VISIT TO LIBERIA BY DAS TODD MOSS - JULY 11 - 17,

C O N F I D E N T I A L SECTION 01 OF 05 MONROVIA 000902

SIPDIS

SIPDIS

DEPARTMENT FOR AF/W DOKEDIJI, AF/EPS CTRIMBLE, EB/ESC
SSAARNIO, INR/AA BGRAVES
USAID FOR AFR/WA-SSWIFT

E.O. 12958: DECL: 07/23/2017
TAGS: ASEC EAID ECON EFIN ENRG EWWT LI MAS MCAP
PGOV, PREL
SUBJECT: VISIT TO LIBERIA BY DAS TODD MOSS - JULY 11 - 17,
2007

REF: A. MONROVIA 610

B. MONROVIA 627

C. MONROVIA 846

Classified By: Ambassador Donald Booth for reasons 1.4(b) and (d)


1. (U) SUMMARY: Deputy Assistant Secretary for African
Affairs Todd Moss visited Liberia July 11-17, and met with
leaders from the Government of Liberia (GOL),business and
banking representatives, members of the legislative
opposition, UNMIL and international partners, and directors
from key sectors of Liberia's fragile economy. Although the
visit was designed to be a broad familiarization tour of key
Liberian issues and personalities, Liberian interlocutors
stressed the urgent need for continued or renewed focus on a
handful of priorities: rehabilitation of the port of
Monrovia, electricity generation and distribution, and
security sector reform. Liberian leaders often thanked DAS
Moss for the generous assistance from the USG, but pleaded
for more rapid disbursement of pledged funding. END SUMMARY.

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NATIONAL PORT AUTHORITY
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2. (C) On July 12, DAS Moss and Ambassador Booth visited the
Freeport of Monrovia and met with recently appointed National
Port Authority (NPA) Managing Director George Tubman. Tubman
claimed that the security situation at the port had improved
since a series of thefts and other crimes in or near the
Freeport in May (refs A, B). He said that the July 9 melee
(ref C) at the NPA between the Liberian Seaport Police (LSP)
and Liberian National Police (LNP) had been a setback caused
by poor communication. (Note: a Board of Inquiry released a
report of the incident on July 17 that laid much of the blame
on LNP Chief Beatrice Sieh. End note). Nevertheless, Tubman
admitted that the security provided by a patchwork of private
security guards, LSP, LNP and UNMIL troops was unwieldy and
the neighborhood surrounding the NPA remained volatile. A
subsequent tour of the port revealed practically no security
around Liberia's only petroleum jetty at the Freeport.


3. (C) Tubman highlighted a number of urgent needs at the
port. He said it was imperative that the NPA receive a
USAID-financed tugboat soon and Ambassador Booth pledged
there would be no further delays in getting funds released.
(Note: Funds are now available and the tug is reportedly on
the way to Monrovia. End note). Tubman explained that
warehouse facilities were inadequate and the cargo handling
contractor, Safebond, was unsatisfactory. (Note: the NPA
published a tender for new cargo handling equipment on July

18. Embassy has submitted a Trade Lead to the Department of
Commerce. Bids are due on August 23. End note). During a
tour of the port, Tubman illustrated the precarious state of
the primary wharf. The pier is limited to one ship at a time
due to a 300-foot shipwreck blocking the north end and the
collapse of a center section of the wharf on the south end.
The lack of nighttime navigational aids further limits port
operations, thereby raising freight costs, he said. Tubman
added that channel dredging paid for by the World Bank was
complete but he had his reservations on the quality of the
work done. In addition, without a full dredging of the wharf
area, the port was unable to accommodate deeper, larger
ships.


4. (C) In response to DAS Moss' request for a long-term
solution to modernizing the port, Tubman's first priority was
to "get people to respect the integrity of the NPA." Tubman
referred to a 1975 Port Master Plan and claimed there was no
need for outside management proposals - NPA could manage
modernization itself. He said the NPA needed a new master
plan for the container age, not a breakup of NPA into pieces
to be developed privately. (Comment: NPA management
continues to grouse over the loss of much of the Port of
Buchanan to Mittal Steel. Recently published tenders from
the Ministry of Lands, Mines and Energy (MLME) for the
western cluster iron ore concessions suggest that northern
sections of the Monrovia Freeport bundled with those
concessions will also likely remain out of NPA bounds. End
comment).

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Liberia Electric Company

MONROVIA 00000902 002 OF 005


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5. (U) At the Liberian Electric Company (LEC) on July 12,
Managing Director Harry Yuan told DAS Moss that at its peak
in the 1970s, the LEC generated 75 megawatts (MW) of power
(65MW from Mt. Coffee Hydroelectric power plant and 10MW
diesel generator) and had 30,000 paying customers. Today, he
said, the LEC distributes only 2MW of power to 460 customers
in central Monrovia, thanks to generators, fuel and
transmission lines provided by the EC, USG, Norway and WB
under the Emergency Power Program (EPP). Rick Whitaker,
Chief of Party for International Resource Group, a USAID
sponsored consultant supporting the re-commercialization of
the LEC, reported that LEC collected $1.5m in revenue in
2006/07 and is now able to pay its modest operating expenses.
The collection rate is 91 percent and power is billed at 34
cents per kilowatt hour (KWH),while the cost of production
is 33 cents per KWH. LEC also receives a subsidy from the
GOL worth about 4 cents per KWH. Whitaker said that hydro or
heavy fuel oil generation could knock down generating costs
by 15 cents / KWH or more. Yuan thanked the USG for its
assistance in meeting the goals of EPP, but lamented that
funds from some donors have been slow and the GOL had been
unable to deliver on promises for expanded power. (Note:
USAID has requested an additional $4.9 million for Liberian
power projects for the coming year, and USTDA has finalized
the Scope of Work for a Mt. Coffee feasibility study. End
note).

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Liberia Economic Development Fund
--------------


6. (C) Community Habitat Finance (CHF) Country Director
Laurin Banner told DAS Moss on July 12 that the Liberia
Enterprise Development Fund (LEDF) will kickoff in September
when President Johnson Sirleaf visits the U.S. and the first
loans should start flowing in October. Initially LEDF
intends to target small and medium sized enterprises (SMEs)
with loans ranging from $20,000 to $1 million at interest
rates from 15-25 percent and terms of one to five years. The
goal for the first 12 months is 100 loans for a total of $3
million. The LEDF is now a separate legal Liberian entity
but still awaits approval from the Central Bank of Liberia
(CBL) to operate as a non-bank financial institution. Banner
said the CBL is worried about the impact on the banking
sector, and LEDF has promised to share experience and
capacity with commercial banks, and possibly provide
guarantees for commercial bank loans in order to improve
sustainability in the sector. DAS Moss suggested that CHF
track job creation and government revenue generation during
the life of the program.

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United Nations Mission in Liberia
--------------


7. (C) UNMIL Acting Special Representative for the Secretary
General (SRSG) Jordan Ryan explained the proposed drawdown
plan that would shrink troops on the ground from 14,000 at
present to 11,000 by the end of 2008 and 9,000 by 2010. He
said the remaining force would be more mobile, backed by air
support and focused on hotspots along the borders, in Sinoe
and in Monrovia. Ryan said that while the threat of a
military incursion remains low, concerns along the borders
remain high and UNMIL is conducting joint patrols with the UN
in Ivory Coast, and with Guinean and Sierra Leonean armed
forces. The bigger issue, according to Ryan, was political
instability caused by "rising hardship" among Liberians as
prices rise without large scale job creation.


8. (C) Ryan also updated DAS Moss on the status of the
Liberian National Police (LNP) and Armed Forces of Liberia
(AFL). He said there were now over 3,500 LNP officers but
that they still had very little equipment, particularly in
rural areas. He noted that jurisdictional issues (such as
the port fracas in ref C) remain, and the corrections
institutions were inadequately staffed and equipped. Ryan
appealed for help in solving funding delays to the AFL and in
particular to ensure a pledged $5 million for a Quick
Reaction Unit (QRU) in the LNP is delivered soon.

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MONROVIA 00000902 003 OF 005


Ministry of Defense
--------------


9. (C) At the Ministry of Defense (MOD) on July 12, DAS Moss
told Minister Brownie Samukai that support for the AFL was
strong and bipartisan and he assured the Minister that
funding was in the pipeline. Samukai thanked the USG for its
backing and expressed hope for additional support, including
training for military leaders, a slot in US officer courses,
legal training for MOD counsel, assistance in developing an
intelligence section at the MOD, help in assessing
cross-border national security threats, and support for a
maritime affairs branch. Samukai reiterated Liberia's desire
to become a base for Africa Command (Africom),noting that
Liberia may have infrastructure issues but it also offered a
strong political climate and support for the United States.
DAS Moss explained that the precise footprint of Africom
remained undecided and would likely be much smaller than
current expectations in the region. Samukai argued that the
mere presence of the U.S. military would contribute to
regional stability.


10. (C) Minister Samukai also asked why the international
community had only advanced a plan to train a force of 2,000
for the AFL. DAS Moss said the focus was on quality not
quantity and Ambassador Booth noted that ultimately Liberia
will decide the size of the AFL and that the initial 2,000
figure was driven by funding limitations and an analysis of
the size force the GOL could afford to pay and maintain. He
said that the initial training will provide Liberian military
leadership with the capacity for ongoing recruiting and
training. Samukai expressed concern about the LNP QRU,
saying he distrusted the quality of UN training for the unit.
He suggested the QRU should have better vetting and
curriculum plans. Ambassador Booth noted that UNPOL was
asking the U.S. to recruit a project manager for the QRU and
trainers would be brought to the program through CIVPOL to
form a small group based on the SWAT model and integrated
into normal police units. (Comment: Samukai, who was
instrumental in setting up anti-terrorist operations and
creating the Black Beret force in the early 1990s, is
jockeying to enhance the purview of the MOD and would welcome
having the QRU or its equivalent under his umbrella. He is
thus involving himself in the policies and planning for a
unit that falls within the LNP and the Ministry of Justice.
End comment).

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Ministry of Finance
--------------


11. (SBU) Minister of Finance Antoinette Sayeh told DAS Moss
on July 16 that the GOL was getting close to passing the
2007/08 budget. She explained that the government was
operating without a continuing resolution and paying only
salary arrears from previous fiscal years. She remarked that
it was getting increasingly difficult to stay the course in
the face of populist pressures, but that the GOL was
determined to pass a budget that does not undermine poverty
reduction priorities. Legislative earmarks, she argued,
would face a certain veto.


12. (SBU) Minister Sayeh thanked the USG for the hard work
it had expended on the clearance of Liberia's debt arrears
but lamented that some shareholders were resisting the policy
changes to HIPC that would be necessary to take note of the
Liberia case, notably the requirement for a specific track
record under PRGF. GOL has proposed an amendment to accept
its current track record, rather than asking for any special
treatment. Sayeh asked for US Treasury support for "one last
push to dislodge the fence-sitters." Sayeh said Liberia
would remain in the post-conflict carve-out for one year
after arrears clearance. She also noted that the situation
with the Nigeria Trust Fund at the African Development Bank
(ADB) remains unresolved and that the ADB still did not have
any entity on the ground in Monrovia to make disbursements.
So far Liberia has only benefited from a $4 million capacity
building project from the ADB.


13. (SBU) Sayeh commended overall good donor support from
the European Union (EU),the United Kingdom (UK),and United
States but said Liberia and its allies needed to do more
outreach to non-G8 European countries in order to get on

MONROVIA 00000902 004 OF 005


their assistance list. She also noted that donor money was
slow, and in particular, there were many commitments from the
World Bank (SB) that had still not been disbursed because of
procurement problems and other reasons. She highlighted the
urgency at the port where WB cost estimates for emergency
infrastructure upgrades had failed to account for the true,
higher cost, and that projects had not been completed as a
result. She added that the GOL had also been slow to review
the Terms of Reference for a management contract, and
suggested that while NPA management had changed, a largely
ineffective Board of Directors remained in place.

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President Johnson Sirleaf
--------------


14. (C) President Johnson Sirleaf told DAS Moss in a July 16
meeting that the U.S. has been a strong partner for Liberia,
particularly in the security sector. She assured DAS Moss
that Liberia would ensure that the UNMIL drawdown coincides
with the emergence of adequate national capability. She
noted the importance of the QRU and pledged to use funds from
a supplemental budget to support the QRU. President Johnson
Sirleaf admitted that she remained uncomfortable with the
professionalism of the LNP, despite vetting. She said the
core of the force still did not have the proper education on
use of force and human rights and required further training,
incentives, and better leadership.


15. (C) The President explained that community development
and local governance was also improving thanks in part to USG
support, but she pleaded for assistance in "shortening the
period between commitment and cash." She also implored the
U.S. for more help in expanding electricity capacity in
Liberia. She decried the slow pace of the USTDA Mt. Coffee
dam feasibility study and urged the USG to quickly assist
Liberia to draw up proposals for lower cost generation and
quickly draft tenders for bids. She noted that roads were
also languishing from delays in donor pledges, and that the
employment expected from public works still had not been
realized. She reiterated that the top priority for the GOL
was employment and further measures to attract people away
from the cities and into the rural areas. When asked by
Ambassador Booth about land reform, the President claimed she
was still waiting for land reform proposals from the
Governance Reform Commission (GRC). On corruption, she said
the GRC had finished a Code of Conduct but the
Anti-Corruption Commission (ACC) remained in development.
Minister of State Morris Saytuma added that the plan is for
the ACC to be able to issue indictments but that a special
court in the judiciary branch would be used for adjudication.


16. (C) DAS Moss asked the President about plans for
addressing the precarious situation at the Port of Monrovia.
The President admitted that the GOL had not done enough in
matching its response to the urgency at the port. She
reviewed that she had received a draft Terms of Reference for
a management contract at the port from the World Bank but
noted that the upgrades required large amounts of capital,
resources that the GOL does not possess and cannot presently
borrow. Ambassador Booth mentioned having heard interest
from possible investors but only if the agreement was for a
significantly long-term Build-Operate-Transfer deal.


17. (C) President Johnson Sirleaf conceded that public
pressures from rising commodity prices were mounting and that
problems at the port were partly to blame. She also
mentioned that a revised revenue code would help ease
pressures on retail prices. Opposition politicians were
using the price issue -- as well as the Taylor trial and
commotion over recent Auditor General statements -- to turn
around popular support for the GOL. She said George Weah was
trying to fuel discontent in order to regain relevance, while
Liberty Party leader Charles Brumskine was reacting to a
perceived leak from the GOL regarding his lobbying activities
for a cellphone company. (Note: In his meeting with Moss,
Brumskine provided his interpretation of the same issue,
noting it was standard behavior for the GOL to engage in
character assassination of the opposition, that he had no
connections with the cellphone companies, and that very
little distinguished the Sirleaf government's tactics from
Taylor's when it came to behavior vis a vis the opposition.
End note). The President noted that the opposition game in

MONROVIA 00000902 005 OF 005


Liberia was always to demonize the government and that would
not soon change.

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Other meetings and activities
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18. (U) Embassy also hosted several other meetings and
events for the visit of DAS Moss, including meetings with
Central Bank governor Mills Jones and Liberty Party leader
Charles Brumskine, a banquet with Liberian banking leaders, a
roundtable with US-funded GEMAP experts, a dinner with
justice sector advisors, and a reception with a wide
assortment of business representatives. In addition, DAS
Moss traveled on July 13 to Tubmanburg to observe several
USG-sponsored projects including a USAID/OTI funded market, a
school and clinic renovated by USAID contractor DAI under
LCIP, and a legislative outreach office set up with support
from the National Democratic Institute (NDI). DAS Moss also
conducted a radio interview with OTI-funded Radio Bomi in
Tubmanburg. On July 14, DAS Moss accompanied EmbOffs on a
tour of the abandoned Bong Mines concession and a trip along
the rehabilitated Bong Mines railway.


19. (U) This cable has been cleared by DAS Moss.


Booth