Economy of Liberia


Economy of Liberia

The 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. 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.

ummary

Civil war and government mismanagement destroyed much of Liberia's economy, especially the infrastructure in and around the capital, Monrovia. Many businesses fled the country, taking capital and expertise with them, but with the conclusion of fighting and the installation of a democratically-elected government in 2006, some have returned. Richly endowed with water, mineral resources, forests, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products - primarily raw timber and rubber. Local manufacturing, mainly foreign owned, had been small in scope. President Ellen Johnson-Sirleaf, a Harvard-trained banker and administrator, has taken steps to reduce corruption, build support from international donors, and encourage private investment. Embargoes on timber and diamond exports have been lifted, opening new sources of revenue for the government. The reconstruction of infrastructure and the raising of incomes in this ravaged economy will largely depend on generous financial and technical assistance from donor countries and foreign investment in key sectors, such as infrastructure and power generation.

In greater depth

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 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.

tatistics

Currency:1 Liberian dollar (L$ or LRD) = 100 cents

Exchange rates:Liberian dollars (L$) per US$1 = L$1.00 (officially fixed rate since 1940);
market exchange rate: Liberian dollars (L$) per US$1 = L$63 (July 2008) - L$1 = US$0.16.
(Market rate floats against the US dollar: December 1998, US$1 = L$40; October 1995, US$1 = L$ 50.)

GDP:purchasing power parity - $1.34 billion (2007 est. CIA World Factbook (CWF))
official exchange rate - $730 million (2007 est. CWF)

GDP - real growth rate:8.5% (2007 est.) (9.4% 2007 est. CWF)

GDP - per capita:purchasing power parity - $400 (2007 est. CWF)

GDP - composition by sector:
"agriculture:"76.9%
"industry:"5.4%
"services:"17.7% (2002 est. CWF)

Population below poverty line:80% (2002 est.)

Household income or consumption by percentage share:
"lowest 10%:"NA%
"highest 10%:"NA%

Inflation rate (consumer prices):11.2% (2007 est. CWF)

Labor force - by occupation:agriculture 70%, industry 8%, services 22% (2000 est.)

Unemployment rate:85% (2003 est.)

Budget:
"revenues:"$NA
"expenditures:"$183 million, as stated in 2007/2008 Budget Fact Sheets. (Currency - US$ or L$ - is not stated for the total, but several components are stated as US$, and given the exchange rate the numbers can only add up if the total is also US$. The Liberian Auditor General reputedly described the budget as "unauditable" [ [http://www.liberiaitech.com/theperspective/0611200701.html The 2007/2008 Draft Budget of Liberia Is Not Auditable, Accountable & Transparent – Says Auditor General Morlu ] ] . Some of his comments can be found at [http://www.liberiaitech.com/theperspective/2007/0627200701.html "The Perspective", June 29, 2007] .)

Industries:
rubber processing, palm oil processing, diamonds

Industrial production growth rate:0%

Electricity - production:319.3 million kWh (2005)

Electricity - production by source:
"fossil fuel:"62.24%
"hydro:"37.76%
"nuclear:"0%
"other:"0% (1998)

Electricity - consumption:296.9 million kWh (2005 CWF)

Electricity - exports:0 kWh (1998)

Electricity - imports:0 kWh (1998)

Oil - consumption:3,550 bbl/day (2005 est. CWF)

Oil - exports:23.31 bbl/day (2004 CWF)

Oil - imports:3,532 bbl/day (2004 CWF)

Agriculture - products:
rubber, coffee, cocoa, rice, cassava (tapioca), palm oil, sugarcane, bananas; sheep, goats; timber

Exports:$1.197 billion f.o.b. (2006 CWF)

Exports - commodities:
diamonds, iron ore, rubber, timber, coffee, cocoa

Exports - partners:
Germany 40.1%, South Africa 12%, Poland 11.7%, US 8.5%, Spain 8.2% (2006 - CWF)

Imports:$7.143 billion f.o.b. (2006 - CIA World Factbook)

Imports - commodities:fuels, chemicals, machinery, transportation equipment, manufactured goods; rice and other foodstuffs

Imports - partners:
South Korea 43.2%, Singapore 15%, Japan 12.8%, China 8.2% (2006 CWF)

Debt - external:$3.2 billion (2005 est.)

Economic aid - recipient:$236.2 million (2005 - CWF)

Fiscal year:calendar year

ee also

*List of Liberian companies

References

External links

*dmoz|Regional/Africa/Liberia/Business_and_Economy/Economic_Development
* [http://www.guinea.aha.ru/liberia.htm Mineral resources of Liberia]


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