What's New in the EU: Liberia, Israel and diamonds

Liberian Minister of Lands, Mines and Energy is visiting Israel this week, only two months after a memorandum of understanding was signed with Israel.

EU 88 (photo credit: )
EU 88
(photo credit: )
Liberian Minister of Lands, Mines and Energy Eugene H. Shannon is visiting Israel this week. The visit comes only two months after a memorandum of understanding was signed on November 20, under the aegis of Liberian President Ellen Johnson-Sirleaf, by Shannon and the Israel Diamond Institute's chairman. The memorandum of understanding laid the foundations for strategic cooperation between the Liberian government and the Israeli diamond industry. Shannon received his PhD in geology from Syracuse University in the United States. I met with him this week, and he expressed optimism for a strong and long lasting relationship between Israel and Liberia. This cooperation comes after years of struggle in Liberia, during which a fierce civil war and government mismanagement destroyed much of its economy. Many businesses fled the country, taking capital and expertise with them. But with the end of fighting and the installation of a democratically-elected government in 2006, some have returned. Richly endowed with diamonds, gold, ore and forests, Liberia had been a producer and exporter of basic products - primarily raw timber and rubber. Johnson-Sirleaf, a Harvard-trained banker and administrator, has taken steps to reduce corruption, build support from international donors and encourage private investment. Embargoes on diamond exports have been lifted recently, opening new sources of revenue for the government. The reconstruction of infrastructure and the raising of incomes in this ravaged economy will largely depend on generous financial and technical assistance from donor countries and foreign investment in key sectors, such as infrastructure and power generation. Foreign direct investment is returning to Liberia, attracted to the more stable security situation provided by the large UN peacekeeping force and the demonstrated commitment to reform on the part of the Johnson-Sirleaf administration. Investors are now seeking opportunities in mining, rubber, agro-forestry, light industry and other sectors. Big foreign companies have negotiated agreements to invest more than $1 billion in the mining sector, and the Liberian government is engaged in negotiations with several large foreign investors. Liberia has taken steps to forge closer ties with Western countries, especially the US. Johnson-Sirleaf has in recent months visited several Western countries, including the United Kingdom, Sweden, Norway, Spain, France and Germany. She has also visited China and Libya, with whom Liberia maintains close ties. In regards to the diamond business, the European Commission has contributed actively to the development of the Kimberley Process since its inception and took over the chairmanship of the Kimberley Process for 2007, succeeding South Africa, Canada, Russian and Botswana. The EC also chaired the Kimberley Process Working Group on Monitoring, which oversees implementation of Kimberley Process requirements. The Kimberley Process is a unique initiative by government authorities, the international diamond industry and NGOs to stem the flow of so called "blood diamonds" - rough diamonds used by rebel movements to finance wars against legitimate governments. These have contributed to fueling devastating conflicts in a number of countries in Africa, including Liberia. For the purpose of reconstruction of Liberia, an initiative named Liberia Extractive Industries Transparency Initiative (LEITI) was established last May 7 by Liberia's government. This initiative is part of an international organization called Extractive Industries Transparency Initiative (EITI), which supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining. The EITI is about companies disclosing what they pay and governments disclosing what they receive: a global standard for local transparency. The EITI is a coalition of governments, companies, civil society groups, investors and international organizations. Numerous governments - including Belgium, France, Germany, Italy, the Netherlands, Norway, Spain and the UK - support the EITI. These governments provide political leadership in promoting the initiative. Many also contribute financially to the international management of the EITI, and support implementation through direct bilateral support to EITI-implementing countries or through a multi-donor trust fund managed by the World Bank. The EITI has a flexible methodology that attempts to ensure that a global standard is maintained throughout the different implementing countries. In a world where 3.5 billion people live in countries rich in oil, gas and minerals, with good governance the exploitation of these resources can generate large revenues to foster growth and reduce poverty. But when governance is weak, it may result in poverty, corruption and conflict. The EITI aims to strengthen governance by improving transparency and accountability in the extractives sector. The EITI board and its international secretariat are the guardians of that methodology. Implementation itself, however, is the responsibility of individual countries. [email protected] Ari Syrquin is the head of the International Department at Joseph Shem-Tov Law Firm.