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The Hard Work

A Fletcher Ph.D.’s lessons from leading Liberia’s Ministry of Finance.

When Antoinette Monsio Sayeh (F82, F85) took over as Liberia’s post-conflict Minster of Finance, some of her fellow civil servants complained about walking the 10 flights of stairs up to their office once a day.

Sayeh didn’t have much sympathy. She climbed them five or six times every day, using her cell phone glow to light the way when the lights in the building went out. Those, at least, usually worked, unlike the elevator, which was out for good.

And if that’s how bad of shape the Liberian government buildings were in, its finances might have been even worse.

“Sometimes its difficult to remember how arduous it was,” Sayeh told The Fletcher School.

Sayeh, who holds a Ph.D. in international economics from The Fletcher School, joined President Ellen Johnson Sirleaf’s cabinet in 2006. The goal was to implement the International Monetary Fund’s government and economic assistance program and get her home country back on its feet, as Liberia was just emerging from a decade of “mismanaged economy” and 14 years of war.

For the next two years, Sayeh, who had previously worked for the World Bank for 17 years, would do the hard work, not only climbing the stairs but also trying to get the country’s finances back in order: clearing its debts, balancing the budget, rejecting requests for expenditures that would put Liberia deeper into debt, and cutting “ghost staff” who “should have retired ages ago and didn’t.”

The work didn’t make Sayeh or her team popular. “We were also seen as very heartless when it came to letting people retire,” she said. But with Liberia’s debt overhang at 600 percent of gross domestic product and 64 percent of the population below the poverty line, someone had to make the hard choices to get Liberia on a sustainable path and restore conditions for growth and job creation, Sayeh said.

“We had a shattered economy and the bleakest of social conditions,” she said.

Key to Sayeh’s mission guiding Liberia through the IMF’s Heavily Indebted Poor Countries Initiative was strict adherence to a balanced budget and strengthening tax collection, which made the Ministry of Finance “everyone’s favorite whipping boy.” Sayeh also eliminated distorting incentives in the tax code and worked to recruit foreign nationals with the higher skills (and salaries) necessary to build capacity in Liberia, two more initiatives that created pushback and resentment among entrenched local interest.

A lot of the focus, she said, was on getting “quick wins” because the government and donor community were hesitant to take on the more difficult task of institution building.

“We were desperate in those early days to get to basic capacity for the civil service at the middle [management] level,” Sayeh said. “It can’t be achieved in fragile states without situating it in a bunch of contexts. It’s helpful to distinguish between capacity of an organization on the one hand and individuals on the other. For example, training may be the right response in a case where specific surgical skills are not there and you need them in a hospital. It would not be an effective strategy if the people had those skills but weren’t motivated to use them.”

Sayeh warned that best practice situations don’t always work on the ground, that organizations “have to design different strategies for the different causes of disfunction.” Progress in fragile states can’t be made without “a lot of ups and downs and sometimes second-best solutions were the result of trying to implement reform,” she said.

Sayeh’s experience in Liberia has left her less than rosy about the outlook for her country and that of other fragile states in sub-Saharan Africa, where the financial gap is widening between fragile and non-fragile nations. Part of that is due to recent commodity price shocks and the 2016 Ebola outbreak, she said, but a lot of it simply comes to down to needing better institutions, better policies, and better governments.

“Research shows even when fragile states were doing better … that growth was more volatile than other countries,” she said.

Liberia is a case in point. The country has seen 22 percent inflation this year and 54 percent of its population was still living below the poverty line in 2016. Its GDP growth, which was 7.15 percent in 2008 when Sayeh stepped down as Minister of Finance to head the IMF’s Africa department, has hovered close to 0 percent since 2014.

“Those are scary things in Liberia because we know how unhappy young people, who had a big part in our war, are, and we know how important it is to demonstrate to them that things are getting better. So, it’s hard to be optimistic,” said Sayeh. “I’m hopeful that the authorities try to quickly arrest the decline … I’m hopeful that they come to a recognition that their political well-being is at stake and try to do something about the economic situation.”