Blood tires?

I was sitting on a very expatriate beach with during my first weekend in Monrovia, watching the waves and sipping a Coke Light, when I had my first encounter with extractive industries in Liberia.

By extractive industries, I mean the kind of natural resource exploitation that has been perpetrated throughout the developing world since the days of colonialism. Such as the timber industry that lined Charles Taylor’s pockets with hundreds of millions of dollars. Such as the diamond companies that continued to profit from West African blood diamonds while the civil wars in Sierra Leone and Liberia were killing and displacing millions. Needless to say, extractive industries did not make a good first impression on me.

Liberia needs to throw whatever fuel it has into the fire to get the economy started again. But if Liberia really returns to business as usual, the same patterns of patronage and marginalization will lead it right back to the brink of war.

The transnational corporate bogeyman presented itself to me in a much friendlier form—that of a lanky Ohioan working on tech support for Firestone, an American company that has been working in Liberia since 1926 and is currently the largest employer in the country. This friendly Midwesterner had apparently come in on my flight and recognized me because I had made a bit of a scene trying to lift my carry-on full of books into the overhead bin. In any case, I was happy to spend my beach time talking to an employee of the infamous Firestone about his company’s labor practices and role in the post-conflict development of Liberia.

Liberia has a love-hate relationship with Firestone. On the one hand, 85% of the country is unemployed, a figure that I repeat because it remains incomprehensible to me that 85% of the population can survive without work. Today, Firestone provides about 15,000 jobs to Liberians. On the other hand, Firestone has historically treated its workers like slaves, giving them impossible quotas and halving their wages if the quotas are not met, which means that many workers pulled their children out of school to work 12-hour days tapping rubber trees and hauling buckets.

The rights of workers are one major concern. Another is the tendency of natural resources to destabilize the countries from which they are extracted. Terry Karl, one of my professors at Stanford, is the world’s leading expert in “the paradox of plenty.” Her research has linked petrodollars in particular, but natural resources in general, to civil war, oppressive regimes, and poverty. Examples abound from Iran to the Democratic Republic of Congo. Karl's research first began when the founder of OPEC told her that oil is “the devil’s excrement.”

In Liberia, the sale of natural resources to companies in the West directly funded the civil war. Stephen Ellis, perhaps the foremost expert in Liberia, estimates that Charles Taylor’s rebel army was earning about $75 million a year from taxing the sale of diamonds, timber, rubber, cannabis, and iron ore. Once Taylor was in office he set up a shadow state that diverted revenues around formal institutions, thus asphyxiating true government institutions.

The government’s Poverty Reduction Strategy (PRS), which is an important document produced by the government of virtually every poor country to guide its interaction with donors like the World Bank or USAID, bets heavily on extractive industries for economic growth over the next four years. Before the war, Liberia’s economy was driven by the “rubber, timber, mining and cash crops.” Ellen Johnson Sirleaf’s administration has begun renegotiating concessions with companies in these sectors, and the Firestone Rubber Company and Arcelor Mittal Steel have already re-opened production.

Ellen Johnson Sirleaf is generally seen as above reproach. However, her ministers and their civil servants are not, and despite some quite drastic attempts by the international community to manage revenues in Liberia like GEMAP and the EITI, there is little doubt that the business of patronage and personal enrichment is booming in Liberia. It is true that Liberia needs to throw whatever fuel it has into the fire to get the economy started again. But if Liberia really returns to business as usual, the same patterns of patronage and marginalization will lead it right back to the brink of war. Could it be possible that, in the style of a true World Bank technocrat, Ellen Johnson Sirleaf overestimates her ability to counter the political consequences of natural resource extraction with sound economic principles? No government policy is risk-free in a post-conflict country, but I fear that the Iron Lady of Liberia (Sirleaf’s nickname) may not see how limited her control over her government actually is.

In any case, I did not say most of this to the Ohioan on the beach. For better or for worse, I am more comfortable with persistent persuasion than the bombastic criticism that most advocates attempt. We talked about the education, healthcare, and housing that Firestone provides to the families of its employees. While these points are obviously standard talking points for Firestone apologists that say nothing about the quality of services, independent sources confirm that Firestone has really cleaned up its act in the past year or so, thanks in part to the new contract negotiated by Sirleaf’s government.

Seeing as I work for an under-funded NGO and the Ohioan works for a transnational corporation, he offered to lend me his car and driver to head home from the beach. I started pressing his Liberian driver (who was incredibly gracious despite the fact that I dragged him away from his beach and beer) about working conditions at Firestone. Is the housing comfortable? Quality of education high? Child labor rules enforced? Salaries fair? He seemed comfortable confirming that conditions had improved a lot over the past few years, and that most workers were now satisfied, despite the fact that they were still poorly paid manual laborers. Perhaps I’m an optimist, but I believe him. I believe that corporations are made up of good people like my Ohioan who just can’t wrap their minds around the power and responsibility that they have in ridiculously poor countries. When pointed in the right direction, these people use their influence and the sheer economic force of their companies to reduce poverty. Anyways, it’s a good thing there’s hope, because managing the tricky relationship with natural resource extraction is the only way forward for Liberia.

Sources:

Stephen Ellis, The Mask of Anarchy (1999).

Government of Liberia, Poverty Reduction Strategy (Draft 1.0) (Feb. 2008).

Terry Karl, The Paradox of Plenty: Oil Booms and Petro-States (Berkeley: University of California Press, 1997).

Michael Ross, “Natural Resources and Civil War: An Overview with Some Policy Options” (Dec. 2002), http://lnweb18.worldbank.org/ESSD/sdvext.nsf/67ByDocName/NaturalResourcesandCivilWarAnOverviewWithSomePolicyOptions/$FILE/Ross.pdf.