Economy of Liberia
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Overview
A civil war in 1989-96 destroyed much of Liberia's economy, especially the infrastructure in and around Monrovia. Many businessmen fled the country, taking capital and expertise with them. Some returned during 1997. Many will not return. Richly endowed with water, mineral resources, forests, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products, while local manufacturing, mainly foreign owned, had been small in scope. The democratically elected government, installed in August 1997, inherited massive international debts and currently relies on revenues from its maritime registry to provide the bulk of its foreign exchange earnings. The restoration of the infrastructure and the raising of incomes in this ravaged economy depend on the implementation of sound macro- and micro-economic policies of the new government, including the encouragement of foreign investment.
In Greater Depth
The Liberian economy had relied heavily on the mining of iron ore prior to the civil war. Liberia was a major exporter of iron ore on the world market. In the 1970s and 1980s, iron mining accounted for more than half of Liberia's export earnings. Since the coup d'état of 1980, the country's economic growth rate has slowed down because of a decline in the demand for iron ore on the world market and political upheavals in Liberia. Liberia's foreign debt amounts to more than $3 billion.
Timber and rubber are Liberia's main export items since the end of the war. Liberia earns more than $100 million and more than $70 million annually from timber and rubber exports, respectively. Alluvial diamond and gold mining activities also account for some economic activity.
Being the second-largest maritime licenser in the world with more than 1,700 vessels registered under its flag, including 35% of the world's tanker fleet, Liberia earned more than $18 million from its maritime program in 2000. The Liberian Government has declared in recent months that it has discovered sizable amounts of crude oil along its Atlantic coast.
Liberia's business sector is largely controlled by foreigners mainly of Lebanese and Indian descent. There also are limited numbers of Chinese engaged in agriculture. The largest timber concession, Oriental Timber Corporation (OTC), is Indonesian owned. There also are significant numbers of West Africans engaged in cross-border trade.
Liberia is a member of the Economic Community of West African States (ECOWAS). With Guinea and Sierra Leone, it formed the Mano River Union (MRU) for development and the promotion of regional economic integration. The MRU became all but defunct because of the Liberian civil war which spilled over into neighboring Sierra Leone and Guinea.
Liberia has relied heavily on vast amounts of foreign assistance, particularly from the United States, Japan, Britain, France, Italy, Germany, the People's Republic of China, and Romania. But because of the Liberian Government's perceived its disregard for human rights, foreign assistance to Liberia has declined drastically. The Republic of China (Taiwan) and Libya are currently the largest donors of direct financial aid to the Liberian Government. However, significant amounts of aid continue to come in from Western countries through international aid agencies and non-governmental organizations, avoiding direct aid to the government.
The United Nations imposed sanctions on Liberia in May 2001 for its support to the rebels of the Revolutionary United Front (RUF) in neighboring Sierra Leone.
Statistics
GDP: purchasing power parity - $2.85 billion (1999 est.)
GDP - real growth rate: 0.5% (1999 est.)
GDP - per capita: purchasing power parity - $1,000 (1999 est.)
GDP - composition by sector:
agriculture:
50%
industry:
15%
services:
35% (1999 est.)
Population below poverty line: 80%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 3% (1998 est.)
Labor force - by occupation: agriculture 70%, industry 8%, services 22% (1999 est.)
Unemployment rate: 70%
Budget:
revenues:
$NA
expenditures:
$NA, including capital expenditures of $NA
Industries: rubber processing, palm oil processing, diamonds
Industrial production growth rate: 0%
Electricity - production: 490 GWh (1998)
Electricity - production by source:
fossil fuel:
62.24%
hydro:
37.76%
nuclear:
0%
other:
0% (1998)
Electricity - consumption: 456 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: rubber, coffee, cocoa, rice, cassava (tapioca), palm oil, sugarcane, bananas; sheep, goats; timber
Exports: $39 million (f.o.b., 1998 est.)
Exports - commodities: diamonds, iron ore, rubber, timber, coffee, cocoa
Exports - partners: Benelux 36%, Norway 18%, Ukraine 15%, Singapore 9% (1997)
Imports: $142 million (f.o.b., 1998 est.)
Imports - commodities: fuels, chemicals, machinery, transportation equipment, manufactured goods; rice and other foodstuffs
Imports - partners: South Korea 38%, Japan 14%, Italy 11%, Singapore 9% (1997)
Debt - external: $3 billion (1999 est.)
Economic aid - recipient: $200 million pledged (1998)
Currency: 1 Liberian dollar (L$) = 100 cents
Exchange rates: Liberian dollars (L$) per US$1 - 1.0000 (officially fixed rate since 1940); market exchange rate: Liberian dollars (L$) per US$1 - 40 (December 1998), 50 (October 1995); market rate floats against the US dollar
Fiscal year: calendar year