Germany Announces Debt Cancellation of US$400 Million at LPRF in Berlin

Berlin, Germany - The Liberia Poverty Reduction Forum (LPRF) has opened in the German political capital of Berlin, with President Ellen Johnson Sirleaf urging the international community to endorse the Strategy’s implementation over the next three years.  President Johnson Sirleaf made particular appeal for additional funding to help Liberia rehabilitate its damaged infrastructure, including roads and ports which, she said, remain seriously underfunded. Without additional funding in this area, the Liberian leader warned, “We would have to scale back on our aspirations for the next three years. We would be constrained in creating an attractive environment for the private sector which we look to as the engine of growth in the medium to long term.”

The President urged partners to provide the resources through the Liberia Reconstruction Trust Fund, which the World Bank is administering on Government’s behalf. “It makes it much easier for us, if funding is channelled into one fund, rather than through many different channels.” The World Bank, Germany and Sweden, the President said, have all contributed, but a tremendous funding gap still exists.

According to an Executive Mansion dispatch from Berlin, the President spoke of significant progress toward debt relief since the last Forum in the United States last year.  She lauded all countries and international partners for their support.  With the support, the President said Liberia has cleared all arrears with major multilateral institutions, reached the HIPIC Decision Point, and obtained a generous agreement from the Paris Club. “Our total debt is about $1 billion less than it was 18 months ago. We still have a ways to go, but I want to thank everyone for helping us move forward with debt relief.”

The Liberian leader also spoke of progress in the country’s key areas of development, including economic revitalization, peace and security and governance and the rule of law with the goal to promoting responsible institutions of justice, human rights, and governance: “Just yesterday, the World Bank Institute released its new Governance Indicators for 2007 and it showed a large improvement for Liberia for the second year in a row. In 2004, Liberia ranked 190th of 206 countries in the world on ‘control of corruption’ – one of the worst rankings in the world. In 2006, our ranking jumped to 145. And in 2007, we moved up to 113. In three years, we have moved up 73 places.  I am not yet satisfied, but I am pleased our efforts are beginning to show results.”

Despite the progress in debt relief and other areas of the country’s development, the Liberian leader cautioned the international community against complacency, warning that the country is at a critical juncture in its recovery process. “While the shadow of war is receding, it is far from gone. Many young combatants remain unemployed, and the risk of a return to conflict remains real. The three years will be critical. I believe our success or failure in that time will determine Liberia’s future. We cannot wait and keep telling people to be patient for a job sometime in the future. We must forge ahead as quickly as possible. We need to see results now and show people that peace, democracy, hard work, accountability, and cooperation pay off with real dividends.”

The President also urged the international community and partners to consider modest amounts of funding to directly support the country’s budget. “We do not expect, and are not asking for huge sums to go through the budget, only modest initial sums to get us started,” the President emphasized, acknowledging that her Government has much work to do to further strengthen the country’s public financial management which, she noted, has made strong initial strides.

The Liberian leader again reiterated the need to speed up the process of implementation for both Government and partner led projects. She pointed out that there is a need to reduce the time from commitment to cash and from cash to completion. “In some cases, slow implementation has been due to weak Government capacity. In other cases, it has been due to capacity problems and burdensome procedural requirements with partners. So I ask you to take a serious look at your capacities and procedures with a view towards speeding things up, and we will so the same,,” the President assured partners.

Meanwhile, it has been announced in Berlin that Germany is cancelling over US$400 million dollars in bilateral debt Liberia owes this European country. Outgoing Liberian Finance Minister, Dr. Antoinette Sayeh, and the German Federal Minister for Economic Cooperation and Development, Madam Heidemarie Wieczorek-Zeul, are signing an agreement Thursday in Berlin, immediately cancelling the amount.  In a statement at the opening session, the German official also announced an additional 10 million Euros (over US$15 million dollars) towards the Liberian Reconstruction Trust Fund.

The Liberian President, who meets German Chancellor Angela Markel Thursday afternoon at the Chancellor’s office, thanked the German government and people for hosting the Forum and for their commitment to Liberia’s reconstruction efforts. The President made particular mention of Germany’s support and generous contributions to debt clearance arears to the World Bank, the IMF and the African Development Bank.

Thursday’s opening session was also addressed by the United Nations Special Representative of the Secretary-General, Madam Ellen Margrethe Loj; the Administrator of USAID and Director of US Foreign Assistance, Ms. Henrietta Foe; and the Director for Strategy and Operations for the Africa Region of the World Bank, Mr. Michel Wormser. The representatives lauded the progress taking place in Liberia and promised to continue their support to enhance and consolidate the country’s development programs.

The LPRF has entered the second plenary session with an overview of the Strategy and lessons learned from the Interim Poverty Reduction Strategy (iPRS).  The session is being chaired by President Ellen Johnson Sirleaf with the Special Representative of the UN Secretary-General, Madam Ellen Loj, serving as co-chair. Presenters include the outgoing Minister of Finance, Dr. Antoinette Sayeh; the outgoing Minister of Planning, Dr. Toga McIntosh and the National Coordinator of the Liberia Reconstruction and Development Committee, Mr. Natty B. Davis.

President Johnson Sirleaf and delegation arrived in Berlin Wednesday for the two-day Forum which is being hosted by the Liberian Government and co-sponsored by the World Bank and the Federal Ministry of Economic Cooperation and Development of Germany.