereas, a domestically owned SMI that adds value to say rubber or timber for exports will most likely bring back and retain in country most of its earning. 
   
   
2. Create both fiscal and non-fiscal incentives for businesses (especially Liberian owned) to thrive; such need not be discriminatory or contravening to multilateral obligations. Undue stress on the business community also affects the survival of local enterprises, discourages FDI, and heightens uncontrollable corruption especially when several agencies are compelled to raise revenue or blamed for the budgetary shortfalls. Even when the intent is not corrupt, just the mere fact that multiple agencies begin to inspect businesses and firms, impose fines, or prosecute businesses all at the same time borders harassment and create poor public sentiments. Government must not be deterred from its desire to strengthen the business environment and facilitate trade.
   
   
3. Increase (rather than cut) the budgets of agencies that affect Trade and the proper exploitation of our resources such as the Ministries of Agriculture, Commerce, the FDA, and LPMC (or a similarly reconstituted agency). Focus and money must be placed on programs that support value addition, the increase of local production, and improvements on quality & standards to ensure Liberia’s trade competitiveness. Increased trade results in increased revenue for both the private and public sectors, and increases net foreign assets without imposing business barriers or fighting around the budget. There is no sustainable way of generating revenue without offering something for money (which is called Trade); what do we have to trade? Our resources. But I stress here again, we must make the move from just exporting unprocessed resources to adding value for greater returns.
   
   
4. Implement a rationalized reorganization of government that would bring in competences and experience rather than merely reshuffling officials (this recommendation doesn’t in anyway conclude that there aren’t competent officials already in government.). We have a savvy and experienced President with enormous integrity, goodwill and support from development partners; but she cannot do the work by herself and must be able to rely on able lieutenants. It is like building a 20 story building with 4 inch blocks from the foundation up and then using gold bricks for the top floor. 
   
   
5.  Great work in being done re the construction of roads. This must continue strategically to open access to markets, facilitate trade, and improve access to social services rather than for political gains. 
   
   
6. Tourism is a great but underexploited opportunity that the government must begin to prioritize. Our rich and diverse culture & history and geographical assets could make Liberia a touristic destination. Relatively, there is a need to improve the country’s image; we must market Liberia. Despite the many good news that have come out of the country since President Sirleaf’s ascendency, we are still a post conflict nation that has been scarred by years of economic mismanagement, mediocre leadership, complex fragmentized society (not limited to tribal, religious, gender, and fraternal), and unfavorable international relations.
   
   The world still sees a nation ravaged by corruption, wars, etc. Where as, with our turn for the better and the goodwill this administration has, we could market our experience in conflict resolution & peace building and make Liberia a destination for global conferences, and peace talks in addition to ecotourism. Why do we have to go all the way to cold Geneva to settle regional disputes?
   
   Government must pay attention on developing the skills needed to drive tourism and cater to increased economic activity; the hospitality sector must be supported and incentivized. Hospitality must be included and subsidized at the University Level. Providing quality hospitality service is a challenge for hoteliers and restaurateurs as there are no formally trained Liberian chefs, hotel managers, and etc.
   
   
7. Existing concessions must be reviewed without intimidating investors with the intent of ensuring that corporate social responsibilities and other obligations of the concessionaires are being met. Furthermore, government needs to be more prudent in negotiating new concessions. We are yet to experience the optimal effects of the over $16B we have attracted especially when concessionaires are not fully utilizing or developing local skills and resources or procuring from domestic suppliers. Partnership with local businesses must be embedded to ensure that concessionaires invest into building local businesses to supply their needs as an alternative to bank financing.
   
   
8. BUILD LIBERIAN MILLIONAIRES! Concessions must be encouraged to establish partnerships with Liberian entrepreneurs and the communities in which they operate. This applies to the emerging oil sector. From the onset, government needs to award a couple of oil blocks or sell shares to Liberians even before prospecting rather than merely allowing large multilateral companies acquire all the blocks and give out X percentage to Liberians at their bargaining terms. With such discretion, these shares would be available only to the few elites and those in power who can advance the agenda of these companies. On the other hand, if say shares of just 3 out of the 13 oil blocks are opened to 1000 Liberians each who will own and in turn negotiate or partner with foreign investors, the chances of spreading wealth and building Liberian millionaires would be greater. Let us learn from the mistakes of other oil rich countries and neighbors such as Ghana and Nigeria. How else would we develop vested interests in peace, security, and a vibrant political system?
   
   
9. Provide customized lending facilities to support entrepreneurship, mortgage & home construction, education & specialized training, healthcare, and manufacturing. In the developed world, Home Starts (measuring how many new homes are built in a period) is a critical indicator of economic strength and directly relates to the performance of other industries such as banking, the mortgage sector, raw materials, employment, construction, manufacturing and real estate. In a strong economy, people are more likely to build new homes; conversely, in a weak economy, people are less likely to.
   
   There has been condemnation of the CBL from some quarters for injecting funds through the commercial banks for lending to Liberian businesses. I don’t know how, why, and where that argument is coming from. Unless it was not strategically implemented and lacked the monitoring mechanisms, it was an unprecedented and overdue move by the government that is HELPING us. 
   

These and several other interventions can develop a sustainable capitalistic private sector driven economy with more revenue generating opportunities to drive an ambitious development agenda.

Hernando de Soto
Economist Hernando de Soto, author of "The Other Path" and "The Mystery of Capital," is the director of Peru's Institute for Liberty and Democracy and a champion of market economics and property rights.This Interview was conducted on PBS: Commanding Heights

Interview Contents

• Capitalism and the Road to Prosperity
  INTERVIEWER: Why does capitalism fail everywhere else and triumph in the West?
  
  HERNANDO DE SOTO: Because the West has a property rights system, and property rights systems seem to be about ownership. What we're discovering more and more is that it's really the system that undergirds the system of values called capitalism. In other words, you have property rights in the West. In developing nations we do, too, but they're not legal. Once you legalize them and you have recordkeeping systems and you have tracking systems and you've got contracts and you're able to get all the information about somebody's ownership over an asset, all of a sudden you obtain enormous amounts of data that you do not have in developing nations.
  
  In the West, that is captured in the property system. If you are somebody that is honorable and pays their debts, which is what somebody would be interested in, that's going to be captured in your records, and your records are linked to your property records. All of these are property rights, [but we don't have them] organized in a central system ... in Third World countries.
  
  INTERVIEWER: Is this a possible change in the Third World?
  
  HERNANDO DE SOTO: Yes, of course. ... You [The United States] were also a Third World country 150 years ago, and you transformed yourselves into a First World country. The same occurred for most countries throughout the world.
  
  INTERVIEWER: And how long will that take in the Third World?
  
  HERNANDO DE SOTO: If we don't do anything explicit about it and we follow your formula, which is to zigzag our way to prosperity, it could take 300, 500 years. From the prosperous Catholic city of Florence until [the time when] all of Italy started having a right to prosperity, not sometimes but all the time, it took 500 years. What we say in The Mystery of Capital is that there are shortcuts, and once we learn what you did, what was necessary, especially the importance of property rights beyond ownership, we should be able to get there very quickly. The Japanese did it, for example, under MacArthur's occupation. They converted from a feudal system to a property-ownership system.
  
  
• The Influence of Developed Nations on Developing Countries
  
  INTERVIEWER: Why do you come here and go on American television? What are you hoping to achieve by this trip?
  
  HERNANDO DE SOTO: A lot of the support we get for working in other Third World countries actually comes from the First World, from developed countries like the United States, so it's important to get our message out. It's important first for support [and] funding, and secondly to influence policy. So much foreign policy is mistaken as to where the challenges really are. We'd like to make sure that in developed countries, who have so much influence on what developing and former communist nations are, people realize what the real issues are about. So it's important to come here.
  
  INTERVIEWER: Does the developed world realize what the issues are?
  
  HERNANDO DE SOTO: I think that the developed world is beginning to realize the issues. A lot of things that have gotten in the way have to do with culture. Culture exists; it's important. I go to Paris because I want to [experience a different] culture. When I go to Paris, I know I'm in another culture. But I don't think culture has really very much to do with the fact that some people are desperately poor and others are wealthy. One has to get that out of the way. It's important for people in the United States to realize that they, too, were a Third World country one time, and regardless of the culture, they became as developed as Spain was once. We have to do the same thing. We have to let them understand that it's invisible things such as the law and institutions which have enormous amounts of things to do with prosperity, and it's not easy to get that message across. You get a tractor, you get a big machine, and say these guys have got it and these other guys don't, and therefore these guys [with the tractor] are more prosperous than the second guys. That's easy to illustrate. When we talk about law, when you talk about institutions, it's very hazy stuff, so you have to go back and sink it in one time after another. It's a lifetime's work, I'd say.
  
  INTERVIEWER: The idea that the U.S. was once an underdeveloped country is hard to conceive when you sit here in New York. This looks like it's been here forever.
  
  HERNANDO DE SOTO: That's right. If you look at New York, there's a feeling that all of these buildings have been here forever, but in fact they haven't been here for that long. They certainly weren't here 100 years ago, not the ones you are photographing now. Enormous amounts of things can be done in half a generation. It's incredible. And when you go and see the United States, Williamsburg, which used to be a capital of the United States, and compare it with the way Mexico City was 120 years ago [or] what Lima was, we probably had bigger cities than you did in the Unites States, and all of this [growth] has been recent. A lot of it has to do with the right laws, with the right kind of institutions.
  
  INTERVIEWER: When you come to New York and see the kind of wealth that's here and the kind of consumption that's here, how does that make you feel compared to the kind of people that you and your people work with day to day?
  
  HERNANDO DE SOTO: The difference between being in the U.S. and being in Peru is that a very small number of people in the U.S. are concerned with development for the very simple reason they're already developed, while development is what we're all about in the Third World. We've got a lot of the human touch; we've got a lot of the human dimensions. What we're missing is prosperity. So naturally when you go to Latin America and you talk about development, it's a big issue. Here in the United States it's an issue for the foreign-policy types. I think they call them foreign-policy wonks, some multinationals who have investment abroad, some internationally minded citizens, but they're not the majority of people. They're the minority, and that's what we deal with -- the minority, the ones who care.
  
  INTERVIEWER: How much does the policy in the developed world actually impact what you're trying to do in the developing world?
  
  HERNANDO DE SOTO: What happens in the developed world impacts what happens in the Third World and in former communist nations very much. First, because people from developed nations have got more money, so people on the left in the United States who want to press certain points of view can actually turn governments around. So can people on the right. The war for development is fought on both fronts, both in the Third World and in the First World. In the First World, if somebody thinks that a human rights issue is very important regarding terrorism and they actually can manage to sink that point in and make it a big issue internationally, it's all about whether you're getting funds or not. You can decide the cause of that war here in the First World because the funding for the weapons, the funding for the balance of payments stabilization, the funding for economic adjustment, it all comes from the First World. So when the First World blinks, the rest of us blink as well, and even harder. So the war is also here.
  
  Let me give you an idea: Aid agencies which are extremely helpful are mainly concerned about physical things. How do we help the poorest of the poor? They give a lot of weight to them and relatively little weight to the changing of institutions or the changing of legal systems. That's a definite impact, because they pour money to those people taking care of the physical infrastructure stuff -- that's also where the best brains in the Third World go to. And they don't go to changing a legal system. So what happens in the First World is very important to us.
  
  INTERVIEWER: Do you feel like you're making progress?
  
  HERNANDO DE SOTO: Oh, yes. I think we are definitely making progress. The press is the first indication. We've been out in the last few months and in a lot of the major magazines in the United States and in Europe and in the UK. It's catching on because we're also making sure that the way our arguments are structured is not only understandable by the right people in developing countries but also can be read by the right people in the First World nations. It's very important to make the argument relevant to everybody.
  
  INTERVIEWER: Recently we were in Mexico and we interviewed Vicente Fox. He talked about your ideas and said, "We're listening to what de Soto is saying. We're also going to Egypt and trying to really connect with top leaders in developing countries...."
  
  HERNANDO DE SOTO: What we're trying to do is talk to very important leaders in the Third World -- not all of them, [as] there are about 160 nations between the Third World and former communist nations. What we're trying to do is to talk to some of those that are very relevant for a variety of reasons, but I would say that the principal one is so that the argument doesn't build up that what we're doing is a Latin American issue, or what we're doing has to do with former Spanish colonies. We think what we're doing has to do with human nature and the way societies get organized. So it's very important for us to be able to talk to the Cabinet in Egypt, which we do, because here we are talking with Muslims with a 6,000-year-old civilization, and the problems they've got are very similar to ours. It's important for us to be talking to Fox as well, because he's basically saying some of the things that the Egyptians have begun to say and the same things that Gloria Arroyo is saying in the Philippines. It's important for us to be in each different culture to indicate that the problems we're facing are standard and they are policy issues that can be dealt with.
  
  INTERVIEWER: In Mexico, they've got a lot of optimism, but they've got a huge challenge. What do you think?
  
  HERNANDO DE SOTO: Personally, I think that Vicente Fox and his people are doing excellent stuff. One has to keep one's eye on them very much because they're breaking an old monopoly tradition in politics, and so they've got a lot of difficult challenges to face. They're very credible now; the important thing is for them to continue being credible. They're also moving a lot of funds at the same time. They've got a very difficult task ahead of them, but we wish them well and we're going to support them as much as we can.
  
  
• The Roots of Poverty in the Devloping World
  
  INTERVIEWER: Let's talk a bit about your personal history. How did you get involved in these sorts of issues of capitalism, of poverty, and property rights?
  
  HERNANDO DE SOTO: The way my involvement in these issues began was when I realized, after living in Europe for a long time yet traveling constantly back and forth to my native Peru in Latin America, that Latin America, and Peru of course, were very poor. I hadn't quite realized that as a child. I thought that my Peruvian friends, my cousins, my interlocutors when I came to Peru were just as sophisticated, as clever, as skilled as my European friends when I was a child. It only dawned on me about the age of 17 that I actually came from a poor country. And then I wondered why, since the skills seemed to be the same, at least among elites. So I told myself there must be something that isn't obvious that accounts for the relative wealth of the European, the North American, the West versus the nations of the Third World. Since then I've been interested in finding out what that difference is. And since I couldn't pick it up in the books, I thought it had to do rather in observation, with getting involved in the grassroots. That's how I got involved in this. And about the age of 39 I had made enough money so as to survive, hopefully, for the rest of my life. I started getting more involved in these issues.
  
  INTERVIEWER: You're talking about grassroots, and we're now going to the town of Cajamarca [in Peru]. What message are you taking to Cajamarca?
  
  HERNANDO DE SOTO: The reason we were invited to Cajamarca, like to all the other places we've been in Peru, is because of the book that I wrote, which has become Peru's number one best seller of all time. We've sold about 300,000 copies. It's called The Mystery of Capital, and it tries to give an explanation for poverty at a time when everybody is somewhat disappointed in the fact that since the fall of the Berlin Wall we've entered another model which supposedly was going to bring prosperity, the market economy capitalism, and it hasn't. I happen to believe in the market economy, and I believe that capital is the source, or explains to a great degree the capacity to great additional wealth of the West. I've come up with an explanation that says with the figures that we are bringing out that, in fact, the poor have worked a lot; that we're a very enterprising lot; that what is missing is a legal system and an institutional framework that allows us to leverage wealth.
  
  The reason I'm going to Cajamarca now is because the universities, the association of Citizens Against Terrorism, and a few other organizations have invited us to talk about The Mystery of Capital. The curiosity stems from the fact that now, 12 years after the fall of the Berlin Wall, and 11 years after Peru adopted pro-market policies, their situation hasn't gotten that much better, and they want to know why. The Mystery of Capital offers an explanation. It says that the system per se works in the West, but that in our country, like in much of the Third World, it isn't functioning, not because it is not adaptable, but because we have missed some of the crucial elements that the Westerners had in the 18th and 19th century, like property rights, without with this system [the Third World] cannot function. I'm going there to explain to them that they shouldn't lose hope, that there are elements missing, but they require the active intervention of public opinion, and that's why I'm talking to them. And the need for politicians to overhaul the whole legal system so that they, too, can have property rights according to law over the assets they possess and be able to create capital.
  
  INTERVIEWER: Is Cajamarca like any other poor town in the rest of the world?
  
  HERNANDO DE SOTO: Cajamarca, yes, is a very typical Peruvian village, mainly of rural characteristics, probably the 20th in size of Peruvian urban conglomerations. So it's very small, and it's pretty representative of a lot of what we call Latin America -- that is to say, Latin America from Mexico down to Bolivia, that part of America where we are mostly a mixture between old Indian indigenous civilizations and the Europeans that migrated.
  
  
• The First World vs. the Third World
  
  INTERVIEWER: Why should the First World care about the Third World?
  
  HERNANDO DE SOTO: I don't think the First World needs to care about the Third World. As a matter of fact, I generally believe that most of the problems that need to be resolved in the Third World and in former communist nations cannot be resolved from outside. In other words, I don't think there's much Westerners can do about it. Therefore, the fact that most First Worlders don't care about Third Worlders doesn't actually depress me, because I think the solutions are a local affair.
  
  Why would it be interesting for the First World to pay attention? Because we're a globalized economy. You depend very much on foreign oil. If you start working down to the crucial ingredient of your economy, you'll see that it's all interwoven. So in spite of the fact that you're not indispensable for the development of the Third World, the fact is that it is useful for us Third Worlders to be in close contact with you, and [to] be able to use mainly your technical advice when needed. But there is no reason that I can think of why I should try to convince a First Worlder to be interested in the Third World, other from the fact that we're all part of the same family.
  
  INTERVIEWER: You fly to a lot places. Where do you like to go? What sort of towns do you get more insight from?
  
  HERNANDO DE SOTO: I have found out as we've been called to work in different parts of the world that every place brings something new. I was very interested, for example, when we were contracted to start helping redesign Egyptian legislation regarding property rights for the poor. I always thought that traveling to a different culture would make a great difference. It makes a difference, but not a great difference, and that's also interesting. What's interesting is to find out that we Third Worlders have much more in common than we have in differences. The cultural differences that would make for an interesting program on the Discovery Channel or an article in National Geographic Magazine are cute, are interesting, but that's not where the basics are. The basics are that all of us Third Worlders have in common a very underdeveloped property rights system, a very underdeveloped legal apparatus, and that's what keeps you ahead of us. That's the part I look at. The fact that I'm able to find it in different cultures is first of all important to us because it indicates that there are basic principles that account for development, that there are general theories that one can bring together and that, therefore, there are solutions that one can devise on the basis of this information. But it's not the differences that make it interesting for me to go into any particular part of the Third World; it's the fact that we're so similar in spite of the fact that this might be manifested in different cultural forms.
  
  
• Assessing the Success of Capitalism
  
  INTERVIEWER: You make a pretty amazing and sweeping statement: The moment of capitalism's greatest triumph is the moment of its greatest crisis. Why?
  
  HERNANDO DE SOTO: The reason why this is not capitalism's best moment. I wrote the book two years ago, before it actually got published and started being circulated in Spanish, because it hasn't really worked for the majority of the people in former communist nations and developing countries. We people from the Third World and from former communist nations are five-sixths of the world's population. There are about six billion human beings in total, and five billion are in developing and former communist nations. At the time of the fall of the Berlin Wall, we all decided to take the capitalist route. Right now it's quite obvious that about 80 percent of the people in developing and former communist nations have not benefited from the system. The fact that there's no alternative around for the moment doesn't mean that one cannot be created. It's obvious that people are trying to find other ways.
  
  So the test is there. The test is, can the system actually work for the majority of the people? So this is capitalism's testing moment. This has happened before. It's not that this hasn't occurred before. In Latin America, we found that in at least five opportunities, all our countries put together since the 1820s, when we found our freedom from Spain, [have] actually tried to follow the U.S. model or the Western model. We've privatized railways and we have lowered our tariffs to zero and we've opened ourselves up to foreign investment, and five times we've had to go back because it made sense for a very small [group] among of people at the top of the pyramid, but for the majority it didn't work.
  
  So our thesis is, basically, the reason it doesn't work for the majority is because the system can only work with property rights. Markets and capitalism are about trading property rights. It's about building capital or loans on property rights. What we've forgotten, because we've never examined the poor, we've sort of thought that the poor were a cultural problem, is that the poor don't have property rights. They have things, but not the rights.
  
  And when you don't have the rights, you don't have a piece of paper with which to go to market. You don't have a legal system that undergirds that piece of paper and allows it to circulate in the market. The question now is whether we're going to follow the Western route -- let's say that capitalism started 500 years ago -- and go through one revolution after another, tremendous wars, social wars and then finally, four centuries, five centuries later the system comes together, or we're going to be able to learn from you and get it over with in the next five, 10 years.
  
  But that requires for capitalism to understand that looking at the poor is not the task of the First Lady of the republic. It's the task of the president. It's not a question of just doing macroeconomic stability, getting your accounts right, stabilizing money. It's about finding out why the poor can't use the legal system and revamping it. It's major surgery. That's why we're at a time where capitalism is going to be tested. Will it be able to cater to the poor, or will it continually be seen in places like Latin America as something that essentially relates to libertarian clubs and to people who are wealthy, in many cases who don't necessarily believe in capitalism. They just believe in helping their own wealth. Or are we going to make it inclusive and start breaking the monopoly of the left on the poor and showing that the system can be geared to them as well?
  
  INTERVIEWER: You have alluded to it a bit, but I want to know if capitalism is really in trouble.
  
  HERNANDO DE SOTO: Capitalism of course is in trouble, because as usual it is only catching on among the top 20, 10 percent of the population of Latin American countries that have got their property rights paperized in a way that they can enter the market. It's in trouble in the sense that it isn't working for the majority. I insist that capitalism doesn't work without property rights, so it only works among the Westernized elites of our country. You may have noticed that in all developing countries and even former communist nations there are always some people who have been to Harvard, that have taught at Yale, that are in touch. Elites all throughout these hundreds of years have always been in touch. Kings and queens from different countries have always been in touch. So the fact that the system works for an elite doesn't mean it's successful. We've always taken it as successful. We've always actually thought that the poor didn't [appear] for cultural reasons. We've always thought that the poor needed to be educated. That's why they didn't come in. And what The Mystery of Capital tries to tell you is that there are huge legal obstacles for the poor to come in. It isn't that they culturally don't want to come in. They're continually proving that they do want to come in because they're continually migrating to countries like the United States and Canada and western Europe, so they do want to come in. The problem in our countries, in Latin America, is we're not letting them in, and it's because we haven't gone around to finding out what is the cost of getting in it. We're starting to find out it's a very high cost.
  
  INTERVIEWER: The elites are to blame?
  
  HERNANDO DE SOTO: I always thought, at least in the case of Latin America, that elites have not accomplished their role. At the end, to create a revolution where the legal system and the market benefits everybody is a heroic task. We realize this the more we look into history and see what the foreign elites did back at the time, for example, of the American independence. They had a vision. And they had the courage to rebel against a status quo. What happens in many Latin American countries and Third World countries is that the elites don't do this, and [they] try to explain the economic backwardness of a large amount of the population -- 80, 90 percent of the country -- as a cultural problem. "We need education," [they say,] instead of seeing it as essentially a problem of [invisible] obstacles that are put in their way ... and they're so set in their ways of thinking that the lower classes are inferior that they're actually acting a lot more like Russian elites in 1914, 1917, than American elites back at the end of the 18th century and beginning of the 19th century, who were open-minded. Many times, of course, [impoverished] Latin Americans become confused by looking at them, because they're able to talk about Hayek and they're able to talk about Milton Friedman. But it's not that they really believe in them; it's sort of like a shield. It's a shield they use. They use libertarianism and conservative ideas the same way communists used to use socialism to hide their real intentions. You have to always be careful about that, because undertaking a revolution in terms of liberty is a very revolutionary task. It requires lots of guts, and it requires going against a status quo. Nobody who really gets along with the status quo can be absolutely trusted to change these countries around from their backwardness to a prosperous society.
  
  INTERVIEWER: We've been told for 50 years now that free markets bring freedom. Do you believe that?
  
  HERNANDO DE SOTO: I believe that markets do help absolutely to bring freedom. I don't think that's enough, but I certainly do think that helps, because at the end good markets work with information. You need information, and that necessarily brings pressures on the political system to make people accountable, to provide the right kind of information, to provide the right kind of enforcement. They feed on each other. But it is also important to emphasize democracy as such. I am not necessarily a great friend of some Asian systems which went towards free markets but disregarded the democratic side. That may have worked in certain cultural circumstances and may not work in others. In the case of Latin America, where there is such a cult to the idea of democracy, you also have to add an effort in terms of political freedoms as well as economic freedoms.
  
  INTERVIEWER: There has been a battle of ideas that that the world has undertaken between communism and capitalism. What's next? Where are we swinging?
  
  HERNANDO DE SOTO: Capitalism definitely won the battle against communism, but a lot of the main ideas or concerns behind the early communists and socialists are still around. They had to do with an equality. They had to do with inclusiveness. They had to do with fairness. These ideas will get back into the game, and I think it depends very much on the elite in developing countries to make sure that these are also incorporated into the capitalist or free-market argumentation. It's not enough to say that these are the leftist kind of things, human rights kind of things. We've got to bring them in. If we don't bring them in, the traditional leftist will come back. The traditional Latin American leftist is very different from the American liberal who respects democracy. I'm thinking about Latin American leftists who have no problem of carrying out reforms with no democracy whatsoever. If we don't incorporate all of these humanitarian values, all these humanistic values, all of these democratic principles within the capitalist agenda, it'll be born again in some other form that may not be the traditional communist one but will bring with it the same, and many, dangers that communism came with, which is a total disregard for the basic principles of economics that produce wealth and that at the end up solving material problems.
  
  INTERVIEWER: It seems that globalization is the trend. Won't that make it worse for poor people?
  
  HERNANDO DE SOTO: No, globalization is where we've been heading for ages. Look at me with the beard and no hair on my head. I'm a product of globalization. Latin American Indians, Peruvian Indians aren't bald, and they can't grow hair on their face. I am a product of globalization. I am the result of Spanish migrants having come to Latin America and probably mixed with some Indians, but not enough so as I can't grow my beard. So globalization has been going on. What we're finding out now is what the early economists, the classical economists told us, from Adam Smith to Marx, which is that the more we learn to divide work among ourselves, the more productive we get. The idea was not only to go for larger markets in larger cities, but go for larger national markets and now larger international markets. And it's obvious that these are going to bring prosperity.
  
  What we've just got to make sure of is that globalization also includes the underclasses. They have a lot to gain from it as well. But if I go with you through the obstacles that somebody that's poor has to go through to get an export license, or an import license, or be able to put together the kind of paper that'll allow you to globalize, you'll find out that it's a pretty exclusive club, those who can globalize. It's a club made of those people and places like where I come from, Lima, that know how to deal with the law firms, that know how to lobby for legislation that helps some, but doesn't help somebody else. In other words, a system of capitalism for only a few, because there's a legal apartheid that blocks the majority from coming in. Everybody wants to globalize.
  
  And if somebody tells me no, the poor of Peru don't want to be globalized, the logical question that comes is then why have a million of them traveled to the United States over the last 12 years, not to mention those who have migrated to Mexico or migrated to Spain or other parts in Europe? The reason is because they want to globalize.
  
  We are now in Cajamarca, and you have seen many people that still keep their old traditional Indian costumes and their ponchos and their big hats. Here we are really in rural bliss in Peru. But I'm sure that when you've been to Lima -- not only Lima but most of the towns of Peru -- you don't see that anymore. People have got sneakers, and they have trainers, and they've got Nikes and other things. They're already globalizing. There is no cultural resistance to getting in on the same wavelength. The problem is that they can't globalize in economic terms. They're not allowed to get into the international market except for touristic projects and for artisanry.
  
  

• Property Law and Capitalism

  INTERVIEWER: You are trying to do something unusual, which is to get a message out to the people. What exactly are you trying to achieve by holding these symposiums?

  HERNANDO DE SOTO: There's a message in my book which is the result of the research and the conclusions my colleagues and I came to as a result of very practical empirical experience in many developing countries throughout the world. The general idea is that there doesn't seem to be a better system in the world than the capitalist system, and it's a very subtle one, too. It's much more sophisticated than what people think. What it has is the ability to pick up the value of people's work. It has the ability to be put on paper, to accumulate, to represent value, and to use it to further additional production.

  What we think is that the reason it isn't working in the developing world and the reason it isn't working in former communist nations is not because people are anticapitalist or people are antientrepreneurial, but that the infrastructure of laws that make the carrying of capital possible are simply not in place.

  The message here is don't despair; it's worked for the West; it can work for us. We know nothing better. But it's going to involve radical changes, and you being entrepreneurs are going to be the first ones interested in making sure that these changes occur, and they have to do with the legal system. Here's what we have to say about how the existing legal system in the Third World conspires against you, how it doesn't allow you to come in. Be conscious that that's the source of the problems, that it's not the capitalist system, it's not the free markets system, it's not your capacity as an entrepreneur; it's essentially a legal system that doesn't allow you to accumulate capital, to organize value, and to be able to transfer it.

  INTERVIEWER: So the system is rigged against poor people?

  HERNANDO DE SOTO: What happens is that over the last 11, 12 years, the recipes available in the international market were at the macroeconomic level. Look, free-market entrepreneurialism is possible everywhere. It's a question of having stable money. It's a question of having fiscal equilibrium -- government doesn't spend more than what it gets. And it's a question of making sure that the government isn't the manager of enterprise, so you have to privatize things.

  That and a few other adjustments called "structural adjustment." But what we're seeing now is that that's important, but it certainly isn't enough. It isn't even the beginning of the story. Of course you need stable money, and of course to have stable money you need a government that doesn't overspend, and of course you also need a government that isn't involved in enterprise. But you also need, more important than other things, a rule of law that makes a market economy, the interdependence between millions of producers, possible through good contracts, through good administration of justice and through representations in paper that are capable of capturing value, so as to use that value to further additional production, i.e. capital.

  The general idea here is that we haven't properly yet understood the capitalist system. It's much more profound, it's much more subtle than we all expected, and it has only partly to do with macroeconomic equilibrium. Most of it has to do with the rule of law, putting in place a system that allows all of us to prosper.

  INTERVIEWER: And so far the system hasn't prospered. Why? Why doesn't it work?

  HERNANDO DE SOTO: The system hasn't prospered so far because we've dedicated ourselves only to doing the macroeconomic side of the formula: stable money, fiscal equilibrium, and privatization. The majority of the capitalist system the way I understand it is essentially a legal property system. And in most developing countries and former communist nations you do not have a legal property system that can provide a framework for the majority of entrepreneurs. I'm talking about 80 to 90 percent of all the entrepreneurs that exist. As a result of it, you cannot produce wealth.

  One of the things that always scares me is that secret little argument, not even intellectual argument, that little prejudice that is not only in the minds of Westerners, but is also in the minds of elites of developing countries and people that take decisions, that the reason the capitalist system doesn't work is because culturally we're not ready for it, whatever the word "culture" means. It may even have racist implications. What we're saying is well, maybe it's true. Maybe the capitalist system does work much better with Protestants and whites. Maybe. But before that, let's take away all these enormous legal obstacles that poor people have to face. Let's take away all the ignorance around law and let's put good law into place and then we'll just see whether it works or it doesn't. We're absolutely convinced it does work because people are actively [conducting] enterprise all over the world. The thing is, they can't make long-term contracts, and because they can't make contracts, they can't obtain credit, and they have no way of constituting a company that can issue shares, therefore they have nothing to sell against investment. That's the reason it doesn't work. I don't think it's cultural at all.

  INTERVIEWER: So education isn't going to solve anybody's problem?

  HERNANDO DE SOTO: Education is important. Education is important; health is important; religion, beliefs are important; a civil society is important; a good democratic system is important. But there are many developing countries where you do have some kind of a democratic system. There are many of these countries where you've got education. You could even say that in terms of the indigenous needs of the Peruvian nation we've over-invested in education. Why? Because most of the people that we've educated have emigrated to the United States.

  So I'm not saying that education is not important, but if you don't have a capital infrastructure that is capable of creating job opportunities and entrepreneurial opportunities as a first source, all that education doesn't help. What we're saying is we've tried education, and it's good that we continue. Health is also extremely impor

All Liberian anti-gay activists have decided to join forces under a single umbrella to help stamp out homosexuality in the small west African nation. The group (PEWMAH) Pedophiles, Embezzlers, Warlords, Molesters, Adulterers Against Homosexuals claims the mantle of covering about 90 percent of the Liberian Population.

According to the group spokesman, Bigboy Gorbachop, "we represent the national character and identity of Liberia and we therefore oppose the legalization of this type of satanic vice which can destroy our proud national heritage."

He further went on to say "we acknowledge we are all sinners; however, homosexuality, is against the very nature of our shared Liberian and African heritage." The group says there is no reason to hold national meetings or conventions as 9 out of every 10 Liberians are members of one or more of its sub groups. "Anywhere more than 3 people are seen, dah meeting!" said the spokesman. 

However, not all anti-homosexual groups are happy about the naming of this umbrella group. The Group Sex Association (GSA) of Liberia, the Closeted Legislative Caucus (CLC), as well as the Greater Monrovia Chapter of Fornicators Anonymous (FA), the Hidden Homosexuals of Liberia(HHL),and Parishioners for Promiscuity (PfP) have all put out statements protesting not being recognized by this umbrella group.

The Godma and Godpa Association of Liberia, currently holding their national convention in Bongquenemah,  could not be reached for comment.

The Closeted Legislative Causes, which is comprised of closeted members of the legislature stressed they are vehemently opposed to the legalization of gay marriage in Liberia. Their spokesman said, off the record, "if gay marriage is legalized in Liberia, some of our closeted partners will demand marriage proposals from us; we prefer to continue to act in a manner that is culturally acceptable for Liberia and Africa as a whole."

For its part, the Group Sex Association spokesman, Mr. Paigar Jukay, said even though his group is not named in the initials of the umbrella group, he is pleased that Liberians of all stripes are waking up to fight this terrible lifestyle. He continued that with the addition of these four groups they will achieve nearly 98% of the population of Liberia. He also reminded this reporter, that many Liberians are actually members of multiple groups named here.

This article was written by George K. Fahnbulleh and Omar Fahnbulleh

The Liberian government recently announced a policy wherein the government would roll the cost of government official's communications into their salaries.  While this policy has been greeted with cheers by the people of Liberia, this writer believes there is something much more dubious afoot:  the deliberate bankrupting of LIBTELCO thru a series of seeming innocuous policies which I will detail.

To get the fiber optic cable here, we spent about 25 millions under a private-public venture called the Cable Consortium of Liberia. We have a problem; we don't have the required infrastructure to the get the cable operational. We need about 7 million dollars to get it going and we have not been able to get Government funding and this is why the connection process is slow. But we are making efforts to get banks to fund the project. At the moment we moving small small. ~ Paul Muah, Deputy Managing Director LIBTELCO 

The gains for the government and people of Liberia, with the implementation of high speed internet connectivity, in terms of increased efficiencies, communications, accountability, education, health are on a scale of orders of magnitude.  It is mind boggling to us, why the government would allow this entity to struggle when it is the entity which was built for exactly this function.

As we examine the latest policy, we realize the civil war destroyed the telephone line infrastructure in Liberia. However, in today's communications, most telephone traffic is no longer analog, but digital in the form of VoIP (Voice Over Internet Protocol) transmitted via fiber optic cables.  This is the same fiber optic infrastructure LIBTELCO is struggling to raise money to construct. 

If the Infrastructure is built efficiently LIBTELCO could offer the Government and it Para-statals (IE. Central Bank, GSA, LPRC, NOCAL) and others, VOIP, VIDEO, DATA, Storage and Cloud based services from it’s current Data Centers.  With Liberia not having an abundance of qualified ICT professionals, the government should make a concerted effort to leverage LIBTELCO's expertise in providing these services. 

In Liberia, government offices do not have desktop phones, instead the government spends quite a bit of money annually to provide telephone service, by paying for "telephone scratch cards."  This means ALL GOVERNMENT BUSINESS, is conducted via private cell phones.  We had hoped this would be a temporary solution to the absence of the land line infrastructure.  With the coming of the fiber optic cable, we had hoped, the government, led by the Minister of Finance, a man with an Information Technology background, would have made this a top priority.

It should have been common and accepted knowledge, that the Government of Liberia, would have been the largest initial purchaser of services from LIBTELCO for desktop telephony, computer network communications (for operations health and education), data center services (the Ministry of Finance's IFMIS is currently hosted at the LIBTELCO data center).  However, the government has done all it can, to pull the rug from under this entity, and refuse to purchase the services only this company can offer.

The following government entities all have a need for massive data transportation and storage services:

1. Central Bank of Liberia (this entity has diverted government funds to construct its own data center in Virginia).  Every service provided by this CBL data center, is currently available at the LIBTELCO data center.  As a matter of fact, any and all high speed internet service to the CBL data center can only come from LIBTELCO.
2. NASSCorp (this entity is building its own data center)
3. National Archives is currently building a massive database of digitized property records
4. NOCAL has a need to provide secure managed data storage and transmission with its international partners
5. GSA - Asset Management and Tracking Services Hosted at LIBTELCO
6. National Security Apparatus
7. Education - distance learning, record keeping etc
8. Health - the ability to bring medical professionals to the desktop to assist Liberian medical providers.

The annual purchase of the services required to sustain the above needs, would far exceed what LIBTELCO needs to build out its infrastructure.  The argument cannot be made that there is no money, when you have at least two entities (Central Bank of Liberia and NASSCorp) duplicating the physical infrastructure and service offerings of LIBTELCO to the tune of several million dollars.

There is no argument any competent ITC professional can make, as to why the Central Bank of Liberia would undertake the extension of the fiber optic cable to Virginia or why NASSCorp would extend same to Red Light, and undergo the expense of providing triple redundancy for power, when all of the capacity and capability needed is already IN PLACE at LIBTELCO.

There is no argument any competent ITC professional can make, as to why the Central Bank of Liberia would undertake the extension of the fiber optic cable to Virginia or why NASSCorp would extend same to Red Light, and undergo the expense of providing triple redundancy for power, when all of the capacity and capability needed is already IN PLACE at LIBTELCO.  When taken into to consideration with the severe financial constraints facing the government, and LIBTELCO, one can only wonder what these folks are up to. 

One can only hope, the intent is not to bankrupt the company and sell it of to private "investors" for pennies on the dollar; but I am hard pressed to accept that the above confluence is simply a misadventure of the keystone cops.  There are too many smart people in this government, for the deliberate and willful ignoring of LIBTELCO.  Ralph Ellison wrote: "I am an invisible man, not because people cannot see me, but because they refuse to see me." LIBTELCO is the Liberian Government's "Invisible man."

The Way Forward

What is required is a UNIFIED NATIONAL COMMUNICATIONS AND TECHNOLOGY POLICY, which would drive the implementation and adoption of a single government wide strategy. We had hoped by now such a policy, which would put all of the communications and computing initiatives under a single budget line item, and a single management agency would have been done by now.

The Bureau of Data Processing currently under GSA, is the statutory agency RESPONSIBLE FOR ALL DATA PROCESSING SYSTEMS WITHIN THE GOVERNMENT OF LIBERIA.  This Bureau should immediately be seconded to the Office of the President, while legislation is drafted and passed to create the Bureau of Information Technology, headed by a cabinet level Director the Chief Technology Officer.

This BIT and it's predecessor will be THE SOLE ENTITY responsible for ALL, YES all computer and telecommunications systems within the government.  This will remove the IT decisions from people in Ministries, who decide whether or not to spend their budgetary allotment on internet services.

It is time to do better.

Why Rodney Sieh’s imprisonment is unconstitutional and what can be done to get us out of this mess¹.
by Ambrose W. Wortorson, Esq.² 

INTRODUCTION
It has been clear for about one month now, that Rodney Sieh’s jailing is unconstitutional. However, greater care should have been taken to explain why neither the executive nor the judicial branch was able to do much, if anything, to get him released. Justice Minister Tah recently took to the airwaves to explain the judicial process, but that was after a deep skepticism had already gone viral. This public relations disaster – and disaster it is – has revealed a tendency of licensed professionals and political actors to talk over and past each other, much to the confusion of the people.

FUNDAMENTAL RIGHTS
Chapter III of Liberia’s well-written 1984 Constitution concerns fundamental rights. Fundamental rights are those basic rights that are so important that there must be a higher purpose or a very special reason for curtailing them. Under Article 11 of Chapter III, "…all persons are equal before the law and are therefore entitled to the equal protection of the law". This means that the law cannot treat one set of people differently than another set of people without some very special reason for doing so. Article 15 of Chapter III explains, "…every person shall have the right to freedom of expression." That too, is a fundamental right. Section "b" of Article 15 specifically identifies "…freedom…of the press" as yet another fundamental right that cannot be curtailed without some very special reason. Article 20(a) of Chapter III ensures that,"…no person shall be deprived of…liberty…except as the out come of a hearing judgment…in accordance with due process of law. In other words, nobody in Liberia is allowed to lose his or her liberty without prior "notice". Article 20(a) of Chapter III also teaches that nobody is allowed to lose their liberty without being given an opportunity to argue against their loss of liberty. Finally, Article 20 (b) of Chapter III identifies an "…easy, expeditious and inexpensive appeal" from judgment as yet another "fundamental right".

ENFORCING JUDGMENT DEBTS
But, these fundamental rights are now clashing with a little-known enforcement of judgment statute from 1972, and that has Rodney Sieh behind bars today. The statute, Chapter 44 of the Liberian civil procedure code, specifically states that nobody should be jailed for failure to pay a debt, except in very limited exceptions. (Section 44.1). One of the exceptions concerns a failure to pay damages where there is an "injury to reputation". (Section 44.71(2)(e)).

Notably, the statue allows installment payments, deferred payments and even mandates that "professional tools and implements" are to be exempt from money judgments. (Section 44.27). So, the statute contains various "outs" to allow judgment debtors to continue making a living whilst paying off their debts. Clearly, this is not a statute that jails everybody who fails or refuses to pay a judgment debt. The statue expressly forbids that.

INJURY TO REPUTATION AND THE CONSTITUTION
Section 44.71(2)(e) has elevated a particular civil wrong -- injury to reputation -- to the level of a jailable offense, without any obvious or special reason for doing so. Indeed, a person who fails to pay a judgment after vaguely causing an "injury" to another person’s "reputation" is going straight to jail. But, a person who is found guilty after a civil trial of any other intentional torts can freely ignore the judgment without any fear of being jailed. That makes no sense and there is no rational basis for creating such a distinction in the law. Since journalists are the most likely to be accused of injuring other people’s reputations, Section 44.71(2)(e) may disproportionately affect them.

Arguably, Section 44.71(2)(e) has created a special class of civil wrongdoers -- mostly journalists -- who are more likely than other civil wrongdoers to be jailed. The distinction that Section 44.71(2)(e) has created violates Article 11 of Chapter III that mandates that, "…all persons are equal before the law and are therefore entitled to the equal protection of the law. " Section 44.71(2)(e) specifically singles out certain types of civil wrongdoers for harsher penalties than other civil wrongdoers. Under this formulation, not all civil wrongdoers are equal before the law.

FREEDOM OF THE PRESS
Section 44.71(2)(e) also appears to violate "freedom of the press", another fundamental right enumerated in the 1984 Constitution. Indeed, Rodney Sieh’s liberty was taken away when he could not or would not pay civil damages after a jury comprised of Liberian men and women found that his newspaper had crossed the line in two stories it carried in November 2009 and in January 2010. Section 44.71(2)(e) does not contain any guarantee that a party who has allegedly injured another person’s reputation will have an opportunity to contest his or her imprisonment before actually "going inside" if he or she can’t pay the judgment. This violates the fundamental right that nobody is allowed to lose their liberty without being given an opportunity to argue against their loss of liberty. No justification has ever been given for this.

INEXPENSIVE APPEAL
Under Section 51.8 of the civil procedure code, Rodney Sieh’s trial judge was supposed to "fix" his appeal bond. It is discretionary, and the civil procedure code does not appear to have any formula for fixing an appeal bond. Rodney Sieh recently wrote in a New York Times Op-Ed piece, that his appeal bond was a whopping $2.2 million dollars. That is an outrageous, and absurd sum, if true. If true, that absurd appeal bond vitiated Sieh's right to an appeal, because he could not afford it. It violated Article 20 (b) of Chapter III that identified an "…easy, expeditious and inexpensive appeal" as a fundamental right.

THE MECHANICS OF GETTING RODNEY RELEASED
Rodney’s Sieh’s imprisonment arguably violates the fundamental rights of equal protection, freedom of the press, due process and inexpensive appeals. Rodney Sieh’s lawyers should consider filing a petition, styled as a combined writ of mandamus, injunction, habeas corpus and certiorari, challenging the constitutionality of Section 44.71(2)(e). The petition could be filed with the Civil Law Court for the Sixth Judicial Circuit, Montserrado County. That lower court Judge will need to address the issues presented in the petition. The lower court may certify that Rodney’s Sieh’s new claims raise constitutional issues, and may transmit the matter directly to the Supreme Court for resolution, if it cannot resolve those matters itself. While the executive branch of the government is not a party to the underlying libel case that resulted in Rodney Sieh’s losing a civil jury trial, the Court will formally notify the Ministry of Justice that the constitutionality of a statute is being challenged.

Once notified, the executive branch should promptly file a Motion to Intervene. But the Motion to Intervene should be made only so that the government can go on the record as taking no position, or more radically, joining the petition. The statute, as written, is indefensible, and it appears to violate some cherished fundamental rights. Care must be taken however, to explain that the executive branch can oppose such constitutional challenges to existing statutes, but that it is not doing so now because the legislature may need to repeal and/or to update portions of Section 44.71(2). The executive branch should not be shy in stating that jailing folks on account of their judgment debts is repugnant. That would not only be fair, but it would also answer the clamor that "the government does something". In this instance, by taking no position, and doing nothing, the executive branch will in effect, be doing something. Alternatively, this administration can also show its alleged democratic stripes and join Sieh’s petition.

CONCLUSION
This case can still be settled. Settling does not mean surrendering. It means an agreement by both sides to cease-fire. However, a settlement would not absolve the legislature of the task of reviewing the judgment enforcement statute, and repealing provisions that put folks in jail simply because they don’t have money to pay judgment debts. Finally, the one good that has come out of this case, is that for the first time in a long while, non-lawyers are now scouring over the statutes, struggling to understand and interpret them, and in some instances calling for their repeal. Others have begun to review a relatively unknown, but very impressive body of Liberian Supreme Court case law. That is good. Just like the Koran is not for Imams alone, and the Bible is not for Pastors alone, the law is not for lawyers alone. It is for the people.

_______________________________________

¹ These are merely Mr. Wotorson’s thoughts and opinions, and they do not constitute legal advice, since he is only admitted to practice law in the United States, and not yet in Liberia.

² Manhattanville College, B.A. Political Science (Honors), 1988. University of Miami School of Law, J.D., 1992. Admitted, New York, 1993, Second Department; United States District Court Southern District of New York, 1995; United States District Court, Eastern District of New York, 1998, United States District Court, Northern District of New York, 2000; United States Court of Appeals, Second Circuit, 2002.

This particular law was designed to force native people into indentured servitude when they could not pay their debts/fines. A wealthy landowner would "stand their bond" and they would have to "work off their debt" to the landowner more often than not by working the farms / tapping rubber.

This is why there are specific types of "offenses" like adultery, where one native man would accuse another of "following his woman" to the Justice of the Peace Court. The JP would then fine the accused say $50, which he could not pay. The JP would then tell some wealthy land owner he has x number of people in "jail" for various debt offenses, and the land owner would pay a percentage of the bond, and cart them off to work for him.

This is why the law even goes as far as setting the monthly debt exhaustion rate at $25/month UNTIL the debt is exhausted. It makes absolutely no sense to imprison someone who cannot pay debt, thereby DEPRIVING THEM of the ability to EARN INCOME to pay the debt, while at the same time absolving them of their debt at a predetermined rate. Except, of course, if the intent is to transfer their debt for cheap labor.

The  Law States as Follows:

§ 44.1. Imprisonment for nonpayment of money judgments.
A person shall not be arrested or imprisoned for disobedience of any money judgment or order requiring the payment of money except for those money judgments enforceable by punishment for contempt under section 44.71(3) or by imprisonment under section 44.71(2) if execution is not satisfied

2. Judgments enforceable by imprisonment if execution not satisfied. Judgments in any of the following actions shall be enforceable by execution, but if the judgment debtor cannot or will not pay the full amount of the judgment together with interest and costs, the sheriff shall arrest him and the court shall order him imprisoned for a period sufficiently long to liquidate the full amount of the judgment, interest, and costs at the rate of twenty-five dollars per month:

(a) Adultery;
(b) Seduction of wife or child;
(c) Illegally taking away or harboring a wife or child or ward under twenty-one years of age;
(d) Enticing an incompetent away from his legally appointed trustee or guardian; or
(e) Injury to the reputation when the words spoken or written are actionable per se.

Article 12 of the Constitution of Liberia States

No person shall be held in slavery or forced labor within the Republic, nor shall any citizen of Liberia nor any person resident therein deal in slaves or subject any other person to forced labor, debt bondage or peonage; but labor reasonably required in consequence of a court sentence or order conforming to acceptable labor standards, service in the military, work or service which forms part of normal civil obligations or service exacted in cases of emergency or calamity threatening the life or well-being of the community shall not be deemed forced labor.

It is obvious that the Statute above is in conflict with the Constitution.

What exactly is the State's interest in imprisoning a person, and burdening the taxpayer with the cost of that imprisonment, for failure to satisfy a civil judgment? <

by Omar Fahnbulleh

I have been thinking about this, for a while, and have mentioned it to a couple of people.  It is time for our President Madam Sirleaf to GO.  Madam yesterday undermined her Justice Ministry’s indictment in the LAA case.  The Liberian Justice Ministry issued an indictment of several Liberians, some serving in the Government of Liberia, but our President came out and issued a vote of confidence for one of the major players in the Indictment, Mr. Musa Bility.  Our president instead of letting Justice take its course decided to step on our Constitution and insert herself into the case and undermine the Justice Ministry by interfering with the legal proceeding. 

Why would Madam Cockrum or Mr. Johnson want to return to Liberia to face trial when the President has already vouched for one of the defendants?

Who is Musa Bility?

To know who Mr. Bility is, one only has to read the news out of Liberia.  This calls into serious question the judgment of the President, and her anti-corruption claims.

In July 2012,

State prosecutors alleged that SCRIMEX Chief Executive Officer Musa Bility defrauded the government of U$350,000, adding that their evidence against his company was overwhelming for indictment. http://bit.ly/1eShFOI

In June 2013,

The Confederation of African Football, instituted a six month ban against Musa Bility, in his role as President of the Liberian Football Association, for “violating statutes relating to the use of confidential documents.” http://bit.ly/13S4Ujc

In June 2013, the Tax Court of Liberia ordered Mr. Bility’s assets seized and sold.

The action of seizure and sale of assets as well as closure of the premises of his companies, according to the writ of execution, stemmed from a September 7, 2012 judgment which compelled Bility to pay US$165,000 representing the amount he owes the government of Liberia in taxes  http://bit.ly/16jv5l5

So even though State Prosecutors have, at least once, presented a successful prosecution of Mr. Bility for defrauding the government of Liberia, the President of Liberia, announces, after a second indictment of Mr. Bility, that she has complete confidence in his integrity.

For the President to say she has confidence in the integrity of Mr. Bility, is at the same time saying she has no confidence in the integrity of the Ministry of Justice.  But it begs the larger question: where in the world, does a President, whose government and country is rife with corruption, step in to serve as a personal character witness for a person indicted for corruption, even before the trial has even begun.
 
This is the second time, Madam Sirleaf has done this.  She visited Mr. Guyde Bryant when he was under a major indictment for corruption.  Madam Sirleaf has neither the desire, nor the intention fight corruption.  It was never part of her agenda and it will never be. 

Our President, every step of the way, has undermined the fight for corruption in Liberia.  She appointed Mr. Francis Cabah back into her Government when he was fired from Social Security for Corruption.  I am here scratching my damn head, in fact, my head hurts.  In the recent tape released by Madam Cockrum we heard the Defense Minister indict the entire government of Liberia when he stated that there are folks in the Government that have stolen but are still allowed to write checks for the Government.  We have yet to hear from our Elected Leaders.

Again I will say its best Madam Sirleaf leaves office now, considering we have UNMIL in Liberia for another four years.  If she leaves now, this will give her replacement a chance while we have UNMIL to do what is right and put in place the programs to move Liberia forward.  Is there anyone, at this moment in time, who believes if Madam Sirleaf stays in power and we stay on our current trajectory, when her term ends and UNMIL leaves we will have Peace?

The following is a rejoinder to Samuel Tweah written 06/25/2007

The Editor 

Samuel D. Tweah, wrote:

"Challenges notwithstanding, the larger vision was that the candidacy of George Manneh Weah, who had earned his wealth outside that culture and demonstrated patriotism and love of country, would catalyze a critical mass of Liberians vehemently opposed to public greed; abuse of power; and violence as a means to self-enrichment. If for any reason the abhorrent forces of stasis were to take over that movement, its liberating mandate, whether or not with George Weah presiding, would have ended even before it began."

Unfortunately Mr. Tweah, like all who have come before him, advocating for this "magical" social transformation, still does not understand how to change Liberia.  Opposition to public greed, and abuse of power are not the domain of any single entity. 

The problem in Liberia is THE SYSTEM.  Everyone who has come before, has come to utilize THE SAME SYSTEM, while pushing one new hero or another!

Being mindful that one definition of insanity is "doing the same thing over and over, and expecting different results each time," it is time for Liberians to wake up and step away from the insanity that is the Liberian Government.

Liberian leaders, political aspirants, opposition leaders have all longed for, and spoken passionately of, social transformation of the "masses."  I submit there can be no social transformation without a complete technical overhaul or re-invention of the government.

The success of any social transformation is due to the capacity of the government to provide a space and ensure opportunities for all its citizens.  All of this capability can only be possible if the government has the ability to manage its fiscal resources in a manner that is transparent, and accountable, and to the benefit of its citizens.

The government cannot create equal opportunities in education in a vacuum.  The government cannot create equal opportunities in health care in a vacuum.  These programs cost money, and when the government's money is mismanaged, those opportunities do not exist.

The latest UN Panel of Experts Report tells us LPRC has under collected taxes to the tune of 7.5 million USD.  The Report also tells of no-bid (opportunity reducing) contracts being awarded.  The Report further lists another contract for oil that has gone un-reported.  Who is to blame for this mismanagement? The President of Liberia, no one else.  The Buck Stops at the President's desk!

The law which set up LPRC requires LPRC has 3 deputy managing directors.  To date, the President of Liberia has not appointed any deputy managing directors of LPRC.  The President is required to follow the law.  She cannot ignore the law, because she does not agree with the law.  

If the President disagrees with the management structure of LPRC, as prescribed by law, then the President must seek to have the law changed.  She cannot shirk from her solemn oath to "faithfully execute the laws" of Liberia, simply because she disagrees with one law or the other.  She does not have that choice!!!  Appropriate advice from the Minister of Justice should have made this clear to the President.  But then again, the Minister is busy finding caps to fit whatever head she chooses.

But LPRC represents only a microcosm of what has always been wrong with governance in Liberia. I have always maintained Liberia is in the predicament it finds itself in, because Liberian Presidents have selectively enforced the very laws they swore to uphold.  They have used that selective enforcement of the laws to persecute their enemies and/or reward their friends.  The same selective enforcement is going on in Liberia today.

Bank robber, Willie Sutton, when asked why he robbed banks gave a concise and clear answer: “Because that is where the money is!”  The same is true of the Liberian Government: that's where the money is.

If Liberia is going to be transformed, it will not be transformed by the cult like worship of Ellen Johnson-Sirleaf!  Madame President don't be fooled, every Liberian president before you has had a cult worshipping him.  Every one of them!  Everyone one of them before you has failed because they tried to manage the same broken system!  If you decide to do the same thing, please see the above definition of insanity.

If Liberia is going to be transformed, it will not be transformed by the cult like worship of a George Weah or any other personality.

Liberia must be transformed, it will be a by leadership which understands graft and corruption are crimes of opportunity.  That opportunity exists because the government of Liberia is technically broken and cannot be repaired by the sheer will of any personality.  The government of Liberia needs a complete audit of all the processes in EVERY MINISTRY and agency to identify those processes which present opportunities for graft and corrupt activities. 

Once this audit is completed, existing processes can be re-engineered or new processes can be put in place, which are more immune to the practices of the past.  Until this is done, it does not matter who is president of Liberia, the government will remain the target of the Willie Suttons of Liberia, who have rightly figured out "That's where the money is!"  

George K Fahnbulleh,
gkfahnbulleh@lakepiso.com
Mesa, AZ

"His Main Occupation was Stealing"

Culled from the South Africa Mail & Guardian Newspaper, Dec 19 1997

US court documents show how Emanuel Shaw II privatised Liberia's oil industry to benefit himself, report Mungo Soggot and James Butty

The man charged with reshaping South Africa's oil industry was accused in a United States court of masterminding a fraudulent scheme to pocket the profits from Liberia's petrol sales while serving as the country's finance minister.

Court papers in the possession of the Mail & Guardian offer an astonishing expos of one of the most ambitious money-making schemes pulled off by Emanuel Shaw II while in power under the Liberian dictator Samuel Doe.

The papers also include several blanket indictments of Shaw such as: "It was common knowledge in Liberia, and internationally as well, that his [Shaw's] main occupation while holding the office of Minister of Finance was to steal as much money as possible from the government and people of Liberia."

Shaw is now earning at least R3-million a year advising South Africa's state oil company on its restructuring and privatisation. His controversial appointment by state oil chief Don Mkhwanazi was the subject of a three-day commission of inquiry this week at the Department of Minerals and Energy. The findings are expected to be released next week.

Shaw has also worked for listed fuel company Engen whose chief, Rob Angel, was quoted last week saying Shaw was a "very,very bright man".

Shaw, one of Doe's closest confidants, fled Liberia ahead of the dictator's downfall in 1990, but before he did so he allegedly masterminded an elaborate ploy to rob the impoverished country of about $27-million - in effect the remaining assets the country had abroad.

The court papers establish that Shaw set up a new national oil company in which he was a major shareholder, resigned as finance minister, and then wrote a letter as if he were still finance minister obligating the government to pay his oil company millions of dollars.

The plaintiff in the case - which was heard in New York in 1991 - was the Liberian National Petroleum Company (LNPC), which was set up by Shaw in January 1989 as the "sole and exclusive supplier of petroleum products" to the Liberian market. Shaw had a 60% stake in the company. The US court was told that, after resigning before Doe's downfall, Shaw wrote a letter to the LNPC as if he were still finance minister, in which he confessed that the government owed the millions to the LNPC.

"In effect Mr Shaw, acting as finance minister, negotiated and signed the two guarantee agreements relied on by plaintiff in order to assure his own company payment of $20-million," the US court was told by a representative of the interim government of Liberia, which took over after Doe was executed. The interim government was the defendant in the case.

Shaw's letter persuaded the British High Court - presumably unaware that Shaw and his accomplices were actually the plaintiffs - to order the government of Liberia to pay up about $8,4-million in August 1990. With Liberia crumbling, no defence was mounted by the country's government. The British court attached a Liberian Boeing 707 parked at Stansted airport as security and issued an injunction over other Liberian assets.

Shaw obtained an injunction on more Liberian assets in a New York court in 1990 and then tried to pull off the same trick by suing for $19-million in a US district court in New York.

But by then the interim Liberian government was ready to defend itself and Judge David Edelstein of the US District Court of Southern New York dismissed the case. The lifting of the injunction allowed the Liberian interim government to tap about $16-million that had been frozen.

One of the interim government's key weapons was a detailed affidavit by Liberian justice minister Philip Banks III, which guided the court through Shaw's ingenious scheme.

Banks, who ran the government's case, said that in 1986 Shaw, Liberia's justice minister Jenkins Scott and several other private individuals started plotting to acquire control over the sale of all petroleum products in Liberia. Their plan came to fruition in January 1989 with the creation of the LNPC, which immediately triggered a fuel price rise.

"Although the monopoly power exercised by LNPC inured directly to the benefit of Minister Shaw, who held a substantial ownership interest in LNPC, it came at the direct expense of the Liberian government and people. As soon as LNPC obtained control over the supply of petroleum products to Liberia, the price of those products increased sharply."

Banks said that the exclusive contract between LNPC and Liberia's existing national petrol company - the Liberian Petroleum Refining Company - was condemned by the judiciary committee of Liberia's House of Representatives, which said the agreement "brings in no new investment and will only raise the cost of products for LPRC". The house declared the contract null and void, Banks said.

Banks explained how Shaw secured himself a 60% stake in the new oil company through a company called Synergy Resources and also siphoned off all the lease payments LNPC was supposed to make to LRPC under the January 1989 agreement. Those payments were made to a company called Global Enterprises, which was owned and managed by Shaw.

Shaw was the LNPC's chief executive and later appointed as president his trusted associate Mark Wolman. Wolman, a South African, ran a private oil company called Tiger Oil, which was a key sanctions- buster. Shaw acted as a "consultant" for Tiger when he arranged for it an exclusive contract to supply petroleum products to the LPRC in 1987 in a similar scheme to the one he pulled off with the LNPC.

Wolman was brutally murdered in Cape Town last year in what appeared to be an execution by a drug gang. Shaw's passport was found in Wolman's briefcase.

The papers, which suggest Doe was in on the scam, explain in detail how Shaw fraudulently wrote a letter in his capacity as finance minister to help LNPC obtain its money. "In short, with the country burning around them, Shaw and Scott decided to plunder the government treasury one more time."

Banks said Shaw signed two guarantees obligating the government to pay at least $20-million, while Scott wrote a letter waiving the government's immunity from legal attack abroad. He said Shaw wrote his letter as if he were still finance minister on July 18 1990 even though he had resigned in June 1989.

Scott was fired by Doe on June 27 1990, but wrote his letter waiving sovereign immunity on July 8 1990. "Their letters are nothing more than a flagrant effort to commit fraud on the courts of the United Kingdom and on this court, before the new government in Monrovia could move to block their continuing theft of government assets."

The Liberian government's founding affidavit said the English court was obviously hoodwinked. "Of course, the English court had no idea that the authors of these letters were the principals of LNPC, and that they were acting in their own self-interests, contrary to those of the government, because these facts were deliberately kept hidden."

The US court was also presented with a now famous letter from Shaw to Gus Kouwenhoven, a man known as "the Godfather of Liberia", in which Shaw documents the various corrupt schemes in which he and Kouwenhoven engaged.

Shaw told the M&G he did not write the letter, saying the Liberian interim government had probably forged it in desperation for money he was holding "in trust for a democratically elected government". But the bundle of papers includes a handwritten note by Kouwenhoven acknowledging receipt of the letter.

* A leading Dutch newspaper, Parool, carried a prominent news story last Friday linking Shaw and Liberia's current leader, Charles Taylor, to a notorious drug syndicate. The article claimed that in return for protecting the syndicate, the two politicians received a cut of its profits. Shaw is Liberia's ambassador extraordinaire, economic adviser to President Taylor, and was recently appointed head of the country's banking commission.

we cannot grow the Liberian economy, if we do not transition from a cash economy, to a credit economy.  The most fundamental concept which a functional credit economy is based, is the ability to uniquely identify every individual participating in that economy, in a manner that is reliable and non-refutable, and the ability to tie every asset to one or more individuals based on that identifier

Dear Madam President, 

As we approach the beginning of your 8th year in office, we need to examine the steps you need to take to place Liberia on a solid footing for growth, after you leave office. 

As an Information Technology professional, my suggestions are based on the need for a unified and managed approach to the acquisition and implementation of technology for the government of Liberia. 

In my opinion, this is the single most important legacy you can leave for Liberia, bar none. 

As things currently stand, there is no central authority which manages all of the Information Technology initiatives of the government.  Ministries implement their own systems, programs outside on their own and there is no professional oversight, neither is there the capacity for these systems to talk to each other.  There are three things which can be implemented on very short order to begin to leverage the technology for the future. 

1) Information Technology Management

The Government of Liberia should set up a government wide technology management agency, which will manage and oversee ALL technology projects for the government and the para-statals.  Fortunately, Madam President, the laws of Liberia already provide for such an agency.  The Bureau of Data Processing, currently under GSA, is, by law, in charge of all data processing systems within the Government of Liberia. 

I recommend you second the Bureau of Data Processing as a stand alone entity, within the Office of the President, while at the same time begin to work on legislation to transform it into the Bureau of Information Technology, to be headed by a Chief Technology Officer, and contain:

• A shared services group - which will provide integrated architecture, development and implementation of all data systems within the government.  Yes I do mean all.
• Database Management Group
• Network Infrastructure and Security Group
• Telecommunications Group

This Bureau of Information Technology will also examine all systems to ensure they meet the requirements of the National Security apparatus as well as the Records Management requirements of the Freedom of Information Act.

2) Growing the Liberian Economy

The government of Liberia must implement a single entity identifier, i.e. social security number, which NASSCorp already has the capacity to do, as well as a Business Entity Identifier.  These were spelled out in a previous paper, entitled "A Protocol for Asset Declaration and Verification."

Madam President, we cannot grow the Liberian economy, if we do not transition from a cash economy, to a credit economy.  The most fundamental concept which a functional credit economy is based, is the ability to uniquely identify every individual participating in that economy, in a manner that is reliable and non-refutable, and the ability to tie every asset to one or more individuals based on that identifier. 

Yes there are more than 10 John Flomo's in Liberia; however, if each is assigned a social security number, it is possible to determine who each of them is, which assets each owns.

Today in Liberia, banks do not serve the economy because of the risks involved for lending.  The biggest risk factor, faced by banks, is the inability to reliably determine each applicant's risk profile, his assets and his liabilities.  It is ONLY possible to this by using the above mentioned unique identifier.

People cannot buy and sell property, raise capital, because it is not possible to reliably establish the ownership of a piece of property.  Even with the current effort of the National Archives, which is digitizing all land records.  It is still not possible to definitively determine ownership of a piece of property.  The requirement that each property record be tied to a social security number, will allow property to be bought and sold in a reliable, irrefutable manner, which will lead to an explosion of capital investment.

The ability of banks to provide long term (20+) mortgage loans as well as automobile loans will also lead to an explosion of building construction and purchasing, putting many Liberians to work, while both increasing and expanding government revenue.

It will also have an impact on reducing corruption.  You see, in a cash economy, I have to come up with $25,000 to purchase a car. In a credit economy, I may only need $5000 and a reasonable monthly payment.  If I have to come up with $25000 at one time, where is the best place to find it?

3) Recruiting Talent

The government MUST establish a database of Liberian professionals in the Diaspora, who it can call on for assistance.  There is no field of human endeavor, in which Liberians have not excelled.  We cannot educate or teach our way out of the brain drain.  Today much of the capacity gap, is being filled in by ex-pats, who while doing a admirable job, are in it for the furtherance of their careers after their Liberia assignments are over. In too many instances the cost for these services is too high, but Liberia has no say because the funding is being provided by "partners." 

Now is the time for government to systematically begin to take ownership of these projects, to ensure their long term survivability, and the success of Liberia as a whole.

Sincerely,

George K. Fahnbulleh