Thu, 28 Mar 2019 Feature Article

Liberia: The Firestone Republic

Liberia: The Firestone Republic

An appendage to the country’s deepening economic crisis has shown itself in the decision by Firestone Liberia to lay off 800workers (13percent of its workforce) in the early quarter of 2019. According to the multinational which has been in Liberia and has had private property right to 10percent of the country’s arable land since 1926, its decision to lay off the workers is as the result of “a thorough and strategic review of its current operations coupled with unsustainable losses resulting from high overhead costs associated with the company’s Concession Agreement with the Government of Liberia, low natural rubber production because of the country’s prolonged civil wars and continued low global natural rubber prices.”

There are many reasons Firestone will have its way in assaulting the workers without any resistance, thus taking bread from the table of approximately 4000thousand Liberians if the number of each worker’s dependents is placed at five. Firstly, national government is the political arm of international finance capital, e.g. Firestone Liberia. The micro-nationalists occupying positions in the three branches of government are errand boys and girls in the service of multinationals like Firestone that have private ownership of the commanding heights of the country’s economy. The government enact anti-labor laws to make workers slavish in favor of foreign capital. Concession agreements are signed at the peril of the people and in the interest of capital.

The multinationals, Firestone of no exception, are lavished with tax holidays, import and export duties exemptions, free access to repatriate surplus value and dividends, etc. under the veil of investment incentives. The state unleashes its armed bodies of men to crush workers’ resistance against bad labor practices, illegal dismissal, wage slavery, etc. as a way of protecting the profit interest of capital at the expense of the working masses. These features of a neo-colonial capitalist economy in addition to the corruption, incompetence and ineptitude of the George Weah led government provide Firestone Liberia more leverages to stifle workers whose labor is the source of the wealth produce at the plantation but never have any right to decide how such wealth is appropriated.

For more than a century, Firestone Liberia has exploited Liberia’s labor and land with little benefit to the country and people. Access to decent housing and other social services for workers remain a challenge. This age-old concession company cannot boast of a university for the workers’ children. Vast majority of the surplus exploited from the labor of Liberian workers is repatriated instead of being reinvested in the industrial sector of the economy (turning rubber into finished goods) thus expanding the productivity of labor although industrial employment which was dominant in the Global North through the 1970s has now shifted to the Global South in the 21st Century.

Liberia, since its integration into the global capitalist system, continues to stagnate in the unequal international division of labor as a supplier of latex rubber to developed economies at a cheap price and an importer of manufactured rubber made goods from those economies at a high price. It is estimated that from every dollar made from the production of rubber, 0.83cents is repatriated through salaries of expatriates as well as profits and dividends while and 0.17cents covers wages to Liberian workers and taxes and royalties to the Liberian government.

This pattern is not only unique to Firestone. It is also the staple of other multinationals that have ownership of other commanding heights of the Liberian economy. While millions are being exported from the production of rubber, iron ore, gold, diamond, timber, and other cash crops, the paltry sum given as wages cannot meet workers’ demand for goods and services. Government revenue generated through this mean is only enough to run a useless state bureaucracy where parasites make lucrative salaries and emoluments while education, health, infrastructure, etc. lie in ruins and tatters. The piecemeal development in these sectors is funded through loans from mostly the World Bank and IMF that the country is unable to repay, thus constraining with debt burden at the service of the Bretton Woods Institutions.

This then leads the country to be placed in an economic straitjacket, with structural adjustment programmes being foisted on it by the two international economic police groups. This in part is the principal reason for the underdevelopment of the republic and has been the channel carved and maintained by imperial external forces that needed the resources of an underdeveloped Liberia to keep their manufacturing industries afloat. Another issue this asymmetrical relations brings to the fore is that the whole structure of neocolonial capitalism is intended to stagnate countries of the global South, but develop the ones in the Global North.

However, there has been no epoch in our country’s history that such condition has been rejected and reverse as was done in few African, Asian and Latin American countries after the colonial powers were crushed into withdrawing their flags and armed bodies of men.

The media and the Ministry of Information reported that a government delegation headed by the Minister of State and Presidential Affairs, Nathaniel McGill – a reprobate who connived with the Central Bank Governor and the venal rascal Finance Minister Samuel Tweah to plunder US$25million meant to mop up excess liquidity – has initiated series of meetings with the management of Firestone to plead with the company to rescind its decision to layoff the workers.

As has always been, the regime, which is an obedient poodle of neocolonial capitalism, has gone genuflecting before Firestone to have mercy on the workers instead of informing Firestone that since its entry into the homeland it has exploited super surplus value from the workers and accumulated massive profits to the disadvantage of the workers, so it is high time it treat the Liberian workers with dignity and honor.

On the contrary, the regime will do no such thing as it lacks the spine to put up any nationalistic defense for the working masses. What we anticipate is the conclusion of more concessions that favor Firestone’s quest to maximize profits, add to the unemployment quagmire and give the remaining workers pittance by a cut in wages. This is the fate of a neo-colonial territory that is economically dominated by international finance capital and politically controlled by a clique of conservative politicos that plunder the public treasury while the exploited layers of society (enslaved workers, poor peasants, and urban pauperized masses) rot in infinite poverty and economic deprivation.

The workers, conscious, united and resilient are the only force that can struggle against the decision of Firestone Liberia, as even the regime is complicit in the scheme. Consistent strike, shut down of production, etc. can win over so many concessions from Firestone, including the reversion of the company’s decision to lay off workers, improvement in housing, wage increase, etc. But unfortunately, the worker union is in comatose and only implement diktats from Firestone to the disadvantage of its constituent members.

In short, the power of capital has compromised the leadership of the workers union at the plantation. Thus, the workers are vulnerable to the assault of capital and weak to confront exploitation head-on. A neutralized and sold-out workers’ leadership at Firestone and other multinationals like Sime Darby, GVL, Arcelor Mittal, MNG Gold Mine, Bea Mountain, etc., a dormant Liberia Labor Congress, and an enclave working class which has just less than 5percent of the economically active population due to the low productivity of labor in the Liberian economy all deprive the country of militant working class actions against exploitation.

The Firestone lay off decision is not only a reflection of how this corporation is a symbol of neo-colonial exploitation in Liberia since 1926, it is also the effect of the prevailing global capitalist crisis. The major capitalist economies suffer from the menace of overproduction/overcapacity which arises as a result of a fall in aggregate demand for goods and services due to global stagnant wages and the rising cost of living. This fall in demand comes about when workers cannot afford to buy with their wages the commodities they produce with their labor power, and a kind of social alienation engendered by consistent cuts in real wages which is a necessity to increase the rate of profits of the few fat cats that have centralized capital in their hands.

Thus, many goods, especially in the steel and automobile industries, are going unsold and firms are no longer expanding production but rather jockeying for markets to dump their surplus goods. Besides, we are in the stage of monopoly capitalism where speculation rather than investment in production is the major source of wealth accumulation. Elements with big capital instead of expanding production through investment rather stash their money in banks or gamble on the stock exchange—a kind of scenario where money is used to produce money.

According to the World Bank, GDP growth in China fell from 6.8percent in first half of 2018 to 6.5percent in the last quarter of 2018 due to low investment and export. Growth in the Euro area declined from 2.4percent in 2017 to 2.1percent in 2018 and is expected to moderate to 1.9percent in 2019 and 1.7percent in 2020 according to the European Union Commission.

On March 21, 2019, the Federal Open Market Committee announced at its meeting that the US economy will slow to 2.1percent in 2019 from 3percent in 2018 and is expected to further decline to 1.9percent in 2020. These number indicate that the era of boom and bust is over and that capitalism has exhausted its capacity to develop the productive forces and that the system can no more play the progressive role it played in the past especially the immediate post- war era.

Liberia’s division of labor (producer of raw materials) is tied to the centers of capitalism. Economic decline in those centers will obviously send shockwave in the Liberian Economy. Decline in steel production in China, EU member states, USA, etc. affects iron ore production in Liberia - iron ore production produces the highest percentage of Liberia's GDP. Fall in rubber related manufacturing in the centers of capitalism unarguably affects the production of rubber in Liberia. Rubber production produces the second highest percent of the country's GDP.

Once there is fall in demand for rubber and iron ore, multinationals total income will decline and eventually elect to lay off workers to fill in for the decline in their rate of profit. This is why Firestone is laying off 13percent of its workforce. Other multinationals like Sime Darby, MNG and Bea Mountain are laying off significant numbers of their total workforce. We must also expect China Union and Arcelor Mittal to announce its own plan to cut its workforce.

The Liberian economy is at the edge of the cliff and the consequences are a catastrophe. The regime is clueless as macroeconomic stability proved elusive according to an IMF’s assessment team. According to the team, the growth forecast for 2018 which was estimated at 2.5percent is now 1.2percent. The team also reported a decline in the 2019 forecast from 4.7percent to 0.4percent. The Liberian dollars depreciated by 26percent in 2018 and inflation accelerated to 28percent at the end of December.

This is butchering the income of thousands of Liberians who are either being subjected to wage slavery at the mines and plantations or are eking out a living through informal economic activities. The incompetent, corrupt and clueless regime of George Weah, looking at these challenges, stretches brazenly in opulence. But the opulence of George Weah is literally scandalous. Weah and his henchmen’s obscene overnight wealth was acquired through theft and swindling on a vast scale of the taxes and resources of a people trapped in starvation and humiliation.

The people are seeing these antics and are drawing the necessary conclusions. The growing contradictions are fast creating a revolutionary situation when all the layers of the exploited class will be actively involved with the politics and life of society. The people are becoming conscious of their power as the motor force of social progress. This may not be seen on the surface now but the molecular changes are taking place under the surface and sooner than later the bubble will burst and everything will turn into its opposite.

The Liberian workers in the mines and on the plantations, inspired by the struggle of the masses in Sudan and Algeria against their bankrupt ruling classes and the struggle of the workers for higher minimum wage in Nigeria are becoming aware that it is their labor power which is exploited to produce wealth from nature and that they are the only productive class in a capitalist arrangement but are being kept on the margins of society. They will need not the permission of their sold-out leaders to begin the spontaneous movement into history.

The peasant masses, although not dispossessed of land like their counterparts in South Africa, are becoming conscious that they cannot move from subsistence farming to industrial agriculture because of the inert place the unequal international division of labor has created for the Liberian economy. The lumpen-proletariat, this class of predominantly former peasants that emigrated from the rural areas to the urban centers, residing in shanty towns and native reserves with no market for their labor; thus, some resorting to crimes, prostitution, petite trading and other informal economic activities, are rapidly realizing that their poverty is not destined by God and are frowning on the mysticism that the solution is to seek solace in salvation but rather they are drawing the conclusion that their wretched existence is the end product of exploitation by both international finance capital and its poster boys and girls in the three branches of government.

The teachers, students, doctors, nurses, civil servants, and all professionals whose wages can no longer meet their demand for goods and services due to rising inflation through experience are developing their consciousness and will not hesitate to throw themselves into struggle against this order that offers the people social alienation while the millions are repatriated and the bureaucratic parasites delight in pomp and pageantry. This is the description of the objective material condition that is fast being created in the neo-colonial Liberian society. But this condition is not enough to usher in a social revolution that takes the people from the state of sub-human status and encapsulates their hopes and aspirations and make them the drivers of their own destiny.

There must be a disciplined and enlightened group of men and women that understand that the programs of a social revolution that prioritize the dignity and honor of the whole mass of people cannot be implemented in the limits of the neo-colonial capitalist system. Suffice this to mean that there is a historical necessity for a political organization, with a sense of history and the sea of cadres, trained to drive the revolutionary itinerary and must play the subjective role of leading the masses to final victory. This is what we are committed to!

Moses Uneh Yahmia can be reached via [email protected]

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