By Mafanta Kromah, mafanta.kromah@gmail.com
An Islamic scholar and politician, Sheikh Mohammed Dukuly has described the decision as a national economic crisis the decision of Firestone Rubber Plantation to reduce its workforce by 13 percent.
Up to 800 workers are expected to be affected by the move beginning this month, April.
In an exclusive interview, Mr. Dukuly noted that it is not time to debate wh ether the company is right or wrong, but to come out with plans on how to approach the situation as a country, government and people.
Mr. Dukuly, who is aspiring to be Senator for Montserrado County, said this decision of firestone will lead to the loss of income for ordinary Liberians who will be out of work.
“Let’s know that each of those 600 redundant and 200 retires are Liberians who are a family heads, individually they will lose income, national we will be losing income because when they are not in job, they don’t have money to spend. That means even the revenue that could be generated from the tax withholding on their paycheck will no longer be there, the money that they should be spending within the economic will no longer be there, there will be low standard of living,” he narrated.
“If you look at the 600 person that will be redundant, assuming they take US$200 per month, multiply that to 600 will give you 120,000 and multiply that by 12months that means there will be a leakage of 1,440,000 or 1.4million upon the layout. It also means that 1.4million will no longer be available to stemoulate the economic, which has a national effect on all of us,” the Liberian Muslim scholar said.
Sheickh Dukuly noted that the pending layoff of hundreds of Firestone workers also has negative multiple effects, stating every individual expenditure is considered another person income, the money they could be spending will be a revenue for someone else.
According to him, if Firestone doesn’t reconsider its decision upon government intervention, those affected income and expenditure will reduce along with those who gain revenue through their expenditure.
It will also lead to reduction in the demand for goods and services, which leads to reduction in production. He also said when there is low production the economic will not be simulated and it becomes stagnated, money will not flow and tax revenue will not be collected.
Sheikh Dukuly further stated that if nothing is done to resolve the situation, it will exacerbate the already high unemployment rate in the country, which could lead to three percent fall in GDP, Gross Domestic Product.
“Economists believe that every one percent increment in unemployment has an adverse effect of three percent reduction in the Gross Domestic Product, which will affect everyone and if that happen, there is a fall in tax revenue and when government is not able to collect tax revenue, we know that there is a budget deficit,” he asserted.
The Montserrado County Senatorial aspirant also said when there is budget deficit, lot of the projects will not be implemented, especially looking at the issues of health care delivery, education, road projects and among others. This could lead to political instability, where people no longer get the right health care, food and will find it difficult to send their children to school.
He emphasized that it could result into social disorder, disenchantment, increase vulnerability of citizens, increase in crime rate, increase in dependency and social degeneration, would all cumulate into political instability, he said.
“This is a national call for all of us including the government to do more in relating to the management of firestone to see how they can reconsider their decision. Those who have private companies, should take on the responsibility as patriotic to see how they can incorporate some of those people into their private company so as to create job and alleviate the burden on the government.
He said with a stagnated economic where there is huge deduction in the prices of the few major commodities, one realized that there is a devaluation of the local currency which also result to inflation and poverty.
“The company decision to redundant 800 persons involve all Liberians to find remedy to the situation. What affects one person in this country, affect all of us,” he said
Every business entity has the sole purposes of existing, which is to maximize profit and the minimize cost. If Firestone says that they have been losing money overtime as the result of which they have taken this decision, our concern is how that affect us as a people and as a nation.
Their existence and success of Firestone depends on the world market, rubber is one of the few products Liberia depends on in terms of exporting and when you look on the world market the price of rubber has drop immensely, which will lead to the reduction of profit for Firestone.
He said it maybe there were other things, taking into consideration policies that were helping the company coup with the situation and perhaps some of those terms and situations are no longer in existence. He talked about government reducing the company tax so that the entity maintained the employees.
However, he indicated that if the approach of the government is not fruitful, government
should start to think in terms of its negotiating ability to see how, the
education of the children of those that will be affected are addressed.
He requested that government put in plan to incorporate those children into the society and provide education for them. He also talked the relocation issue of the redundant employees as another issue to be addressed.
On March 18, Firestone Liberia announced that the company will reduced it workforce by 13 percent that is 800 employees by the second quarter in 2019.
According to the company’s press statement the decision is due to the continue losses from high overhead costs associated with the entity concession agreement with the government and reduction of price on the world market. 200 of the 800 that are to be redundant are retired staff.
The entity said, it has incurred losses of around US$20million yearly for the past ten years and is at the point where the situation can no longer be sustained. They said, 200 of the effected employees work at the Rubber wood Plant which has been shutting down in the past several years because the US$16 million invested in it has not proven viable for the entity, which they are to be sell or shut down.
The government of Liberia through the Ministry of Information, noted that government is in constructive meeting with the management of the company. According to the ministry, the government is requesting a negotiated settlement that will prevent or delay the planned layoff.
According to MICAT, the management of the company has agreed to remain engage with government on different options government is proposing.
It stated that the third meeting with the management has been schedule for early April where member of the senior management team from Nashville will be in the country.