Rice Announces Huge Debt Relief for Liberia

Cites "time of optimism" after 14 years of civil war in African nation

The United States will implement $391 million in U.S. debt forgiveness for Liberia, U.S. Secretary of State Condoleezza Rice announced February 13 at the opening of a two-day "Liberia Partners' Forum" at World Bank headquarters in Washington.

Rice said the United States has contributed more than $500 million in humanitarian and development assistance to the war-torn West African nation and now is "determined to continue and expand our support."

President Bush "has asked Congress for more than $200 million in total assistance for fiscal years 2007 and 2008 and we want to do more," she said.

"The United States currently holds $391 million in outstanding bilateral claims from Liberia. We will cancel that debt - all of it," Rice told the conference. She added, "We hope this will enable the [Liberian] government to direct more of its resources toward reconstruction and development."

After 14 years of civil strife and 250,000 deaths, Rice said, there is "a time of optimism" in Liberia, due largely to President Ellen Johnson Sirleaf and her administration, which has "worked tirelessly over the past year to ensure that ... reconstruction and development take root and have a chance for lasting success."

Rice said Sirleaf, who was elected in November 2005, and "her team ... are committed to advancing democracy, rooting out corruption and to working in the best interests of the Liberian people."

"All of us in the international community applaud her determination and are putting our full support behind the Liberian government," Rice added.

In addition to the United States and World Bank Group, the two-day donors' conference was co-hosted by the United Nations, the European Union and the African Development Bank. Twenty-two nations also participated, including China, Japan, India, Senegal, Germany, France and the United Kingdom. Multilateral organizations like the African Union and nongovernmental organizations also sent representatives.

The Liberian president, who also addressed the opening session, touched on the $3.7 billion debt her country owes. She said it largely was incurred "unwisely" by "previously nonperforming governments" that looted the nation over a period of 14 years. These loans, totaling in the billions, have "largely tripled through accumulated interest," she added.

According to International Monetary Fund Managing Director Rodrigo de Rato, Liberia's debt arrears now amount to $795 million to his organization alone. Both he and World Bank President Paul Wolfowitz, who also spoke at the forum, agreed that the debt burden is "unsustainable" and keeps Liberia from effectively raising its per capita income, which now is less than a dollar a day.

Liberia now has a chance for recovery, Wolfowitz said, because Sirleaf has "shown the bold leadership she promised" when first coming into office.

Sirleaf pledged to continue the battle against corruption in Liberia. Corruption, she said, "has eaten away at the fabric of our society." On the economic front, she said her goal was simple: "To move from aid to trade, from economic free-fall" to prosperity for all.

During a break in the conference, Assistant Secretary of State for African Affairs Jendayi Frazer told USINFO she especially was pleased by two other initiatives Rice mentioned: making Liberia eligible for favorable trade benefits under the African Growth and Opportunity Act and resuming direct flights between Liberia and the United States.

I'm very excited about an Open Skies agreement that will be signed with Liberia to try to establish direct airline transport so that our peoples can move around more easily between our two countries," Frazer said. Bilateral open skies agreements give airlines in both countries the right to operate air services from any point in one country to any point in the other, as well as to connect those flights to points in third countries. These pacts eliminate restrictions on air services with regard to frequency of flights, the type of aircraft and other aspects.

Measures like that, as well as continued aid and the debt relief, "should be a real boost to the efforts of President Johnson Sirleaf" in putting her country back on the path of sustainable recovery, Frazer added.

U.S. Agency for International Development (USAID) acting Assistant Administrator for Africa Walter North, who was part of the U.S. delegation at the conference, just returned from visiting Liberia.

At a February 12 briefing for journalists at the State Department, he said: "I was very heartened by the progress I saw taking place there. People you meet on the street are upbeat and looking forward" to a better future under the leadership of Sirleaf.

North said assistance from international donors is doing a good job, but the government of Liberia is also beginning to increase its revenues by tackling corruption through efforts like the Governance and Economic Management Assistance Program, which places donor advisers in key areas, like ports administration, where corruption previously drained off revenues.

After visiting the port of Monrovia during his trip, North said, "You see an incredible amount of activity happening, the vitality of marketplaces" that in the future could spell prosperity for a Liberia rich in natural resources such as rubber, timber and diamonds.

For more information on U.S. policies, see U.S. Aid to Africa and the African Growth and Opportunity Act.

Source: U.S. Department of State

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