Liberia is one of the world’s poorest countries with a gross domestic product of less than $1000 per capita. Many of the country’s economic misfortunes can be attributed to the first Liberian Civil war that lasted between 1989 and 1996. These civil wars resulted to many investors fleeing the country but a change in the political and economic structures has seen some of these investors slowly tripling back to the country (Wodon, 2011).
The installation of a democratically elected government has to a great extent enabled the country to recover from some of the effects of the civil war. However, the country is still clearly reeling from the effects of this war. Despite the fact that Liberia is indeed one of the world’s poorest countries, the country boasts of several export products that have over the years comprised the backbone of its economy.
Liberia’s mainly deals in exporting rubber that accounts for 65% of all exports. Other export products include diamonds, gold, and iron (Wodon, 2012). The country’s major export destinations are the United States, Europe, and the Middle East. Liberia is mostly covered by arable land with agriculture being one of the core economic activities in the country.
Despite this fact, Liberia is still grappling with land tenure issues where land tenure and security issues arising from the civil war are yet to be addressed. The relevant authorities tasked with the responsibility of addressing several land issues such as the Department of Lands, Survey and Cartography, and the Centre for National Documents and Records Agency have to contend with various land verification and management issues that can be attributed to the destruction of relevant land records during the civil war (International Monetary Fund, 2007).
Similar to other poor countries globally, Liberia faces a huge unemployment rate. The unemployment rate measures the total number of citizens who are seeking for employment in relation to the entire workforce in the country. The trend taken by Liberia’s unemployment rate is a direct reflection of the political and economic misfortunes that the country has faced.
The average unemployment rate in Liberia between 1980 and 2010 stood at 11.25% (International Monetary Fund, 2012). However, concerted efforts towards good governance and sound economic practices have resulted in this rate falling steeply from an average of 11.25 between 1980 and 2010 to 3.70 in 2010 (International Monetary Fund, 2012).
This trend in unemployment can be attributed to the civil war that resulted in the destruction of many pillars of the economy. The recent fall in this rate can be attributed to the new political and economic structures that have been put in place to deliberately stimulate development. The education level in Liberia can be inferred from the country’s literacy rates.
In 2010, there was a 60.8% literacy rate (Watkins, 2007). This figure is relatively high as compared to the literacy rates during the civil war periods. Liberia’s education system also offers free primary and secondary education to the students and this has served to increase the country’s literacy rates (Watkins, 2007).
There are various economic strategies that might result to a firm investment in the Liberian economy. Companies wishing to establish operations in Liberia can be attracted by the socio-cultural aspects of the country, which promotes good co-existence between members from various local and international communities.
The good political climate has existed in the country since the installation of the country’s first democratically elected government and this trend has been maintained by the subsequent governing authorities, which have all ensured that elections in the country are peaceful (Johnson, 2004). Improved economic practices were instituted by subsequent governments and were all aimed at encouraging investment and development in the country (Johnson, 2004).
The first strategy that is globalisation might see a vehicle manufacturing firm such as General Motors setting up operations in Liberia as a marketing strategy to enhance its presence in the market and market its products. The localization strategy might see a multinational firm such as Unilever set up a firm in Liberia with an aim of introducing its products to the market and establishing a market niche through customisation of products.
This is whereby products offered are tailored to cater for the specific market requirements. The third strategy that is the transnational strategy seeks to establish operations in a foreign country while maintaining the head office in the parent country of the country.
Such a strategy might see a company such as Coca-Cola establish operation in Liberia to take advantage of the huge market offered by the country’s population, the relative stable political climate, and the enhanced political and economic structures meant to stimulate economic development.
The fourth and final strategy is international strategy. An international strategy seeks to diversify the market for the goods or services offered by the firm. Such a strategy might see a multinational organisation such as Hewlett-Packard establish operations in Liberia in order to facilitate an expansion of its global market presence.
References
International Monetary Fund. (2007). Liberia: Interim Poverty Reduction Strategy Paper. Washington: International Monetary Fund.
International Monetary Fund. (2012). Liberia: Poverty Reduction Strategy Paper – Second Annual Progress Report, 2009-10. Washington: International Monetary Fund.
Johnson, T. C. (2004). Education and Social Change in Liberia: New Perspectives for the 21st Century. London: Author House.
Watkins, S. R. (2007). Liberia Communication. London: Author House.
Wodon, Q. (2011). Poverty and the Response to the Economic Crisis in Liberia. New York: World Bank Press.