Josh Mailman, co-founder, the Threshold Foundation, the Social Venture Network and Business for Social Responsibility, commenting on US author John Perkins’ best seller, “Confessions of an Economic Hitman” wrote the following:
“A fascinating insider’s view of how private multinational companies legally rob the poor of the Third World, country after country…”
John Perkins had worked for years as a consultant with an American company, MAINS, doing stints in Latin America and Asia. And his key function was to prepare development models for Third World countries that would ultimately benefit predatory corporate interests rather than the people it would claim to help.
In the case of Indonesia for example, his was to prepare a master plan for the electrification of Java island (the most densely populated island of the Indonesian archipelago), a master plan which in effect served to advance the interests of a few but very powerful corporate institutions whose greed placed the acquisition of huge profits over the interests of the Indonesian people.
The situation of the Liberia Electricity Corporation compares similarly to that of Indonesia. Now, one does not have to be a rocket scientist to know that demand for electricity corresponds to economic growth.
Seemingly, projections for the supply of electricity to Monrovia were made based on projected high economic growth. Based on such projections, the cost of one kilowatt hour of electricity was determined and fixed.
In the case of Liberia, whose sole hydroelectric dam at Mount Coffee was extensively damaged during the war, supply of electricity to Monrovia and outlying areas had virtually come to a halt. Into the vacuum stepped a host of private power producers charging power rates based on the number of amps (US$40/amp) supplied monthly to customers, which was extremely prohibitive.
Following President Sirleaf’s election to office in 2005, hopes were raised for the restoration of Mount Coffee and the resumption of electricity supplies to Monrovia and outlying areas. President Sirleaf had in her campaign promise declared that she would restore electricity to Monrovia in 6 months.
President Sirleaf’s pledge appeared to have been based on open public statements by China’s Ambassador that Beijing was prepared to finance the reconstruction of the Mount Coffee Dam as a gift to the people of Liberia.
Experts say this offer was made hoping that the Chinese-owned Bong Mines iron ore concession would benefit immensely from the cheap supply of electricity which would have served to lower their operating costs.
But that was not to be. The corporatocracy stepped in with the full backing of the US government. The dam would be reconstructed with US money and by US companies under an arrangement termed as the Millenium Challenge Account grant.
The major prerequisite for admission into the grant program was a pledged commitment to open free trade, Good Governance, etc.
Under the grant arrangement the management of the LEC would be taken over by a US corporate body. And a significant chunk of the grant money would go into the payment of salaries and perks to the new management team.
Meanwhile the Liberian management team remained in place but with marginal power and authority and, much too often, lines of authority became blurred, resulting in conflict between the foreign management and its Liberian counterpart.
But Liberians in general did not benefit from such growth. And despite the completion of the dam, electricity supply to Monrovia has still not attained prewar levels.
Moreover, the very high cost of electricity has led to another problem of ever-growing proportions. And it is power theft. It has dogged the operations of the LEC since the resumption of electricity supply to Monrovia.
Despite excess capacity produced from Mount Coffee, distribution remains a cardinal problem coupled with power theft. And power theft is not ever going to stop unless the cost of electricity is reduced significantly from 50 US cents to at least 16 US cents per kilowatt hour.
Additionally, the LEC management under the Millenium Challenge Account (MCA) operates in secrecy and details of its operations are opaque as ever, giving rise to pubic speculations of graft, theft and even money laundering .
Despite requests from the public for information on its activities, those requests have fallen on deaf ears.
Indeed, Liberians would like to know and should know and understand why the cost of electricity in Liberia is the highest in Africa. One way of ensuring this is for LEC to publish for the public benefit, schedules of income and expenses, which it has failed to do.
Liberians are also interested in understanding why and under what terms and conditions the International Development Association (IDA) and the International Finance Corporation (IFC) are investors in the LEC.
The IFC is also involved as a shareholder in the gold rich Kinjor mines in Grand Cape Mount County, benefitting immensely while the people of Kinjor remain mired in poverty.
Accordingly, Liberians should and ought to know how much LEC pays to these institutions as interest and expense. Of noteworthy interest is the fact that the IDA and IFC are subsidiaries of the World Bank. And the World Bank is a principal lender to Liberia. This is sheer hypocrisy.
The World Bank and US companies have clearly benefited from the MCA arrangement, but it remains unclear just how Liberia has benefitted from it with less than ten (10%) of the population enjoying access to electricity today and at very high cost.
LEC prior to the war was run by a corps of professional Liberians with just a spattering of internationals in its employ. Power generation, transmission, and distribution of electricity for public consumption was by far, more efficient then as compared to foreign management under the MCA. Clearly, unrestrained corporate greed will ultimately harm US long-term interests in Liberia, Africa and elsewhere because, as sure as night follows day, there will be resistance in some form or another. No lessons learned yet, it seems.