Could the Rice Situation Create a Perfect Arbitrage Opportunity?

In the wake of the rising prices of commodities on the global market, could the Government of Liberia’s effort to keep the price of rice low present more problems than she is able to handle?

For the last several months, especially since the Russian invasion of Ukraine, the price of rice and other commodities have been increasing rapidly but the Government has apparently made a decision to subsidize the price so that consumers do not feel the impact.

From speaking with my non economist friends, the landed cost of a 25kg bag of rice is approximately $15 but the Government has been working with importers to ensure that they keep the price at $13. Under this arrangement, Government is paying the importers $2 per every 25kg bag of rice they import.

From our “back of the envelop” calculation, the Government has to pay approximately $2 million every month.

Under this arrangement, the rice importers are making no profit: they are only breaking even.

Well, without profit motive, will business people (capitalist) have any incentive to continue importing especially when the global increase in the price of commodities will not abate any time soon?

How long can Government continue this subsidy? If the landed cost increases to $17 per bag, will the Government continue to pay the difference? What if the landed cost went to $20?

Well, that is not my main concern. My concern here is that could this subsidy be creating arbitrage opportunity whereby profiteers can buy the rice at $13 and then flip it in Guinea or Sierra Leone for $30?

This will mean that rice will always be in short supply on the Liberia market becsuse we are supply Guinea and Sierra Leone and importers do not have incentives to continue importing.

Government is unable to properly man the borders and so this is bound to happen.

Government could go bankrupt doing this and importers who are supposed to be making no profit will not be able to continue doing this. Bearing in mind that money has a cost and so if they are borrowing money to import the rice but making no profit then this is a problem. The free market doesn’t work like that.

While as a non economist, I have no solution, I think we are headed in a direction that will cause us some problems. I would have created a situation whereby the people begin to appreciate that the price of rice is headed north and that we we should all brace for this. Maybe allow the price to slip gradually even if efforts are made to keep it lower. For example, if the landed cost is $15, I would have worked with importers to take the price to $14 while I eat the $1 per bag. This would have sent a message to consumers that prices are headed north but we are making efforts to keep it low.

Hopefully this situation doesn’t persist for long time and that global markets can adjust sooner because if not, the consumers might experience a “shock” in the price rather than a gradual increase to which they would have adjusted.

Again, I am a non economist who is talking to my non economist friends.

Cardinal Point Prepares for 2023 elections…

The upcoming 2023 general and presidential elections is shaping up to be an interesting event and the strategists at Cardinal Point Advisors are readying themselves for interesting engagements.

We will deploy all our political assets and human resources to ensure that our clients benefits.

As stated previously, the time to “pick your brain” is over. Now, those interested to reading and learning from the “playbook” must be prepared to sign engagement contracts or service invoices.

Remembering Dr. Amos Sawyer – Rest in Power

In just his 76th year, the Lord has called him from labor to rest even though his country and the African continent still need him – may his soul Rest in Power and may the work he started continue.

Even though in my professional career I would come to work with Dr. Sawyer on many projects but I first met him in November 1991 when he served as Guest Speaker at the Gala-day program of the WVS Tubman High School. At that program, Ms. Hester Williams (the VP for Instructions) would ask me to introduce Dr. Sawyer – President of the IGNU. This was the first time in my life that I would do public speaking.

I had sat in class and made the best grades but would that translate into being able to publicly express my thought? Ms. Williams decided to bet on me. I then turned to my friend and cousin Opa (sometimes we called him Ben Johnson but now he is Dr. J. Emmanuel Moore) to help me with putting the speech together. We went back and forth and came up with the best we could do.

On that day, I was dressed in my THigh drilling uniform ( I hated drilling but Ms. Willaims insisted that if I didn’t drill, I won’t read the speech). I would go on to make a huge and lasting impression on all those who attended the program. My delivery of the speech demonstrated that I had the ability to elucidate (this word was in the speech) my thoughts clearly. My friend Paul Y. Harry was the MC – he even announced that he would’t wash his right hand for a week because he shook Dr. Sawyer’s hand with it.

Ever since that time and even before, I had been a great adminirer of Dr. Sawyer.

And then when I started my UNDP assignment with the Ministry of Planning and Economic Affairs, my work would put me in direct contact with Dr. Sawyer – working on a number of governance issues which had development planning implications.

Amongst many of the projects and issues we worked on, the Liberia RISING 2030 vision was a key one. This project really connected us. He was always impressed with the work we were doing and off course that meant a lot to us – for Dr. Sawyer to be impressed with our work was a big deal for us.

We all grew so closed that we affectionately called him Papay. He was a gentle soul. His depth and breadth of understanding of various subject matters and his lived experiences were incredible. He took everything seriously and wanted to get the best. But more importantly, he wanted to see young people well trained so that they could take over from his generation. In his little space at the Governance Commission, he invested in a number of young people – most notable is Dr. IB Nyei but he was not the only one. He is notable because he will never miss an opportunity to mention “progressivism”. I blieve that Dr. Nyei is a Neo Progressive like myself.

Dr. Sawyer has approached me and indicated that it was important that the Government sponsors IB Nyei so that he could take advantage of the opportunity to complete his doctoral studies. He mentioned that the kid (I call him conrade) had a lot of potential. And offcourse, I would never miss an opportunity to help in such a situation and a request coming Dr. Sawyer was like a command. We did whatever we could do when we had the opportunity and I share no regrets.

I remember that Dr. Sawyer interacted with Dtweah (Samual Tweah) at one point (2012/2013) and was so impressed that he pushed for Dtweah to be placed on the Governance Commission or at least work with the Commission so that the likes of him could take over from them when they are gone. Dr. Sawyer was serious about that but I guess that other things intervened.

I also remember when we worked on the National Vision project and we were doing the retrospective analysis, one of Dr. Sawyer’s colleagues wanted to work on the project but I was skeptical and felt that it wouldn’t serve the project’s interest. We wrestled over this for weeks but then Dr. Sawyer indicated to us that we were right but we should consider that this fellow is definitely going to piss: the question was whether we wanted the fellow outside the tent and pissing inside or we wanted him inside the tent and pissing outside? He reminded us that he knows his colleague is going to piss so we need to decide.

Dr. Sawyer respected us as colleagues and valued our opinions: he provided valuable lessons and insights to make his point and to convince us. He never one day try to bully us or use some Papay or senior statements status. We always debated the points and if we were right, he would concede.

Oh how I loved working with and learning from Dr. Sawyer! I can’t say this about many of our elderly leaders but I can say this about Dr. Sawyer: his mind was very sharp until his last breath. If someone tells you that you are like Dr. Sawyer, you should celebrate – his acumen showed and manifested for as long as he was alive.

Papay, take your rest! Rest in Power…

The Formation of the CDC – intrigues & coincidences

A colleague sent me an excerpt of the book written by Emmanuel Clark and Ivah Tukpah. This portion was about the formation of the CDC. Honestly, I haven’t read the entire section but in the portion that I read, I see that the guys tried to reflect the major coincidence that has dogged us all for many years: it has to do with folks in Monrovia, who at the same time as we, in the US, may have been thinking about encouraging Amb. George Weah to run to run for President. For many years, and even at this moment, I believe that some folks may have spied on what was happening in our chatroom (listserv) and decided to run with the idea in Liberia. The coincidence was too coincidental to be believe that it was a coincidence. Well, maybe it was. Dtweah and I met in May 2004 and started a conversation about the “political and humanitarian future” of Amb. Weah. We continued that conversation until July 24, 2004, when we invited many of our friends in Minnesota to a meeting at my residence in Crystal, Minnesota (6500 34th Ave N). At this meeting, I remember very vividly when comrade Momo Dudu tried to derail our plans by asking critical questions, many of which we didn’t have answers to because we were still forming our thoughts at this point. I had to interject and dismiss comrade Dudu’s concerns so that we could have the space to continue our thought process. Today, I render no verdict on whether I was right or wrong – that is a subject for a different day and time. A few years ago, I started outlining and cataloging, to the best of my recollection, what the formation of the Liberia National Congress (later and now the Congress for Democratic Change) was really like. Due to the many intrigues and intricacies, I slowed down my narrative because as I started to mention about some colleagues, one of whom almost became Vice President (at least in his mind), I started to get some calls: “JFK what kind of shit on you on so? Don’t put my name in your thing ho.” I respect these colleagues. I am still in a deep thought as to whether to continue the descriptive nonfiction. I have sufficient notes and emails to present a decent account, from my vantage point. Remember that my vantage point is an extremely important one because I sat in the middle of the inside… That 17 months journey (from May 2004 to October 2005) which took a considerable amount of our time, resources, and energy will have to be narrated in full so that our people can appreciate the fullness of the undertaking. It will not be able the rendition of a verdict on our actions or inactions but rather narration of our journey

Tribute to my brother Alexander Kashif Garley – rest well

This is one of the most difficult essays I will ever write – to bid farewell to a brother. And even as I am writing, I still don’t believe that Kashif is dead. I am still refusing to commit the scene to my imagination or memory. I still can’t imagine Kashif being a dead body!

On June 9 when Kashif send me a message and said “chief, COVID got me mehn.” My response was “F-uck! U lie mehn.” I went on to say that you might be sick from something else but not COVID. And then for a few days, I never heard from him. I called Joseph Crayton and he confirmed that Kashif was indeed sick.

I didn’t believe Kashif because he (Kashif) is one of the most careful persons that I have ever met when it comes to issues of health. I remember during the EVD epidemic, the guy stayed far away from Liberia even after I encouraged him to come back to Monrovia. He said, “no chief. I will come when it is over.” So to have learned that he had COVID, it was difficult to believe.

Then on June 28, around 1:37 am CST, I got a message from Crayton that says “Kashif didn’t make it.” I decided to call Crayton to make sure he didn’t type the wrong thing. When Crayton answered and confirmed, I cut the phone off and took to my bed! I still can’t believe that it is true but it seems that the world has accepted it to be true.

Kashif and I have not been friends for the longest. There are many other friends who and I go way back from the late 1970’s. I first met Kashif in October or November 2004 when we were enroute to Fort Lauderdale, Florida to meet with then Ambassador George Weah regarding CDC and FOGOW (Friends of George Oppong Weah). Kashif was a guest of FOGOW and I was a devout proponent and ideologue of the Liberia National Congress (LNC) turned CDC (Congress for Democratic Change). We were on opposing sides of the “divide”.

Because my colleague Dtweah was delayed in arriving in Florida, I was the only person in the room to stop the onslaught that was coming from the army of the FOGOW. I think those in the room on that day would say that I held my ground and disrupted the meeting. I was able to cause sufficient confusion that made the Ambassador to say that you guys need to go work things out. This meant that we needed to go back to Minnesota and work things out between the CDC and the FOGOW.

When we got back to Minnesota, we were invited to an office owned by Kashif. This was the second time I met Kashif. I am not sure I ever met him again since 2004 until we met on Thinker’s Village beach in late 2010.

I remember one day Dtweah told me that Kashif was asking him about “why your man Kollie doesn’t like to smile?” Kashif told Dtweah that “if your man Kollie doesn’t learn to smile, when we get the chartered plane to go to Monrovia for the campaign, he won’t get on it.” This was vintage Kashif! He was a guy with big dreams and aspirations and he worked hard. Nothing scared Kashif! He always believed in himself and pushed himself harder to get whatever he wanted.

When I met Kashif in 2010, it was difficult to find a business that he was not involved with or thinking about. He was always thinking about the next venture: sometimes partnering with others and at times going it alone. But if Kashif wanted something, he went for it.

He loved his mother, his wife and his kids. He would do anything for them. In fact, he told me that he works as hard as he does so that his family would be “comfortable.” I couldn’t find anyone who worked as hard as Kashif. He came to work very early and went home very late. Not only did he work hard, he loved every bit of what he did. He was passionate about starting and growing one venture after the other.

For the 10 years that I was in Liberia, Kashif and I grew very close. From rivals during our 2004 political encounter, we became brothers. While in Liberia, apart from my day job, I spend most of my waken moments with Kashif. We spend lots of time together. I had come to admire him and respect him for his diligence, commitment and hard work.

Ever since I got the message from Crayton that “Kashif didn’t make it,” my life has not been the same. I have been trying to hold it together but it is impossible.

All I can say is that God knows why. Kashif was so much promise and hope to many. I haven’t spoken to his mom but don’t even know what to tell her. This is so so unfair.

Kashif, wherever you are, I need you to know that we all loved you and will miss but we will NEVER forget you.

For me, you were a brother and I am sure you knew that. The time we spend together was short but you had a lot of impact on me and I hope I did as well.

Brother, until we meet on that great-getting-up-morning, take your rest

ALEXANDER KASHIF GARLEY, Rest in Peace….

Do they not care that these countries perish or they care that these countries perish?

economic recovery in the post COVID era – rich & powerful vs poor & weak

The powerful countries will be printing money as means of jump-starting their economies as part of the post COVID-19 economic recovery. And it makes sense! Folks need to make major investments in infrastructure and human capital development in order to get things moving again. What else are they supposed to do?

But it seems that many of the world’s poorest countries will not be allowed to even borrow modest amount of money to make any kind of investments. Our international partners will tell us that we can’t borrow because it might put us in moderate or high “debt distress” as shown by our DSA (debt sustainability analysis). They will tell us that there is a “speed bump” that we can’t cross over even if it means that our people will suffer and die. I am not sure what other options are there for us.

Our “development” partners will define debt in all sorts of ways just to ensure that our countries do not borrow any money to make the investments required to move our economies forward. When the COVID recovery is over, the gap between the rich countries which borrowed multiple times their GDP and poor countries which did not borrow anything and therefore could not make any investments will be wider than we have ever seen.

The debts of the rich and powerful can hit any limit but poor and weak are not allowed to borrow to do anything. Some of the poor countries are not even able or allowed to print their own currencies to replace mutilated notes.

The argument from our “development” partners is that we don’t have the “absorptive” capacity. I really have never understood what this meant. That if you built roads and power plant we will not be able to use (absorb) them? Because the monies that these countries want are for critical infrastructure needed to unlock the growth potentials in their economies. If these “binding” constraints are not removed, these countries will never make any progress. With poor infrastructure, there is no foreseeable way that these countries can escape the “poverty trap.”

The partners do not even want to have a conservation about which projects these countries want to undertake. All the partners care about is that these countries shouldn’t borrow. What if they want to borrow to build a power plant so that value-addition and light manufacturing can begin? The partners don’t care. For them, once you don’t have the money, you don’t deserve cheap power or better roads.

The partners don’t want us to borrow against future income. For them, it is against the rule of development. For them, you must have the money in hand (appropriated in your budget) before you can even begin the procurement process for anything. They say, it is irresponsible to borrow against future income. Really? I thought that was what the smartest business people did: borrow to invest and when the return comes, you pay back the debt.

If a country is expecting $100 million in future income over the next 20 years ($5 million per year) and the country wants to build a bridge that cost $80 million with a 2 year construction period. The partners demand that the country can’t borrow the $80 million to build the bridge in 2 years. Instead, the country should construct $5 million worth of the bridge every year until it is complete. This means that it may take 16 years to complete the bridge. Don’t you think that the portion of the bridge that was constructed in year one would be structurally challenged before we get to year 16?

I really have never understood the logic behind the argument of the partners. For me, the bridge in 2 years might even open up more opportunities such that we might not even miss the $5 million per year. Lots of other economic and social benefits would have accrued over those years.

Some times it makes me to wonder what the motives of these “development” partners are? Do they not care that these countries perish or they care that these countries perish? Seems that either way, these countries are perishing….

Second Visit to Juba, South Sudan – my reflections

I arrived in Juba, South Sudan a few days ago. I came upon the invitation of the Government and I have spent some time talking to various officials and stakeholders. I have also spent some time talking to ordinary people on the streets. It has been fascinating!

Since the beginning of 2021, I have been putting more time on my advisory efforts: trying to work with governments and multinationals to navigate the complex paths of development and investments. I am not an expert but the fact is that I do have some experience. I have made a number of mistakes and I think folks can learn from those mistakes. I continue to argue that you don’t have to make the same mistakes especially when those made those mistakes are willing to share with their experiences with you – for a fee though. It can be more expensive when you decide to make your own mistakes.

For the newest African Republic, I believe that they should not have to make the same mistakes that other countries made: they can leapfrog into development if they chose the path less travelled. Orthodoxy won’t get them there.

I see that South Sudan has a lot of potential and holds great promise. But the few days I have spent here also show me that the challenges are enormous, daunting, and complex. Unless the Government and People of South Sudan thread very carefully, they might remain an under-developed country for a long time. But they chose the path of learning from the mistakes of others and I think they will get ahead faster. I don’t think time is on their side. They must act now and act fast.

My advice to them is: don’t do things the same way other countries have done it because you will get the same results.

If South Sudan wants to move forward faster, the political leadership must make some tough, unorthodox decisions. A lot of people will not like the decisions but after the results are shown, they will come to appreciate it.

My advice, if you ask me is DON’T LISTEN TO THEM. There is no where in the literature that shows that they have helped any country. It is time to tell them, thanks but no thanks and move forward.

Here is my argument: moving with THEM will lead you nowhere. If you move without THEM and get nowhere, you have lost nothing. But moving without THEM holds the possibility that you could get there faster.

Reflections: my ulaa listserv days

I was going through my yahoo email account and reflecting back about the days when I was into politics. Looking back, it all looks very interesting.

On or about April 26, 2007 some colleagues (actually big brothers) who didn’t like that I became too active in the Liberian immigration (TPS) process decided to go after me. These guys know how to play dirty. And I was an innocent kid who was trying to see if we could get some results. But it was never about results: it had always been about who takes the credit.

These guys (withholding their names) entered my yahoo email and wrote something as if it was coming from me and then responded to it in such a way that scared me.

I had gone to help the OLM (Organization of Liberians in Minnesota) people do some last minute prep work. I used the OLM computer to log into my yahoo mail and there is something there that keeps you logged in on that particular computer default unless you unclick that button. I didn’t know and these guys got into my email box and did what they did.

After writing the email that made it look like I was bragging, then they responded with a title that read like this: HAS MEGALOMANIA SET IN?

To today’s date, I don’t know what megalomania means but it sounded very ugly then. Doesn’t it?

Anyway, I forgive those guys and didn’t take it personal. That is how they were trained to fight.

Launching Cardinal Point Advisors…

In May 2014, when I informed Madam President that I intended to leave the Government and move into private practice, I organized and incorporated Cardinal Point Advisors.

However, when Madam President convinced me to stay on for a few more years especially since the Ministry was in the middle of reform, I decided to shelf the firm since I couldn’t run the firm and at the same time hold a government position.

I always knew that a government job, especially at the senior level, was a temporary gig. I tell my colleagues that the exit from the government is at the top: as you rise, beware that you are on your way out.

I decided that Cardinal Point Advisors would be the baby that I wanted to nurture and grow.

As a value proposition, I felt that others could benefit by learning from the mistakes we made. Wouldn’t it be nice if other leaders from developing countries didn’t have to make the same mistakes we made? To me this is worth a lot.

I have never thought that we had the all answers to transforming a developing country but I think that if can explain the mistakes we made, then others wouldn’t have to make them. And by not making those mistakes, they can make progress faster. This would be a great help to them.

Even if they think that I m not advising them on what to do, I will be advising them on what not to do.

And I think that is worth a lot. And I should get paid for that. Don’t you think so?

That is the value proposition of Cardinal Point Advisors : that you don’t have to make the mistakes we made. You can skip that mistake and pay us for showing you how…

Debating “Settled Matters” – a waste of valuable time

Throughout my adult life and especially my time in public service, I have not seen the utility in debating or proving a matter was settled. I have always seen it as a classic waste of valuable time and energy.

For example, if in 2016 or before that time, someone had argued with me that there was no way on ‘God’s green earth’ that I could become Commissioner of Maritime and then in September 2016, Madam Sirleaf announced me as Commissioner of Maritime, I would consider that matter closed.

In scholarship, one would say that the matter is “settled”. It would be a waste of my time to keep arguing with the person or trying to provr to them (through whatever means) I could become the Commissioner of Maritime. I am already the Commissioner of Maritime. I don’t have to argue about that or try to prove to the person that I told them that I could become.

What I would rather spend my time doing is to ensure that I become a good Commissioner of Maritime. And if it means hiring that person, if they have the skills, to ensure that I become a good Commissioner of Maritime then I will do that. In fact, I think by hiring the person I will be further demonstrating that the argument is over and that I am a bigger person.

By moving beyond the argument that has been ‘settled’ and expanding the frontier so that I can launch myself into the category as one of the best Commissioners of Maritime, I will be ensuring my place in maritime history.

I didn’t just want to be a Commissioner of Maritime, I wanted to be one of the best that the institution had ever seen. I wanted to leave a legacy. I wanted to be remembered by the colleagues at the Authority as someone who moved the Authority one step forward.

I hope that my three (3) year tenure at the Authority did accomplish a little bit of that and that I did not spend my time proving to anyone that I could be a Commissioner of Maritime. That matter was “settled” by my appointment to the post.

In my next blogpost, I want to talk about ‘loyalty’ vs ‘competence”. Watch out…

PS. Let me be clear. This post has nothing to do with the nonsense that was posted on Facebook about James Kollie going to the Ministry of Finance. It is not true! It is not possible. In 2016, I was invited to be considered for the post of Minister of Finance and I turned it down. So those circulations don’t turn my head and I believe the disinterest is mutual…