VZCZCXRO5948
RR RUEHMA RUEHPA
DE RUEHMV #0196/01 0481654
ZNR UUUUU ZZH
R 171653Z FEB 10
FM AMEMBASSY MONROVIA
TO RUEHC/SECSTATE WASHDC 0062
INFO ECOWAS COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 02 MONROVIA 000196 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN LI
SUBJECT: IMF: LIBERIA REMAINS ON TRACK FOR 2010 HIPC COMPLETION POINT 
 
REF: 09 MONROVIA 804; MONROVIA 122 
 
¶1. (SBU) SUMMARY: A working-level delegation from the International 
Monetary Fund has offered a cautious assessment of Liberia's 
prospects for HIPC Completion Point during 2010, insisting that the 
IMF must use its pre-Completion Point leverage to ensure Liberia 
implements long-delayed legislation and demonstrates enduring 
public financial management reforms.  However, the simultaneous 
visit of the IMF's Deputy Managing Director-the first visit by Fund 
management in over two decades-offered symbolic endorsement of 
Liberia's HIPC progress, and seemed to reinforce the GOL's 
conviction that it will achieve Completion Point as early as May or 
June.  END SUMMARY. 
 
 
 
¶2. (SBU) Chris Lane, deputy director of the Africa division, led an 
IMF assessment team to Monrovia February 9-17 in advance of the 
February 14-16 visit of IMF First Deputy Managing Director Jonathan 
Lipsky.  Although the IMF intends to conduct the fourth review of 
Liberia under the Poverty Reduction and Growth Facility as early as 
March, the GOL's eagerness to reach HIPC Completion Point this 
spring prompted an interim appraisal.  The purpose of the IMF 
visit, Lane told Econoff February 12, was to evaluate the final 
four HIPC triggers, and discuss a post-Completion Point framework 
for fiscal policy and the national budget.  The IMF last visited 
Liberia to conduct its third review in October 2009(ref A). 
 
 
 
¶3. (SBU) The four remaining triggers are: the completion of audits 
of five key ministries; an audit of the Ministry of Education (MoE) 
payroll; passage of the revised Investment Incentives Act; and the 
one-year implementation of the Public Financial Management Act of 
¶2009. 
 
 
 
¶4. (SBU) Through USAID, the MoE will complete its payroll audit 
next month.  And despite inter-governmental political wrangling 
that threatened to hinder the audit process (ref B), the IMF 
believes the General Auditing Commission will deliver the five 
required audits by March.  Lane noted that Minister of Planning and 
Economic Affairs Amara Konneh, who leads a newly-formed Technical 
Committee on the HIPC audits, appears to have placated 
uncooperative actors, and a draft of all five audits has been sent 
to ministers for review. 
 
 
 
¶5. (SBU) The two most worrying, as-yet incomplete pre-requisites 
are the twelve-month implementation of the PFM Act and the passage 
of the Investment Incentives Act.  Although the PFM Act originally 
passed in August 2009, the IMF would be willing to abbreviate the 
12-month implementation period, given that the Ministry of Finance 
readied strong regulations while awaiting passage.  However, the 
President inadvertently signed into law an earlier draft version of 
the PFM Act, so now the National Legislature must pass an amendment 
to the legislation.  Further, the Investment Incentives Act 
continues to languish in the legislature, mired in the tug-of-war 
between those who wish to encourage foreign investment and 
proponents of protectionism. 
 
 
 
¶6. (SBU) In short, Lane summarized, Liberia is advancing towards 
Completion Point, but not as quickly as the IMF would have hoped. 
Recognizing that many reforms could lose momentum after Completion 
Point, Lane believes it is essential to institute strong financial 
management at line ministries, and secure legislative buy-in for 
sound fiscal policy, while the Fund still maintains leverage in 
Liberia.  While Lane would not commit to Liberia's mid-year 
timeframe for Completion Point, he did offer that IMF still 
believes that the HIPC process in Liberia has gone much smoother 
than in other countries. 
 
¶7. (SBU) At the same time, Deputy MD Lipsky's trip to Monrovia 
represented the first visit by senior Fund management in over two 
decades.  Lipsky, accompanied by Antoinette Sayeh, Africa director 
and former Liberian Finance Minister, met with the President, 
members of the legislature, representatives of the private sector, 
and toured both the University of Liberia and a school in 
Paynesville.  In a February 15 meeting with donors, Lipsky appeared 
confident that the remaining triggers would be achieved in the next 
several months.  The Ambassador urged Lipsky to emphasize to the 
 
MONROVIA 00000196  002 OF 002 
 
 
legislature that achieving benchmarks for Completion Point is the 
responsibility of the entire government, and the legislature must 
play a productive role. 
 
 
 
¶8. (SBU) While Lipsky's two-day agenda, heavy on meetings with 
students and photo opportunities, appeared to be a goodwill tour, 
IMF Resident Representative Yuri Sobolev worried that the feel-good 
agenda left little time to deliver hard-hitting messages to 
government officials and legislators.  Similarly, Lane noted 
privately that Lipsky tends to be disinclined to deliver a tough 
message upon first meeting foreign interlocutors, and anticipated 
that he would not press Liberian officials to redress delays in the 
HIPC process. 
 
 
 
¶9. (SBU) Indeed, while Lipsky carefully read scripted remarks 
during a joint press conference with the President, his assertion 
that "with continued strong performance, Liberia could reach 
Completion Point later in 2010," was translated in the local media 
into an affirmation that Liberia would reach Completion Point later 
this year. 
 
 
 
¶10. (SBU) COMMENT: The IMF's current thinking is consistent with 
its longstanding conviction that premature Completion Point would 
curtail the institution-building that will be essential to sound 
fiscal management in years to come.  However, the Ambassador 
observed that Lipsky's characterization of Liberia's growth 
prospects and the timing of Completion Point seemed rosy, 
particularly in contrast to the more cautious views of 
working-level IMF staff. 
 
 
 
¶11.  (SBU) COMMENT CONTINUED: Given that two of the four remaining 
triggers concern long-pending legislation, post will continue to 
engage actively with the Legislature, advancing the view that 
HIPC's success will be a victory for all of Liberia, while its 
failure would fall not only on the executive branch but also on the 
entire GOL. 
THOMAS-GREENFIELD