"War Torn Liberia" a Monrovia Travel Page by johnbradshawlayfield

Liberia, officially the Republic of Liberia, is a country on the west coast of Africa, bordered by Sierra Leone, Guinea, and Côte d'Ivoire. Liberia, which means "Land of the Free," was founded as an independent nation by the American Colonization Society, with support of the American government, for free-born and formerly enslaved African Americans. Recently it has witnessed two civil wars, the First Liberian Civil War (1989–1996), and the Second Liberian Civil War (1999–2003), that have displaced hundreds of thousands and destroyed its economy.

Historically, the Liberian economy depended heavily on iron ore and rubber exports, foreign direct investment, as well as the export of other of its natural resources, such as timber. Foreign trade was primarily conducted for the benefit of the Americo-Liberian elite, with trade between foreigners and indigenous Liberians severely restricted throughout most of its history by the 1864 Ports of Entry Act. Little foreign direct investment benefited the 95% majority population, who were often subjected to forced labor on foreign concessions. Liberian law often did not protect indigenous Liberians from the extraction of rents and arbitrary taxation, with the majority surviving on subsistence farming and low wage work on foreign concessions.

While official export figures for commodities declined during the 1990’s civil war as many investors fled, Liberia’s wartime economy featured the exploitation of the region’s diamond wealth, with the country acting as a major trader in Liberian, Sierra Leonian and Angolan conflict diamonds, exporting over $300 million in diamonds annually. Timber, iron ore, rubber, and other commodity exports continued during the war, in part due to illicit agreements struck between Liberia’s warlords and foreign concessionaires. Looting and war profiteering destroyed nearly the entire infrastructure of the country, such that the Monrovian capital was without running water and electricity (except for fuel-powered generators) by the time the first elected post-war government began to institute development and reforms in 2006. Although some official exporting and legitimate business activity resumed once the hostilities ended (for instance, Liberia signed a new deal with steel giant Mittal for the export of iron ore in summer 2005), as of mid-2006 Liberia is dependent on foreign aid, and carries a debt overhang of $3.5 billion. The UN ban on Liberian diamond exports, which was renewed at the end of 2005, as well as the enforcement of the Kimberly Process by international diamond traders has effectively shut down Liberia’s diamond industry, (although there are fears that foreign traders are hoarding the country’s diamonds during the ban). The country currently has an approximate 85% unemployment rate, the worst in the world

The Liberia dollar currently trades against the US dollar at a ratio of 57:1. Liberia used the US dollar as its currency from 1943 until it reversed dollarization in 1982. Its external debt ($3.5 billion) is huge in comparison to its GDP (approx $2.5 billion/year); it annually imports approximately $4.839 billion in goods while it exports only about $910 million. Inflation is falling, but still significant (dropping from 15% in 2003 to 4.9% in the 3rd quarter of 2005); interest rates are high, with the average lending rate listed by the Central Bank of Liberia at 17.6% for 3rd quarter 2005 (although the average time deposit rate was only 4.4%, and CD rate only 5%, barely keeping pace with inflation). It continues to suffer with poor economic performance due to a fragile security situation, the devastation wrought by its long war, its lack of infrastructure, and necessary human capital to help the country recover from the scourges of conflict and corruption.