economy of Liberia

Much of independent Liberia's economic history is subject to limited archival documentation, making it hard for economic historians to make comprehensive assessments about the nature of Liberia's economy over time.{{Citation |title=Reconstructing the Fragments: Liberia's Economic History, 1847–1980 |date=2022 |url=https://www.cambridge.org/core/books/sovereignty-without-power/reconstructing-the-fragments/50F73CA82992D6E3DBAC1B14A8260C4D |work=Sovereignty without Power: Liberia in the Age of Empires, 1822–1980 |series=Cambridge Studies in Economic History - Second Series |pages=1–30 |editor-last=Gardner |editor-first=Leigh A. |publisher=Cambridge University Press |doi=10.1017/9781009181082.002 |isbn=978-1-009-18110-5|doi-access=free }} The Liberian government only began producing GDP per capita data in 1964.

A 2022 study by LSE economic historian Leigh A. Gardner assessed that Liberian GDP per capita was $430 in 1845, which was just above subsistence and approximately half of Japan's GDP per capita at the time. It rose to approximately $500 by the time of independence, but the economy subsequently stagnated until the 1930s when a period of rapid economic growth began. Whereas Liberia had been poorer than Ghana during the 19th and early 20th centuries, it caught up with Ghana in 1950 and subsequently diverged considerably, becoming almost twice as wealthy as Ghana by 1970. Throughout the 1970s, the Liberian economy stagnated.

In 1926, the Liberian government gave the Firestone Tire company the right to lease up to 1 million acres of land for 99 years at a cost of 6 cents per acre.{{Cite journal |last=Browne |first=Vincent J. |date=1955 |title=Economic Development in Liberia |url=https://www.jstor.org/stable/2293474 |journal=The Journal of Negro Education |volume=24 |issue=2 |pages=113–119 |doi=10.2307/2293474 |jstor=2293474 |issn=0022-2984}} Firestone developed an inordinate sway over the Liberian government, effectively acquiring control over its finances in the subsequent period. The company was an important source of foreign investment into Liberia during this period. Firestone then set about establishing rubber tree plantations of the non-native South American rubber tree, Hevea brasiliensis in the country. By the 1950s, the company was Liberia's largest private employer and also its largest exporter.[https://www.propublica.org/article/firestone-and-the-warlord-chapter-2 "Firestone and the Warlord, Chapter 2", T. Christian Miller and Jonathan Jones, November 18, 2014, ProPublica and PBS Frontline] Vincent Browne wrote in 1955 that rubber accounted for more than $45,000,000 of Liberia's approximately $55,000,000 worth of exports. Liberia became one of the largest rubber exporters in the world in the post-World War II period. Today, Firestone's rubber plantation in Liberia is the world's largest contiguous rubber plantation, operated by the Firestone (now Bridgestone) subsidiary, the Firestone Natural Rubber Company.

In the 1940s, Liberia become one of the largest recipients of American aid. US aid to Liberia began with the Lend-Lease program of 1942.{{Citation |title=An African Marshall Plan |date=2022 |url=https://www.cambridge.org/core/books/sovereignty-without-power/an-african-marshall-plan/1B4756AD50A4B8F04FE015EA738C0CED |work=Sovereignty without Power: Liberia in the Age of Empires, 1822–1980 |series=Cambridge Studies in Economic History - Second Series |pages=191–216 |editor-last=Gardner |editor-first=Leigh A. |publisher=Cambridge University Press |doi=10.1017/9781009181082.009 |isbn=978-1-009-18110-5}} The aid per capita received by Liberia was comparable to that obtained by countries such as Korea and Marshall Aid recipients like the United Kingdom. Economic historian George Dalton estimated in 1965 that Liberia received more aid per capita from the United States than any other African country.{{Cite journal |last=Dalton |first=George |date=1965 |title=History, Politics, and Economic Development in Liberia* |url=https://www.cambridge.org/core/journals/journal-of-economic-history/article/abs/history-politics-and-economic-development-in-liberia/B29DDB1606FB356DDC86CFB5C79577DC |journal=The Journal of Economic History |language=en |volume=25 |issue=4 |pages=569–591 |doi=10.1017/S0022050700058423 |s2cid=154558909 |issn=1471-6372}}

In the post-WWII period, Liberia tried to become a destination for offshore services, as the country loosened laws related to ship registration, corporation, and taxes.{{Citation |title=Selling the Flag |date=2022 |url=https://www.cambridge.org/core/books/sovereignty-without-power/selling-the-flag/DC00B85AF010021EECE005DDE7425866 |work=Sovereignty without Power: Liberia in the Age of Empires, 1822–1980 |series=Cambridge Studies in Economic History - Second Series |pages=246–270 |editor-last=Gardner |editor-first=Leigh A. |publisher=Cambridge University Press |doi=10.1017/9781009181082.011 |isbn=978-1-009-18110-5}} The Liberian shipping registry was highly successful as Liberia had by the 1960s become the largest ship registry in the world in terms of tonnage.

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. By the 1970s, 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.

Upon the end of the war in 2003, GDP growth began to accelerate again, reaching a peak of 9.4% in 2007.{{cite web |url=http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/weorept.aspx?pr.x=41&pr.y=12&sy=2000&ey=2016&scsm=1&ssd=1&sort=country&ds=.&br=1&c=668&s=NGDP_RPCH%2CPCPIPCH&grp=0&a=|title=Report for Selected Countries and Subjects: Liberia|work=International Monetary Fund|date=June 20, 2011}} In 2009, during the Great Recession GDP growth slowed to 4.6%, though a strengthening agricultural sector led by rubber and timber exports increased growth to 5.1% in 2010 and an expected 7.3% in 2011, making the economy one of the 20 fastest growing in the world.{{cite web |url=http://www.imf.org/external/pubs/ft/scr/2010/cr10373.pdf|title=IMF Country Report No. 10/37|work=International Monetary Fund|year=2010}}{{cite web|url=http://www.africagovernance.org/article/liberian-president-government-and-people-are-partners-progress|title=Liberian President: Government and People are Partners in Progress|date=January 27, 2011|work=Africa Governance Initiative|url-status=dead|archive-url=https://web.archive.org/web/20161220103119/http://www.africagovernance.org/article/liberian-president-government-and-people-are-partners-progress|archive-date=December 20, 2016}}

In March 2010, Bob Johnson, founder of BET, funded the first hotel constructed in Liberia in 20 years. The {{convert|13|acre|m2|adj=on}} luxury resort was built in the Paynesville section of Monrovia.{{cite web |url = http://www.rljkendejaresort.com/FactSheet/tabid/635/language/en-US/Default.aspx |title = Fact Sheet - RLJ Kendeja Resort & Villas |url-status = dead |archive-url = https://web.archive.org/web/20100128045153/http://www.rljkendejaresort.com/FactSheet/tabid/635/language/en-US/Default.aspx |archive-date = 2010-01-28 }}

Liberia's external debt was estimated in 2006 at approximately $4.5 billion, 800% of GDP.{{cite web |date=June 13, 2011 |title=The Challenges of Post-War Reconstruction—the Liberian Experience |url=http://allafrica.com/stories/201106140356.html |work=Government of Liberia |publisher=allAfrica.com}} As a result of bilateral, multilateral and commercial debt relief from 2007 to 2010, the country's external debt fell to $222.9 million by 2011.{{cite web|url=http://mof.gov.lr/doc/2nd%20Qrt%20Debt%20Management%20Report.pdf|title=Second Quarter 2010/2011 Public Debt Management Report|work=Debt Management Unit|publisher=Ministry of Finance|date=March 25, 2011|url-status=dead|archive-url=https://web.archive.org/web/20130910014431/http://mof.gov.lr/doc/2nd%20Qrt%20Debt%20Management%20Report.pdf|archive-date=September 10, 2013}}

Image:Young boy grinding sugar cane in Liberia.jpg

Liberia's business sector is largely controlled by foreigners mainly of Levantine (primarily Lebanese) and Indian descent. There also are limited numbers of Chinese people engaged in agriculture. The largest timber concession, Oriental Timber Corporation (OTC), is Indonesian owned. There also are significant numbers of West Africais engaged in cross-border trade. Legal monopolies are possible; for example, Cemenco holds a monopoly on cement production.

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.

{{main|Mining industry of Liberia}}

Alluvial diamond and gold mining activities also account for some economic activity. In recent years (2005 - 2012), foreign investment from ArcelorMittal Steel, BHP Biliton, and China Union is aiding the revitalization of the iron-ore mining sector.

Liberia has begun exploration for offshore oil; unproven oil reserves may be in excess of one billion barrels.{{cite news |url=https://af.reuters.com/article/southAfricaNews/idAFWEA839820091103 |archive-url=https://web.archive.org/web/20120120101525/http://af.reuters.com/article/southAfricaNews/idAFWEA839820091103 |url-status=dead |archive-date=January 20, 2012 |title=Liberia may have over 1 bln barrels in oil resources |newspaper=Reuters Africa|date=November 3, 2009}} The government divided its offshore waters into 17 blocks and began auctioning off exploration licenses for the blocks in 2004, with further auctions in 2007 and 2009.{{cite web |url=http://www.businesswire.com/news/home/20040202005192/en/NOCAL-2004-Liberia-Offshore-Bid-Announcement|title=NOCAL 2004 Liberia Offshore Bid Round Announcement|work=Business Wire|date=February 2, 2004}}{{cite web |first=Natalie Obiko|last=Pearson|url=http://www.rigzone.com/news/article.asp?a_id=53828 |title=Liberia Opens Bidding for 10 Offshore Oil Blocks |work=RigZone |date=December 10, 2007}}{{cite web|url=https://www.psg.deloitte.com/NewsLicensingRounds_LR_0909.asp|title=Third Liberian Offshore Petroleum Licensing Round 2009|work=Deloitte Petroleum Services|publisher=Deloitte|date=August 27, 2009|url-status=dead|archive-url=https://web.archive.org/web/20131104072748/https://www.psg.deloitte.com/NewsLicensingRounds_LR_0909.asp|archive-date=November 4, 2013}} An additional 13 ultra-deep offshore blocks were demarcated in 2011 and planned for auction.{{cite news | first=Alphonso | last=Toweh | url=https://af.reuters.com/article/topNews/idAFJOE76K01J20110721 | archive-url=https://web.archive.org/web/20120322102142/http://af.reuters.com/article/topNews/idAFJOE76K01J20110721 | url-status=dead | archive-date=March 22, 2012 |title=Liberia marks out new oil blocks, auction seen soon |work=Reuters |date=July 21, 2011 }} Among the companies to have won licenses are Repsol YPF, Chevron Corporation, and Woodside Petroleum.{{cite press release | url=https://www.chevron.com/stories/chevron-to-acquire-deepwater-interest-offshore-liberia | title=Chevron to Acquire Deepwater Interest Offshore Liberia | publisher=Chevron Corporation | date=September 8, 2010 | access-date=August 9, 2019 | archive-date=September 27, 2020 | archive-url=https://web.archive.org/web/20200927230326/https://www.chevron.com/stories/chevron-to-acquire-deepwater-interest-offshore-liberia | url-status=dead }}

Liberia maintains an open maritime registry, meaning that owners of ships can register their vessels as Liberian with relatively few restrictions. This has meant that Liberian ship registration is usually understood as the employment of a flag of convenience. Liberia has the second-largest maritime registry in the world behind Panama, with 4,300 vessels registered under its flag accounting for 12% of ships worldwide.{{cite web |first=John W.|last=Schoenurl|url=http://www.nbcnews.com/id/3072983|archive-url=https://web.archive.org/web/20201020124056/http://www.nbcnews.com/id/3072983|url-status=dead|archive-date=October 20, 2020|title=Liberian shipping draws scrutiny|work=NBC News|date=August 11, 2003}}{{cite web |url=http://www.liscr.com/liscr/AboutUs/AboutLiberianRegistry/tabid/206/Default.aspx |title=About the Liberian Registry |publisher=Liberian Registry |url-status=dead |archive-url=https://web.archive.org/web/20141110180209/http://www.liscr.com/liscr/AboutUs/AboutLiberianRegistry/tabid/206/Default.aspx |archive-date=2014-11-10 }} This includes 35% of the world's tanker fleet. Liberia earned more than $18 million from its maritime program in 2000.

Liberia has relied heavily on vast amounts of foreign assistance, particularly from the United States, Sweden, 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. 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.

{{Further|Communications in Liberia}}

Communications in Liberia is the press, radio, television, fixed and mobile telephones, and the Internet. There are six major newspapers in Liberia, and 45% of the population has a mobile phone service. Also, the radio stations in Liberia are abundant to the extent that there are over 70 radio stations in the entire country (Liberia). As for Montserrado County, there exist about 30 radio stations.

Even as it struggles with economic and political constraints, Liberia's media environment is expanding. The number of registered newspapers and radio stations (many of them community stations) is on the rise despite limited market potential. And politically critical content and investigative pieces do get published or broadcast.[http://www.audiencescapes.org/media-environment-development-Liberia-quantitative-qualitative-analysis-research "Media Environment and Regulation in Liberia"] {{Webarchive|url=https://web.archive.org/web/20160304031431/http://www.audiencescapes.org/media-environment-development-Liberia-quantitative-qualitative-analysis-research |date=2016-03-04 }}, AudienceScapes. Retrieved 8 February 2014.

{{Further|Energy in Liberia}}

Formal electricity services are solely provided by the state-owned Liberia Electricity Corporation, which operates a small grid almost exclusively in the Greater Monrovia District.{{cite web |url=http://siteresources.worldbank.org/EXTAFRREGTOPENERGY/Resources/717305-1266613906108/Liberia_Energy_ESW_11-4-11web.pdf |title=Options for the Development of Liberia's Energy Sector|work=International Bank for Reconstruction and Development|publisher=World Bank Group|date=2011}} The vast majority of electric energy services is provided by small privately owned generators. At $0.54 per kWh, the electricity tariff in Liberia is among the highest in the world. Total installed capacity in 2013 was 20 MW, a sharp decline from a peak of 191 MW in 1989.

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.

• Central Bank of Liberia
• Transport in Liberia
• Tourism in Liberia
• Firestone Natural Rubber Company
• United Nations Economic Commission for Africa

{{reflist}}

• [https://web.archive.org/web/20130624230301/http://www.liberiawebs.com/index.php?option=com_content&view=article&id=1534:68-liberian-live-in-abject-poverty-census-reveals-&catid=81:politics&Itemid=293 68% of Liberians live in poverty census reveals]
• [https://web.archive.org/web/20070505214622/http://www.guinea.aha.ru/liberia.htm Mineral resources of Liberia]
• [http://www.trademap.org/open_access/Index.aspx?proceed=true&reporter=430 Liberia latest trade data on ITC Trade Map]
• [http://www.worldbank.org/en/country/liberia Liberia profile] - World Bank

{{Liberia topics}}

{{Africa in topic|Economy of}}

Liberia