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NS4301 Summer 2015
Liberia
Overview
• State Building
• American Colonization Societies
• Independence proclamation (1847)• Post-independence Challenges
• Borders consolidation, Revenue shortages, Coastal & Hinterlands disconnection
• First Overture to Global Economy
• Firestone Concession (1926)• WWII Economy Growth without Development (1943-70)• Conflict Economy (1980-2001)• Post-Conflict Statistics & Challenges
• Country Statistics
• Ebola effects
• Future Prospects
3
Liberian Political and Economic History
4
Coastal Colonies
•American Colonization Society (ACS)
• UK/US Anti Slave Trade Act (1807)
•Economy• Coastal• Hinterland
5
Independence (1847)
Liberia Administrative Map
State Formation
• Challenges:• Border consolidation • Insolvency• Coastal/Hinterlands
• Firestone Colony (1926-1951)• Iron Ore Discovery (1951)
• Africa’s first and the world’s third largest exporter of iron ore
• William Tubman’s Open-door politics (1944-1971)• Lend/Lease Act – U.S. Built $22 million free port of Monrovia (two
other modern ports constructed in that era)
• Port and road development – connected the hinterlands
• Basing of US Military Forces
• Four-Point Program (1949): Liberia applied for and received $40 million for public construction
Growth without Development
6
• Tubmanomics continues• 38 major foreign concerns representing a combined investment of
nearly $750 mil under Tubman
• Government receives 50% of economy of extraction profit
• Citizens could buy shares in the various companies below market price
• GDI more than quadrupled between 1950 and 1961
• Money in / Money out• Tubman’s Open-Door Policy has equally provided a cover for the
almost total control of Liberia's commercial activity by Lebanese merchants in the wholesale and retail trade.
7
Growth without Development (cont.)
Cold War/Civil War Economics
• William Tolbert’s Political Divergent (1971)• East-West pendulum
• Year of Ferment and Rice Riots (1979)
• Samuel Doe (1980)• First Indigenous Head of State
• Start of Economic Decline
• ECOMOG
• Civil Wars (1989-2005)• UN Economic Sanctions
• Civil War Economics (French Logging Concession, Conflict Diamond)
8
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Relative Economic Decline
10
Conflict GDP and GDP Per Capita
11
Current Socio-Economic Data
• Population: 4.1 million (July 2015 est.)• 43% from 0-14 yrs• Growth rate: 2.47%• Life expectancy: 58.6 yrs
• More than 28 distinct ethnic groups• Literacy Rate: 47.6%
• Male 62.4%• Female 32.8%
• Heavily Urbanized: 49.7%• Annual rate of change: 3.36%
• Export: $486 mil (1979)• $10mil (2004)
• External Debt: • $4.5bil (2005-2007)• $650-700mil (current)
• Rice production fell 73% between (1987-2005)
• 54% of business operating costs are attributable to energy (2012)
13
Post Conflict Economy and Human Development
14
Limits to Economic Development:
Vulnerable Economic Foundations
34.70%
46.60%
4.70% 14.00%
GDP Composition by Sector (2015)
Agriculture, Fisheries & Forestry
Services
Manufacturing
Mining & Panning
Source: 2015 Economic Stabilization and Recovery Plan
15
Limits to Economic Development: Ease of Doing
Business
Source: World Bank
16
Limits to Economic Development: Economic
Freedom
Source: Heritage.org 2015 World Economic Freedom
17
Limits to Economic Development: Global
Competitiveness
Source: World Economic Forum, 2015 Africa Competitiveness Report
18
Costs of Ebola
Source: 2015 Economic Stabilization and Recovery Plan
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Costs of Ebola
• Revised GDP Figures by Sector
Source: 2015 Economic Stabilization and Recovery Plan
20
Costs of Ebola
Source: 2015 Economic Stabilization and Recovery Plan
21
Human Development Challenges
• Human Development Index• Large Youth Bulge• Education:
• Mean years: 3.93• Adult literacy 42.9%
• Health Infrastructure:• .01 physicians/1,000 people
Source: UNDP HDI Data
22
Legatum Prosperity Index
29
Future Prospects
Pre-Ebola Development Plan
• Agenda for Transformation (AfT) and Liberia Rising 2030• Revitalize traditional economic sectors
• https://www.youtube.com/watch?v=MIJz_I80Sio• Minister Amara M. Konneh
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31Source: 2015 Economic Stabilization and Recovery Plan
2015 Economic Stabilization and Recovery Plan
• Three Part Plan (cost of 812 million USD):
• Recover Output and Growth• Focus on farmers
• Diversify throughout the value chain
• Finance delayed projects due to Ebola crisis
• Strengthen Resilience and Reduce Vulnerability• Implement a 7-year Health Investment Plan
• Improve education at all levels
• Implement Water and Sanitation Expansion Plan
• Strengthen cash payments to Ebola victims
• Invest in Security Sector
• Strengthening Public Finances and Ensure Delivery• Replace current budge shortfalls
• De-concentrate public services across all 15 counties
• Reform Civil Service priorities and pay rationalization
32
GDP Forecast
33
Questions?