NS4301 Summer 2015 Liberia. Overview State Building American Colonization Societies Independence proclamation (1847) Post-independence Challenges Borders.

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

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Liberian Political and Economic History

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Coastal Colonies

•American Colonization Society (ACS)

• UK/US Anti Slave Trade Act (1807)

•Economy• Coastal• Hinterland

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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

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• 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.

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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)

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Relative Economic Decline

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Conflict GDP and GDP Per Capita

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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)

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Post Conflict Economy and Human Development

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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

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Limits to Economic Development: Ease of Doing

Business

Source: World Bank

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Limits to Economic Development: Economic

Freedom

Source: Heritage.org 2015 World Economic Freedom

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Limits to Economic Development: Global

Competitiveness

Source: World Economic Forum, 2015 Africa Competitiveness Report

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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

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Costs of Ebola

Source: 2015 Economic Stabilization and Recovery Plan

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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

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Legatum Prosperity Index

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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

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GDP Forecast

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Questions?