Sunday, February 16, 2014

It's the economy, stupid !

The dogged pursuit of irrational economic policies by the Jammeh regime has accelerated the deteriorating conditions of the Gambian economy, and yet neither the political parties on the ground nor the dissident community abroad is able and willing to capitalize on the bad numbers to effect political transitional change.

Why is this the case?  In the next few paragraphs, we will attempt to show how Jammeh succeeded in holding off IMF and World Bank scrutiny, and thus giving the general population the impression that the economy is not as bad as critics claim. But first, let us look at the strategy that Jammeh adopted in dealing with the Bretton Woods institutions that made it possible to hold them off for so long despite the regime's persistent failure to adhere to its undertakings with donors in the maintenance of prudent fiscal and monetary policies.

When Jammeh was Chairman of the Armed Forces Provisional Ruling Council (AFPRC) in 1994, he learned early the importance of donor resources, and how vital they are to the viability of a small economy like Gambia's.  He recognized early also that the Taiwan resources he was able to tap into were temporary at best, and which he later transformed into a fund he managed personally with great discretionary powers as to how to target them.  We now know that most went into highly dubious projects such as the Vegetable and Fruit Plantation Project was was funded to the tune of $ 15 million with little or nothing to show for it.

After Jammeh successfully maneuvered his way into the Presidency as a civilian head of state, he continued to cultivate unconventional sources of development assistance while trying to normalize relations with traditional donors who had walked off the stage following the military coup.  During the transition, with donors refusing to continue disbursements, the economy suffered but not in the magnitude expected because (i) despite the propaganda from anti-PPP forces at the time, the economy was in a far better shape than they would want Gambians to believe, and (ii) Taiwan and other unconventional funds were flowing freely using unconventional disbursement procedures which allowed quicker expenditure patterns thus bypassing all internationally recognized tender procedures.

It was during this period that Gambia Radio and Television Studios and Building, Banjul International Airport Terminal Building and the 22nd July Arch were built which proved highly successful in holding back any rising opposition to a regime that was increasingly displaying violence as a means of keeping the opposition in check with murders, tortures, disappearances and the suppression of press freedom.   When critics point to human rights violations, Jammeh points to the edifices he's built in the name of the Revolution, as progress.

When donor missions to Banjul resumed and traditional aid started flowing after the transition to "civilian" rule, the regime, while privately recognizing the vital role that these 'colonial' (to borrow Jammeh's characterization) institutions was publicly chastising them as exploitative, and thus anti-development, with little regard for the welfare of the rural population.  Despite these public tirades at political rallies, Jammeh was quietly falling in line with the norms and procedures of the World Bank, IMF, AfDB, UK and the EU not only because they were the biggest donors to The Gambia but also because the absence of the balance of payment support, and other direct assistance in support of the recurrent budget has started manifested itself in the general operations of government.

Normal government operations were further aggravated by a new civilian administration that was discovering that it was easier to shed the military uniform that the military mentality. The ensuing disruption of normal administration was impacting the economy in many ways, including but not limited to revenue collections.  Hiring and firing of civil servants at will only made matters worse.  Not lost in all of this confusion, however, was the recognition of importance of external funds to Jammeh's own political survival, and the need to play ball with the World Bank and the IMF; never mind the anti-colonialist, Marxist, Pan-Africanist rhetoric Jammeh picked up while making his way to State House via the student radical circuit and the military police.

Jammeh learned  very quickly that you can agree with all the parameters agreed to between government officials and the donors, specifically the World Bank and the IMF, and yet bulk when it comes to implementing the program with little or not consequence. I believe Jammeh has not observed a single promise he's made to the Fund about containing domestic debt to a manageable level in over a decade, and within that period he's been sanctions in any significant way a single time; that was when the Central Bank of The Gambia (CBG) was caught cooking the books, and the Fund ask for a refund of the funds released as a result the false figures provided by CBG.

Since then, there has been the standard issue template written admonition of failing to "adhere to prudent fiscal and/or monetary policy".  Jammeh has been borrow locally to finance his pet projects, especially in a run up to presidential election time, thus depriving the private sector of much needed bank loan for growth and expansion.  No wonder the private sector is shrinking with many investors fleeing Gambia in droves.  Of course, the anti-private sector policies, including the confiscatory machinery unleashed on private sector operators by Yaya Jammeh like the National Intelligence Agency and the recently-formed Gambia Revenue Agency has accelerated the exodus to neighboring countries with friendlier investment climate.

Jammeh routinely ignores policy agreed between government and donors, including the IMF, a practice that has gone unchecked and unsanctioned until recently when the European Union issued it's 17 points demand that addressed key human rights reforms, such as the abolition of the death penalty, re-opening of newspapers and private radio stations and the like.  This development, however late in coming, was not a surprise because the focus of dissidents and international organization such as Amnesty International has always been on human rights issues at the expense of the rights to basic needs of the population, even though grave economic mismanagement has been proven to be the shortest route to a change in government.

High unemployment, rampant corruption, hyper-inflationary pressures-cum-high food prices and shortages of basic commodities tend to spring the population faster into action against a government than the denial of human rights, yet activists, dissidents and opposition politicians hardly delve into, what we consider as the soft underbelly of the Jammeh regime.  It is a regime that seized power under the pretext of coming to eradicate corruption and reduce poverty only to turn Gambia into the most corrupt in the sub-region while increasing the incidence of poverty from 50% in 1994 to its current deplorable level of approximately 66%.

Jammeh's use of state resources to advance his private business ventures, and to further enrich himself has gone unabated, making him the single biggest private businessman in the small Gambian economy.  And because of the size of his private holdings, Jammeh is able to influence the local market ranging from prices of food stuffs to local foreign exchange rates.  In fact, he interferes openly and regularly without apparent restraint from donors.  We must acknowledge that last June, the IMF did issue a lukewarm warning refraining the Office of The President from interfering with the local forex market which Jammeh ignored a month later with yet another executive order setting new rates for the US dollar.

Economic management issues, as important as they are in impacting the lives of the 1.7 million Gambians, have not been exploited fully, neither by civic society groups nor by politicians.  It is more perplexing when the regime has clearly demonstrated its ineptitude and lack of depth in managing a previously well-managed economy they inherited from the administration of Jawara.  Youth unemployment is higher now than when Jammeh seized power in 1994 which has resulted in an apparent shift in political support when the youth of Banjul voted in an Independent candidate for Mayor of the capital city instead of the ruling party that had a stranglehold on the youth vote.  It is time the dissident opposition community abroad and politicians at home take their cue from the young by focusing more attention in future campaign on the economic management issues that this regime continues to mishandle.

Note:  To my friend Omar Jallow (OJ), the Interim Leader of the PPP -  I am happy that you have started highlighting the economic issues facing The Gambia resulting from the mismanagement and the continued domination of the local market by Yaya Jammeh.