Liberty Party’s Plan to Create Jobs, Promote Full Employment, and Improve Livelihoods

Understanding the Unemployment Situation in Liberia

After years of the Sirleaf Administration and enormous flow of foreign aid into

the country, the majority of Liberians continue to face unprecedented hardships. Each

day is a desperate struggle for survival: sixty-four percent of Liberians (about 2 out of

every 3) still cannot afford to feed themselves and their families adequately; 48% of

Liberians (almost half) live in extreme poverty.

Unemployment remains at 82% since 2008 (Figure 1); meaning that the UP government’s policies

have failed to create jobs and have had little or no impact on the unemployment situation.

In the face of this, the public workforce was reduced by 10,000 jobs–from an estimated

48,000 in 2008 to 38,000 through the “downsizing” and “rightsizing” exercise. Figure

1 below, using data taken from the Central Bank of Liberia’s Annual Reports, shows the

relatively steady 82% unemployment rate from 2008-2010, which, sadly still persists in our 2016 economy.

Unemployment graph

Figure 2 below shows that more than half (53%) of those jobs were in the

agriculture and forestry sector (27%) and with the government (26%). Another 19%

came from social and community services provided by churches, NGOs, and other nonprofit

organizations. General merchandise and trade provided 5% but is largely underreported

because the informal sector activities are not taken into account. The rest (23%)

were service industries that support the major job providers.

 

percentage of jobs Lib

Liberty Party’s job-creation plan seeks to broaden opportunities to bring more people into the formal sector or to enable them to

create their own employment. Over the long term, leveraging our location in the region and emerging relationships with Asian nations, coupled with reduction in regulatory burdens, will spur investments from both foreign investors and the Diaspora. The major components of a Liberty Party Government’s job-creation policy are therefore as follows:

A) Expand the Public Sector (short to medium term measures to create 215,000 employment opportunities)

1) Invest in labor intensive infrastructure rehabilitation and development in

partnership with the private sector and NGOs. Goal: 100,000 jobs over 3 years

(30,000 targeted to former combatants drawn into non-lethal AFL engineering

brigades)

 

2) Establish a Student Service Corp to draw high school graduates and college

students into community service. Goal: 3,000 service/teaching/mentoring-type

opportunities over 3 years

 

3) Establish youth-empowerment programs in partnership with the private sector and

NGO’s, by providing cost sharing contribution from GOL and other partners, to

provide non-formal education for out-of-school youth, teach basic literacy,

numeracy, life and business skills, and promote public-private partnerships in

workforce development. Goal: 100,000 opportunities with stipends over 3 years.

 

4) Expand the education sector with more formal and informal teaching and training

opportunities for school-age children, adult learners, and vocation and technical

education. Goal: 12,000 new teaching opportunities.

 

5) Leverage public procurement for goods and services to give priority to Liberian owned

businesses, build the domestic entrepreneurial class, and attract talented

Liberians in the Diaspora. Goal: US$57.5 million per year in public

procurement/supply opportunities that can help to capitalize Liberian business for

re-investment in the economy.

 

6) Engage commercial banks with the view of establishing a fund for extending

business loans to Liberians, assisting Liberians to play a more meaningful role in

the retail sector of our economy. This fund will be guaranteed by the GOL and

supervised by a small business institute (SBI) to be established by a Liberty Party

Government. Goal: empower Liberians to play leading role in the country’s

economy.

 

7) Change the resident/work Permit Laws, granting residency and the authority to

work to business owners for longer periods than are provided for under our

current law. Depending on the nature and amount of the investment, non-

Liberians will be granted resident/work permits for periods ranging between five

to twenty years. And those non-Liberians who have lived in Liberia for more than

twenty years, they will be grandfathered into the longer resident/work permit

period, without regard to the nature and amount of investment. Goal: encourage

substantial investments in the non-extractive industries thus creating additional

employment opportunities for Liberians.

 

B) Private Sector Development and Expansion (medium to long-term measures that will

put the private sector in the lead in job creation)

1) Reform the banking system and expand insurance industry

i) Reduce the legal bottlenecks to foreclosure actions on non-performing loans;

introducing new legal instruments and, in partnership with the banking

institutions, information sharing mechanism on creditworthiness of potential

borrowers. Goal: reduce the risk to bank lending and the ratio of nonperforming

loans to total loans from 10.3% to 5% in five years;

 

ii) Reduce the excess liquidity of the banking system by offering partial

guarantees to encourage more commercial agriculture loans across the board.

 

iii) Establish a microfinance regulatory and supervisory framework, introducing

microfinance institutions (MFI) to receive limited deposit-taking in rural areas

supported with deposit guarantees (up to L$25,000.00 per depositor). This

will, (a) reduce the geographical distance between small and potential savers,

especially those in the informal sector, and “banks”; (b) eliminate the

bureaucracy involved in transacting business with banks, and (c) increase

confidence that their deposits are secured. MFIs, as an outreach approach,

will ensure that more small savings come into the formal business environment.

 

Goal: increase access to banking and financial services throughout the country,

ensuring that the national economy under a Liberty Party Government will benefit

from the accumulation of capital which banks can lend to productive commercial

ventures, thereby creating more employment opportunities for Liberians.

 

iv) Introduce community-based micro-insurance schemes to reduce the risks of

adverse health, accident, and death to those in the informal sector in exchange

for regular premium payments matched to the current family out of pocket

expenses on health care and burial. Currently, 92% of our workforce has no

insurance coverage. Goal: increase the coverage and access to insurance and

reduce the risks for illness and death to families so they can spend more time

engaged in productive economic activities.

 

2) Re-capitalize the Agriculture and Cooperative Development Bank with significant

private interest and control to finance commercial ventures in the agriculture

sector with public guarantees. Goal: raise the portfolio of new loans going to the

agriculture sector from 4% of total bank loans to at least 40% in 5 years; giving

priority to rice, rubber, logs/sawnwood, oil palm and agro-processing ventures.

 

3) Re-capitalize the National Housing and Savings Bank with significant private

interest and control to finance low and medium-cost, and commercial housing,

ventures. Goal: 25,000 new housing units financed over 5 years.

 

4) Stimulate broad growth in the economy through reduction in the regulatory

burden (business registration, import/export document processing, pre-payment of

withholding tax); open service delivery opportunities and market competition in

areas currently dominated by public corporations (energy, IT, communications,

urban water and sanitation, produce buying and exports), and engage all major

existing concessionaires in the iron ore, timber, agricultural and rubber industries

to provide full government support in ensuring that their projects are fully

operational by the end of 2013.

Goal: reduce government’s overall presence in

the economy and ratio of revenue to GDP from 38% to 25% over six years.

 

5) Aggressively lead bilateral trade negotiations to open new export markets while

seeking to develop the manufacturing sector of our economy. A major

shortcoming in managing our natural resources has been a failure to make them

more valuable to our country by producing semi-finished or finished products.

Another short-coming is the absence of set-asides and preferential treatment for

subcontracting of Liberian-owned businesses/domestic suppliers, in the

negotiation of mineral development and concession agreements, to build a more

sustainable link to the local economy. This means that we derive less value by

selling our natural resources for cheap, repurchase the finished products at higher

prices, and fail to integrate other Liberian industries with these extractive

industries.

Goal: maximize the benefits that accrue to the country from the exploitation of our natural

resources; and cut overall trade deficit by one-half from US$517 million in 2010 to US$258

million in 6 years. This will concurrently reduce the exchange rate between the L$ and the $US

and the inflationary pressures contributing to high prices.

 

Conclusion

That the issue of jobs, and of other opportunities for individual progress, is critical to the

peace and stability of our country cannot be in dispute. Also, it has to be common

knowledge by now that a dispropotionate reliance on the extractive industries for job

creation is a failed policy from the past that cannot continue. The new jobs-creation

vision for our country has to be one that promotes a diversified economy, empower the

Liberian enteupreneur, and add value to our raw materials. This is the direction of our

job-creation plan. Liberty Party’s job-creation plan is designed with that outlook and will

take our country in that direction.

We estimate that the plan as outlined in this paper will create approximately 215,000

employment opportunities in the formal sector over the next six years, bringing relief to

Liberians while we expand and diversify the economy over the medium and long term.

Many of these opportunities do not require donor support; though we will seek their

collaboration. These policy measures can take effect almost immediately. Some will

require assessments and negotiations; which a Liberty Party Government will do

aggressively.

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