LIBERIA: Donors spell out harsh consequences if anti-graft plan not agreed

[ This report does not necessarily reflect the views of the United Nations]

MONROVIA, 8 Sep 2005 (IRIN) - Liberia stands to lose millions of dollars of aid and billions of dollars of debt relief if it does not sign up to a plan to wipe out rampant corruption in the war-scarred West African nation, donors warned on Thursday.

Authorities have been haggling with the international community for months over the so-called Governance and Economic Management Assistance Programme (GEMAP), designed to ensure funds do not end up in the pockets of politicians but go towards approving the lot of Liberia's three million population who suffered 14 years of civil war.

And with just over a month to go before crunch elections, the International Contact Group -- made up of Western and African diplomats that helped forge a 2003 peace deal -- spelled out the stark consequences if no deal was struck.

"Without GEMAP, Liberia risks repeating its recent history of conflict," the group said in a statement published on Thursday.

It said if there was no deal, the European Commission would be forced to reconsider a US $44 million aid package for a nation that is still without running water and electricity more than two years after the war ended.

Global lenders like the World Bank and International Monetary Fund would not expand their programmes, and there would be little chance of Liberia being eligible for US $3 billion of debt relief, the International Contact Group said.

And there could be consequences for Liberia's security too.

"The US government will be forced to reconsider financing the training for a new military force because without GEMAP, the new military force might not get paid," the statement said.

There would also be knock-on effects in terms of the UN lifting the sanctions it imposed during the final years of the civil war on the export of diamonds and timber.

"Without GEMAP, it will continue to be difficult to convince the UN Security Council that Liberia can fairly and transparently manage the diamond and timber industries so that sanctions can be lifted," the International Contact Group said.

Liberia's interim leader Gyude Bryant, installed in August 2003 and charged with shepherding the country to elections next month, has repeatedly argued that lifting the export bans would help kickstart the battered economy and provide jobs for idle ex-combatants.

With GEMAP, donors want to ring-fence key sources of revenue, place international supervisors in major ministries and lucrative sites such as the port, airport, customs office and forestry commission, as well as bring in judges from abroad.

Last week Liberia's government spokesman, William Allen, told reporters that the two sides had moved closer to a deal.

"We have agreed on some of the contentious issues which we have been discussing over the past time," he said. "We all agreed that the documents need not go to the UN Security Council level and it must be between the two partners."

But he said there was still disagreement about how much authority would be granted to an outside expert overseeing the central bank and how long the GEMAP scheme would last.

"The government wants it to last 40 months, while donors were pushing for 46 months," Allen said, adding that the final document would be binding on any incoming government.

Diplomats have told IRIN in recent days that they are keen to get the anti-graft plan wrapped up before presidential and parliamentary elections on 11 October, so that the new leaders know that power does not mean a chance to line one's pockets.

A senior source in the transitional government told IRIN on Thursday that a deal was just days away.

"The cabinet is seriously meeting today to make a final decision on the GEMAP and from all indications, it will be endorsed by this weekend," the source said.

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