Liberian Vice President, Boakai Said Cement Co. Is A Cartel; Are Other Companies Cartels Too?
By J. Yanqui Zaza
Later, he opened a Pandora Box as he tried to exonerate the Sirleaf government of being responsible for the constant increase in the price of cement. Responding to a question written by a female delegate, V.P. Boakai said the Cement Co. was not only involved in influence peddling, as a legitimate business practice, but it also uses intimidation and blackmail to prevent competitors from importing cement. For instance, he said, the Cement Co. discourages lending institutions from financing a competitor and, or forces cargo ships from transporting cements belonging to competitors. In short, V.P. Boakai said “…Cement Co. was a Cartel,” meaning a mafia, a gangster, a drug kingpin, etc. Some members of V.P. Boakai entourage indicated that an investor has penetrated the Cement Co.’s turf, apparently, similar to what OTC did during the regime of Charles Taylor. The price of cement was lower during the Taylor regime than the price Liberians are paying now.
Forget about the exposure of the real culprit of the rapid increase in the price of cement since only government officials were, supposedly, in the dark. Rather, our focus should be on the million dollar question. Does the activity of the Cement Co. an aberration, or rather a mirror of big business in Liberia? Do other importers wield similar power? Are agents of big business still influencing decisions at the Legislature, Judiciary and Executive Branches, a major deficiency of capitalism? Or are rice importers discouraging the Liberian government from playing a pivotal role in food production? Or why did President Sirleaf reject the diamond producing policies of Botswana, which receives significant profits of the diamond operations than Liberia, Sierra Leone or Congo does?
I surmised that Lofa delegates were not surprised about influence peddling, but they did not expect that a cement co. would wield such an enormous influence. More so, many measures have been instituted to prevent these kinds of monopolistic business activities. For instance, Liberia was put under quasi-receivership by the international community after Liberia and the international community signed GEMAP. This agreement coerced Liberia into hiring expatriates to co-manage Liberia’s economic activities. Additionally, excessive salaries are been paid to key presidential advisors to discourage them from being bribed by unscrupulous investors. Most importantly, many Liberians, even if they didn’t vote for candidate Sirleaf, accepted the view that her international experience would aid her in selecting competent advisors and lead the country from the dark days of rampant corruption.
Cognizant of the effects of corruption, the Federation of Lofa Association in the Americas (FLAA) leadership zeroed on the topic “Concessionary Contracts” for a panel discussion because of the economic implication and the unacceptable level of corruption in Liberia. According to public information, poor management of a country’s resources usually brings about chaos in society. Equally true, service industries, licensed to import and export goods and services, also breed civil wars if they become less concerned of the future of its host country and more about huge profits. Liberia’s civil war became inevitable because prices of goods and services skyrocketed and profits from the country’s natural resources were siphoned to personal benefits.
Granted, an investor might soon be sharing the cement market with the Cement Co., thereby creating conditions to reduce the price of cement, but the poverty level in Liberia is not tied solely to the high price of cement. More so, Liberia’s economic system, capitalism, encourages hostile business environment amongst competitors. Therefore, the Cement Co. is correctly applying principles of capitalism to buy a competitor to protect its turf, some of the complaints V.P. Boakai mentioned. In fact, it would be considered a negative government’s interference if the Cement Co. was prevented from owning the would-be-new competitor(s) in order to expand its business. Further, as long as Liberia continue to embrace the capitalistic system that is based on the theory “the fittest survives,” entrenched companies such as the Liberian Firestone Company might be dictating policies in Liberia the same way corporations such as General Dynamics, Goldman Sachs, AIG, etc does influence decisions in the United States.
Alarmingly, the decisions as to how, when or where Liberia should invest its $144 million dollar cash reserves, which companies are eligible to invest in Liberia, etc might be influenced by many of the 25 Hedge Fund managers who made $11.6 billion dollars in compensation in 2008. Below are four of the 25 managers:
NAME AMOUNT NAME AMOUNT
1) James Simmons $2.5 billion 3) John Arnold $1.5 billion
2) John Paulson 2.0 billion 4) George Soros 1.1 billion
How do billionaires influence decisions in poor countries such as Liberia? They finance the campaign of candidates who become obligated. Subsequently, once taken in the bit, handpicked leaders, including President Sirleaf are compelled to dance to the tune of billionaires’ music, be it permitting the Cement Co. to increase the price of cement or granting Liberian Firestone Company the privilege to pay miniscule taxes and dividends. In the case of Ivory Coast, government did allow corporations to dump chemical waste in the Ivory Coast, and other poor countries have permitted researchers to use untested drugs on innocent citizens as tryouts, etc. Unintentionally, V.P. Boakai did not just have implied that there are many Cartels in Liberia, but might have also just uncovered a working relationship between the Sirleaf government and big business. Sadly, it is a relationship that allows small business to increase prices of goods and services and big business to pay miniscule dividends.