Post-War Growth In War Ravage Liberia

Ms. Sirleaf

Many times, international events are restricted to industrialized, developed nations in the media.  However, I am happy to be following a positive story out of the small African nation of Liberia.  In 1989, Liberia was making steady economic progress, nearly doubling its GDP since 1970.  Then came 14 years of  constant civil war, the effect of which was devastating.  250,000-1/12th of the population-were killed.  Infrastructure was destroyed and businesses had collapsed.  The notion of economic prosperity seemed like a pipe dream.  

In 2005, Ellen Johnson Sirleaf was elected in the first presidential election after two years of transitional rule, and she inherited a seemingly hopeless situation despite being Africa’s first female elected head of state.  Six years later, the charismatic but soft-spoken Sirleaf stood before a Washington D.C. crowd and explained why Liberia is now an attractive environment for private enterprise and foreign investment.  Her optimism shined through in her comments-”If we continue on this path, in 10 years, Liberia will not require foreign assistance....Liberia should be a middle-income country by the year 2030.”  Even if her projections turn out to be incorrect, her audience applauded her for giving it all she has to address a serious development problem.  Economic development is a difficult task in societies with weak governments and economies.  Add years of civil war into the equation, and economic growth is a practically insurmountable objective.  

The good news is there are some statistics to support Sirleaf’s optimism.  Since she took office, the average number of days required to start a business has plummeted from 68 to 20.  The number of start-up procedures required to register a business has dropped from 10 to 5.  Despite still being expensive to start a business in Liberia, the cost of 55% of the average Liberian’s annual income is an improvement from the 540% cost in 2006.  

The Liberian government has allowed the private sector to acquire capital at a slow rate, which is wise.  Too much easy credit too quickly can flood an economy as we witnessed in the financial crisis in 2009.  These credit reforms have been complimented with a broader economic and social set of reforms that seek to improve the capacity of Liberia’s workforce through education and health care, eliminate corruption, and reduce national debt.  In the last five years, Liberia has been able to acquire almost a billion dollar in foreign direct investment and experienced steady GDP growth in a global economic recession.  

From what I understand, Liberia is still a long ways off from becoming a middle-income nation.  There is still a ton of work that needs to be done.  Liberia is one of the poorest nations in the world, and the catastrophic effect of a civil war in a small nation will be difficult to overcome.  One thing Liberia appear to have going for it is an engaged and responsible leader.  This key factor might make the difference on their road to recovery.