The_Open_Door_deel1

-350-
can also be observed with respect to expenditures for health and
education though in general the Government's expenditures for
these two sectors continue to be modest. However, the total
(absolute) amount spent in a particular sector is far from being
the main yardstick by which to evaluate a Government's policy
since the quality of the services provided or the nature of the
expenditures (recurrent/capital costs) are important indicators
of the efficiency of the expenditures. The qualitative aspect of
the expenditures, notably as it concerns the development of
manpower, will be the subject of the next chapter whereas Table
47 shows Public Capital Formation by sector for the years 1964
through 1975. Owing to the change of Fiscal Year in 1976 and the
uncoordinated and haphazard nature of the expenditures under the
1976 - 1980 Development Plan reliable data for the years beyond
1975 were not available at the time of compiling this table.
Preliminary data for the years 19 76 and 19 77 (and later) indicate
that public capital formation - which in general has been very
low during the years shown in Table 47 - has increased sharply.
Responsible officers within the Ministry of Finance informed the
present author that for political reasons these figures had been
subject to manipulation-
The high level of public investments in 1965 - 1967 was to a large
extent the result of the construction of a hydro-electric dam at
Mount Coffee near Monrovia, of water supply and sewage disposal
systems in the nation's capital, of the construction of the J. F.
Kennedy Memorial Hospital in Monrovia, regional roads, and
elementary and secondary schools. A major portion of these
capital outlays were financed from foreign sources, mainly loans
(Table 48)- It is important to note the insufficiency of domestic
funds to finance this improvement of the country's productive
capacity.
The considerable dependency on foreign money is clearly
illustrated by the use of foreign grants to cover operational
(current) costs of government. In 1977 the Government even
started to contract loans for the financing of current operations
when a $ 30 million Eurodollar loan (a commercial loan from a
Syndicate of Banks) was contracted for the strengthening of the
finances of the public corporations. The number of Public
Corporations had considerably increased during the 1970's but
this quantitative increase had not been accompanied by
qualitative improvements. All but three were operating at large
losses thereby further deteriorating an already bad financial
situation. It is noteworthy that the $ 30 million Eurodollar
loan had not been included in the original Plan, In 1978 this
loan was consolidated when it was included in a $ 60 million
Eurodollar loan which was granted by the same Syndicate of Banks
which had provided the first Eurodollar loan
With the advance of the 1970's expenditures of the Central
Government and of government agencies went further out of
control. As a result of the fast growth of Government
expenditures and the slower growth of domestic revenues, budget
deficits emerged in the second half of the 1970's which