Liberia remains uncompetitive in a highly competitive world

By Rufus N. Darkortey

July 7, 2007

Take a look around your living room. The television and computer sitting on the shelf were manufactured in a country other than Liberia. Walk over to your closet, the coat suit hanging there was manufactured by a country other than Liberia. Look at the Volks wagon, Mercedes Benz, Chevy Blazer, Nissan and Toyota pick-up trucks commuting the streets, they were manufactured in countries other than Liberia. Watch an NBA, NFL, Tennis, Soccer, or Boxing game, the players and executives that participate in these sporting events are barely Liberians. Turn on an African or other type of movies; you will either be watching a Nigerian movie or movies from countries other than Liberia. Finally, tune in to world political and economic events, the major players are of countries other than Liberia.

Some readers will find every mean to disagree with me or defeat my argument on grounds that Liberia or Liberians have been competitive in some areas. For example, George Weah, former World, Europe, and Africa footballer of the year; Angie Brooks-Randolph, former President of General Assembly of the United Nations; Refugee Boy, a movie by a Liberian, etc.

While these counter arguments are valid, they can be invalidated by the inconsistencies and insignificance at which these historical events occur. Liberia’s competitiveness in the world is statistically or physically observed to be very negligible. For example, among other countries, Liberia’s economy ranks at the bottom; her quality of movies, music, and other forms of entertainment rank least; her political power is very insignificant to others; and her manufacturing sector is almost non-existent.

The Big Question:

A question that comes to mind is that – is Liberia uncompetitive by nature or by design? Putting the question another way – did God design Liberia to be a poor, weak, insignificant, or uncompetitive; or Liberia’s poverty, weakness, uncompetitiveness, or insignificance is a design organized and implemented by Liberians, her governments, or her key decision makers?

Based on casual observation and analysis, I can reasonably conclude that Liberia is uncompetitive by design and not by nature. Answering the first question will help to support and explain my conclusion. Liberia is naturally blessed with natural resources (e.g., iron ore, timber, diamond, gold, etc.), and fertile soil that can adequately support the massive production of rice, orange, banana, etc for domestic and international consumption. The marketability and significant economic values of these natural resources are highly sufficient to create wealth for domestic investors; create high quality jobs; strengthen the economy; and give Liberia a competitive power in the world. Therefore, Liberia lack of competitiveness is not by design of nature.


Liberia is poor, weak, insignificant, and uncompetitive by her own design:

Liberia still remains poor, weak, insignificant, and uncompetitive by her own design. However, before justifying my claim, let me compare and contrast Liberia and Singapore, a South Asian country. Unlike Liberia (3.2 million people) with abundant natural resources, the only natural resources Singapore, a country of 4.6 million people, has is fish and deepwater ports. However, according to the 2006 CIA World Factbook estimated statistics, the gross domestic product (GDP) (Purchasing Power Parity) of Singapore is US$141.2 billions, while Liberia’s GDP is US$2.8 billion. Her unemployment rate is 3.1 percent, while Liberia’s unemployment rate is 85 percent. And her GDP Per Capita is US$31,400.00, while Liberia’s GDP Per Capita is US$900.00. The finding of these comparisons suggests that Liberia’s uncompetitiveness is driven by self-designed behaviors, policies, and practices that are counterproductive to the competitive growth and development of the country.

A brief analysis of the following factors will help us understand how Liberia is uncompetitive by design.

Poverty or the lack of income: Poverty is very detrimental to a society because it affects the social, economic, and political wellbeing of every citizen of a country. Every economy depends on buying and selling of goods and services. However, in order to buy or sell any product, you must have the money to do so. A poor individual does not have the capacity to buy a flat screen TV, an automobile, or a computer. As a result, no supplier will be willing and able to sell these items in Liberia where 80 percent of the people live on just US$2.50 per day. Therefore, the wealthy Liberians who are potential suppliers of such economic items will not be able to do so. Consequently, their wealth will lack the potential to be fully reinvested unless it is deployed in other wealthy countries. The wealth that lacks the potential to be reinvested elsewhere or maintained will be unexpectedly depleted. As a result, the wealthy individual may be forced to explore corrupt means to replenish his wealth – a situation that leads to corruption and illegal activities in a country like Liberia.

The government also lose substantial amount of tax revenue per year due to poverty. Because poor individuals don’t have the capacity to succeed in a market economy, they resort to barter systems where they are forced to beg or exchange goods and services with other poor individuals. As a result, the government of countries like Liberia will lose millions of U S dollars in sales and other pertinent taxes due to the high poverty rate of 80 percent. Consequently, to provide the basic social services like roads and hospitals, the government will have to beg other countries to the unfavorable terms and conditions of those countries, a career Liberia has chosen to do very well.

The dissatisfaction of the poor individuals to continuously live under such humiliating circumstances, while the elitist class enjoys the wealth of the country can potentially force the poverty stricken individuals to seek desperate or catastrophic remedy, which are very detrimental to an entire society. The very high level of corruption and the civil war of Liberia are dramatic examples of such catastrophic remedies.

The lack of capital to domestic investors: The average saving rate in Liberia is practically zero, since the average Liberian lives on just US$2.50 per day. The banking sector is not in the position to make loans to the 80 percent of Liberians that are poor because they lack the income and properties to pledge as collateral for a loan. Besides, unlike the USA where consumers and borrowers are traceable by a social security number and a well organized postal system, it is highly difficult to trace any borrower in Liberia. Additionally, unlike developed countries that provide start-up capital to small business owners through small business administrations, Liberian governments, for the past 200 years, have consistently failed to capacitate domestic investors.

Moreover, the private sector development policy of successive Liberian governments is to completely rely on foreign investors to provide the jobs. Unfortunately, the government has not understood that foreign direct investment (FDI) in Liberia is a necessary but not sufficient condition to build a strong private sector that provides quality jobs that pay competitive wages. A key economic concept suggests that capital flows to where it receives the highest return, thus foreign capitals that have been deployed in a weak country like Liberia has accumulated huge economic rent (profit).

Although this claim cannot be statistically justified due to the difficulties in acquiring such data in least developed countries like Liberia, the empirical evidence based on physical observation is profound. For example, Liberia has had long standing foreign investment relationship with Lebanese investors. However, such investment in Liberia has not provided quality jobs that pay competitive wages that can lift a typical Liberian out of poverty. It has been observed that each Lebanese store employs, on the average, 2 Liberian workers. One of these workers is responsible to wash dishes and perform other household duties, while the remaining worker does the heavy lifting in the store. These workers usually get paid salaries that are very inadequate to lift them out of poverty. Unlike, the unattractive wages that are paid to the Liberian workers, the Lebanese investors are observed to be accruing huge profits as demonstrated by their high standard of living, which are exemplified by the quality of their homes, cars, or the quality of schools their children attend.

The lack of significant social infrastructural development: National development policies of Liberia and many African countries have always depended on the platform of a sitting government, which unilaterally decides the kind of development that must occur in the country, where, when, and how such development should be implemented. Because such policies are biased against groups and regions that are not favorable to the sitting president, most parts of Liberia has not experienced any form of development since the establishment of Liberia about 200 years ago. Additionally, such policies severely lack continuity, consistency, organization, congruity, and the rapidity at which they can develop the country because these policies are largely vulnerable to exploitation and manipulation by the sitting administration to the disadvantage of the entire country.

Because most Liberian leaders are exploitative, manipulative, and unpatriotic, they must be forced to develop the country by a model I proposed, which is calling for the establishment of a national development plan for Liberia. Under the proposal, a law will be passed that will clearly specify the developmental needs of the country, where, when, and how such needs must be implemented. Please see the following links for details on the proposal: http://www.liberianforum.com/articles/establish-national-development-plan-for-liberia.html, or http://www.liberianforum.com/press-releases/press-release-for-the-establishment-of-national-development-plan-for-li.html.

I have commenced discussions with members of the legislature to pass such a proposal into law for the common good of our country. Please join me in this endeavor by encouraging your legislator to vote for this brilliant proposal.

The lack of competitive political parties or too many political parties: The one party system of the True Whig Party monopolized and dispensed political power to the detriment of the growth and development of Liberia. The development of the country was one-sided with the development of the indigenous been neglected by the Americo–Liberian ruling class, which is typical in most countries. Fortunately, this system was dismantled and replaced by another unproductive political system that gave rise to political pluralism. As a result, every Tom, Mary, Dick, and Harry is claiming to be president without the requisite credentials to do so. The new multi-party system has given rise to the establishment of make shift, uncompetitive, and unproductive political parties. Because these parties severely lack the ability to compete with or constructively oppose the ruling party, Liberia is suffering from some form of political paralysis, where the ruling party completely dominates the rest of the political parties, thus practically giving rise to a one – party system.

Liberia can only improve democratically if all the inefficient political parties are combined into 2 political parties. The benefit of a 2 party state is that it creates a competitive political environment that promotes growth, development, and unity. The design of such system is above the capacity of this article, but I hope we can start to think about it.

These factors plus many others that I intend to develop in the near future are key variables that are making Liberia uncompetitive by design. I hope by reading this article, you are inspired to make Liberia competitive by mitigating the uncompetitive factors.

Rufus N. Darkortey resides in Cleveland, OH, where he works in the risk department of a large bank. He holds a Masters of Arts degree in economics. He can be contacted at 216-577-3177 or darkort@aol.com