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Further Reading

Liberian Economy

Liberia is a rather strange place. It should not be a poor country, but it certainly is. For a few years in the 1970s, Liberia's per capita income was equivalent to that of Japan. Liberia is now ranked by the World Bank as among the very poorest countries in the entire world. Unfortunately, The Economist magazine forecasts a further downturn in the economy, by some 8% this year alone with further economic contractions in 2004. Liberia needs peace and stability, not only to protect human rights and make for a better life for citizens, but also to allow economic progress to take place.

A decline in world prices for Liberia's chief exports, iron ore and natural rubber, brought financial hardship to the country during the 1960s and early 1970s.

Liberia is a very poor country with a market-based economy that is only beginning to recover from the ravages of civil war. According to the Liberian government, the unemployment rate is 70 percent (although in a largely subsistence economy, this figure may be more a reflection of urban unemployment). In addition, the absence of infrastructure throughout the country continues to depress productive capacity, despite Liberia's rich natural resources and potential self-sufficiency in food. The country's literacy rate is an estimated 25 percent.

Liberia's need to rebuild following a seven-year conflict combined with its abundant natural resources make it a country with great potential for investment. However, as long as little is done about the governmental corruption that reaches to the highest level of government, it is unlikely that significant numbers of serious investors will be induced to come here. The economy has shown signs of growth, but very little progress has been made in addressing the criteria laid out by the International Monetary Fund (IMF) for creating an improved economic environment that would attract foreign investment. Moreover, international sanctions, including a travel ban on senior Liberian government officials and an embargo on the trade in Liberian diamonds, have been imposed because of the government's support to rebels in neighboring Sierra Leone. Instability in the northern county of Lofa, where government troops have sporadically clashed with armed dissidents, has also impacted the economy.

Most productive facilities in Liberia were devastated during the civil conflict, so there is potential for growth in almost every sector. Figures quoted are from Liberian government sources.

Resources such as gold, diamonds and iron ore are present in considerable abundance but the civil war devastated the sector. Iron production ceased entirely. In 1999 mining accounted for 2 percent of the gross domestic product (GDP).

Agriculture contributed 76 percent of GDP in 1999. Principal crops grown in Liberia include rice, cocoa, coffee, oil palm, sugar cane, and cassava. Also grown are pineapple, banana, papaya, and mango. Rice, the staple food of Liberia, comes mostly from imported sources, but the country is capable of self-sufficiency in rice production. Attainment of self-sufficiency, however, would require development of the sector. Rubber is cultivated and minimally processed for export. There is potential for growth in the area of secondary processing.

The eastern part of the country contains the most unspoiled region of the Upper Guinea Forest, a high priority conservation area due to the large number of endemic mammal species. This area has potential for growth in sustainable logging of tropical hardwoods, but on-going heavy exploitation of large concessions and forestry mismanagement in recent years have raised the concern of environmentalists.

Gola or Ekop [Tetraberlinia Tubmaniana] is known presently only from Liberia. Ekop is a general utility wood that is used for veneer, plywood, and furniture components. The names "African pine" and "Liberian pine" have been applied to this species, but because it is a hardwood and not a pine, these names are most inappropriate and very misleading. The name gola was proposed by the College of Forestry at Monrovia, Liberia. The heartwood is light reddish-brown and is distinct from the lighter colored sapwood, which may be up to 2 inches thick. The wood is moderately coarse textured. Luster is medium. Grain is interlocked, showing a narrow stripe pattern on quartered surfaces. The wood weighs about 39 pounds per cubic foot. Tests made at the Forest Products Laboratory indicate no potential difficulties in the machining of gola. It also peels and slices very well. Gola is a very recent newcomer to the timber market and its potential has yet to be developed. Its workability and relatively light color should permit utilization in both the solid and veneer form for both utility and decorative purposes.

The seacoast of Liberia has many beautiful tropical beaches, a favorable climate in the dry season (September-May), and sport fishing. However, growth in this sector is a long-term prospect because of the lack of adequate infrastructure, and current problems with regional and internal stability. Manufacturing accounted for just under 5 percent of GDP, but the availability of agricultural crops, mineral resources, and low cost labor presents opportunities for growth in this sector.

Post-conflict Liberia with large foreign debts and inadequate government revenues cannot recover without a program of assistance from international financial institutions (IFIs) and donors. The IMF has identified problems with continued lax expenditure controls and extrabudgetary expenditures. Large resource allocations to military expenditures and foreign travel as opposed to much needed social services remain a problem. The willingness of the IFIs and donors to construct a program to bring Liberia to the point where it would be eligible for assistance under World Bank rules depends largely on evidence that the government of Liberia is committed to sound economic policies. To date, that has not happened.

Liberia's infrastructure was totally devastated during the civil war years from 1989-96. Currently, public utilities, such as electrical power, sewers and running water are provided to only a small portion of the public in Monrovia. Roads in and around Monrovia get minimal maintenance, but roads to the hinterlands are frequently impassable in the rainy season. The telephone system frequently breaks down and there is only minimal domestic or international postal service.

Due to the high price of newspapers, the high rate of illiteracy (estimated at 75 percent), high transportation costs, and the poor state of roads elsewhere in the country, newspaper distribution generally is limited to the Monrovia area. As a result, radio was the primary means of mass communication. There were several FM stations in Monrovia: Two private commercial stations (DC-101); and Radio Veritas, which operated under the Catholic Archdiocese. There also was the state-run national station (ELBC), a FM station operated by President Taylor's private Liberia Communications Network (LCN). ELBC, and Radio Veritas also broadcast on short-wave frequencies strong enough to reach all parts of the country. In 2001 President Taylor closed the short wave frequency of Radio Veritas, citing "illegal operation." In February the Government restored the station's short-wave license, and in April Radio Veritas resumed short-wave broadcasting. There was a French broadcast through the national radio facility, a religious station (with limited short-wave capacity), and a growing number of small local stations in cities around the country. Media practitioners believed that the ruling party funded many of these stations.

Call-in radio talk shows were popular and frequently a forum for both government and opposition viewpoints. The number of objections and threats from the Government, party leaders, and security agents aimed at radio hosts and station managers regarding inappropriate commentary diminished to some extent. Interviews with prominent persons were broadcast frequently.

Due to the economic situation in the country and the dependence on generators requiring expensive fuel, most stations limited broadcast hours and in some cases ceased operation for short periods.

Television was limited to those who could purchase sets, the generators, and fuel to provide electricity. For those persons and businesses with satellite capability, the CNN was available. There were two television stations: The LCN, owned by President Taylor, and the Ducor Broadcasting Corporation, which was privately owned but assisted by President Taylor's generator.

Several Internet cafes operated in Monrovia, although access was limited by relatively high fees. The Government continued to charge that opponents used the Internet to wage a propaganda war. However, the Ministry of Information also maintained an unofficial website--allaboutliberia.com--that promoted a progovernment view of the country. Two Internet Service Providers (ISPs) operated in Monrovia and both were linked to prominent persons. Some people believed that government security personnel monitored the Internet, especially e-mail.

There are two major issues affecting the business climate in Liberia -- regional and internal instability and widespread corruption. After a seven-year civil conflict in which the country's infrastructure was virtually destroyed, followed by on-going instability in Lofa County, investors are wary of making large capital investments. Bilateral and multilateral sanctions imposed on Liberia over the past several months have also entered the equation. Investors' concerns are also exacerbated by the presence of armed security forces in and around the capital city, Monrovia, and by their poor human rights record.

The Liberian government has made little effort to address corruption in any sector. Investors find the bureaucratic red tape daunting, the requests for bribes overwhelming, and the contracts made in Liberia difficult to enforce. There has been interference by the executive branch in the workings of the judicial and legislative branches. In some cases over the past several years, judgments by the Supreme Court of Liberia, the highest court in the land, were not carried out because of presidential interference.

The Constitution prohibits forced or bonded labor, including by children; however, this prohibition was ignored widely in many parts of the country. In some rural areas, farmers were pressured into providing free labor on "community projects" that often benefited only local leaders. There were allegations that large logging companies in the southeast forcibly recruited workers. There also were reports that local officials forced convicts to work for them. There were reports during the year that local government officials forced persons to work without compensation on President Taylor's farm. During 2002, AFL soldiers forced the manager of an agricultural project to do menial labor for 3 weeks.

There were reports that commanders of security forces forced persons to dig for diamonds and gold in the west and southeast part of the country.

Some former combatants, including some in the security forces, were accused of forcing children to work in the mining industry. Human rights groups reported instances of forced child labor in some rural areas, particularly in artesanal diamond mining. A child rights advocacy group's report on child labor in the southeastern counties and that of another prominent human rights group contradicted a government report, which concluded that there was no conclusive evidence of forced child labor. Subsequently legislators from three counties sued the child rights advocacy group for defaming the counties' reputations. At year's end, the case still was pending. There also were reports that LURD rebels forced civilians into service as porters for LURD ammunition and supplies in Lofa and Gbarpolu Counties.