Sunday, May 22, 2011

The Economist Bylines from Monrovia

On Friday, on the Economist's online Africa blog, Baobab, a post appeared about the Lebanese in West Africa. The report concerned Liberia extensively, including interviews with some of the most prominent businessmen in the country, Ezzad (also spelled Ezzat) Eid (owner of the Royal Hotel and City Builders, among other enterprises) and Abdallah Shehny (of the prominent Shehny Brothers congolomerate), as well as the head of the Liberian Business Association, Mr. Sam Gibson.

There are several comments that I might make about the Lebanese and their involvement in Liberia's economy. I'm not educated enough on all the details of commerce in the country to contribute to the discussion about whether or not they unfairly collude, or even if they "send money out of the country," as Mr. Gibson "grumbles."

To that, I would first offer that, as they are unable to establish citizenship in Liberia, they are actually encouraged to not more permanently reside excess capital in the country. Secondly, I would point out that any foreign investor would naturally want to repatriate profits, as it would be only logical to do generally (and which is ensured by Liberia's investment code).

Traders from the Levant have operated in Liberia and West Africa for at least 100 years. Many of the most prominent "Lebanese" in Liberia were born in Liberia, are not the first-generation of their family in Liberia, and/or have mainly ties to the country, more so than to Beirut. I wonder what would be different if people Lebanese/Syrian descent were allowed to own land, becomes citizens, and participate in all sectors of the economy and society. (For more, read this article from Fall 2010 in the Liberian Observer)

Also, my friends and colleagues in the business community in Monrovia, both Liberian and foreign, generally argue against the oft-repeated assertion that Lebanese mostly ship out their profits. I can personally observe that, in the years I have been in Monrovia, I have seen remarkable expansion of Lebanese-backed businesses: hotels, supermarkets, gas stations, building-supply stores, etc., both in the central sections of the city along Tubman Boulevard, and on the far fringes of the metropolitan area, along Somalia Drive. Lebanese businessmen may be repatriating profits, but they are clearly also investing in expansion of their own businesses and the country's economy.

Lastly, I would be interest to know how frequent it is for Liberians to export money from the economy, as a great many of the more wealthy Liberians, both businessmen and politicians, maintain a second home and/or family in the United States or elsewhere. In my years of living in Monrovia, I cannot report to observing particularly decent working conditions or employee treatment among any group of owners of any descent/nationality. Liberian employees generally enjoy few protections, perks, or benefits, regardless of their boss's ethnicity.

Given my lack of expertise in that area, I'll limit my comments to those observations and questions. But what I would point out, given how rare it is to have a publication so prominent and widely-read as the Economist to byline from Monrovia, that it is a tremendous shame that the column included this:

Easy relations with the political elites and the money to pay bribes also help. Liberia's Lebanese are unable to buy property and are banned from 26 industries, but simultaneous patronage by officials is common. "I budget for bribes," admits a Lebanese. "Anyone wanting to do business here does."

I do not dispute the accuracy of the sentiment whatsoever. When I say its a shame, what I mean is that its hugely lamentable that Liberia's reputation continues to be so poor among its own business leaders and commercial participants. If not already regarded as such, this sentiment is now reverberating among the readership of the Economist, exactly the type of sophisticated international professional that Liberia should be working to win over. As long as this is the report on the ground, that will be a losing battle, and investors will remain elsewhere.


Scarlett Lion said...

I don't think it's a shame that the column included this -- it's honest. To not mention that would be a disservice to the sophisticated readers you mention. There's no need to sugar coat reality, nor is it the job of the economist to "win over" investors. It's their job to report, and for investors to make decisions based on reliable information. If sources like the Economist tell investors that that they don't have to budget for bribes, when in fact they do, they are doing readers/investors a disservice.

The problem is not that the Economist reports this, the problem is that it exists. If the need to bribe is enough to scare off an investor, I would argue that investor isn't ready to work in Liberia, or in most places in the world for that matter.

MM Jones said...

Yes, totally agree with your comments. That's what I was trying to say: its a shame that this is the reality of doing business in Liberia, and its too bad that Liberia has this reputation. Of course its not a newspaper's job to sugar-coat or win over investors. Its Liberia's job to attract investment, and with corruption to widely reported in such a prominent publication, there is a long way to go. That was what I was attempting to express.

Anthony Usher said...

It probably will end like in germany, austria, turkey or ruanda.

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