Open Door Policy
For Tubman, economic development was a device for ac complishing political aims. The unification program would be meaningless, he believed, without economic development that benefited the mass of people, but the president was also anxious to preserve the standard of living of the Americo?Liberian elite. Foreign investment was seen, therefore, as a means by which higher incomes and improved social services, such as health care and education, could be made available without imposing au sterities and heavy taxation upon the prosperous upper class.
The Open Door Policy, announced in 1944, was a bid to at tract foreign capital from many sources for a wide range of projects that would also allow the economy to become more diversified. Foreign firms were guaranteed freedom to remit earnings with out excessive restriction. The new policy also opened the interior to foreign investment and led to the construction of roads, rail roads, port facilities, and other infrastructure to serve the conces sions granted inland for mining, lumbering, and tree crop plantations. As a measure of the success of the program, by the early 1960s there were 25 major foreign firms investing and operating in Liberia, compared with only one?the Firestone Plantations Company?when Tubman entered office.
Tubman prophesied that investment from abroad would "strike the rock of our natural resources so that abundant revenues may gush forth." Liberia's untapped iron ore reserves were among the largest in the world. In 1951 the Liberian subsidiary of the Republic Steel Corporation of the United States opened a rail link to its concession in the Bomi Hills and began shipments to the port of Monrovia. In 1963 the Liberian?American?Swedish Minerals Company (LAMCO) completed a similar connection between its concession in the Nimba Range and the port of Buchanan. Under the so?called Tubman formula, instead of paying a fixed rent on the concession, LAMCO had agreed to turn over half of its capital stock to the Liberian government, allowing it a formal role in the management of its operations. A German mining consortium had also entered into a similar 50?50 profit sharing agreement with the government in 1957. The foreign concessionaires also committed themselves to providing schools, health facilities, and housing for employees and their families.
Resistance to large?scale foreign participation in the economy remained an issue within the True Whig Party, but Liberian firms as well profited from the improved economic climate brought about by the influx of overseas capital. One of the most important of these was the National Iron Ore Company, based largely on Liberian investment, which began successful operations in the Mano River region in the 1950s.
The foreign concessions brought employment opportunities to tens of thousands of Liberians and introduced them into the modern sector of the economy. But because of the very low level of technical training available, even to better educated Americo-Liberians, few were qualified for any but lower level positions. Expatriate personnel occupied virtually all managerial and technical positions, and little effort was made to train indigenous personnel for promotion to a higher level. This. remained a source of dissatisfaction among Liberian employees of foreign?owned concerns and was made an object of criticism by opponents of the concessions within the oligarchy. In 1958 a law was enacted imposing penalties on companies found guilty of discrimination in hiring and promotion practices, but until qualifications of Liberian candidates for jobs could be, substantially improved, changes were seldom more than cosmetic.
Investment by private enterprise was supplemented after World War II by United States economic assistance. By 1960 American aid had totaled more than US$50 million, directed especially to agricultural development. The United States economic mission to Liberia also drew up plans for roads, health facilities, schools, communications infrastructure, and municipal buildings to be constructed with American funds. The privately financed Liberia Company was sponsored by Edward R. Stettinius, Jr., a former United States secretary of state and director of the War Production Board, to promote economic development in general.
Under the Open Door Policy foreign merchants, largely Lebanese, established a variety of retail and wholesale businesses in Liberia. Encountering little competition from Liberian businessmen, they also acted as middlemen in the domestic rice trade, buying crops from small farmers in the interior for resale in the towns. By the early 1960s Lebanese merchants conducted more than half of all middle?level commercial activities in the country.
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