Economy of Liberia

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Economy of Liberia
Downtown Monrovia 3348917715 67a2002529.jpg
A street in Monrovia
Currency Liberian dollar (LRD)
Calendar Year
Trade organizations
AU, African Development Bank, ECOWAS, MRU, WAMZ, World Bank, IMF, WTO, Group of 77
Statistics
GDP Increase $2.719 billion (PPP) (2012 est.)
Rank: 185 (2012 est.)
GDP growth
Increase 8.3% (2012 est.)
GDP per capita
$700 (PPP) (2012 est.)
Rank: 224 (2012 est.)
GDP by sector
agriculture 62.7%
industry 6.4%
services 30.8% (2010 est.)
Increase 6.9% (2012 est.)
Population below poverty line
80% (2000 est.)
Labor force
1.372 million (2007 est.)
Labor force by occupation
agriculture 70%
industry 8%
services 22% (2000 est.)
Unemployment 3.7% (2010 est.)[1]
Main industries
rubber processing, palm oil processing, timber, diamonds
151st[2]
External
Exports Increase $774.8 million (2012 est.)
Export goods
iron, diamonds, timber, rubber, cocoa, coffee
Main export partners
 China 24.2%
 United States 15.4%
 Spain 11.1%
 Thailand 4.5%
 Côte d'Ivoire 4.4%
 Malaysia 4.1%
 France 4.0% (2012 est.)[3]
Imports Increase $2.275 billion (2012 est.)
Import goods
machinery, transportation equipment, fuel, chemicals, manufactured goods, food
Main import partners
 South Korea 26.4%
 China 24.1%
 Singapore 23.0%
 Japan 15.9% (2012 est.)[4]
Increase $348 million (31 December 2012 est.)
Public finances
Revenues $481.5 million (2012 est.)
Expenses $522.3 million (2012 est.)
Economic aid recipient: International multi-billion dollar debt relief and development aid
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The First Liberian 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, but many have not. 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.

Summary[edit]

Civil war and government mismanagement destroyed much of Liberia's economy, especially the infrastructure in and around the capital

In greater depth[edit]

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. However, in recent years (2005 - 2012), foreign investment from Mittal Steel, BHP Biliton, and China Union is aiding the revitalization of the iron mining sector; meanwhile, Liberia's debt has been reduced significantly from assistance from the World Bank, the United States, EU, AND the IMF to as low as under $500,000 USD.

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.[citation needed]

Boy grinding sugar cane 1968

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. Legal monopolies are possible; for example, Cemenco holds a monopoly on cement production.

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 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. These sanctions have been lifted following elections in 2005.

Unlike almost all other countries in the world, Liberia has not adopted the metric system as its primary system of measurement.

In March 2010, Bob Johnson, founder of BET, funded the first hotel constructed in Liberia in 20 years. The 13-acre (53,000 m2) luxury resort was built in the Paynesville section of Monrovia.[5]

References[edit]

  1. ^ "Report on the Liberia Labour Force Survey 2010". Liberia Institute of Statistics and Geo-Information Services (LISGIS). February 2011. 
  2. ^ "Doing Business in Liberia 2012". World Bank. Retrieved 2011-11-21. 
  3. ^ "Export Partners of Liberia". CIA World Factbook. 2012. Retrieved 2013-07-27. 
  4. ^ "Import Partners of Liberia". CIA World Factbook. 2012. Retrieved 2013-07-27. 
  5. ^ "Fact Sheet - RLJ Kendeja Resort & Villas". 

External links[edit]