Since the 1960's Liberia's economy has fallen. In the 1960's Liberia experienced relative economic prosperity. Under the leadership of president William Tubman Liberia exported vast quantities of raw materials. Iron-ore was discovered in Liberia in the early 60's. Liberia became a world leader in iron-ore. Also in the 1960's the timber industry realized the huge opportunities Liberia's wooded areas provided. The United States and other world leaders were also investing heavily into the Liberian economy. Large companies were setting up plants in Liberia because of the cheap prices Liberian laborers would work for. By the late 60's twenty-four companies were making investments in Liberia. They were investing $800 million(Newton) into the economy. In particular, Firestone set up two plants in which they used the raw material of rubber and converted it into automobile tires among other things.

This prosperity, however, soon ended. By the 1970's, when a global reccession struck, Liberia declined economically at a rapid pace. Under the leadership of William Tolbert Liberia suffered economic depression. In part, this was due to corruption that existed in the government. Raw materials in Liberia were also becoming depleted. When Samuel Doe overthrew Tolbertin1979 Liberia was in economic turmoil. Doe, however, did not improve upon Liberia's financial state. In an article called "Living Dangerously," in Africa Report, Doe's economic policy is illustrated: "Sound financial and economic management is not considered one of his trademarks." During the 1980's Liberia became severely depressed. Unemployment in Monrovia reached 50%(Newton). Between 1980-1987 the GNP (Gross National Product) declined by an average 2.1% annually(Africa South of the Sahara 1996). During this time real GNP per person declined 5.2%(Africa South of the Sahara 1996). Between 1980-1985 the GDP (Gross Domestic Product) decreased by 1.5%(Africa South of the Sahara 1996). Between 1985-1989 the GDP also decreased by 1.5%(Africa South of the Sahara 1996). From 1983 to 1989 the per capita income fell from $400 a year to $370(Africa Report). An incredible fact is that during this time the United States was giving $380 million in foreign aid(Newton). It was later observed that the government was embezzling some of this money.

In the early nineties at the start of the civil war Liberia was exporting less of its important raw materials. The fishing industry caught 1,180 metric tone of fish in 1960(Africa South of the Sahara 1996). But by 1993 this number had reduced to 7,800 tons of fish(Africa South of the Sahara 1996). In 1973 Liberia exported $49.4 million worth of diamonds(Africa South of the Sahara 1996). By 1988 this number had shrunk to $8.8 million(Africa South of the Sahara 1996). In 1981 Liberia was exporting 10 million tons of steel(Africa South of the Sahara 1996). By 1989 it had been reduced to 2 million tons(Africa South of the Sahara 1996). In 1989 Liberia exported 118,000 metric tons of rubber(Africa South of the Sahara 1996). In 1993 they only exported 10,000 metric tons(Africa South of the Sahara 1996). Clearly the civil war had a profound impact on Liberia's economy. Doe also hurt the economy by not reinvesting in it and also taking foreign funds that were supposed to be used to spur the economy. The Liberian economy, was also dependent on raw materials. When the raw materials shrunk the Liberian economy suffered.

In the future the Liberians need to invest in their economy. This can only happen when civil war ends and the country reaches political stability. There needs to be a leader who can smartly invest in education. Education is key so that people can grow up to become innovators in their respective industries. Foreign aid is necessary for Liberia to grow. The United States needs to continue to send foreign aid. This money needs to be spent on the education process of the youth to ensure the growth of Liberia in the future. The government needs to be responsible with how they spend money. The government needs to encourage multi-national companies to set up factories and plants in Liberia. For this to happen Liberia needs to have a stable political environment. Liberia needs to have a good transportation system so that companies can transport their goods throughout Liberia and can also export the goods. Liberia has valuable raw materials such as rubber that could be converted into valuable commodities. Eventually what needs to happen is that the Liberian people need to become independent of the multi-national companies. Through the education process Liberian people can gain the skills necessary to manaage and direct companies.

Copyright, Jeffrey Wellington 1996