Liberia: Country and Foreign Investment
Liberia, on the west coast of Africa, has an area of 99,067 sq km. A low coastal belt is backed by gently undulating forested plateau; then in the north is a mountain region which includes Mount Nimba at 1,752m. The climate is tropical, hot and humid. The capital is Monrovia, which together with the newer port of Buchanan are amongst the most modern ports on the west coast of Africa. There are direct scheduled flights from both Europe and the US to Roberts International Airport on the outskirts of Monrovia.
The foundation and initial colonization of Liberia in the 1820s resulted from a number of initiatives in which enslaved African Americans returned to Africa in an eventually successful attempt to create a republic on libertarian lines. By 1840 a number of Liberian colonies had united in a Commonwealth. The Liberian settlers were relatively few in number, and invited participation in their economy from indigenous African tribes. Eventually these migrants outnumbered the colonists; by now, descendants of the original settlers make up no more than 5% of the total population of nearly 3.9m (July 2011 est).
After a period of settled government in which Presidents Tubman and Tolbert were prominent, Tolbert was assassinated in 1980 by Samuel Doe, who became president. This regime was legitimized in 1986 with the establishment of the 2nd Liberian republic. In 1989 Charles Taylor toppled Doe's government, leading to a period of chaos and civil war. Businessman Gyude Bryant was chosen to lead a transitional government under UN sponsorship at all-party peace talks in August 2003 after Taylor was forced to step down. Crucial elections were held in October, 2005, resulting in the appointment of Ellen JOHNSON-SIRLEAF as President.
Liberia has plentiful water, mineral resources, forests, and a climate favorable to agriculture, and has been an exporter of raw timber, rubber, diamonds, iron ore, coffee and cocoa. The fairly small manufacturing sector has been mostly foreign owned. External confidence in the key diamond extraction industry has largely been re-established, with Canadian company Diamond Fields to the fore in resuming foreign investment. GDP has been growing strongly: 9.7% in 2007 and 7.8% in 2008.
Liberia's success story, however, has been its shipping registry, which after some problems in the 1980s is now rapidly growing back to its former prominence. Currently it is the world's second largest registry - previously it was the leading registry.
Foreign companies can operate in Liberia through local agents, a local corporation or a branch. Liberia has a very liberal business climate. There are no statutory foreign exchange controls in Liberia, and funds may generally be freely remitted into and out of the country. There is a dual system of statutory law based on Anglo-American common law for the modern sector and customary law based on unwritten tribal practices for the indigenous sector. Non-resident companies, ie those with external ownership, are not subject to taxation.
At the International Reconstruction Conference on Liberia held at UN Headquarters in New York in February, 2004, a total of $520 million was pledged to help Liberia meet a host of reconstruction and humanitarian needs over the following two years. UN Secretary-General Kofi Annan told the two-day meeting that Liberia had arrived at a moment of hope, and that the conference demonstrated international solidarity with Liberia at a decisive moment. US Secretary of State Colin Powell, in describing the United States as "Liberia's best and oldest friend," said stability in Liberia was critical to peace and well-being throughout West Africa. "The United States will stand by Liberia," promised Powell.
A Governance and Economic Management Action Plan was created in October 2005 by the International Contact Group for Liberia to help ensure transparent revenue collection and allocation - something that was lacking under the Transitional Government and that has limited Liberia's economic recovery.
Following the lifting of UN sanctions in 2006 and 2007 timber and diamond exports have resumed. Liberia shipped its first major timber exports to Europe in 2010. The country reached its Heavily Indebted Poor Countries initiative completion point in 2010 and nearly USD$5 billion of international debt was permanently eliminated. The IMF has completed the sixth review of Liberia's extended credit facility, bringing total disbursements to over USD379 million. The African Development Bank approved a grant of USD48 million in 2011 to support economic governance and competitiveness.