ANNUAL MESSAGE Delivered By Her Excellency Ellen Johnson Sirleaf President of the Republic of Liberia Delivered to the 52nd Legislature of the Republic of Liberia Unity Conference Center Virginia, Liberia Monday, 29th January 2007 Mr. Vice President, Mr. Speaker, Mr. President Pro Tempore; Members of the Legislature; Mr. Chief Justice, Associate Justices of the Supreme Court and Members of the Judiciary; Members of the Cabinet and other Government Officials; Mr. Doyen, Excellencies and Members of the Diplomatic Corps; His Excellency the Special Representative of the Secretary General of the United Nations in Liberia; Officers, Men, Women, and Staff of the United Nations Military Mission in Liberia; The Officer in Charge, Men and Women of the Armed Forces of Liberia (AFL); Former Government Officials; Leaders and Members of the Inter-Religious Council of Liberia; Political and Business Leaders; Traditional Leaders, Chiefs and Elders of Liberia; Labour and Trade Unions and other Workers Organizations; Civil Society Organizations; Members of the Press; Distinguished Ladies and Gentlemen; Fellow Liberians: I wish to thank the Almighty God for yet another opportunity to come together at an auspicious occasion as this one. May I request that you join me, Honorable Members of the Legislature, in rising and observing a moment of silent Thanksgiving to our Omnipotent and Omnipresent father who has guided and steered our nation and its affairs, over the last years. While standing in prayers, let us also remember those from this Honorable legislature and from other works of life who gave the best of themselves in service and have gone to eternal rest. Thank you. One year ago on January 23, 2006, and only a few days after I appeared before you in fulfillment of the constitutional requirement under Article 58 to “present the administrations…” I did so barely 7 days after I took the oath of office on January 16, as President of the Republic of Liberia. I swore then to uphold and defend our Constitution, to nurture and strengthen our common peace and security, heal our nation’s wounds and lead it to recovery, and reconstruction. An expectant air of euphoria, optimism, and hope enveloped that occasion. Our Nation and people had voted. I heard them say during the long months of campaigning that they yearned for a complete break with past practices that were responsible for our years of violent conflict and under-development. They wanted fundamental change in all areas of our nation’s life. They wanted a new, free, and democratic Liberia where civil liberties, the rule of law, an accountable and transparent government, peace and security would be the norms, and not from the generosity of an imperial president. They wanted a rule rooted firmly in our Constitution, our statutes, and the true Liberia way of life. I declared to our people then that I had heard them loud and clear. But change does not come from the waving of a magic wand or the pushing of a BUTTON! It comes from CONVICTION, from a process of CONSISTENT policies and actions that seek and alter the way we make individual decisions; the way we carry on our activities; and ultimately the way we think. This is not an easy challenge. I promised that with God’s help and guidance, I would lead a nation in which we all will put our best efforts and creative energies to work to fulfill our individual and collective expectations. I can say boldly that in just one year, we have made an important beginning even in the face of monumental challenges. That was to be expected. Our national resolve was tested – that was a normal consequence. But, we have prevailed. We have registered many successes. Of significant importance to our initial efforts in this respect, is the fact that we have placed our nation firmly on the road, laying the basis for full recovery and reconstruction for peace, security and healing. As we get on with this monumental national undertaking, as we work to deal with every issue of post conflict reconstruction, all we ask of you and the Liberian people as a whole is PATIENCE. Fellow Liberians, as I stand here to deliver this address covering the State of our nation after the first full year of my Administration, I declare to you our elected representatives, our people here at home and abroad, our local and international partners, and indeed the international community, that our Nation is peaceful, secured, hopeful and strong. Honorable Members of the Legislature, Fellow Liberians: It is in this view that during the fiscal year under review, my Administration submitted, for your consideration several legislations, agreements and treatises for your consideration, intended for the Legislative Branch of the Government to create permanent and durable legal frameworks for governance and the efficient running of our common patrimony. The Acts and Legislations presented to this august body included many international conventions and other instruments for ratification. Clearly, the ratification in line with international best practices will help to restore Liberia’s place in the comity of nations We also submitted legislation to enhance the reform of our forestry sector, to revise our revenue laws and harmonize the national custom tariff schedules and coding system; as well as to repeal laws such as Section 1508 of the Labor Practices Law, and PRC Decrees #12 and #88A that grossly infringed on the fundamental rights and liberties of our workers and citizens. These international instruments and proposed Legislations included: 1. Partnership Agreement between the Member States of the African, Caribbean and Pacific Group of States; 2. ECOWAS Energy Protocol; 3. UN Convention Against Corruption & the AU Convention on Preventing and Combating Corruption; 4. An Act Repealing Sections 1508 (3) of the Labor Practices Laws & PRC Decree #12; 5. An Act Repealing PRC Decree 88A; 6. ILO Conventions 100, 138 and 185; 7. An Act Authorizing Legislative Approval of Major Budgetary Transfer; 8. An Act Adopting the National Forestry Reform Law of 2006; 9. An Act to Amend Certain Portions of the Revenue Code of Liberia and to Harmonize Description and Coding System of the Customs Tariff Schedules; 10. Production Sharing Contracts with Addendums for Blocks LB 11-13 signed between NOCAL and ORAN Petroleum Limited & Broadway Consolidated PLC; and 11. Instrument of Ratification of the Maritime Labor Convention (2006) and related Certificate of Deposit; Honorable Members of the Legislature: I wish to thank you for acting on two important instruments. After your careful study, scrutiny and revision in keeping with your constitutional mandate for independence and oversight of the Executive, you passed the FY 06/07 National Budget. We also thank you for passing into law the Forestry Reform Act thus preparing the way for the lifting of international sanctions on our forestry sector. Both of these instruments were duly submitted to me for Executive concurrence and they are now fully operational. While we applaud you for such acts in the national interest, I wish to take this opportunity to call on your Honorable Body to pass into law or forward for Executive action, other instruments pending before you. This will greatly improve our governance process and set us on the road to progress in tackling the people’s business. Honorable Members, in addition to the legislation, agreements and treatises submitted to your Honorable Body, our Administration also issued a number of Executive Orders as interim regulations, and stop gap legal measures to, among other things, centralize and improve revenue collection, streamline expenditures and expand the fiscal space of the national economy, revamp and reform the Forestry Sector, and improve the overall process of national governance. Prominent among the ordinances and executive orders issued were: Executive Orders 1 Executive Order # 1 To Reform the Forestry Sector. 2 Executive Order # 2 Repositioning the Governance Reform Commission 3 Executive Order # 3 Creating the Mechanism for proper control of Government Revenues and Obligations 4 Executive Order # 4 Ensuring Government Support to the RR Component of the National Commission on Disarmament, Demobilization, Rehabilitation and Reconstruction Program 5 Executive Order # 5 Suspension of Protective Tariff on Cement 6 Executive Order # 6 Establishing a total Ban on Firearms 7 Executive Order # 7 Establishment of LIMPAC to provide for The Improvement of Macroeconomic Policy Formulation and Analysis 8 Executive Ordinance # 1 Establishing Government Policy on Per Diem Allowances 9 Executive Ordinance # 2 Establishing Government Policy on Per Diem Allowances for Domestic Travel By Officials and Employees of Government Honorable Ladies and Gentlemen: As we enter a new legislative session, I wish to seize this moment to remind all of us that, at this stage in our history, we cannot afford to remain complacent because of the achievements made thus far. The road ahead is long, tough and challenging. But it is, no doubt, the road into the future of restoring our County to sustained peace and prosperity. And we must all take it boldly with the single-minded determination to succeed. In this forward march into the future, turning back is no option; neither is it advisable. So, in this Legislative session and in the years ahead, we are embarking upon a noble but difficult journey to reduce poverty across the nation, reform and strengthen our economic management system, rebuild our infrastructures decimated by years of war, reform our security sector, restore our social services including our health care and educational systems, decentralize national governance, and restore the rule of law that has been undermined by the tragedy of several internal wars. This is the thrust and fulcrum of our legislative agenda during the course of this session. Ours is a plan to propose laws and execute policies within the framework of the Interim Poverty Reduction Strategy Paper (iPRSP). This is our agenda; and this is our challenge. It is a tall order, but it is the mandate of our people. We, therefore, have no choice but to pursue it, and let the judgment of history fall where it may. Acting together, we bear the burden of the collective expectation of an anxious nation, where expectations are high. We look forward to your support and collaboration in this endeavor during this Legislative session as we will be submitting, initially, the following legislations and agreements: Acts and Concessions 1. Telecommunications Act 2006 2. Governance Commission Act 3. National Defense Act 4. Act Amending Chapter 22 of the Executive Law Repealing the Act establishing the Ministry of Rural Development 5. Act Amending Title 2, Criminal procedure Law 6. Act creating the National Bureau of Veterans Affairs 7. Enactment of a Code of Conduct and Conflict of Interest 8. Anti-Corruption Statute 9. Mineral Development Agreement with Mittal Steel Company 10. An Act to establish a Liberia National Commission on Small Arms Honorable Members of the Legislature, Fellow Liberians: One of the first steps in dealing with post-conflict reconstruction is to create a credible goal-oriented, domestic, political and economic agenda – and a foreign policy posture capable of projecting our image as a new democratic nation committed to the guiding principles of sound economic policies, good governance, creditworthiness and partnerships. As part of our efforts to achieve this goal, immediately upon our assumption of office, we formulated our vision based upon a development framework anchored on four pillars: Security Reform, Economic Revitalization, Infrastructure Rehabilitation, and Good Governance and the Rule of Law. I. Security Sector Reform Honorable Members of the Legislature, My Fellow Citizens: I am pleased to report that during the period under review, the security of our nation witnessed steady and significant reform and improvements through the collaborative efforts of our people, National Security Services and the international community, especially the United Nations Mission in Liberia (UNMIL). Pursuant to provisions of the Comprehensive Peace Agreement reached in Accra in August 2003, we continued from the NTGL and concluded the demobilization, deactivation and restructuring of the Armed Forces of Liberia (AFL), the Liberian National Police, and the Special Security Service. This required the retirement of a total of 17,000 persons at an estimated cost of US$ 20 million with additional costs of US$ 1,100,100 in benefits to widows. A reorganization of these institutions and the recruitment and training of new personnel within the framework of a comprehensive security sector reform has begun. The goals are to create a well trained and properly equipped army of 2000, and police and security forces of some 6,000, to protect the geographic integrity of our Country and respond to any internal and external threat to our national security. To ensure that these goals are met, we must move quickly to establish the Office of Veteran Affairs and provide the means for full settlement of remaining arrears and payment of pensions to all qualified deactivated security personnel. We have also initiated steps to revamp and strengthen the operations of the Bureau of Immigration and Naturalization (BIN) with ongoing effort to reactivate offices at all important entry points in the Country thereby strengthening the security of our borders and protecting our economic interest. The United States has been our key partner in the reform of the sector, particularly the training of the new army, while the United Nations assumed major responsibility for the training of the police force. Important assistance has also been provided from our sisterly countries of Nigeria and Ghana and from China in the training of our Special Security Service. We thank each of these partners who have assured us that they will continue to honor their commitment to this important aspect of our national development endeavor. II. Economic Revitalization Honorable Members of the Legislature, My Fellow Liberians: As we all know, our economy is small, open, import-oriented, and dualistic, with modern and traditional, or formal and informal sectors co-existing and functioning reasonably well. The modern or formal sector of our economy continues to be dominated by multinational corporations which import capital, technology and management – and generally export raw or unprocessed products. The traditional or informal sector on which our economy turns, continues to be rural based, rudimentary in technology with less developed infrastructures – producing largely for domestic consumption. Overall, our economy is performing well. According to 2006 estimates, real Gross Domestic Product is expected to grow at a rate of 8 percent. This compares with a 30 percent decline in 2003. This gives recognition to the propelling forces of our revived traditional engines of growth and the boom in construction activities. The export-oriented sector made an annual contribution of 47 percent to overall Gross Domestic Product (GDP), while the traditional or informal sector, largely characterized by subsistence farming, accounted for the primary economic activities of our nation. After taking office in January, we took important first steps on the long road to economic recovery. We endorsed and made active the Governance and Economic Management Assistance Program (GEMAP) which provides international experts for deployment in key financial agencies of Government. This provided the basis for a partnership consultation framework, the Economic Governance Steering Committee which I chair. We also established the Public Procurement and Concessions Commission (PPCC) which has strengthened public expenditure regulation and led the review of all contracts and concessions agreements, particularly those granted under the National Transitional Government of Liberia. This review process received technical support from our partners through the Contracts and Concession Review Committee. At the end of this exercise, on December 31, 2006, some ninety-five (95) Contracts and Concessions had been reviewed. We have thus started the process to renegotiate these agreements, wherever better benefits to the country can be obtained, or to terminate for non performance or non compliance with our statutes. In this regard, we are pleased to report the conclusion of renegotiation with Arcelor Mittal Steel which will provide stimulus to our economy with a significant investment of US$1 billion over a seven (7) year period. Your early ratification of the Amendment to the Mineral Development Agreement will enable this important activity to proceed. In the course of the year, we also established the Liberia Reconstruction and Development Committee (LRDC) as the successor regime to the Results Focused Transition Framework to coordinate the dialogue and the work with international partners on policy issues and program initiatives for economic recovery and growth. In order to build a track record of policy implementation that would lead to eventual settlement of our hefty US$3.7 billion external debt, we formulated and successfully implemented, with support from the International Monetary Fund, a Staff Monitoring Program. This will be followed by an even more rigorous macroeconomic program under an Interim Poverty Reduction Strategy program (IPRSP) which has been formulated for a dialogue with our partners at a forum scheduled to be held in Washington D.C., in February, with the co-sponsorship of the U.S. Government, the World Bank and the United Nations. In this regard, we are pleased to note that the preparation of the IPRSP involved the participation of key national stakeholders – the Legislature, civil society, national non-government organizations, and political parties. In furtherance of improved budget and fiscal performance, we adopted a realistic, cash-based budget, matching revenue projections with domestic and foreign expenditure commitments. Similarly, new critical expenditure measures were introduced including the strengthening of the Cash Management Committee, the introduction of an Interim Commitment Control System, the implementation of Foreign and Domestic Travel Ordinances, the introduction of prioritized cash plan for all line Ministries and Agencies which form the basis for the issuance of allotments by the Bureau of the Budget, and strict adherence to the guidelines of the Procurement Act. As a result of these fiscal reform and discipline measures, I am pleased to note that actual revenue collection for the period of January 1 to December 31, 2006, was US$114 million compared with US$77 million for the previous year. Expenditure for the same period amounted to US$93.5 million compared with US$81.8 million for the previous year. Thus the calendar year’s total revenue intake compared with total expenditure resulted in a calendar year excess of US$ 21 million. It is also important to note that this performance moved us from a deficit to a surplus position propelled by a forty-eight (48) percent growth in revenues. Honorable Members of the Legislature: Following the imposition in 2003 of sanctions on timber exports by the United Nations Security Council, the Forestry Sector has successfully undergone major reform. The Forestry Development Authority (FDA) and the Forest Reform Monitoring Committee (FRMC) constituted by Government to oversee and monitor our forest reforms by formulating and implementing measures for the resumption of forest allocation, have worked in line with guidelines formulated by Government in collaboration with our international partners. Moreover, as a result of measures instituted by Government to address international concerns regarding the administration of our forest sector, including the promulgation of Executive Order No. 1, the United Nations Security Council lifted sanctions imposed on this sector. Government also made significant progress toward meeting compliance with requirements of the Kimberly Process, a precondition for the lifting of sanctions imposed on our diamond sector. We are continuing to work with our international partners to meet the requirements that will lead to the lifting of the sanctions hopefully during the next review by the Security Council. Honorable Members of the Legislature: During this reporting period, the Liberian Institute of Statistics and Geo-Information Services (LISGIS), once an integral part of the Ministry of Planning and Economic Affairs, was granted full autonomy by Act of the Legislature. This decision demonstrates our commitment to accord full recognition and support to the need for reliable statistics to guide our reform effort. LISGIS will be given responsibility for undertaking the first national census in 20 years under a program to be submitted for your consideration and approval as required by the Constitution. This will enable us to review and redirect our effort toward progress in meeting the Millennium Development Goals and the preparation of a structured long term vision that will guide us as a nation and people. This process under the Ministry of Planning and Economic Affairs will be enhanced through the Macro Economic Policy Analysis Program for which the African Capacity Building Foundation has provided US$1.8 million. During the year, our Ministry of Planning and Economic Affairs also concluded preparation of a draft policy to guide operations of Non Governmental Organizations, Community Based Organizations, and Private Volunteer Organizations. We expect this to take effect this year following consultations and validation with stakeholders. Honorable Members of the Legislature: We are pleased to report that considerable progress was made towards regaining our national authority in the preparation, implementation, and monitoring of European Commission assistance to our country, thereby leading to a removal of the Sanctions imposed on Liberia on account of the failure of previous Governments to meet internationally acceptable practices in fiscal performance and protection of human rights. We are therefore optimistic that we will soon meet all the requirements for the restoration of full National authority status with the Commission. We have worked assiduously at the sub-regional and regional levels, to promote cooperation and increased economic integration in West Africa. We actively participated in the work of ECOWAS including transformation of the ECOWAS Secretariat into a Commission with a stronger regional Parliament and a Court of Justice. In addition, we hosted the Ministerial Meetings and assumed the Chairmanship of the Mano River Union. In this role we will have a stronger voice to strengthen the role of the Secretariat based in Freetown including activation of the Capacity Development Program for the three countries which, through our instrumentality, has an allocation of US$2 million from the Africa Capacity Building Foundation (ACBF). Moreover, we are pleased to note that at a Summit in Conakry on December 16, 2006, Liberia was designated to play a mediatory role in the ongoing border dispute between our sisterly Republics of Guinea and Sierra Leone. We will continue to use our best effort to contribute to the peace and stability that our three nations deserve in order to pursue our national and regional development goals. Honorable Members of the Legislature, My Fellow Citizens: During the period under review, under our Maritime program and through our agent, the Liberian International Ship Corporate Registry (LISCR), 2,300 vessels representing 70 million gross tons and 36 million net tons were registered under our Flag. These numbers represent an increase of 135 vessels, or a 6 percent growth over the previous year. Despite this, there was a 15 percent decline in overall maritime revenue from US$10.4 million to US$8.8 million. According to our agent, the decline in revenue was due to poor incentives for ship owners and fluctuations in vessels movements by smaller vessels replacing larger ones in our registry. This is a matter requiring better examination on our part within the context of a review of GOL/LISCR Agreement this year. We also believe that the performance under our Maritime program will improve when the Ministry of Finance is given more oversight responsibility. Technical assistance has been received from one of our partners to examine this issue and formulate options on the way forward. However, I am pleased to report that the Bureau has made progress in its restructuring and training programs and in the settlement of long standing obligations to the International Maritime Organization. This will enable Liberia to seek membership in the IMO Council. Substantial progress was made in the rehabilitation of the Liberia Maritime Training Institute (LMTI), in Schiefflin, with the assistance of the Global Maritime Academy, the Transport School of the Merchant Marine Academy of the United States of America and the International Maritime Organization. We expect more support for this initiative once the feasibility study for the institute’s rehabilitation has been concluded. Honorable Members of the Legislature: The growth of our economy is also reflected in our trade sector. In the area of foreign trade, the nation’s total exports in 2006 was US$163.81 million compared to US$131.30 million in 2005 an increase of twenty-five (25) percent. Total imports were valued at US$456.77 million compared with US$229.83 million in 2005, representing an almost one hundred (100) percent increase. This resulted in significant increase in our nation’s balance of trade deficit from US$98.583 million to US$ 292.96 million, a reflection in part of the lag in reactivating the productive export sector unmatched by the increase in demand for imports resulting from partnership financed economic activity and an increase in consumer purchasing power. Recognizing, however, that commerce and industry constitute two areas critical to the revitalization of our post-war economy, the Administration has given keen attention to reforming and reinvigorating these two sectors. Our goal is to ensure that our people have continuous, unlimited access to commodities and services that they need for their livelihood – and for national reconstruction. Measures were thus taken to address long standing monopolistic practices to ensure that strategic commodities were available on the market in adequate quantities and at affordable prices. These measures were subject to considerable questioning as they exposed deep rooted vested interests and their allies. Nevertheless, I am pleased to report to you that the measures taken have largely achieved the objectives so there will be no need for further intervention by the Government in the importation of commodities other than the regulatory function relating to prices. In other words, Honorable Ladies and Gentlemen, except for those who have engaged in acts of sabotage in the past, the market will be opened to all importers of all commodities including rice and cement. Honorable Legislators, in the area of industrialization, I am especially pleased to report that Liberia has been declared eligible for membership to the Africa Growth and Opportunity Act (AGOA) of the United States, thereby laying the basis for the inflow of American Foreign Investment Capital and an entry of Liberia’s exports into the U.S. markets. This will enable us to give support to and prepare our artisans and cottage industries to benefit from this potential. Honorable Members of the Legislature, My Fellow Liberians: When we took office, we faced challenges in our efforts to regain investors’ confidence due to legitimate concerns about our country’s image and post conflict security and stability. However, such challenges, rather than weaken our resolve, spurred us to work even harder to attract foreign investors. A critical part of our efforts has focused on creating an improved investment climate – a strong judiciary, streamlined regulations in the level of corruption, and a more efficient and transparent Government. The “one stop shop concept,” initiated by the National Investment Commission, under which the Commission coordinates investment issues, has helped to reduce bureaucratic hurdles that frustrate new foreign investors. With this improvement, Government received many investment inquiries from potential investors out of which 18 were translated into project proposals in manufacturing, service, packaging/processing, and mining sectors. The 18 processed projects have the capacity to create 589 jobs with a total investment size of over US$42 million. We intend, in all cases where applicable, to ensure that value is added where investment involves the use of our primary products. Honorable Members of the Legislature: When we assumed office one year and a fortnight ago this week, we inherited an agricultural sector that had been devastated by the civil conflict. Agriculture being labor intensive traditionally absorbed more than 70 percent of our nation’s workforce and today remains the prime pillar of our strategy for poverty reduction, food security and economic recovery. In order to start on the long road toward the achievement of this objective, we distributed over 40,000 tools and 20 metric tons of rice seeds to some 33,000 farmers throughout the country. more... more...