President Weah’s Pro-Poor Policy Versus World Bank’s: More Questions Than Answers

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By J. Yanqui Zaza

Among the many recommendations forwarded to President George Manneh Weah, I have yet to see any proposal as to how best Liberia can generate the necessary revenue to finance needed programs.

Currently, Liberia’s reliance on users’ tax (such as import tax, which constitute 50% of government revenue) is inadequate to fund the current budgetary allotment, not to mention additional programs.

However, an appropriate alternative for generating adequate revenue would require a World Bank (WB) approval since the WB generates a significant portion of its revenue from money lent to countries to replace LOST REVENUE.

For example, the WB’s June 30, 2015 Audited Financial Statements show that it earned $1.1 trillion interest income from loans, but paid $392 million interest expense to borrow the same amount lent to financially cash-strapped countries.

Predictably, cognizant of the profit motives of the WB, Botswana abandoned its (WB) policy and began to share in the management of its natural resources. Subsequently, the country now derives about 50% of its national budget from diamond revenue.

This is because it adds values to its diamonds before export, reduces royalty fees and management fees paid to foreign parents and demands a market price for its exports, not the low prices dictated by foreign parents.

The million dollar question is will President Weah follow Botswana’s path or accept the lopsided theory propagated by the WB and profiteers that government bureaucrats are more corrupt than chief executives, therefore, government should limit its activities and should allow profiteers to own and, or manage the resources, and profits will trickle down to the masses.

There are established public records which indicate that chief executives on Wall Street or in Silicon Valley are corrupt, and are responsible for financial crises, such as the 2008 Wall Street Financial Meltdown.

Additionally, International Transparency and, or the African Union Committee, headed by the former President of South Africa, Mr. Thabo Mbeki, relying on investigative reports, stated that multinational corporations do not only initiate bribe offerings, but are responsible for ninety-five percent (95%) of the $60 billion that is siphoned out of Africa every year.

Let us review the records of the June 30, 2015 Audited Financial Statements of the World Bank (WB), founded in 1934 to reduce poverty and ignorance, and determine whether it can accept and promote the Pro-poor Policy of President George Manneh Weah.

1) Big business (de facto owner) owns $293,304,000,000 of WB’s total assets of $343,225,000,000.

2) The legal owners, 180 countries, own $38,637,000,000 as Total Equity; WB paid $150,000 per year for each of the 6000 special employees, according to Reem Heakai of Inestopedia.com.

3) Interest Income- $1,170,000,000. Interest Expense: $392,000,000 in 2015. Interest Income: $1,179,000,000, Interest Expense- $387,000,000 in 2014. Interest Income-$1,427,000,000, Interest Expense-$615,000,000 2013.

4) WB owns and, or manages non-governmental agencies (NGOs).

And half of WB’s lending projects had provisions for NGOs, according to Director of Global Policy Forum, Mr. James A. Paul. In addition to the figures of the audited Financial Statements, does the WB encourage countries to build gigantic projects (i.e., Hotel Africa in Liberia, Akosombo Dam in Ghana, Aswan in Egypt, etc.,) in order to lend loan?

Does the WB encourage poor countries to pay excessive allowances to advisers, thereby, creating the need to borrow money to replace the LOST REVENUE? In the case of Liberia, the payment of excessive allowances did not create the need to borrow money, but it encouraged others to augment their salary.

In fact, Liberian lawmakers demanded and began to receive excessive compensations, an additional LOSS OF REVENUE. Does the WB encourage central banks of poor countries to use “Special Drawing Rights (SDRs) (i.e., a privilege to borrow) to increase the Bank’s assets in order to persuade stakeholders that the Bank is financially strong to borrow money?

In the case of Liberia, the Central Bank of Liberia not only used SDRs, but also included long-term accounts receivable as cash equivalents assets. Does the WB, deceptively, encourage poor countries to become members of the World Trade Organization (WTO), in order to discourage poor countries from amending concessionary agreements?

This is because arbitration within the WTO is at most times final arbiters of issues, including concessionary agreements. In the case of Liberia, can President Weah convince members of the WTO to accept that  local judges in Liberian courts should remain the final arbiters?

Did the WB play any role in the design, discussion, and conclusion of the 62 fraudulent concessionary agreements that President Ellen Johnson Sirleaf’s government negotiated and signed?

The London-based Certified Public Accounting Firm reported that 62 of the 68 concessionary agreements were fraudulent. Does the WB discourage poor countries from becoming self-sufficient in food production in order to rely on importation, which must be subsidized by government’s revenue, thereby increasing the need to borrow money to replace the LOST REVENUE?

Does the WB support the idea that non-governmental agencies are less corrupt than government officials, primarily because the WB is an owner of NGOs?

Does the WB encourage local profit-making investors to own and, or manage lucrative assets such as real estate, gold, diamond, timber, etc. in order to compel the country to use money borrowed to replace the LOST REVENUE that would have been earned if government bureaucrats had manage these lucrative assets? These are questions begging answers.

Conclusion

The WB and its sisterly institutions are like any profit-making entities, which focus on making profits rather than focusing on the plight of the poor.

In fact, to increase profits, lending institutions will lure borrowers to undertake risky projects; including borrowing more money than the borrower can afford to pay.

This is because bankrupt borrowers or defunct institutions usually end up paying higher cost of borrowing than borrowers that are solvent.

It goes therefore that President Weah’s pro-poor governance approach, by its nature may, more likely than not, at any given point come into conflict with World Bank policy prescriptions.

How President Weah is going to respond to those challenges will determine the extent to which his pro-poor governance will actualize for the benefit of the poor.

Authors

8 COMMENTS

  1. In view of the the begging question(s) for answers as it relates to President Weah’s Pro-Poor governance and the WB prescription to borrowers; Now, can the WB borrow money to fund excessive renovation cost for Executives(eg. A USD 300,000 Allotment alledgedly used on President & Vice President) private homes and (Offices) wherein government revenue base remained in a state of bottlenect virus ?

  2. Although one can challenge the World Banks policies, and there are many valid arguments to do so, I think this article can largely be dismissed as “fake news”. Private companies do not “own” World Bank, nor does the World Bank “own” or even control any NGO’s. Yes NGO’s can work with World Bank funding, just as they work with EU funding or USAID funding. The Aswan dam and the Akosombo dam, even though there are concerns from an ecological point of view, are highly beneficial for the population and have paid the investment back in terms of development and prosperity. If you want to quote megalomane money wasters you should rather mention the Vatican-sized Cathedral the former Ivorian president Bouet built in his home town.
    However I like the notion that President Weah should follow the example of Botswana rather. (even though Liberia doesnt have the quantities of Diamonds as Botswana did to finance their development) That is a good suggestion. Lets hope the President has the courage to go alone.

  3. Thanks Dr. Bole Assamoah for your comment and conclusion that the article is incorrect.
    However, for those readers who are searching for the truth, please read the NY Times article about the World Bank called “The World Bank is remaking itself as a creature of Wall Street.” Yes, Dr. Assamoah is right that 180 countries own the World Bank, however, it is big business that is the de facto owner.
    Also, please read an article called “why IMF/World Bank are to blame for Ghana’s economic crisis,” by Dr. Kwame Osei.

  4. Not with standing, President Weah’s quest for pro- poor Liberians life to be improve and all the regulations on WB financial policy we are in deep worry as Liberians as we are direct beneficial of WB financial scheme, the hydro and many others project sponsored by WB lawmakers are fighting for lucrative salary n benefits, where are we.

  5. I want to thank Mr. Yanqui Zaza for what I term his exposition of WB but forgot to add IMF.
    Does WB really help poor countries to get better and stand on their own financial feet? Not
    likely! Why? Because WB and the IMF are engaged in an astronomical predatory lending.
    By predatory lending I mean, why would WB and IMF lend a poor country for example1 billion
    dollars and expect the repayment to be 3 billion dollars? This mean that all the internal
    revenue the poor-debtor country is able to raise is all paid off into the cover of both of these
    two institutions; nothing is left to work with (lost of total revenue to the poor country). This
    makes poor countries desperate to borrow again, again and again with no relief in sight.
    Thus, making poor countries, though independent but dependent in steering their own ship
    of state. In Africa, we say the one who feed your belly controls your mouth. That is what
    the WB and IMF is all about, if you do not know. In order to sustain this process, that is why
    in no time after the WB and IMF approved of your loan, the so-called experts willl fly into
    your country and begin to dictate prices to a level that ordinary citizen is left down on the
    ground unable to afford the prices of essential commodities. And usually, citizens anti-
    Government and establishment also resulting to toppling regime.

    In Africa in particular, that why it is not difficult to locate and convince a poor county to
    borrow. And once you borrow, you will borrow, borrow, borrow!

    But first of all, let us find out what are the ingredients of the economic incomes to WB and
    IMF? Do they build factories and manufacture products for sale for their incomes? No! The
    only income resources are the poor developing countries. These institutions lend you a loan
    of about US$500 million dollars, prepare that they are going to collect from you US$1.5 billion
    dollars. This practice in no way solve your financial problem and, therefore they are not going
    to solve African countries problem at all!

    So, what can the African developing countries do? The first answer is African developing
    countries must cut their coat according to their size and ability; famous saying isn’t it? The
    must plan their policies according to their financial resources level. What is a very stupid
    of policy without planning is happening in Liberia. Liberian Senator earn US$9,000.00,
    and Representative gets US$6,000.00 salaries a month respectively. Compare with what
    output of work they do a day to improve and help Liberia economically? Zero! Why? Look,
    Liberia is now suffering from the highest unemployment- about 85%. So why these people
    continue through the Ellen Johnson-Sirleaf regime to receive such an astronomical salaries
    but doing practically nothing to help the country to improve economically and creation of
    jobs, efficient healthcare delivery, sound educational systems and production of sufficient
    food for national consumption?

    Well, for now, the challenge of bringing relief to our people lies squarely on President George
    Manneh Weah. But, he must listen to the people.

  6. How should the pro-poor policies of this government be implemented to improved the health of all rural dwellers?

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