Background: Context and Definitions

Happy New Year, Madam President! Congratulations also on your third anniversary as President. It is my desire that the next three years will be even better than the last three. Like you, my hope is that the coming years will be results driven.

Today, more than ever before, we have an opportunity to reverse the urban-rural disparities that permeate every sector (economic, political, and social) of our society. For more than a century now, rural Liberians have been given blank checks by the central government, while they sit and watch the exploration and extraction of natural resources (minerals, forest product, iron ore, etc.) from their communities. Madam President, this is an economic injustice that you have begun to reverse. Unfortunately, the lack of managerial capacity and structural deficiencies continue to pose impediments to achieving a sustainable local economic development program.

Your resolve to pioneer a new paradigm in our development practice is indeed a departure from our traditional top-down development planning model. Your commitment to foster the political and economic independence of local government warrants notice as well. Certainly, the formulation of the Poverty Reduction Strategy (PRS) and County Development Agendas (CDAs) are further manifestations of this commitment (http://www.emansion.gov.lr/doc/Final%20PRS.pdf). Your political will has equally been supported by your public policy actions. To date, your administration has allocated more than $9 million, as County Development Funds (CDFs), to support local development projects. The passage into law of the Community Forest Rights Act will also provide local communities a fair share of forest’s revenue (http://www.loggingoff.info/media/articles/article653.pdf).

For the first time, counties are directly receiving development contributions from the extractive industry. Mittal Steel is contributing $3 million dollars (annually) to support development efforts in Nimba ($2 million), Bong ($500, 000), and Grand Bassa ($500,000). MarGibi, Bong, and Montserrado Counties are expected to benefit from a $3.5 million (annually) development contribution from China Union Company for mining operations in Bong Mines.

Notwithstanding these commendable efforts, it has become discernible that the county funding initiative is failing to meet its objectives as envisioned--funds allocated for county development projects are being discretionarily expensed by counties’ officials. The level of complacency attributed to some Legislators, regarding the misapplication of development funds, is equally appalling. Consequently, the intended beneficiaries of these development projects are now spending valuable time protesting these antidevelopment elements, instead of spending time on other productive activities. It seems to me that our county leaders have failed to recognize a fundamental tenet of economic development -- empowering people. Economic development is more than infrastructure development; it is also about democracy, women’s rights, community organizing, and good governance.

Madam President, I support your recent concession affirming mistakes in the current management arrangement of the CDFs. Your pronouncement is encouraging, given the numerous allegations of misapplications that have emerged from the various counties. Many Liberians, especially those in the affected counties, are surely in concert with your acknowledgement. Unfortunately, many commentators on this issue have narrowly focused their efforts on the misapplication side of the debate; they have overly concentrated on alleged corrupt practices by county officials. While this is necessarily an important issue, I believe we have failed to approach this seminal economic development enterprise in its relevant context. Accordingly, I am contributing my voice to the ongoing discussion from a broader viewpoint. Utilizing a problem analysis framework, I am proposing that the observed misapplication of the CDF is a symptom of a fundamental weakness in the local development planning and project management environment.

I echo your recent pronouncement that a new strategic direction must be pursued to ensure the efficient utilization of development funding. In this regards, you are suggesting that the “Executive” now manage the CDF. Again, you recently asked the Legislative Branch to excuse itself from further direct involvement with the management of the CDFs. I also give you credit for constituting the Sam Jackson’s Committee to perform a formative evaluation of all ongoing projects financed through the CDF initiative. While these are necessary suggestions, I argue that they are limited compared to the scale of the challenges. Madam President, I assert that we need a holistic approach, starting with a critical review of our existing institutional framework regarding development planning. Failure to recognize existing institutional challenges, by employing a quick-fix solution, will remain superficial. In the long run our efforts will only continue to generate the same negative latent effects as those already experienced in Nimba, River Cess, River Gee, Margibi, Grand Kru, Bong, and Grand Gedeh Counties.

In this letter I define economic development as a process of generating economic wealth with the sole intent of improving the social well-being and quality of life of a community of people. Economic development means more than economic growth; it is also about improving the standard of living of real people. Community development is concerned with the development issues of a subset of people at a local level (county, district, village, or neighborhood). The goals of economic development remain consistent, at both national and local levels: job creation, infrastructure development, and improvement in the quality of life. Local development has the same meaning as community development by definition.

Economic development is both a process and a practice. The process of economic development requires an understanding of the development context, understanding the etiology of a community’s problems, and adopting the right strategy (among competing alternatives) to achieve established goals. Economic development is also a professional practice. In practice, the economic development process is not managed by politicians; rather, the process is coordinated by qualified technicians with skills in development planning and administration, strategic planning, policy and program evaluation, budgeting, and leadership.

Challenges to Community Economic Development

Madam President, in spite of your strong political will, there remains capacity and structural challenges to achieving local economic development. I have identified four challenges: (1) the lack of policy guidelines in the beginning, (2) the absence of a clear definition of the economic development context, (3) the lack of technical and managerial capacity at the county level, and (4) the lack of institutional coordination.

Lack of Established Policy Guidelines in the Beginning

The importance of adequate planning in economic development practice cannot be overemphasized. Indeed, considering the scarcity of productive resources amidst competing community priorities, it is unfeasible to achieve goals without first formulating a realistic plan. Economic development obviously does not take place in isolation--it is a part of the whole socio-economic environment. In every successful community development effort, there is a plan that satisfies a number of basic principles: relevance, clearly defined goals, intergovernmental cooperation, open participation, a detailed implementation strategy, and defined indicators of success. The complexity of this process also requires that it be facilitated and managed by professional development planners.

Unfortunately, the overwhelming ongoing dissonance in the management of the CDFs suggests that the program was poorly conceived. I hasten to acknowledge your enduring political will for initiating this defining program. Yet, political will alone is not a sufficient condition to accomplish economic development goals. The ongoing bickering (regarding the misapplication of the CDF) between county officials and their constituents on the one hand, and the emerging disagreement between the Legislative and Executive branches on the other hand, further affirms my thesis. Some may suggest that the National Budget Act, the PRS, and the CDAs provide the necessary guidelines to ensure the efficient use of the CDF (http://www.mofli beria.org/budget0708.pdf). I concur that these documents do certainly provide some general guidance. However, they are limited in two respects: 1) they provide very limited guidelines on intergovernmental coordination, and 2) they provide no institutional framework for monitoring ongoing development projects. Besides, it must also be recognized that the start of the development funding allocation (2006) precedes the formulations of the PRS and CDAs (2008). Thus, while they are helpful points of reference, these documents are only relevant for the budget years 2008-2011.

Lack of a Defined Local Economic Development Context

The absence of a clear (unambiguous) economic development context presents an additional challenge. The basic questions that remained unanswered are: What do we mean by local economic development (in our national development agenda)? What economic development activities are designated for local governments? What are those projects that remain the prerogative of the national government? Given the highly relative nature of economic development, a failure to define a clear economic development context to guide local project planning and implementation generates further confusion. To avoid such confusion, a comprehensive economic development policy framework (built on a common vision) is necessary to generate popular support for ongoing projects. Establishing project boundaries, which distinguish between the economic development responsibilities of national government and those of local government, do also help avoid duplication and waste of limited financial resources.

The failure to define local development confines has also allowed county officials to assume individual definitions. Without a clear context, some have been encouraged to use the CDFs as discretionary income on personal projects. Emerging reports suggest growing discrepancy between county development priorities and those of county officials. The recent indictment of Rennie Jackson (Superintendent of Bong County) for spending $10,000 of the CDF on a trip to the USA is one example. The recent affirmation by Samuel Grisby (Superintendent of Sinoe County) that he unitarily invested $25,000 of the CDF in a commercial rice project is another instance (http://www.analystliberia.com/theft_or_misapplication_0ct30_08.html). Failure to establish a defined local development framework has also provided a pretense for county officials to pursue projects for which they evidently lack the managerial and technical capacity to manage. For example, the decision of Bong County officials to construct a 12-mile road (the now infamous Hindi road project) was plainly unrealistic and an inefficient use of the CDF (www.newdemocratnews.com/story.php/recordid8&&sub).

Lack of Institutional Coordination

Another challenge hindering the local economic development agenda remains the absence of a specific institutional framework to coordinate local economic development planning. To date, local economic planning and implementation activities are spread across various line ministries (Planning and Economic Affairs (MPEA), Public Works (MPW), Internal Affairs (MIA), and Rural Development with competing objectives. Moreover, ingrained bureaucratic cultures continue to be impediments to change.

I have reviewed the National Budget Act (2007-2008) and observed many instances of competing functional responsibilities and measurable program objectives across these institutions as well. For example, I have observed that the MPEA statutory responsibilities for national, sectorial, and regional development planning (local development in context) are identical to those prescribed for the MPW, MIA, and Rural Development Ministry. In particular, the community development planning responsibility of the MIA is similar to that of the Ministry of Rural Development: to lead and manage rural development programs.

There are equally many instances where the measurable objectives of some of the line ministries are parallel. For example, one measurable objective of the MPW (in the 2007-2008 Budget Act) is to construct 30 feeder roads (2 per county). Similarly, the Budget Act also indicates that the Ministry of Rural Development would “construct at least 10, ten-mile feeder roads in each county.” Besides being parallel, these goals also lack the specificity needed to measure success. Program planning (best practice) dictates that objectives be SMART (specific, measurable, achievable, realistic, and time bound). Undoubtedly, these objectives fail this basic test. The most disconcerting observation, at least in my opinion, are the responsibilities for planning and evaluating community development programs and monitor NGOs activities assigned to the Ministry of Internal Affairs (MIA). I contend here that this is precisely the same statutory responsibility of the Ministry of Planning and Economic Affairs (MPEA): to facilitate the consistent and efficient implementation of projects and programs (nationally and locally).

Lack of Local Managerial Capacity

One of the effects of our civil crises is the disruption of our human capital formation. Owing to the high illiteracy rate, combined with a large exodus of human capital (occasioned by the civil conflict), Liberia’s manpower needs are overwhelming. Clearly, the lack of management capacity is a serious constraint to achieving our national development agenda. This recognition is not new; it is a recurring theme in almost all national planning documents on Liberia, including the PRS and CDAs. In one report, Liberian local government programme: towards decentralization, Mou Charles and Maxwell Poe have observed “years of public mismanagement have left the Liberian administration system inefficient and, perhaps, unable to implement reforms needed to steer the envisioned growth (http://www.uncdf.org/english/local_development/uploads/concept/UNCDF_LiberiaCP2006.pdf).” They have also suggested that the absence of local government capacity has given development partners to pursue, at their own choosing, alternative development objectives. The lack of managerial capacity (nationally and locally) has also been identified by the Liberian Government as a potential risk to a successful implementation of the PRS and the CDAs, (http://www.emansion.gov.lr/doc/Final%20PRS.pdf). In a recent observation report of the Joint Staff Advisory Note (JSAN) of the IMF, Staff has also identified capacity as one of the constraints to achieving the PRS. (http://www.imf.org/external/pubs/ft/scr/2008/cr08289.pdf).

Summary and Going Forward
Madam President: I’ve decided to write you this letter to provide an independent analysis of the existing national debate regarding the County Development Funds. Unlike other contributors, I have suggested that the observed misapplication is not the problem, but a manifestation of structural limitations in program planning and management at the local government level.

The failure to properly conceive local economic development as a holistic endeavor brings us here. I am aware of the existence of the PRS and the CDAs to guide our national and local development efforts. However, observed challenges will continue to present risks to the attainment of any successful local development outcomes, if not adequately addressed. I am mindful that community development issues are clearly linked to our national security priority. Our people have experienced participatory planning (for the first time), through the formulation of the PRS and CDAs, and their expectations are lofty. They have said what their priorities are, and so, they deserve to see the results.

Amidst widespread misuse observed in the implementation of development projects, it is in the best interest of the Liberian people in general and specifically citizens in those constituencies, that government to take urgent actions. I am proposing the following:

• Place a freeze on funding of any new projects or disbursement of funds for a period (at least six months) to prevent further abuse.

• Expand the mandate of Jackson’s committee to include a review of existing institutional structures and how they affect the implementation of local economic development programs.

• Establish a technical secretariat in the Office of the President to coordinate further implementation of the CDF.

• Enact a comprehensive national planning law that will define the local economic development context, establish specific economic development planning guidelines, establish land use policies, and establish an institutional framework to coordinate local development planning and management.

Madam President, On January 17, 2006, when you took the Oath, you provided hope for a new day in Liberia. Today, more than ever, our country is at a crossroads; many of our compatriots now have doubts about your commitment to the change you promised. I do not doubt you. But like everyone who is cheering you on, I want to see the changes you promised, and that you are so capable of delivering (based on your past record in the financial/economic sector).

I am reminded by your words, “We are moving forward: The best days are coming. We have the resources, and we have the right government. And we have good friends, good brothers and sisters who will work with us.” Madam President, I encourage you to reflect on this affirmation and make the sturdy decisions!

Now I will rest my pen, wait, and see!

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About the author: I am a Liberian living in the USA. I am presently a retail electricity market development associate with a state public utility regulatory commission. I have completed graduate studies in Regulatory Economics (electricity, telecommunications, and natural gas regulation), International Economic Development, and Regional Planning (all but thesis). I can be contacted at josephfallah@aol.com or kissiman@hotmail.com,

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