Friday, 4 May 2012

Aid and Trade: Two Sides of the Same Coin: Doing Business in and with Liberia

One of my friends from the Lebanese community recently told me that when I first met him, I started ranting about how the Lebanese business community in Liberia is sucking Liberia's blood; that the Lebanese are exploiting the locals; they use corrupt business practices; and are minting millions! I laughed hard when I heard that and asked him what he thought about me. He said he thought I was one of those typical aid-crowd expatriates who had no clue about anything at all but definitely was full of herself. He said he let it go because we had only just met but if I had continued with the same tirade again, he would have taken me to task. 

This was most likely way back in 2004 or 2005 at a birthday party of a mutual friend, and now it has been almost ten years since I have been living and working in Liberia. I came to Liberia with the aid wave in October 2003, hardly a couple months after the Accra Peace Agreement was signed in August 2003. Six years later, I joined the trade wave, I switched allegiances, I gave up the pretentious, dysfunctional and extremely profitable world of "saving the world," and became a capitalist. 

It has been 2 years since I became a hard-hearted capitalist and I am not yet making even a third of my salary at the UNDP. I guess I am not sucking enough Liberian blood. 

When I think about how childish and knee-jerk-y my initial reactions to the business community were, I cringe when I think about how disrespectful and offensive I must have been to a lot of business folks or for that matter, a lot of persons way more experienced and worldly than I was at that pimple-faced-hardly-in-my-20s point of my life. In fact, I even remember insulting my landlord on the phone one day after having suffered through a day without electricity. He quietly told me to look for another apartment. Thankfully, I apologised to him a couple of years later for having ignored my childish tantrums. 

I have a bit of self-righteous snobbiness to my personality and I always feel like blurting opinions out without really thinking too much about them. And lastly, I come from a bratty background, having enjoyed all the perks and privileges of having grown up in the capitals of the world, thanks to my father's diplomatic career; this life somehow led me to believe I knew everything. 

So, after all this time, have I managed to get a clearer and less offensive idea of how the various business communities operate in Liberia? Or why does the young, bushy-tailed aid crowd have such snobby and distorted views of the local business communities for I keep hearing these opinions whenever I do end up crossing paths with these young, do-gooder's? What is the truth?

I guess the average expatriate who arrives in Liberia to save it from itself is confronted by a very skewed view of Liberia. Out of their international workplace full of people all over the world and local staff, they only interact with 'foreigners' who are either their local supermarket owners, their landlords, their favourite restaurant owners and so on. Somehow, the aid worker believes that the local economy is being controlled by 'foreigners' - the Indian and Lebanese communities who are laughing all the way to the bank. They will see Liberians working for Indians and Lebanese, often in unskilled, subordinate positions. They might even have seen a Lebanese or Indian man or woman screaming their heads off at a Liberian. They will notice that goods and services are quite expensive and they are getting ripped off! Needless to say, anyone could be forgiven for thinking that the 'foreign business communities' are blood-sucking leeches who should be ashamed of themselves. 

In my own slow learning process, I certainly came to appreciate what a business owner goes through. In fact, I came to romanticise the entrepreneurial spirit because my boyfriend had started a business from scratch in Liberia. I knew what he went through to set up a company, hire local people, having had to create and train a team of technicians, fight for contracts and struggle against a local culture of corruption. Wesley's passion for IT, for working for oneself, for feeling responsible for his staff and for creating something wonderful was quite contagious and, I started to appreciate a bit more what a 'businessman' is. After all, I grew up in a bureaucratic background with my father having served his government faithfully for almost 40 years, and having had very little 'real' interaction with business owners, I could never understand or appreciate it. 

Because Wesley was my boyfriend and I really respected the hard work he put in and how much he believed in helping people realise their full potential, I came to see his style of business as superior to what I saw otherwise. But then again, his line of work was specialised, service-oriented and quite unique in those early years of post-conflict Liberia. I got a very small glimpse of the business community through Wesley and clearly, it was not the full picture. 

The real mental leap that needs to be made here is to ask oneself why the local economy is controlled by so-called foreigners? And why are these people even considered foreigners by Liberians?

Liberia, to date, has not managed to reform its outdated constitution which does not award citizenship freely. For example, even if you have been born here, even if you have spent almost all your life here, even if you have grown to love palm butter, and are for all practical purposes a Liberian, you cannot acquire citizenship unless you have African ancestry. In other words, you need to be black and/or have black biological parenthood. Therefore, even though a significant portion of the Indian and Lebanese business communities have either been born here, spent most of their lives here, live and work here, and even speak the Liberian English, they are considered 'foreigners.' They have to pay 'foreign business' taxes and permit fees even though they know the ins and outs of doing business better than anyone else. They are the real local businesses. 

Furthermore, Liberia seems to have historically had very little industry of its own; thrived on a raw-materials-export economy; and, had a very small if non-existent "Liberian" entrepreneurial class. 

It seems that Liberia and Liberians had no problem with a Lebanese businessman own and operate the biggest supermarket in Monrovia; everyone fondly remembers Abou Jaoudi as a really nice supermarket in the 1980s (it is now called Harbel Supermarket and is still quite a great place to get your weekly groceries from, it's well stocked and prices are good considering that everything has to be imported from abroad). Other friends of mine tell me that Camp Johnson Road was the Indian quarter of Monrovia with supermarkets, clothes shops and so on. Still others rave about Broad Street and all the  fabulous shops that used to be there, that one could get the latest fashions from Paris. That's small business talk. 

Then there's reminiscing for big foreign-owned extraction industry. People are proud of having grown up in or worked in entire mining towns created and operated by foreign companies. Why are they so proud that foreign companies came into Liberia, extracted all their minerals and exported it in raw form? And, Liberia hardly has any local production and the worst possible infrastructure you can speak of. 

Apparently, Liberia was so amazing and well connected to the rest of the world that one could take a swim at the beach in the morning and go ski in the Swiss alps in the afternoon. Doesn't one love hearing the old folks reminisce and get misty about the 'good old days?'

But, as I usually end up interrupting my friends over-excitedly, "good old days for who? good old days for who?" Clearly, only for a select few. 

One does not really need to read any article nor big fat academic analysis to understand Liberia. Even before I went to London to pursue a masters in Violence, Conflict and Development and ended up reading a lot about Liberia and could use fancy words to talk about Liberia and rentier states and the extraction industry, I felt frustrated with a state and society which relied on outsiders to run their economy and give them jobs (besides the government which is the first job of choice). I paid my monthly rent to a person considered an outsider by the Liberians. I bought my weekly groceries from a 'foreign-owned' supermarket owner. I dined at restaurants owned by 'foreigners.' I had a vague idea of the Firestone plantation, also foreign owned. All that I knew of Liberia was a state and society that historically was outward looking, had hardly done much to develop itself, and still had a real strange and hollow sense of pride about being the first independent republic in Africa. "Independent for who?"

Since I have joined the private sector, my ideas about doing business in general and specifically, doing business in Liberia have changed. I have inherited a passion for it from having seen and observed Wesley run a company and try to have that same sense of excitement. Wesley always told me that one needs to be an inherently positive-thinking person to be able to do business, one needs to see and realise opportunities. I also love the fact that I seem to have a natural flair for being a boss and can force myself to be optimistic. So, from Wesley, I really learned about the love of creating an organisation, heading a team of people and, getting pleasure out of providing quality service to clients. I also really like dreaming about taking over the world. 

Two years into it, I also learned about the actual mechanics of running a business from Haresh, my newest life and business partner. Fate had it, I guess, that I ended up meeting someone from the Indian business community and seeing things from another perspective. Haresh was here in the 80s and left after the start of the civil war and only returned to Liberia after almost two decades. I learned a lot from his approach to business which is nothing is impossible. He attacks the local market by slashing prices. He is open to any business idea. Haresh's friendly and easy going maneuvering of our clients and business partners is infectious. Although he generously adopted the services spirit of the company, he also helped us to expand the supply side of the business. 

All in all, I love owning and running a business in Liberia. Do I feel I am part of the leeching foreign business community of Liberia? I take great offense to anyone saying that 'foreign' businesses are exploiting Liberia. First of all, Liberia has since the 1920s outsourced its local trade to outsiders. To create critical sources of income for itself, Liberia even leased large potions of its land to companies like Firestone and even helped them to brutally recruit labour. 

This outwardly looking economic policy works in a double-handed way. So, not only does the state earn revenues in terms of concessions, royalties and taxes which are official rents but because a lot of these concessions were and are still not not socially or politically in the best interest of the majority of the population (i.e. land grabbing), unofficial rents also go into the pockets of government officials. This applies to big business. 

As for the small businesses (which is where Haresh and I and our sweet little company fall under), the official rents are work and residence permits (US $ 1,000.00 per international work permit and $ 500.00 for a new residence permit and $ 250.00 for residence permit renewals), business registration renewals ($ 900.00/year) and all kinds of other fees. I find the annual work permit fees to be an atrocious extortion! Duty imports are likewise also quite high and make the business of trying to provide critical goods to an economy which does not produce much itself riddled with high costs.

These kind of operating expenses really drive up costs. On top of it, other basic amenities such as electricity and water are expensive. Even until now, although the Liberia Electricity Corporation (LEC) has re-started its operations, users have to still 'buy' electricity from businesses who are 'selling electricity' through generators. And guess who is doing this? A lot of Lebanese businesses! Randall Street (where I live and work) has not had running water since at least one year now. The Liberia Water and Sewer Coporation is kaput and we pay about $ 20.00 per week so we can take a shower. And again, it's a Lebanese businessman who is trucking water to homes and businesses. Come to think of it, it is astounding how much basic local trade is run by the Lebanese and Indian business communities. 

I can surely appreciate why things are so expensive here - just add up basic operating costs. Even then, one is surprised at how competitive still some prices are. For example, rates for international calls via the GSM operators are cheap! I guess instead of criticising the so-called 'foreign business communities,' resourcefulness against all the possible odds needs to be appreciated. 

A company like ours makes its bread and butter by providing on sites services which need to be rendered by technicians. Despite the appalling vacuum of good schools and universities, we somehow manage to recruit, refine and nurture a pool of young Liberian IT Technicians who themselves have somehow managed to pick up IT skills here and there or were trained from scratch in-house. We somehow manage to deliver quality service to our clients - without them letting know what pains we go through in terms of the quality of human resource  - at competitive rates.  

Liberians have a poor work ethic though of no fault of theirs. It boils down to a really poor educational system - university graduates can't spell! - and an absence of a functional formal economy for almost two decades. 

I feel that the newer lot of companies are creating a professional work force as they go along. Wesley himself trained dozens of techies who now are working in all the major banks. 

This is one of the major reasons why it hurts to pay a $ 1,000 annual work permit when I am helping to create a trained, professional team in this country. Humph!

I have noticed though that when these so-called government officials come in to check our records, they almost feel annoyed when they find that our company has been religiously filing taxes. They feel cheated out of a lucrative under-the-table deal. I sometimes feel I am getting a peak into how the Liberian state actually benefits from its dysfunctional relationship with the 'foreign business communities.' I have even noticed that these fellows huff and puff when they have to deal with our local staff as if the 'foreigners' are ignoring and disrespecting their authority. In fact, one of these guys made it clear to me. I disdainfully gave him a blank stare. 

All in all, it is definitely wrong to assume that the Lebanese and Indian business communities are blood leeches. Yes, some of them have made good fortunes in this country:

- commitment to living and working despite all odds in a real hell hole
- excellent business opportunities in a country where nearly everything has to be imported
- excellent business opportunities in a country where a local business class has never been created or nurtured (the Madingoes are traditional resourceful traders like the Lebanese and Indians but are not considered Liberian!)
- excellent business opportunities where a corrupt state is a huge buyer itself

but some businesses are just getting by. Running and operating a business has high every day expenses and every day quality of life is quite poor. I mean just look around, Liberia is not paradise.  

Of course, it is still lucrative to do business here given that this country operates on an open-door policy and is very keen to let outsiders come in and run the show for them. Liberia has a dual-currency system and one has the opportunities to make money in a hard currency (US Dollar). 

I ended up joining the private sector out of circumstance and a real hard-headed stubbornness to prove everyone wrong (they all told me to go back to the UN life). I wanted to see this through and carve out a new life. And since I have done so, I do enjoy the challenges of running a company. Liberia definitely is reviving its extraction economy and I like everyone else will benefit from it. I have no qualms about it. In fact, I feel part of another kind of international bubble that is living and working in Liberia - not the aid one but the trade one. I get to meet and interact with CEOs and officers of mining companies, agricultural multinationals and international banks. In a way, I am back in that bubble lifestyle but it is more real because I manage a local business. Or maybe I am bluffing myself. 

Having discussed all the challenges of running a business and understanding the context in which 'foreign business communities' ended up controlling the local economy, I do also have some criticisms against these communities. They are not so perfect. 

One of the most shocking things I hear amongst the Indians is how they describe Liberians. They say 'kaala.' That means black. So, they will never use names for their local staff but address them as 'I'm sending my kaala over to your office.' It really disgusts me and I often have to display my absolute irritation whenever I hear this. I do not speak Arabic so I do not know whether the Lebanese have any pet names for Liberians. 

I also find that the business communities here do not really have much trust in their local staff so much so that Liberians end up only filling 'store boy' positions in their shops. One will be hard-pressed to find a Liberian in a position of real skilled responsibility. I find this common to both Lebanese and Liberian businesses. Apparently, theft and back-stabbing is quite common. Fortunately for us, Haresh and I are now running a company whose basic structure was designed around trained Liberians. I would go so far to say that I can trust my staff with my life. 

Lastly, I find most of these Lebanese and Indian traders are quite outdated in the way they conduct their business. Their shops and offices could do with a bit of upgrading; after all, image is everything. They do not believe in spending anything on the way they appear to the public, keeping their places clean and tidy, upgrading their accounting systems and so on. And of course, they do not trust the locals. They speak pessimistically about Liberia as a whole and think the place will erupt into civil strife again.  And they believe corruption (giving out commissions) is the only way to go!

I suppose the business communities in Liberia will eventually be forced into modernising themselves and go with the times. The so-called new wave of anti-corruption which has become Sirleaf's main mantra is surely going to trickle down although I am appalled at the corrupt business practices that prevail in Liberia, especially in the aid industry, something which I hardly had a clue about when I was within the belly of the beast. Likewise, businesses will be forced to bring in better quality goods into Liberia and sell them cheaper. Change is inevitable and too much is at stake in Liberia.

I would venture to say that the goal of the Liberian regime was to manage the outsourcing of trade to foreign companies and foreign business communities and, if they had done it better, they might even had created a Dubai of sorts. But all is not lost. Sirleaf is intent on reviving an open-door economy but a better managed one. Hopefully, she'll do a better job of integrating the 'foreign business communities' into Liberian state and society because that is where state and society is going to really benefit from a super diverse and synergetic energy.  It is and will be a good time to be in Liberia.

Tail end: Doing business in Liberia is definitely not easy and is extremely challenging. However, it is lucrative and there are excellent business opportunities for anyone who has some good capital and good business ideas. One has the chance to be part of a fast-growing economy and to create something unique. One also has the chance to be part of the dynamic and resource business community.  I would say that one of the most significant challenges here is human resource. Now that our business is growing, we need a bigger and ever more skilled team of IT professionals. 

No comments:

Post a Comment