Two-Year Project : U.S. Team Steps In to Help Guide Liberia’s Budget

This tropical African nation, founded a century and a half ago by freed American slaves, has steepled Baptist churches and Southern-style houses with porches and fireplaces. The flag is red, white and blue, the U.S. dollar is legal tender and only a few years ago, a fellow named George T. Washington was ambassador to the United States.

Liberia has been the closest thing to an American colony in Africa. But, unlike the European colonizers of this continent, Uncle Sam was content with the role of friend, adviser and patron--at least until two months ago.

That’s when 17 American financial experts moved into the government offices of this decaying seaside capital and, in an unprecedented move, began controlling federal spending in Liberia, the only African country that has governed itself continuously since its inception.

The two-year project is a last-ditch effort to save an economy racked by corruption and to restore some credibility to a government that has been an embarrassment to the United States, which has sent $500 million in aid and loans since 1980.

Waste Whittles Budget

In asking Secretary of State George P. Shultz for help a year ago, Liberian President Samuel K. Doe admitted that his fiscal affairs were out of control and lamented, “I don’t know who to trust.”

Liberia is $400 million behind in loan payments to the World Bank and International Monetary Fund, both of which recently closed their doors in Monrovia. Liberia now is one of few poor countries in the world that cannot get money from those two lenders of last resort.

Liberia even owes the American government about $1 million, and under U.S. law no new aid can be provided until the country pays up.

Meanwhile, fraud and mismanagement are washing more than $60 million a year out of the $200-million annual budget. The state telephone company lost millions of dollars during a six-month period last year because operators were accepting $10 bribes to place lengthy overseas calls and charge them to other numbers.

Government officials have routinely authorized projects that the country cannot afford, awarding contracts to relatives and friends. President Doe ordered 80 new Mercedes-Benz cars for top-level government workers at a cost of $2.5 million last year, and the planned renovation of the presidential mansion will run about $8 million.

When essentials such as government salaries have fallen behind, the country has minted its own dollars and declared them equal in value to the U.S. dollar.

“The silliness just doesn’t stop,” an independent financial analyst said recently.

Foreign advisers have tried for more than a decade to help Liberia solve its fiscal problems. They have sponsored expensive studies and produced detailed recommendations. But Liberia did not take the advice.

“It’s not like it’s some big mystery, what it takes to solve Liberia’s problems,” one of the new American experts said recently. “We’re not here with a bunch of prescriptions. Our job is to prevent corruption and mismanagement by putting basic controls on the operation.”

The “operational experts”--nicknamed “Opex” here--work deep inside the government with broad powers. Their most important task is to approve every government check, investigating first to make sure there is money in the bank, that the payment is in the budget, that the price is right and that the goods or services were delivered.

“We get right into the middle of it every day--paper flows, documents and checks,” one Opex team member said. (The American experts, wary of upstaging the Liberian government, which technically oversees the program, declined to be quoted by name.)

The Opex system was set up after lengthy negotiations between Liberia and the U.S. Agency for International Development, which is spending $18.4 million on the project. The team is made up of veteran consultants, accountants and financial systems specialists with long experience in Third World economies. They range in age from 42 to 64 and all have a minimum of 15 years’ experience in their fields.

Under the agreement with Liberia, disputes between the Opex team and government ministers about which checks to issue go straight to the president, who has the final say. Most economic analysts believe that the key to the program’s success depends on how Doe handles those cases.

Most observers expected cartons of disputed checks to end up on the president’s desk within days. But since the program began Jan. 4, Doe has yet to be asked to choose between the American experts and his ministers.

“From the beginning, we recognized this was a risky proposition,” Mary Kilgour, U.S. AID director in Liberia, said. “It will only succeed if senior government wants it. The government asked for these experts and now it’s received them--if not enthusiastically, then at least openly.”

But not many people think the program will survive the entire two years.

With Opex standing between officials “and their bread and honey, it’s just a matter of time before they try to end-run the system,” a local banker predicted. In fact, during the project’s early days, police reported two attempted burglaries in Opex offices at the finance ministry.

Doe is unpredictable as well. In late February, he fired the point man for the Opex project, Finance Minister John Bestman, complaining that he was tardy for Cabinet meetings. He also fired five top-level officials in the Finance Ministry, citing “official reasons.” Government officials, though, have been surprisingly cooperative with the Opex team, and most foreign observers have grown slightly more optimistic.

“It’s gone from being an odds-on failure to a long shot,” a Western diplomat said.

Some Liberians have criticized the Opex plan as being, in the words of the opposition Liberian Action Party, “tantamount to surrendering our sovereignty.” Even supporters criticized the president for embarrassing the country by allowing things to deteriorate to the point where such drastic measures were required.

“We do have major economic problems in this country, but getting a helping hand from the outside is the right thing to do,” said Thomas D. Voer Hanson, a deputy minister of finance. “These people are here to help and we are giving them maximum cooperation.”

Bestman, before he was fired, likened the project to the foreign financial experts hired by countries in the oil-rich Persian Gulf. “The only difference between them and us,” Bestman said, “is that they can afford to pay for the foreign experts and we cannot.”

In fact, most Liberians outside of government are fed up with corruption and mismanagement, and they have greeted the Opex team warmly.

“The reaction has been incredible,” one Opex team member said. “Strangers in the street will say, ‘Hey, are you an expert ?’ We even get letters from people--fan mail signed ‘Concerned Citizen.’ ”

Special Relationship

While the United States has never been this deeply involved in a foreign country’s internal financial affairs, the process is not without precedent. Several of France’s former colonies in Africa, for example, have government ministries run by French advisers in key positions.

U.S. Ambassador James Bishop has said the Opex project “brings a greater intimacy to the relationship” between Liberia and the United States.

“Nations traumatized by colonialism would disguise or even reject such intimacy,” the ambassador said when the Opex agreement was signed. “It is conceivable for us precisely because Americans and Liberians have always been equal.”

Liberia cherishes its special relationship with the United States, which has spent more per capita here than in any other country in sub-Saharan Africa. About 5,000 Americans live in Liberia, and the United States has its largest diplomatic mission in black Africa here.

This is also the home of the regional CIA headquarters. The U.S. National Security Council operates a radio relay station for all diplomatic cable traffic on the continent. The U.S. military has 24-hour access to Liberia’s American-equipped airport, Roberts Field.

American businesses employ about one-fifth of the nation’s work force. Many work for Firestone, which operates the largest rubber plantation in the world in Liberia.

The rubber industry is one of the few bright spots in Liberia’s economy. Concern about acquired immune deficiency syndrome has touched off a boom in sales of latex goods, such as gloves and condoms, and Liberia’s rubber trees produce 20% of the world’s latex.

But fixing Liberia’s economy will require more than increased foreign exchange earnings or a few years of tight controls on the purse strings.

Sharing access to the public trough with friends and family is a tradition in Liberia, where tribal loyalty usually transcends national loyalty, especially among the 96% of the population whose ancestors were here long before the freed American slaves arrived to found a nation.

“If you have access to public resources, you are obligated to take some of the money and spread it around to your friends,” an economic analyst said. “People don’t consider that a bad thing.”

Liberia’s acceptance of the American hands-on help is one of several positive signs Western diplomats see these days in Liberia. The country has also improved its human rights record.

Until recently, Doe was widely considered one of the more autocratic rulers in Africa. He was 28 years old and barely literate when he staged a 1980 coup d’etat, in which President William R. Tolbert Jr. was murdered in his bedroom and 13 Cabinet ministers were executed on the beach by a drunken firing squad.

Then, in 1985, Doe was elected president in an election widely considered fraudulent. Following a coup attempt a month later, he locked up dozens of his opponents and shut down most of the country’s newspapers.

Now Doe has freed his political opponents from jail and invited those who have fled to return. Several daily newspapers are on the streets of Monrovia and, with Doe’s blessing, they have taken out after corrupt public officials.

Even the roadblocks, where police officers armed with automatic weapons used to routinely demand bribes from passing motorists, have come down in recent months.

“Nobody’s white-washing the past. You can’t forget it,” a senior Western diplomat said not long ago. “It’s still an erratic government. It’s still a country where if the president wants it badly enough the system will produce it for him. But at some point you have to turn the page of the history book, and we’ve seen substantial improvements.”