LIBERIA: PRESIDENT CALLS FOR CONTINUED REFORM IN THIRD

UNCLAS SECTION 01 OF 03 MONROVIA 000090

SIPDIS

DEPT FOR AF/W AND CA/OCS/CI/ADOPTIONS

E.O.12958: N/A
TAGS: PGOV PREL EAID EINV KCRM CACS LI
SUBJECT: LIBERIA: PRESIDENT CALLS FOR CONTINUED REFORM IN THIRD
STATE OF THE NATION ADDRESS


1. (U) SUMMARY. In her third State of the Nation Address before a
joint session of the National Legislature January 26, President
Sirleaf summarized the achievements of her government in 2008 and
called for Liberia to "sustain this progress" in 2009. She vowed to
continue the fight against corruption. She thanked donors for debt
relief and contributions to all four Poverty Reduction Strategy
(PRS) pillars, and asked for their emergency support in fighting the
army worm infestation. She called the United States Liberia's "key
partner" and lauded us for the return of Peace Corps, the opening of
the American International School of Monrovia, Security Sector
Reform, and for according Liberia Millennium Challenge threshold
status. She announced a moratorium on all international adoptions
until the GOL can introduce more safeguards for adopted children.
Finally, she declared a reduction in business and personal tax rates
in order to make Liberia's investment climate more attractive during
the global financial crisis. The full text of speech can be found
on the Executive Mansion website at:
http://www.emansion.gov.lr/doc/2009_Annual_Me ssage.pdf
END SUMMARY.

--------------
CORRUPTION
--------------


2. (U) President Sirleaf said the GOL's greatest challenge in 2009
would continue to be the fight against corruption. She reiterated
that the recent increase in press stories on corruption was not
indicative of an increase in actual corruption, but rather a sign of
a truly free press that is ready to expose dishonest officials. She
lauded the Anti-Corruption Commission (ACC) and the General Auditing
Commission for their work in 2008 and asked the Legislature to
continue supporting them. She also asked the Legislature to pass
the Code of Conduct for Public Servants, a pending amendment to the
Public Procurement and Concessions Commission Act, and a forthcoming
asset freeze provision in the Penal Code as soon as possible.
Sirleaf announced she has set up a committee to inspect county
development project funding and asked the county legislative
caucuses to continue their oversight of the projects but to stop
interfering in their implementation. The President said the
Ministry of Justice would be working with the Judiciary to set up a
special mechanism for handling corruption cases expeditiously.
Finally, she vowed that 90% of all GOL employees will be paid by
direct deposit by April 2009.

--------------
U.S. ASSISTANCE AND INVESTMENT
--------------


3. (U) President Sirleaf said President Bush's February 2008 visit
was historic for Liberia and thanked USAID for fulfilling the
promise he made for 10,000 desks and one million books. She called
the return of Peace Corps proof that Liberia was on the right
development track and expressed her gratitude for Liberia's
designation as a Millennium Challenge Account threshold country.
Sirleaf thanked us for our contribution to Peace and Security Pillar
(see paragraph 6). She praised the opening of the American
International School of Monrovia and, looking at the Chief Justice,
called for an end to harassment of the school by "questionable
judicial" activity. She said Delta Airlines' planned direct flight
to Monrovia could bring new investment from the United States.

--------------
MORATORIUM ON ADOPTIONS
--------------


4. (SBU) Sirleaf unexpectedly announced a moratorium on all
international adoptions until a special committee she created looks
into the "gross mismanagement" by both U.S. personnel at the
American-run Acres of Hope NGO and GOL officials who lured children
with living parents into orphanages and sometimes sexually abused
them. She said the adoption program will be suspended until
regulations for adoptions have been strengthened and vowed to submit
a comprehensive National Social Welfare Policy and National Adoption
Act to the Legislature by the end of the year.

--------------
POVERTY REDUCTION STRATEGY
--------------

President Sirleaf thanked donors for their assistance to the four
pillars of the Poverty Reduction Strategy (PRS) and highlighted GOL
achievements made under each one.

-- PEACE AND SECURITY


6. (U) Sirleaf thanked the United States for our contribution to
Peace and Security Pillar through the Security Sector Reform
program. She noted that the Armed Forces of Liberia reached its
full strength of 2,057 soldiers in 2008 and that the
re-establishment of the Coast Guard was underway. She was grateful

MONROVIA 00000090 002 OF 003


for the training that led to the activation of the Emergency
Response Unit (ERU) of the Liberia National Police (LNP) and pledged
that all 500 ERU officers would be operational by the end of 2009.
She noted that there is approximately one police officer for every
1,000 Liberian citizens and said she would look for assistance to
help recruit and train more officers. She vowed to submit the
Liberian National Security and Intelligence Act to the Legislature
sometime this session.

-- ECONOMIC REVITALIZATION


7. (U) Sirleaf highlighted the sharp improvement in economic
indicators - GDP, GOL revenue, foreign reserves, and exports - under
her administration. She said the global financial crisis was a
"mixed curse" for Liberia, with lower costs of imported food and
fuel outweighing lower export revenues from rubber. Calling
agriculture the key to economic development, she said the crisis
provides incentive for Liberians to boost domestic food production
(and reduce the $200 million spent on rice imports last year) and
offered five acres of land to any Liberian willing to move out of
Monrovia to farm. Sirleaf thanked the donors for committing to debt
relief and vowed to keep Liberia on course towards the HPIC
completion point. She also called on the Legislature to ratify
several concession agreements, including with Buchanan Renewable
Power ($150 million),China Union mining ($2.6 billion),and
forestry concessions. While applauding foreign investment in the
extractive industries, she noted weak growth by Liberian businesses,
and criticized cumbersome and corrupt procedures at the port. (See
paragraph 11 for more one the investment climate.)

-- GOVERNANCE AND RULE OF LAW


8. (U) Under Governance and Rule of Law, Sirleaf said steps would be
taken in 2009 to speed up the lethargic judicial process. A
magistrate would be assigned to the Monrovia Central Prison to
expedite hearings for pre-trial detainees. She said she looked
forward to the official opening of "Criminal Court E" in the coming
weeks in order to tackle the large backlog of rape and gender-based
violence cases. She also said the Ministry of Justice would crack
down on "professional jurors" who leapfrog from case to case in
search of fees. (Note: Juries earn most money from bribes rather
than the paltry official remuneration. End note.)

-- INFRASTRUCTURE AND BASIC SERVICES


9. (U) Stating that roads and bridges were the highest priority
identified by Liberians in the PRS county consultation process,
Sirleaf promised substantial upgrades in 2009. After thanking China
for its road construction work thus far, Sirleaf said systematic
work on all of the streets in Monrovia would begin in two weeks and
would be finished in two years. She also promised work on specific
rural primary roads and some farm-to-market roads. Sirleaf said the
GOL did not have the funds to rehabilitate the country's five ports
but would offer a Build Operate and Transfer (BOT) scheme to
interested foreign companies. She vowed to dismiss port employees
for theft and said better security at the port would reduce freight
costs and thus the price of imported goods on the Liberian market.
She said 11,000 affordable housing units would be constructed in
2009 and praised revival of the state-owned Liberia
Telecommunications Corporation "that will compete with the private
GSM companies."

--------------
DECLARATION OF EMERGENCY AGAINST ARMY WORMS
--------------


10. (U) Sirleaf declared a state of emergency in Bong County and
other areas affected by the army worm caterpillars. She instructed
the Ministry of Finance to make funds available quickly to help
fight the insects' progression and provide relief to those who lost
their crops, and called on foreign partners for rapid assistance.

--------------
IMPROVED INVESTMENT CLIMATE
--------------


11. (U) President Sirleaf has long stressed the need to improve the
business climate in order to support investment. She called on the
legislature to pass revisions of the Investment Code, the Revenue
Code and the Public Financial Management Act and announced new tax
reductions. She said the revised Labor Code would include an
increase in the minimum wage, (which is currently 25 cents an hour
or $2 per 8-hour day).

--------------
COMMENT
--------------


12. (SBU) The Sirleaf Government has made impressive progress
towards its development goals in 2008, including the adoption of an

MONROVIA 00000090 003 OF 003


inclusive Poverty Reduction Strategy, debt relief, and security
sector reform. The challenge will be to sustain this progress into
2009 as she begins the second half of her six-year term. The
low-hanging fruit has been gathered and the remaining challenges -
such as seriously tackling corruption, reforming the judicial
system, and attracting new investment amidst the global financial
crisis - will be more difficult. Sirleaf, however, seems to be
enthusiastically up for the challenge. She did not hesitate to
point fingers and announce politically tough initiatives. Her
particularly hard-hitting statements on corruption will set the tone
for the coming year. We eagerly await her promised imminent Cabinet
reshuffle to find out whom she thinks is worthy of bringing along on
the journey.