The Challenges of Development in Sierra Leone.

Distinguished guests, ladies and gentlemen:

I would like to begin by thanking Chatham House for inviting me to participate in this important conference. The ideas and views I plan to share with you this morning reflect the experience of many in the Government of Sierra Leone, but I alone am responsible for the content of this presentation.

I have been asked to address three questions:

First, to explain what is meant by a “government in difficulty;”

Second, to comment on external efforts to lessen or resolve such difficulties with respect to their impact, their benefits and limits, and any gaps; and

Third, to discuss whether the private sector can make a useful contribution in dealing with the difficulties in question.

I would like to consider these three questions in the order in which I have just presented them and then conclude by making some more general observations about the challenges faced by our government in its attempt to deliver the key ingredients of a stable society: genuine democratic governance, equitable and rapid economic growth leading to broad-based and sustainable development. While some of my comments may also apply to other governments “in difficulty,” I will be talking today specifically about the Sierra Leone experience since it is the one I know best and it offers a case study of government and social collapse into civil war followed by a remarkable joint national-international effort to end the conflict, build peace and regain the confidence of a badly traumatized people in their national institutions and leadership.

A Government “in Difficulty”

Mr. Chairman,
At independence in 1961 Sierra Leone had a functioning multi-party democracy that was superimposed on a traditional political structure based on the African system of chieftancy. Sierra Leone was then, and is today, a religiously plural, multi-ethnic society with 13 principal ethnic groups. Although there have been minor ethnic tensions and religious differences, on the whole Sierra Leone has been fortunate to escape the kinds of severe ethnic and/or religious conflicts seen in other parts of Africa.

Despite this promising start, government - and the country as a whole - found itself in increasing difficulties through the 1960s to 1980s. These decades were marked by periods of political instability, including repeated military coups and attempted coups; the ill-advised resort to the creation of a one-party state and the abolition of elected local governments in the early 1970s; endemic corruption; periodic bursts of inflation sparked by budgetary excesses and long periods characterized by weak economic growth, little or no real development and very low levels of donor aid.

In 1991, when armed guerrillas crossed the border from Liberia, the fragile nature of Sierra Leonean institutions became apparent. The military was unable and sometimes unwilling to defend the country and some soldiers worked for government by day and the guerrillas by night. Three more coups in the 1990s, including the one in 1997 that ousted the then 10-month old democratically-elected government of the current President, simply made matters worse. Government was not only in “difficulty,” it was in exile while a cabal of soldier-rebels looted the capital city and much of the wealth of the diamond producing areas of the country, embarked on large-scale destruction of social and economic infrastructure, oppressed and abused ordinary people and accelerated the internal displacement of about two million citizens and the flow of about half a million refugees mainly into neighboring Guinea.

After the return to power in 1998 of the legitimate government, with the assistance of international military intervention, a by then very weak government nevertheless worked tirelessly to re-establish its credibility and to recover those parts of the country still occupied by rebels. The intervention of the United Nations and creation of UNAMSIL - the United Nations Mission in Sierra Leone - combined with strong support from our major donor partners enabled us to restore order, regain control of all national territory and finally, in February 2002, to declare that the war was over.

While the complex history of post-independence Sierra Leone to 2002 can hardly be conveyed in a few short paragraphs, I think this brief summary gives a sense of the extreme “difficulties” that faced government by the turn of the millennium. Behind this description of a government that gradually fell into greater and greater “difficulties” are several underlying factors that probably will be familiar to other governments that have faced similar challenges. It is these factors, accumulated over the past 40 years, in addition to the physical destruction caused by war, that both external efforts and government have tried to address. They include:

§ Long periods of poor and unaccountable governance;
§ Excessive centralization of decision making in Freetown;
§ Excessive elite monopolization of wealth;
§ A political culture focused on the capture of resources for particular individuals, rather than the generation of wealth for all;
§ A hierarchical agrarian society characterized by low productivity;
§ Very limited organizational and management capacity in government and very low civil servant salaries that contribute to low motivation, corruption and a driving out of the best talent;
§ Very low literacy rates that inhibit participation;
§ Very high poverty rates placing the country for many years at the bottom of the UN Human Development Index;
§ An education system that was not necessarily designed to meet the development needs of the country;
§ A climate of mutual suspicion between government and the private sector;
§ A continuing sense of marginalization and alienation, especially among youths.
Certainly this list is not exhaustive but I think, taken as a whole, it captures some of the socio-cultural constraints as well as economic challenges we have faced. Let me now comment briefly on our successes since the end of the war in 2002 and then turn to the impact of external efforts on these issues and realities.

For the past four years, our government under the leadership of President Kabba, has made solid progress in building a more peaceful society, managing the transition from relief to development, spurring economic growth and reforming the political and economic structures that will underpin our continued success. Among our successes, we have:

§ completed the preparation of a Poverty Reduction Strategy in line with the World Bank PRSP process;
§ reintroduced democratic governance at the local level by holding in May 2004 the first local elections in over 30 years;
§ decentralized governance and are devolving some power and resources to the district councils to broaden participation in governance;
§ as a result of our policies, attracted substantial donor aid to help rebuild social and economic infrastructure including schools, clinics, markets, feeder roads and others through our national social fund which I head and through projects being implemented directly by ministries;
§ addressed the HIV/AIDS crisis by establishing a National AIDS Secretariat and funded AIDS projects with World Bank assistance;
§ increased control over diamond mining so that official exports increased from $10 million in 2000 to $127 million in 2004, representing 92% of total exports.
§ Through our recovery policies, helped increase per capita GDP by 18% in 2001; 27.5% in 2002 and an as yet unconfirmed rate for 2003 and 2004 of at least 10%.

Impact of External Efforts

Mr. Chairman, ladies and gentlemen.

The impact of external efforts in Sierra Leone is complex, dynamic and not completely understood. There is no question that the ECOWAS intervention and the subsequent international effort through UNAMSIL were critical to the restoration of order. They helped us to regain control of our national territory, to rebuild our military and police forces and to be secure during the post-war transition period when peace-building was our primary concern. The Truth and Reconciliation Commission and the Special Court have also brought a measure of justice and some comfort to the war’s many victims. On the economic side, high levels of donor aid in the form of direct budgetary support; humanitarian relief; reconstruction, development and technical assistance have helped to reverse the terrible consequences of the war and have brought benefits and hope to many people.

Many organizations have done outstanding work in Sierra Leone. I would like to commend especially the UNHCR and the World Food Programme for their massive effort to address the acute needs of our refugee and internally displaced populations during and immediately after the war. I must also cite the work of UNICEF and several NGOs who have had such a positive impact on our children, including child soldiers; amputees; rape victims and other traumatized groups. In addition, the international development community - including the World Bank, African and Islamic Development Banks, UNDP, the EU, etc. have made major contributions complemented by our bilateral partners, especially Great Britain (DfID) who did so much both in the security and economic areas. Without this combination of external efforts, I fear to imagine what condition Sierra Leone would be in today and we thank them most sincerely.

While this praise is genuine and well-deserved, the impact of external efforts has also had its limitations and negative effects, including:

1. Limitations

§ While massive numbers of homes were destroyed during the war, most donors refused to provide assistance to the shelter sector since it is often viewed as a private good. The main exception was the provision of housing for amputees and handicapped people through the Norwegian Refugee Council and a few others. More creativity and flexibility is needed in this critical sector, since it continues to be a very serious need. Support should be based on what is needed and not what the donor wishes to provide.

§ Several donors are better able to deliver infrastructure (school buildings; clinic buildings; road upgrading) than to help us ensure that the infrastructure will be sustainable by supporting activities inside those buildings that will improve the quality of education, the quality of health care delivery, etc.

§ When faced with the collapse of security, many traditional donors refuse all assistance to non-lethal military needs, police or prisons. Fortunately, UNDP and DfID helped in these areas but many donors are being unrealistic when they ban all aid related to security.

2. Negative Effects

§ A perhaps inevitable stimulation of a dependency mentality among too many of our citizens who have become too used to external assistance - this is apparent from the rise of street begging, to the plethora of new local NGOs with names that reflect the latest aid trends in order to better capture grant aid that will support their founders and staff and - sometimes secondarily - also benefit their target groups.

§ A weakening of national sovereignty and decision-making authority when loans and grants come with many and sometimes difficult terms and conditions and are then micro-managed by the donor institution..

Viewed more broadly from the perspective of the developing world, there appears to be an assumption of a global consensus - which is really a Western consensus - on how a country should develop. Democratic capitalism with free markets and a business-friendly environment (meaning minimum regulation and taxation) are expected to bring down poverty rates and push a country up the UN Human Development Index. Deviating from development orthodoxy is often punished by reduced aid and any attempt to pursue a different approach is met with resistance and sometimes hostility. Yet, 45 years of external efforts to aid Sierra Leone have had little impact since more than 80% of our people still live on less than US$1 a day as they did before the war. Aid has been provided to us and to many other poor countries with democratic and authoritarian governments; with single party and multi-party systems; in times of economic stagnation and of growth and in times of peace and turmoil. Despite this, incomes of the richest countries, which were 16 times higher than the poorest countries in the 1960s, grew to be 35 times higher by 1999. In 1960 there were 25 countries listed as being in the so-called “Fourth World” and of these only two have since grown out of this category: Egypt with massive American aid and Botswana. While conflict, corruption, bad policies and other factors have certainly played a major role in keeping the poor poor, this can hardly be the entire answer to why since 1960 only four countries have been added to the World Bank list of “high income countries:” South Korea, Taiwan, Singapore and Hong Kong. The first two, like Egypt, benefited from enormous quantities of American aid and the latter two city-state examples are anomalies.

Aid donors and their recipients have searched for the magic development bullet for decades. It has turned out that there is no magic bullet, that neither financing supposed investment gaps; nor intensive support to education; nor population control; nor structural adjustment; nor privatization; nor debt relief; nor other supposed development solutions have delivered as expected and as promised. Most recently, democracy - sometimes more grandly referred to as democratic governance - has been touted as the cure but democracy is not enough to empower the poor or bind fragmented societies together and there are many examples of so called autocratic governments outperforming democratic ones.

I should now turn to the final question put to me which is whether or how the private sector can help address the issues we are considering.

The Private Sector’s Role

Good governance may not be sufficient but it is essential for economic growth, investment and development. Democracy is a key pillar of good governance since it is premised on accountability. The business sector has a direct interest in promoting good governance in order to build a more stable and predictable enabling environment for the private sector. The public sector, in turn, has a direct interest in promoting the enterprises that create jobs, pay taxes and spur development.

In Sierra Leone, the relationship between the public and private sectors has too often been undermined by mutual distrust and poor communication as government concentrates on public sector management and business focuses on corporate growth, profits, market share, etc. Yet an enormous potential benefit for both sectors would flow from a more dynamic public-private partnership in critical areas of mutual interest. The very term that best describes the system of most developed countries, “democratic capitalism,” acknowledges that democracy and business are inextricably linked in what should be a complementary effort to generate wealth and ensure social harmony.

Businesses work on profit and loss. When they prosper, dividends are paid to share holders. Businesses have an economic interest in and derive benefits from investing in democracy. This “democracy dividend” is paid to businesses and - through them to shareholders and customers - in the form of declining production costs and greater productivity as elected leaders streamline investment, tax and labour laws while increasing transparency and accountability.

Specifically in the case of Sierra Leone, the private sector could:

§ Approach district councils and propose establishment of Public-Private Partnership Committees that would systematically seek areas where common efforts will help generate private and public sector wealth by strengthening the architecture of democratic governance - legal, regulatory and customary.

§ Consider ways to foster workforce development by increasing coordination of vocational and technical training and expanding apprenticeship opportunities in factories and offices, both in the trades and in white-collar jobs.

§ Consider a private sector advisory committee for the Anti-Corruption Commission to address, develop and enforce codes of conduct; assess systemic issues and tackle corruption “hot spots” that most seriously affect business.

§ Consider how corporate social responsibility policies and corporate giving programmes can be professionalized; linked to the PRSP and increase their impact by building synergies with public sector development initiatives.

§ Actively support the current initiative of government and the Sierra Leone Chamber of Commerce, Industry and Agriculture to convene a National Summit on Democracy, Business and Development in September 2006 to be preceded by district and regional preparatory summits that will examine the full range of areas for potential public-private sector partnership development.

General Observations, Recommendations and Conclusions

It is much easier to recount and analyse the experiences of the past and to comment on the performance of external actors than it is to find specific solutions that work. I will nevertheless suggest a few actions that may improve the impact of both government and external actors.

1. Social Capital and Government Actions

A UN inter-agency mission recently consulted with stakeholders on how to develop a “peace consolidation strategy” to support long-term security and development in Sierra Leone. The report cited the continued disaffection among youth, the lack of accountability in public institutions and recommended efforts to induce attitudinal changes towards a “politics of accountability.” The report then urged that initiatives be launched to “strengthen capacities for conflict transformation.” The inadequacies in these intangible areas go to the heart of the problem of how to build - some would say rebuild - social capital, including trust between government and the governed and a greater willingness among individuals to pull together and to value personal integrity and the common good.

Why would any government deliberately choose policies that stifle growth and risk conflict? Part of the answer is that politicians in a polarized and resource-poor society respond to negative incentives and politicians in a more cohesive society are better able to work for the common good. One key to rebuilding social capital may be to point out that “government,” in fact, is not one coherent entity but a collection of individuals with different interests often representing different group interests. A weak central government comprised of a coalition of polarized factions jockeying for access to wealth will undermine development goals such as those set out in the government’s Poverty Reduction Strategy Paper whereas a stronger, more unified central government with a visible consensus for action is more likely to be able to deliver social goods and services and produce sustainable growth.

The UN Inter-Agency report and recent academic studies such as William Easterly’s The Elusive Quest for Growth, suggest that strong national and local institutions are key to reconciliation and sustainable development. The UN report recommends, for example, that government support:

§ Creation of a Political Party Commission, an all parties association, a stronger National Electoral Commission and district peace committees;
§ Reform and strengthen the Anti-Corruption Commission; including improved audit and procurement capacities;
§ Strengthen the independence of the judiciary;
§ Create a national framework for the protection of human rights and free speech;
§ Increase police and military training in mediation and grievance management;
§ Create a National Centre for Conflict Transformation that would have a strong training role; and
§ Support youth associations for entrepreneurship.

2. Donor Actions

Donors need to be more flexible, less paternalistic, less directive and listen more to the experiences of those who live and work daily on development issues in the countries they visit. Donor staff visiting Sierra Leone come to work with local agencies and sometimes fail to understand the very real constraints to efficiency and productivity facing executing agencies who struggle with erratic electric supplies; a lack of running water; power surges that wipe out hard drives despite voltage regulators; the effects of malaria and other illnesses on staff and their families; the difficulties of staff who must work and write in a foreign language; the high cost of vehicle maintenance caused by terrible roads and, consequently, expect too few staff to do too much work in too little time.

I have also seen more than one example where donors torpedo their own projects and then blame their clients. The donor task managers’ goal too often seems to be to satisfy every bureaucratic requirement no matter how petty even if it confounds common sense and undermines project goals.

Too many projects take 2,3,4 or more years to design - or rather over-design - are then expected to satisfy multiple goals and objectives and are required to adhere to a dizzying array of rules, regulations, trigger points, benchmarks, timetables, indicators, log frames, budgetary caps by component and sub-component; monitoring and evaluation requirements; environmental standards; reporting schedules, etc. Executing agencies are sometimes overwhelmed with requests for information; missions that arrive with little or no advance notice; extra reports and requests by visiting missions for weekend trips to see projects.

There is also a chilling effect on dialogue and debate when donor representatives say, as they have said to me on more than one occasion,

“this or that development approach is the current consensus within our organization’s headquarters. If your country cannot conform to our priorities in this regard, it will jeopardize your access to donor aid and - since we are an influential donor - other donors may also decline to assist your country if they find that you disagree with our approach.”

While this may be a statement of fact from the donor’s perspective, it is viewed as a not too subtle threat from the vantage of the recipient government. Given the number of mistakes made by donors over the past 40 years, one would think there would be greater tolerance for different approaches if there is a local consensus of views that varies from a dominant and sometimes momentary intellectual consensus.

I do not doubt the good will of donor institutions or their staffs. Their support is essential for our development. But the truth is that some donor organizations have become too complex, too cautious, too bureaucratic and too rigid.

3 Conclusion

I have tried to give you the perspective of a government that freely admits to the terrible errors of past governments and its own weak policies while also taking credit for its role in the achievements of the past few years. The failures are ours, but not ours alone. Blaming slavery or colonialism or debt or oil prices or globalization or war or human nature will not get us very far. But each has certainly played its part in crafting our current reality. There are no panaceas that will end poverty or create justice or end war. There is much that we still do not know about the complex inter-play between the many factors that make London rich and Freetown poor; that give most of you at this Conference a life expectancy more than double that of most of my fellow citizens. But together we must try to promote stability and development by using the tools available to us - democracy, financial and human capital and our collective human will. In my opinion, we have no other choice.

Thank you.