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The Open Door Policy of Liberia: An Economic History of Modern Liberia

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... Given that LEDFC has financed hotels, manufacturing and other formal sector businesses, it is clear that the institution has helped to increase the participation of Liberians in industries in which Liberian ownership has been generally limited. In the pre-war era, Liberians were not significantly involved in the hotel, construction and manufacturing sectors (Kraaij 1983). Traditionally, the main areas of business activities for Liberians have been petty trade, subsistence agriculture and other activities in the informal sector. ...
... Along with the problem of limited entrepreneurial and managerial capacity, competition from well-established foreign merchants in Liberia also present unique and difficult challenges to the new businesses in sectors dominated by these foreign merchants. Many sectors of the Liberian economy are dominated by Lebanese and other foreign nationals who, using efficient networks and relying on a long history of entrepreneurship, conduct business at levels much superior to that of domestic entrepreneurs (Kraaij 1983). Some of the sectors, consequently, are dominated by foreigners; namely hotels, construction and wholesale trade, although these have recently attracted more domestic entrepreneurs. ...
... Liberia had a unique history that accounts, in part, to its limited entrepreneurial and managerial capacity. For historical reasons, the elites preferred occupations in government and related activities (Clower 1966; Gårdlund 1968; Kraaij 1983). This led to the condition in which private enterprise was largely left in the hands of foreigners. ...
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Countries emerging from protracted and devastating conflicts are often seen as needing significant external intervention in their financial markets to rebuild their private sector and promote quick and effective economic recovery. Despite enormous challenges, the provision of credit or the implementation of various lending schemes often dominate efforts to promote domestic private sector recovery in the immediate aftermath of conflict. This approach raises a number of questions: First, how effective are loan programs in the development of domestic enterprises in the immediate aftermath of conflicts? Second, can loan programs work without significant improvements in the business climate? How sensitive is the design of lending programs to the success of domestic enterprise development projects following devastating conflicts? This paper explores the experience of the Liberian Enterprise Development Finance Company, which was established in 2007 to provide medium-and long-term credit to small and medium domestic enterprises. In addition to shedding light on the challenges such an enterprise faces in a post conflict environment, the paper explores whether the strategies employed are effective and if there are opportunities for effecting remedial changes that could improve the outcomes of such a program in post-conflict environments generally.
... Contrary to claims made by free market and pro-economic globalisation proponents, Liberia's open Door Policy did not reap sustained benefits given the magnitude of unequal integration. It facilitated FDI, thus incorporating Liberia into global capitalism, yet economic growth was largely based on resource extraction without value addition (Kieh 2012;Van der Kraaij 1983). Furthermore, open Door positioned foreign corporate interests 'above' the Liberian state, shifted domestic expenditure from social spending to debt servicing, undermined labour rights, all the while eroding government-citizen relations (Kieh 2012;Pailey 2021;Van der Kraaij 1983). ...
... It facilitated FDI, thus incorporating Liberia into global capitalism, yet economic growth was largely based on resource extraction without value addition (Kieh 2012;Van der Kraaij 1983). Furthermore, open Door positioned foreign corporate interests 'above' the Liberian state, shifted domestic expenditure from social spending to debt servicing, undermined labour rights, all the while eroding government-citizen relations (Kieh 2012;Pailey 2021;Van der Kraaij 1983). In the next section, I examine how the Sirleaf administration expanded open Door with reforms that seemingly advanced the aspirations of Liberian citizens while maintaining a neoliberal economic agenda that undercut government-citizen relations (Kieh 2012, 229;Pailey 2021, 7). ...
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Attempting to reduce America's dependence on foreign-sourced rubber, Firestone established in 1926 the world's largest industrial plantation in Liberia under a controversial 99-year-lease agreement. Nearly a century later, backlash against the exploitative nature of corporate hegemony and economic globalisation crystallised in a transnational campaign, Stop Firestone, and class action suit to hold the multinational accountable. I argue in this article that Liberia's unequal incorporation into global capitalism has configured and reconfigured the set of relations between government and citizens through parallel, albeit interrelated, processes-the globalisation of capital (via trade and investments) and the globalisation of rights (via universalised notions of citizenship as a human right). While the pursuit of foreign direct investment (FDI) in particular placed the interests of investors like Firestone 'above' the state thus undermining government-citizen relations, it simultaneously created a politicised workforce and network of Liberian activists thus strengthening citizen-citizen relations. Based on careful review of concession agreements and court proceedings as well as interviews conducted with government officials, activists and legal advocates based in Liberia and the United States, this article is the first to meld historical and contemporary developments, underscoring the twenty-first century implications of Firestone's enduring exploitation of Liberian land and labour.
... Post-independence, the country was initially divided between the Indigenous population and Americo-Liberians. Americo-Liberians are formerly enslaved black Americans who claimed Liberia as a Christian state and Liberians as American descendants (van der Kraaij, 1983). Any inclusion or recognition of Indigenous people in the coming years was for the purpose of avoiding conflict, creating a labour force to support domestic economic development, and preventing the expansion of foreign, primarily colonial, forces. ...
... Any inclusion or recognition of Indigenous people in the coming years was for the purpose of avoiding conflict, creating a labour force to support domestic economic development, and preventing the expansion of foreign, primarily colonial, forces. This closed-door policy to foreign investment made way to a new open-door policy that emerged out of economic necessity (van der Kraaij, 1983 the Liberia Company (1947; iron-ore) (Sawyer, 1992). Much of the wealth generated left the country and what remained primarily benefited Americo-Liberian elites. ...
Chapter
The Wicked Problem of Forest Policy - edited by William Nikolakis July 2020
... governments have often lacked mass support-the crisis of legitimacy (Kieh, 2008(Kieh, , 2012. For example, during the Tubman administration, although the country experienced an influx of foreign capital through its "open door policy" (van der Kraaj, 1983), the material conditions of the subaltern classes did not improve. For example, by the late 1960s the local wing of the ruling class, comprising about 3.9% of the population, accounted for about 60% of the wealth (Movement for Justice in Africa, 1980). ...
... First, it provides propitious conditions for metropolitan-based multinational corporations and other businesses to make huge profits. For example, from 1963-1976, the Liberian American Swedish Mineral Company (LAMCO) made $485 million in profits from an initial investment of $250 million but paid less than $100 million as royalties to the Liberian government (van der Kraaj, 1983). Second, the Liberian state provides an enabling environment in which the faction of the local wing of the ruling class that controls state power during a particular historical period can use the agency of the state to accumulate wealth. ...
Article
Using a political economy approach, this study examines the nature, dynamics, and causes of the expansion of the Liberian public sector. The findings show that the major causes for the expansion of the Liberian public sector did not fit those provided by the literature—citizens’ demands for new services, and other issues that emerge from state-building. Instead, the politico-economic interests of the Liberian ruling class (both the internal and external wings) are the major causes for the increase in the size of the government. These interests include serving the interests of corporate capitalism, and the private accumulation of wealth.
... On the wall behind Joseph Saye Guannu, the interviewee, is the name of the longest serving president of Liberia, for whom the library is named: W. V. S. Tubman. Land privatization in the form of concessions expanded signifcantly under the leadership of Tubman, a planter who served as president from 1944to 1971(Van der Kraaij 1983. In shooting outside the Tubman library, the flm appears to be rejecting his privatization logic for the idea of the commons. ...
... Bong mine, as the study area is colloquially called, is chronologically the fourth iron ore mine in Liberia. Using conventional open pit mining methods, it was initially operated by the Germans between 1965 and 1990 (Kraaij, 1983). ...
... The exploitation of tribal communities" wealth, specifically iron ore and rubber, by Liberia"s two oldest concessionaires becomes vivid when you see that Firestone Tire and Rubber Company invested only 30 million dollars and earned a profit of approximately 66 million dollars (after tax) in five years of initial operation, while the Liberia Mining Company, owned by Lansdell K. Christie, invested ten million dollars and earned a return of 11 million (after paying royalties) in three years of initial operation (Clower et al., 1966;Kraaij, 1983). The foreign investors (concessionaires) accumulated such a profit because they benefited from tribal people forced to labor for them, they paid low rent for tribal land, they acquired high prices for extracted commodities, and they negotiated their contracts with corrupt-incompetent public officials (Gobewole, 2016b, p. 91). ...
... It was an earlier President of Liberia in the 1920s, Charles D. B. King, who said in his first inaugural address: '…there can be no doubt as to the desirability of adding to our Americo-Liberian population, settlers from America, who want to come here, and who, if carefully selected and properly aided would help us to build up the country…we need not hesitate to send out to our race in foreign lands the Macedonian cry: "Come over and help us".' 51 Sirleaf will most likely be remembered for re-inscribing the politics of migration into the trajectory of Liberian politics, just as her twentieth-century predecessors had with Americo-Liberian settlers. The question is whether or not her political dispensation will be an exact replica of her predecessors. ...
... En outre, la moitié de la production (autour de 7 000 tonnes) était exportée sous forme de latex liquide, une technologie de pointe (Lief, 1951). Les chefs africains, soutenus par les forces armées, fournissaient des travailleurs « libres », contre paiement par le Gouvernement (Kraaij, 1983 ;Salles, 1979). ...
Article
In 1933, Africa accounted for only 0.2% of the world’s natural rubber output. However, an international cartel pushed up prices from 1934, without constraining African producers, and large firms transferred technologies from Asia. From 1942 to 1945, the Japanese having seized most Asian heveas, tapping was intensified, abandoned trees were rescued, and the collection of wild rubber started again (Landolphia, Funtumia, etc.). In 1945, Africa achieved 28% of global production of natural rubber.;Many heveas were also planted, only yielding after 5 to 7 years, but living for 35 to 40 years. After 1945, Asia entered into a period of political crisis, giving an advantage to Africa, especially to Nigerian smallholders. In 1972-74, Africa still produced 6.8% of the world’s natural rubber. However, the synthetic rubber industry grew in the West, Asia overcame its crises, and independence led African states to adopt disastrous economic policies. The surge in oil prices in 1973 hampered synthetic rubber, and stimulated natural rubber in Asia, but Africa was unable to take advantage of this favourable situation.
... Although there is evidence to suggest that gold mining occurred in Liberia as early as 1500 in Kpelle country (even though those deposits may have actually been located in what is now the Republic of Guinea) the first recorded instance of diamond mining dates back to the early 20 th century. In 1906, a small Liberian-owned gold mining company reportedly found the first Liberian diamonds, in Montserrado County (Van der Kraaij 1983). Despite this early find, interest in diamond mining only took off from the 1950s onwards, as reflected by the increase in prospecting and mining activities, the growing number of Liberians involved in diamond mining, and the awarding of concessions to foreign investors. ...
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This Book is originally a Ph.D. thesis in law with emphasis on Comparative Industrial Relations Law from Ahmad Ibrahim Faculty of Laws (AIKOL), International Islamic University Malaysia (IIUM). The project looks into comparative advantages of mediation in resolving industrial disputes in Liberia with the aim at deriving some enhancement precedents from the following Common Law Jurisdictions; the UK, New Zealand and Malaysia. The research explores the substantive and procedural laws of mediation in Liberia, and subsequently examines the effectiveness of those laws. It concludes that though mediation as a tool of amicable methods of disputes resolution is encouraged by the Liberian Labour jurisprudence. However, there are still lots of substantive and procedural loopholes to be addressed by policies, laws, regulations and legislative instruments. For instance, there is a need for an ADR legislation or at least, a Mediation Act to regulate and standardise the practices of ADR. There is also a need to introduce the Court-Annexed Mediation System (CAMS) as an auxiliary to reduce backlog cases of labour disputes at the Court’s docket. Besides, the project further encourages academics to consider researching in the area of ADR in general and industrial disputes resolution system in particular. It also recommends to the government to establish a labour market research institute in Liberia which could be responsible to look into challenges and prospects of the market. Finally, the research also asserts that Effective, Efficient and Expedient (EEE) Industrial Disputes Mediation System in Liberia would contribute to Industrial Peace and Expeditious Justice Delivery, Social Stability and Economic Growth with a shared prosperity in Liberia.
Article
What did independence mean during the age of empires? How did independent governments balance different interests when they made policies about trade, money and access to foreign capital? Sovereignty without Power tells the story of Liberia, one of the few African countries to maintain independence through the colonial period. Established in 1822 as a colony for freed slaves from the United States, Liberia's history illustrates how the government's efforts to exercise its economic sovereignty and engage with the global economy shaped Liberia's economic and political development over the nineteenth and twentieth centuries. Drawing together a wide range of archival sources, Leigh A. Gardner presents the first quantitative estimates of Liberian's economic performance and uses these to compare it to its colonized neighbors and other independent countries. Liberia's history anticipated challenges still faced by developing countries today, and offers a new perspective on the role of power and power relationships in shaping Africa's economic history.
Chapter
The Wicked Problem of Forest Policy - edited by William Nikolakis July 2020
Article
The engagement of Swedish industry in the Liberian American–Swedish Minerals Company (LAMCO), which mined iron in Liberia between 1963 and 1989, was the largest Swedish commercial investment in Africa during the Cold War. In this paper I investigate how political and administrative actors of the Swedish government conceptualized the link between private and public interests in the context of LAMCO’s operations, and how this shaped Swedish government policy towards the company and Liberia. I identify two phases: a phase of almost unanimous political support for LAMCO and close Swedish–Liberian relations from ca. 1955 to 1965, and a more fragmented phase following 1965, during which LAMCO was increasingly understood as a political liability. My findings show how business interests could figure into Swedish foreign policy during the Cold War, highlighting the coherence with which Swedish industry and government acted in relation to the commercial interests in Liberia before ca. 1965, but also the lack of coherence – between government and industry as well as within the state apparatus – that followed the turn to a more activist policy after the mid-1960s.
Article
This essay follows the journey of a 1926 Harvard expedition to Liberia and also the more recent journey of its remains-nearly six hundred photographs and more than two hours of motion picture footage. My goal is to make visible the forgotten paths of empire that led to widespread economic, environmental, and cultural change in the West African republic of Liberia. In tracing the transnational flows of capital, knowledge, commodities, and microbes associated with the rise of industrial plantations instrumental in advancing American economic and political interests across the globe, I offer a materialist approach to the history of scientific ideas and objects that takes both epistemology and environmental change seriously. The transformation of landscapes on an industrial scale was critical, I argue, in bringing ecological and evolutionary understandings of disease into being. And the photographs and film footage left behind have the potential to acquire new agency and meaning as they bring forth stories from Liberians that reanimate places and give voice to ancestors, who were much more than laboring bodies, reservoirs of biological specimens, or objects of a scientific gaze.
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The Polish mission to Liberia (1934–8) was a series of diplomatic, commercial, and scientific initiatives carried out by Poland's Maritime and Colonial League and Ministry of Foreign Affairs. Contextualizing the mission in terms of contemporary attempts to construct Poland's colonial identity, this article argues that Poland's colonial lobby imagined their presence in Liberia as a unique form of colonialism, distinct from its Western counterparts. Many participants in the mission considered Poland to have a special moral mandate in Africa by virtue of its own experience as a recently occupied nation. The grandiose visions of Liberia as a Polish colony and unfulfilled economic promises, however, contributed to the ultimate termination of the mission in 1938. The Poles’ concept of colonialism obscured their plausible objectives in Liberia and distracted them from executing their economic plan. The construction of a Polish colonial identity was a perfect means of rallying patriots around the flag and creating domestic support for Poland's maritime projects, but a colonial ideology was a double-edged sword in foreign affairs.
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The elusive quest for democracy has been an enduring staple of the Liberian political economy since the establishment of the country (Liebenow, 1969, 1987; Sawyer, 1992, 2005). As Kieh (1997: 23) observes, Since the inception of the Liberian state in the 1800s, the country has been engulfed in a crisis of democracy. This phenomenon has been characterized by political repression, and its attendant lack of respect for civil liberties and human rights and socioeconomic malaise.
Chapter
As part of a broader study, John Tully has recently tackled the social history of rubber in the Second World War, at a time when control of this commodity assumed urgent strategic significance, due to the mechanisation of the world s armed forces.1 This is a welcome development, but Tully s story leaves many crucial gaps. Moreover, his narrative pits grasping and greedy elites against a combative and heroic workforce, allowing for few or no shades of grey.
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As Liberia moved toward greater freedom of expression in 1971 after several decades of authoritarian rule, The New York Times credited a longtime critic of officialdom, Albert Porte, and a three-month-old magazine, the Revelation, with being pacesetters of the emerging trend (Johnson, 20 October 1973). Porte shared with several editors of the Revelation one commonality not noted in The New York Times article, and that was their West Indian origin. This article retraces the participation in Liberian journalism by persons of Caribbean descent, arguing that their specific contribution was a tradition of social criticism. The time frame extends from 1830, the year the nation's first newspaper was founded, to 1971, when Pres. William V.S. Tubman died, after serving as head of state for 27 years while dismantling protections for civil liberties (Wreh 1976). By examining behaviours and artifacts over such a long span, it is hoped that this study will better distinguish idiosyncratic patterns from those that are culturally determined.
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