Ellen Seeks US$8B 2-Yr ‘Marshall Plan’ for MRU

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President Ellen Johnson Sirleaf last Friday presented to the 2015 World Bank Spring Meetings post-Ebola recovery plans on behalf of the three worst Ebola hit countries—Liberia, Guinea and Sierra Leone.

The MRU post-Ebola recovery plans, which President Sirleaf estimated to cost US$8 billion, are  meant to get all three   countries to zero case of Ebola and to then build more resilient healthcare systems.

According to a dispatch from the United States, President Sirleaf spoke on Friday morning at a high-level roundtable where the Heads of State of Guinea and Sierra Leone were also in attendance.

She also asked her international partners to provide additional resources to help the affected countries achieve the goal.

After stating her plan and requests, the president said, “Is this asking too much? We say no.”

World Bank President, Jim Yong Kim, during a visit to Liberia recently, noted that the international community needed to give underdeveloped countries the needed support in order not to see the recurrence of such a devastating virus like Ebola in the future.

Given the nature of the meeting, President Sirleaf did not provide many details of the plans or how the three leaders would ensure that the funds would be appropriately spent.

In addition to requesting funding for the MRU recovery plans, Sirleaf also requested debt relief from the World Bank for the three countries.

Several weeks ago the Daily Observer, in an editorial, advanced this particular part of the international post-Ebola response—debt relief for the three most affected nations.  The Liberian government made no response to that suggestion, but apparently took note of it. 

Last Friday the Liberian leader, herself a former World Bank executive, unlike her two colleagues, Presidents Conteh and Koroma, seized the opportunity as she faced her former colleagues.  In the audience most likely was her former Finance Minister, Antoinette Sayeh, who heads the Africa Bureau of the Bank’s sister organization, the International Monetary Fund (IMF).  The IMF will most likely play a key role in whatever response the three MRU leaders receive in respect of their US$8 billion request for post-Ebola relief.

President Sirleaf has repeatedly spoken of the precarious situation that the countries face as a result of the deadly viral outbreak. The already struggling economies have been dealt hard economic and financial blows, not to even mention the already fragile health sectors that even President Obama, the United Nations and other international partners have admitted led to the rapid, almost uncontrollable spread of the virus, with  such devastating effects in all three countries.

She described the difficult decisions Liberia had to make to cope with Ebola. She lauded her international partners for their support throughout the outbreak and highlighted the struggles Liberia would face in its recovery efforts.

In addition to the Ebola outbreak, there had been a sharp decline in the global prices of the country’s top export commodities—iron ore and rubber. Liberia’s economy is now doing poorly because of the reduction in its trade with other countries.

The World Bank’s latest report presents a dire update of the economic situation in the Mano River Union sub-region. Although Liberia had done much to put the outbreak under control, reportedly the best of the three MRU countries, its 3% growth rate is still below pre-Ebola estimates of 6.8%.

The report also indicates that Sierra Leone is currently in a recession as the economy contracted by 23.5%. Guinea’s economy is also expected to contract by 0.2%.

Against this backdrop, President Sirleaf announced a two-year “Marshall Plan” for the Mano River Union countries that were affected by Ebola.

Marshall Plan Background

The original Marshall Plan was the US$8 billion post-World War II economic and financial package for war-torn European countries devastated by the war.  Equivalent at today’s rates to US$120 billion, the Marshall Plan, conceived after the war and disbursed beginning in 1948, was named after George Marshall, US Secretary of State, and given on a per capita bases. 

The largest recipient of Marshall Plan money was America’s chief ally during the war, the United Kingdom, which received about 26% of the total, followed by France (18%).  Britain and France were among the leading “Allied Powers,” led by the United States during World War II.  West Germany, which before the war was parted united Germany, was part of the opposing Axis Powers, led by itself (Germany) under Adolf Hitler who started the war.  The other Axis Powers were Italy, under Benito Mussolini, and Japan, under Emperor Hirohito. 

But after the war, the world saw the rise of what Britain’s Sir Winston Churchill called “the Iron Curtain,” in which the Communist-led Soviet Union partitioned the whole of Eastern Europe, including eastern part of Germany, later called East Germany,  Poland, Hungary, Bulgaria, Yugoslavia, etc.,  and the entire Union of Soviet Republics (Estonia, Latvia, Ukraine, etc.

With Germany divided after the war between the Communist East (East Berlin—the divided capital, too, and the capitalist and pro-Western West Germany (West Berlin), West  Germany received 11% of the Marshall Plan money.   The Soviet Union and its satellite states, East Germany and all the now Communist East European nations, declined to be part of the Marshall Plan.

This led to the Western European states, Britain, France, Spain, etc. developing their industries and economies faster than the rest of Europe and the Soviet satellite states.  Soon—indeed by the early 1960s, West Germany regained her position as one of the world’s leading industrial nations—and so did Britain and France.  

The Marshall Plan was initiated by the United States government to help European countries rebuild their economies after the devastation of World War II.

Economic Relief for MRU

Before the current World Bank Roundtable meeting, the World Bank Group (WBG) announced US$650 million more to help Liberia, Sierra Leone and Guinea recover from Ebola, bringing the total amount allocated for Ebola relief to US$1.6 billion.

That was in addition to the US$2.17 billion in debt relief that was provided to the three countries, with Liberia benefiting from a US$464.7 million share of that.

Meanwhile, the World Bank's most recent analysis of the economic and fiscal effects of the Ebola epidemic on the three countries indicates a year after the onset of Ebola, the estimated GDP losses for the three countries through 2015 totaled US$2.2 billion (US$240 million for Liberia, US$535 million for Guinea and US$1.4 billion for Sierra Leone).

 This was the result of the severe impact of the epidemic, which has been exacerbated by the large decline in the world prices of iron ore and rubber  and severe corporate governance issues in mining in Sierra Leone.

The analysis notes that important differences among the three countries are emerging. Liberia is gradually returning to normalcy, Guinea's economy is stagnating, and Sierra Leone is suffering a severe recession.

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