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World > Africa > Liberia > Economy (Notes)

Liberia - Economy (Notes)


ECONOMY
The Liberian economy relied heavily on the mining of iron ore and on the export of natural rubber 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. Following the coup d'etat of 1980, the country's economic growth rate 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 about $3.7 billion. Efforts are currently underway to relieve Liberia of its bilateral and multilateral debts. Some bilateral creditors, including the United States, have pledged debt relief, and discussions of Liberia's arrears are underway at the international financial institutions (World Bank, International Monetary Fund, African Development Bank).

The 1989-2003 civil war had a devastating effect on the country's economy. Most major businesses were destroyed or heavily damaged, and most foreign investors and businesses left the country. Iron ore production stopped completely, and the United Nations banned timber and diamond exports from Liberia. UN sanctions on Liberian timber were removed in 2006; however, activity in the timber sector has not yet resumed on a large scale. Diamond sanctions were terminated by the UN Security Council on April 27, 2007 in Resolution 1753. Liberian diamond exports will be certified through the Kimberley Process Certification Scheme.

Currently, Liberia's few earnings come primarily from rubber exports and revenues from its maritime registry program. With the second-largest maritime registry in the world--there are more than 2,350 vessels registered under its flag, and some 35% of the oil imported to the United States is transported on Liberian-flagged ships--Liberia earns over $15 million annually from the flag registry. There is increasing interest in the possibility of commercially exploitable offshore crude oil deposits along Liberia's Atlantic Coast.

With a new, democratically elected government in place since January 2006, Liberia seeks to reconstruct its shattered economy. The Governance and Economic Management Program (GEMAP), which started under the 2003-2006 transitional government, is designed to help the Liberian Government raise and spend revenues in an efficient, transparent way.

Foreign direct investment is returning to Liberia, attracted to the stable security situation provided by the large UN peacekeeping force and the demonstrated commitment to reform on the part of the Sirleaf administration. Investors are now seeking opportunities in mining, rubber, agro-forestry, light industry, and other sectors. Large-scale activity in Liberia's logging industry is expected to resume in 2007, and significant diamond sector activity could follow the lifting of UN sanctions. Arcelor Mittal Steel has negotiated an agreement to invest over $1 billion in the mining sector.

Liberia is a member of 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. There has been some revival of MRU cooperation discussions in recent years, particularly since the January 2006 inauguration of Liberian President Sirleaf.


Facts at a Glance: Geography - People - Government - Economy - Communications - Transportation - Military - Current Time - Ranking Positions
Notes and Commentary: People - Economy - Government and Political Conditions - Historical Highlights - Foreign Relations - Relations with U.S.



Facts at a Glance
Geography
People
Government
Economy
Communications
Transportation
Military
Current Time
Ranking Positions


Notes and Commentary
People
Economy
Government and Political Conditions
Historical Highlights
Foreign Relations
Relations with U.S.





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