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.
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; activity in the timber sector is expected to resume on a large scale during the October 2007-May 2008 dry season. Diamond sanctions were terminated by the UN Security Council in April 2007, and Liberian diamond exports have resumed through the Kimberley Process Certification Scheme.
Currently, Liberia's revenues come primarily from rubber exports and revenues from its maritime registry program. Liberia has the second-largest maritime registry in the world; there are 2,724 vessels totaling 83.3 million gross tons registered under its flag, earning some $16 million in maritime revenue in Liberian FY 2007/2008 (July 1-June 30). There is increasing interest in the possibility of commercially exploitable offshore crude oil deposits along Liberia's Atlantic Coast.
With a democratically elected government in place since January 2006, Liberia seeks to reconstruct its shattered economy. The Governance and Economic Management Assistance 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. In addition, the Liberian Government is working to improve the business climate, has formed a commission to deal with land tenure issues, and is reviewing tax and tariff regimes to harmonize them with neighbors in the Economic Community of West African States (ECOWAS). The Liberian National Investment Commission reported $97 million in new investment in 2007 and has set a target of $100 million a year for future years. Investors are finding opportunities in mining, rubber, agro-forestry, light industry, and other sectors. Arcelor Mittal Steel has negotiated an agreement to invest over $1.5 billion in the mining sector, and the Liberian Government is engaged in negotiations with several other large foreign investors.
Years of conflict and mismanagement also left Liberia with a large debt burden of $3.4 billion, owed to multilateral development banks, bilateral creditors, and commercial creditors. Several bilateral creditors, including the United States, have pledged debt relief, and the International Monetary Fund (IMF), World Bank, and African Development Bank have approved a formal program to clear Liberia's $1.5 billion in arrears to international financial institutions. With this support, and with technical assistance provided by Liberia's international partners, the Liberian Government seeks to make key economic reforms to attract investment and qualify for eventual debt relief under the Heavily Indebted Poor Countries (HIPC) initiative.
Economy
GDP (IMF 2007 est.): $473.9 million.
Real GDP growth rate (2007, projected): 79.4%.
Per capita GDP (2006): $185.50.
Average annual inflation (2007): 11.4%.
Natural resources: Iron ore, rubber, timber, diamonds, gold, and tin. The Government of Liberia believes there may be sizable deposits of crude oil along its Atlantic Coast.
Agriculture: Products--coffee, cocoa, sugarcane, rice, cassava, palm oil, bananas, plantains, citrus, pineapple, sweet potatoes, corn, and vegetables.
Industry: Types--agriculture, iron ore, rubber, forestry, diamonds, gold, beverages, construction.
Trade (2007, provisional): Exports--$184.1 million (of which rubber $170.9 million). Major markets--Germany, Poland, U.S., Greece. Imports--$498.7 million (petroleum $125 million; rice $65.3 million).
