Liberia - Recent economic developments and medium prospects

Report No. 4178-LBR Liberia Recent Economic Developments and Medium-Term Prospects December 30, 1982 Western Africa Region Programs I, Division B FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  ABBREVIATIONS ADPs - Area-based Agricultural Development Projects CARI - Central Agricultural Research Institute FDA - Forest Development Authority GOL - Government of Liberia GSA - General Services Administration ICOR - Incremental Capital Output Ratio IDA - International Development Association IFAD - International Fund for Agricultural Development IMF - International Monetary Fund LBDI - Liberia Bank for Development and Investment LPMC - Liberia Produce Marketing Corporation LPPC - Liberia Palm Products Corporation LCCC - Liberia Cocoa and Coffee Corporation LWSC - Liberia Water and Sewerage Corporation LEC - Liberia Electricity Corporation LIFZA - Liberia Industrial Free Zone Authority LIBSCO - Liberia Sugar Corporation LRPC - Liberia Rubber Processing Corporation LRDU - Liberia Rubber Development Unit LPRC - Liberia Petroleum Refining Corporation LTC - Liberia Telecommunications Corporation MCC - Monrovia City Corporation MOA - Ministry of Agriculture MOE - Ministry of Education NBL - National Bank of Liberia NHA - National Housing Authority NHSB - National Housing and Savings Bank NIOC - National Iron Ore Company NIC - National Investment Commission NPA - National Port Authority OAU - Organization of African Unity RDB - Rubber Development Board SDR - Special Drawing Rights SME - Small and Medium-Scale Enterprises USAID - United States Agency for International Development WAEC - West African Examinations Council WARDA - West Africa Rice Development Authority  FOR OFFICIAL USE ONLY LIBERIA RECENT ECONOMIC DEVELOPMENTS Table of contents Page No. ECONOMIC INDICATORS SOCIAL INDICATORS FOREWORD.......................................................... INTRODUCTION, SUMMARY AND CONCLUSION ........... .. ................. ii-xiii RECENT ECONOMIC PERFORMANCE AND OUTLOOK Chapter I Recent Economic Developments ...................... 1 Overall Growth ........................................... 1 Balance of Payments and External Trade .. ................. 3 Exports ................................................... 5 Imports ........................................................... 5 Money and Credit ......................................... 8 Prices and Inflation . . . . .1............... 11 Employment .......................... ..................... 11 Development. Planning ... ................................... 12 Chapter II Public Finance and External Debt ............. . 13 Central Government Revenue ............................... 15 Expenditure .............................................. 18 External Debt ............................................ 19 New Loan Commitments and Term Structure .................. 20 Debt Burden ........ ...................................... 21 Chapter III Medium-Term Prospects ............................ 23 Low Growth Case - No New Major Policy Initiatives ........ 23 Policy Directions Necessary for Resumed Growth . . 26 Prospects for the Economy with Reforms ................... 37 Balance of Payments Prospects ...... ...................... 38 Prospects for Government Revenue .......... .. ............. 38 Debt Service Burden ...................................... 40 Conclusion ......................................................... 42 This document has a-restricted distribution and may be used by recipients only in the performance of their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - STATISTICAL ANNEX ................................................. 43 MAP BACKGROUND PAPERS - REVIEW OF MAJOR SECTORS AND DEVELOPMENT ISSUES (available on request) Chapter I Agriculture Chapter II Mining and the Concessions Chapter III Manufacturing Chapter IV Transport Chapter V Public Enterprises Chapter VI Social Sectors Chapter VII Development Administration  List of Text Tables Page No. Table 1 Rates of Growth and Sectoral Shares in GDP ................ 3 Table 2 Summary of Balance of Payments, 1977-81 .............. 4 Table 3 Volume, Value and Unit Price of Principal Export Commodities 1976-1981 .................................... 6 Table 4 Money Supply and Private Sector Liquidity ................ 8 Table 5 Summary of Commercial Banks' Consolidated Balance Sheets, 1977-81 .......................................... 9 Table 6 Summary of Government Revenue and Expenditures, 1977-81 ....... . ..................... 14 Table 7 Trends and Structure of Central Government Revenue, 1976-77 - 1980-81 .16 Table 8 Functional Classification of Budgetary Expenditure, 1976/77-1980/81 .......................................... 19 Table 9 Liberia - Selected External Debt Indicators, 1976-1981 ... 22 Table 10 Recent and Prospective Growth Rates in Major Sectors ..... 24 Table 11 Summary Projection of the Balance of Payments - Low Growth Case, 1982-1986 .... ................ 25 Table 12 Summary Projection of Central Government Budget - Low Growth Case, 1982-1986 ...................... 26 Table 13 Summary of the Balance of Payments Projection - High Growth Case, 1982-1986 .... ............. 39 Table 14 Summ.ary Projection of Central Government Budget - High Growth Case, 1982-1986 ................... .. 40 Ta.ble 15 Projected Debt Service, 1982-1986 ............ ............ 41   ECONOMIC INDICATORS - LIBERIA ANNUAL RATE OF GROWTH GROSS NATIONAL PRODUCT IN 1981 (% 1971 CONSTANT PRICES) US$ Million % 1977-80 1981 GNP at Market Prices 930.2 100.0 0.6 -2.2 Gross Domestic Investment 189.1 20.0 -7.7 -29.4 Gross National Saving 123.7 13.0 -2.7 -36.2 Current Account Balance -65.4 7.0 Exports of Goods, NFS 540.7 58.0 1.4 -11.3 Imports of Goods, NFS 549.0 59.0 -2.2 -16.0 OUTPUT, EMPLOYMENT AND PRODUCTIVITY IN 1981 Value Added Employment V1 V. A. Per Worker US$ Mln. % 000 % US$ % Agriculture 332.3 36.0 534.0 79.4 622.2 45.0 Industry 254.5 27.0 44.3 6.6 5,744.9 416.0 Services 342.2 37.0 94.6 14.0 3,617.3 262.0 Total/Average 928.9 100.0 672.9 100.0 1,380.4 100.0 GOVERNMENT FINANCE Central Government 1980/81 1981/82 US$ million % of GDP US$ million % of GDP Current Receipts 217.9 20.1 240.5 22.0 Current Expenditure 237.9 22.0 271.5 25.0 Current Surplus -20.0 4.8 -31.0 -(3.0) Capital Expenditures 59.1 5.0 49.0 5.0 External Assistance (net) 83.5 8.0 76.5 7.0 MONEY, CREDIT and PRICES 1978 1979 1980 1981 (Millions US$ outstanding, end of period) Bank Credit to Public Sector 20.7 40.8 43.8 35.8 Bank Credit to Private Sector 132.2 146.3 124.6 91.0 (Annual Percentage Changes) Consumer Price Index 2/ 7.3 11.5 13.7 8.6 Bank Credit to Public Sector 250.8 97.1 7.4 -18.3 Bank Credit to Private Sector 21.1 10.7 -14.8 -27.0 NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Subject to, further verification. 2/ Sept. - Nov. 1964 = lOO .. not available . not applicable  TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1979-81) 1979 1980 1981 (Millions US$) US$ Million % Exports of Goods, NFS 553.6 613.5 540.7 Iron ore 308.5 55.0 Imports of Goods, NFC 587.4 614.0 549.0 Rubber 92.2 17.0 Resource Gap (deficit=-) -33.8 -0.5 -8.3 Diamonds 32.2 6.0 Logs or Lumber 50.7 9.0 Interest Payments (net) -13.7 -23.9 -20.2 Coffee 26.5 5.0 Workers' Remittances -35.0 -32.0 -33.0 Palm Products 4.5 1.0 Other Factor Payments (net) -87.7 -83.7 -72.0 Cocla 11.5 2.0 Net Transfers 34.7 35.7 68.1 All other Commodities 30.4 5.0 Balance on Current Account -135.5 -104.4 -65.4 Total 556.8 100.0 Direct Foreign Investment 1/ -26.9 -48.9 -28.9 EXTERNAL DEBT. DEC. 31, 1981 2/ Net MLT Borrowing 2/ 121.0 60.4 45.0 Disbursements 177.1 75.8 49.4 Amortization 56.1 15.4 4.4 Sub-total 94.1 11.7 16.1 Public Debt, incl. guaranteed: 592.3 Non-Guaranteed Private Debt: Increase in Reserves (+) 41.4 -50.9 3.2 Total outstanding & Disbursed: 592.3 Gross Reserves (end year) .. .. .. DEBT SER. RATIO FOR_1981 3/ Net Reserves (end year) Public Debt. incl. guaranteed: 6.5 Fuel and Related Materials Non-Guaranteed Private Debt: Imports 103.2 152.1 129.6 Total outstanding & disbursed: 6.5 Debt Service as X of Government Revenue: 15.4 RATE OF EXCHANGE: US$1 = Liberian Dollar 1 IBRD/IDA LENDING (DEC. 31, 1981) (MILLION US$) IBRD IDA Outstanding & Disbursed 84.5 28.8 Undisbursed 35.8 18.9 Outstanding incl. Undisbursed 120.3 47.7 1/ Includes errors and omissions. 2/ IBRD Debtor Reporting System. 3/ Debt Service as percent of Exports of Goods and NFS. .. not available not applicable  Page 1 TABLE 3A LIBERIA - SOCIAL INDICATORS DATA SHEET LIBERIA REFERENCE GROUPS (WEIGHTED AVERAGES AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE)- TOTAL 111.4 MOST RECENT MIDDLE INCOME MIDDLE INCOME AGRICULTURAL 6.1 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA NORTH AFRICA 6 MIDDLE EAST GNP PER CAPITA (US$) 170.0 270.0 530.0 1053.2 1253.6 ENERGY CONSUMPTION PER CAPITA (RILOGRAMS OF COAL EQUIVALENT) B2.7 533.9 425.0 610.1 713.5 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 978.0 1335.0 1873.0 URBAN POPULATION (PERCENT OF TOTAL) 20.5 26.2 33.0 28.3 47.3 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 3.9 STATIONARY POPULATION (MILLIONS) 12.6 YEAR STATIONARY POPULATION IS REACHED 2100 POPULATION DENSITY PER SQ. EM. 8.8 12.0 16.3 54.7 35.8 PER SQ. KM. AGRICULTURAL LAND 160.3 219.9 296.2 129.9 420.9 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 45.4 46.8 47.8 46.0 44.3 15-64 YRS. 52.0 50.8 49.9 51.1 52.4 65 YRS. AND ABOVE 2.6 2.5 2.4 2.8 3.3 POPULATION GROWTH RATE (PERCENT) TOTAL 2.8 3.1 3.4 2.8 2.8 URBAN 5.4 5.6 5.7 5.2 4.6 CRUDE BIRTH RATE (PER THOUSAND) 50.1 48.8 48.8 47.2 41.2 CRUDE DEATH RATE (PER THOUSAND) 20.6 16.5 13.6 15.7 12.2 CROSS REPRODUCTION RATE 3.4 3.4 3.4 3.2 2.9 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71=100) 96.0 101.0 97.0 90.7 100.4 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 113.6 100.5 101.4/c 93.9 108.5 PROTEINS (GRAMS PER DAY) 45.8 43.0 42.9/c 54.8 71.9 OF WHICH ANIMAL AND PULSE 10.8 11.6 12.6/? 17.0 18.0 CHILD (AGES 1-4) MORTALITY RATE 45.5 39.6 33.8 23.9 15.1 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 44.1 49.1 53.6 51.0 56.9 INFANT MORTALITY RATE (PER THOUSAND) 194.0 173.8 153.9 118.5 104.3 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 20.0/d .. 59.1 URBAN .. .. 64.0/d .. 83.1 RURAL .. .. 6.0/d .. 39.8 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. 11.0/d URBAN .. .. 35.0/. RURAL .. .. 6.0/d POPULATION PER PHYSICIAN 12600.0 11754.5 9276.5/f 14185.2 4015.5 POPULATION PER NURSING PERSON 1411.8/e 2671.5 1808.5/? 2213.2 1802.2 POPULATION PER HOSPITAL BED TOTAL 711.8 592.0 623.0/f 1036.4 641.7 URBAN 181.3 194.4 .. 430.8 538.3 RURAL .. .. .. 3678.6 2403.3 ADMISSIONS PER HOSPITAL BED .. 27.7 .. .. 25.5 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. URBAN 3.9/g,h .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. URBAN 1.7/g,h .. .. RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. URBAN .. .. .. RURAL .. .. ..  Page 2 TABLE 3A LIBERIA - SOCIAL INDICATORS DATA SHEET LIBERIA REFERENCE GROUPS (WEIGHTED AVERGES - MOST RECENT ESTIMATE)- MOST RECENT MIDDLE INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA NORTH AFRICA & MIDDLE EAST EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 31.0 53.0 67.0 83.3 88.7 MALE 45.0 71.0 83.0 96.1 104.5 FEMALE 18.0 35.0 51.0 80.4 72.0 SECONDARY: TOTAL 2.0 9.0 22.0 15.3 39.7 MALE 3.0 15.0 31.0 19.4 49.3 FEMALE 1.0 4.0 12.0 11.3 29.0 VOCATIONAL ENROL. (X OF SECONDARY) 11.7 5.3 2.5 4.7 10.1 PUPIL-TEACHER RATIO PRIMARY 32.4 35.5 42.1 38.6 34.1 SECONDARY 14.2 16.5 .. 23.4 23.7 ADULT LITERACY RATE (PERCENT) 8.9/i 15.0/k 25.4 35.6 43.3 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 1.0 11.1 8.1/d 31.9 17.8 RADIO RECEIVERS PER THOUSAND POPULATION 102.2 116.1 176.2 71.8 131.3 TV RECEIVERS PER THOUSAND POPULATION 1.5/1 5.2 11.6 17.9 44.1 NEWSPAPER ('DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 0.8 5.2 6.1 19.1 31.5 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.6 0.7 0.7 0.6 1.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 380.4 481.8 628.4 FEMALE (PERCENT) 33.9 32.5 31.6 36.5 10.6 AGRICULTURE (PERCENT) 80.0 75.0 70.0 56.5 42.4 INDUSTRY (PERCENT) 10.0 12.0 14.0 17.7 27.8 PARTICIPATION RATE (PERCENT) TOTAL 38.9 36.1 33.6 37.0 26.0 MALE 51.9 49.0 45.9 46.9 46.2 FEMALE 26.1 23.3 21.2 27.2 5.6 ECONOMIC DEPENDENCY RATIO 1.2 1.4 1.5 1.3 1.9 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. 61.7/1 HIGHEST 20 PERCENT OF HOUSEHOLDS .. 72.6TI LOWEST 20 PERCENT OF HOUSEHOLDS .. 5.3/1 LOWEST 40 PERCENT OF HOUSEHOLDS .. 10.97 . POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 507.0 279.2 RURAL .. .. 75.0 200.6 178.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 137.0 523.9 403.6 RURAL .. .. 125.0 203.6 285.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 23.0 .. 22.1 RURAL .. .. .. .. 30.9 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. lb Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1978 and 1980. /c 1977; /d 1974; /e 1964; /f 1975; /j 1956. /h City of Monrovia only; /I 1962; /j 1964; /k 1973; /1 Population, higher income calculated as residual; includes expatriates. May, 1982  Page 3 DEFiNITIONS OF SOCIAL INDICATORS Notet: Aitwhggh the data are draa frotm sources generally judged the m st authoriotaie and reliable, it shoald also e noted that they may e be inter- nationally comparable be uoe of the inck of tandardiond dofiniioto and conce?tn asd by differen coIn too in colle-cti th data. rho data ate, eae- theleas . sefol to desobih ordtrn of nognitada, indicate t-rend. and choracerioe teratei -ajor diff-o-pcet bhetnen eamblees. The reference grotpn are (I) she tame .oontop group of the anh -bjt country and (2) a country troop miti so-evhat highor average Income than the coantry groop of the subject country (encept Too "igh Income Uil nporters 'group ehere 'iddle Incoa Norih Africa and diddle last Is chostn bec--e of nirongee actio-cultural offinirtes). In the reference group d to the overagen ore population weighted arithmotic tlean for atch indicato and sheet only ahtn majorily of the co-nrites In a grop ha data fo thcan Indl oarer. ieSn the ooerageo o coantotee unonng the indiftotrs depenad on tho aailability of d-a and is nor upifort. cotiton most he esnrciaed to relating averages of Pee tedicotor no another. Those anorages are only useful inoompoing the value of soe tedi-ator at a time among thy .oontry and peferent groups. ARRI (rhoutand sq.k.) Population per Hospitat fed - .oata, uban, and r.at - PoyaCasion (fetal, rot - Total surfaoe area 1otprinsng load area and Inland caters; 179 data. orban, and rural) divided by their respec tint number of hopital beds e oetaret - istigtae ad atgriclturtal area ansad reaporantly or peroanently anatlable in Pobtic and pri-vra general and specit-ired hospital and re- far c reps, pastures, market and kitchen gardens or to lie fallov; 1979 data- habilot-,ion centers. inepitals are eetabttshments permaneetly staffed by astolass nore phystotan, Esrahltshmsensr proniding prinoipatlplacsso- tNP PiER CAPIIA (US) - GNP par capine estihtes as curreni market pricen, cat- ditat cr e are vet inclsded. toral bonyitals. honenn, tnclude health omlated by sm=e cannver tlon mathod as WPrld lath coiaa (1978-80 baesis; 1961, and medical centers not peretanonrip staffed by a physicist (bat by a 1970, andd 19O daia. madital assistants. nurse, midatfe, en .) ehich offer tn-potent accemen- daniot aed provide a limised range of gedloat fanil tries. Pot stat ta- ENtitY CONSGIIPTtON Pit GAP1TA - Annoal conseveptlon of conarerciat esergy (coal float purpomstseuban hospitals Intlude Wigs prinoipal/genenal hospitals, aed ligeise, petrolnan, nacura i gas and hydra-. euctear and georhertpl elec- and rtural hospitals. lootl or oru at hospitals ond medical and matrettey trIo ipy) it kilograss of coal equivateer per capita; 1960, .1970 , and 1979 centers. Ipto tattoed bospitais ore toocluded only under total. data. Adeissions per tapitat ted - Tocal -nupber of od=issions to yr discharges frop bospi als divided by the no-mbr of beds. PdPUL,ATION AND TITAL, lTdTI-Iiln Total Poplation, dtfd-fear (thousand:) - Ae of July i: li6t, t97t, and t9lt dnUSING data. iterate hoze of WausetPld (parsons pen bousmehold) - total, urban, and rurat- Urban Poeuiation (perrcent of Ptorll - fat to of urhan Is toral populastionn; A housohold contists of a troop of tndiniduals vho share lIning quarters different deftiniLonen of urban areas may affeot comparability of data and their mtsn mzeots. A boarder or lodger may Of ety vat be tnoivded in amacngecouetries; 1960, till, and 19gO dosa. tie household toe ntatisticol pe pones. Popelarion Pronectiones Averagoesnuber of persona per seem -rota I, urbam, and rural - overage eutm- Poyuataiom in yea 2000 - Turrets ppopltiron projeortons ar iebaed pno t9ll her of pensoos peer oom in all ceban. and rural eotpied connentifetal total populatLon by age and set and theft =ory liry and fortility rates. delilnge, resps tinely. Hi eld ings ee lade non-ieinmaer sore ta-es and Projeorien parame!ters forp mraltny eaten conenIse of rh ee levels aseuP- onoccopied parts. Ing life expectancy as birth tnP Cas ing miii coun ry s pee noapita in o.e access in cler rigcy (percent of doni ings) - total, urbam, and rural - tenet, aed female life onyotfanty erahilieteg an 12.1 prays. TIne para- Conventitenat dotittegs ebbh eleerriitey in lining quarters as pereentage Reaters Ion feositry race also have those lenelas assuming decline in of total, urban , and renal dvea 11gm respectIvely. fertility acco ding to Income tenet and past family planning pee l pmace. foci tountry Is thee uss igned ott of these nine combinations of eortality EDUCATIIO and fd hilisy trends for prejettinI purposes. Adjsted dnrolHmeet iitlos ttanioena ynpstuasonv - In a nrar fonory ypetuas Inn there Isneogrovth stoce Primary schoel - meat,. male and femLale-tenets tonal, male and female the birth tate it equal to tie deart rare, and alto the age structure re- onnotleent of all ages at the pyleory tenet ar percentages of respeycfine mete5n constant.' This to actienea onty after ferttility rotes dectline to primlary echool -age popalationa; normally lncisdrs oh ildreo aged h-li tha reptatemant level of sntI net reyrodntinn rate. mien each grenecersti years ban adjcsted fon differenr lengths of primary eduowitno; for of momyn replates itself mtactp ly entor fasioary population etzs ens tonnftresotlth universal edacat tot enrollment say etceed 100 peroent enrimaind on she basis of tie projected chararrerisrl0s of the populatio e nimoy =ef pupils are belle or above the oflioal school age. In tie year 2000, and she rate ef decline of ferriiltyeratennoyeolae- tecoedary school - total, masle ord fema le - Coepoted am abone; snendary meet tenet. edmoation requires at feast inst years if aypreovd primtary instroftian; leer tstarioeaty populatinon is reached - The year vhem stationary peystartan provider general, nocatitotal, or teare hertalimig tnntrao none for pupims aloe vitt be teethed. usually of t2 to 17 years of age; cotrespondence cosms one gteeralie eopelam ioaDensiry excilded. Per Ao. km. - hid-year popalation per squrar kilometer (100 heo.anes) of Vocationaf enroilmenr (rnent of seonadaryf - Vocational tenitnruionn total area; 1960, 1970 and 1979 data. Iectedo tecirsoal, tedusA lal, or o1the progrtNs Uhich operate independ- Pee mq. km. agrtoeltara I iand - Coparued as abate for agriouttural land eontly or as deparrweoml of secondary leotitotlons. Only; 1960. 197r an 1979 dota. Pepio-teac-er torte - prm ary. amd seoEndary - fatal studemts errotted In Peeslalori hAte itrneere (percent) - Children (0-14 Vears), . anting-ege (15- prImary and seaondary lenels dtvided by numbers Pf teachers ir the 64 yea s). aed reti ed (by yea s and oneh as percennages of mid-poor ppop- o rrtpondfo1g ievels. lat-n; t1960, 1970. and 1980 dana. Adl- i trsraty rote (pterent) - Literate adults labia no read bPd write) tPopuationtG.prvth fore (pernceni) - total - Anneal troef I rates of total mid- as ayperentate of total adullt pepalot ten aged tIS pears and oveer. year popalation fur 1950-6i, t960-70, and t9ll-it. Pepuatasion Growrth fore (per ent ) - orban -Annali grnwth rate s of urban pops- CONSUhItfTION latioss tor 19S0-60. t9bO-70, and 1910-li. Passeeger fare (per thousand ypotuatien) - Passenger oars otpprtse motor Crude Rlo t are (per thousond) - APtual litne btrths par thousand of =td-year cars meatieg itss than eIght pnrsonsi rexcludes aebutonres, bearese and pnpatiioe; t96., 1970, and 1t9i data. -ilftarn oetb dlr8- Crad leanthar (pen thesondi - Aavat deaths yen fhosmand of mId-ypor Radio feceioers (per housand populanion) - Ill types g .e.eivers foe radio poplation; h.9 1970, and 1991 da a, broadcasts to general public per lbeusand ot popuioin, exclIdesou- Greet oseprdaction Hate-ottrage monumrs if daughtsasea voavill beao In ilrensed rei rie r in countris and n years nhen egistratior of adio her ineral reproduite per tid ir tie experien es present age-spe it tar- saetsens in effect; data for recent yeare may ens be oteparable mince ility rates; assloly line-year ae ages ending in 1960. 197. and 19. neff ounr ire aohlished ticeasing. PFalEl:y Pianning -hAeoryrns. Apneual (thousoeds) - Avnual vuaber of acceptors Tb' Rocetvers (tee thousavd population) - TV rae einert for broadcast to of birrb-oontrrl denices mnder aceniors of national family planming program. geveral public per thousand population: exc ludes unet tensed IV receivers P.=lly Plnaing -Users (parcent of married wntnee - Percentage of =arried in coan rfes and In years - hen ragsltratinn ot IT sets wan in eftent. wmen of otld-bea ing age g15-44 pram) vhb use b-rnb-cnatiol devices to oEDUpaper CirT ilation rey rhosand poyuiation) - Iboem the overage tie- alt mtrried women in same age groop clati_on of doily generai Interest nevspaper, defined as a periodii l pSbi bat on denoted y rIN Ily ii recording gene al nevs. it is coaside ed iaOi stND NUT3oN to bt "daily" If it appea s oa leant fe times a veek. index of Peed Preoottn pr Capita (1969-71-100) - Index ot per capita annual Cinemta APnual A:teodocce per Capita par lear - fated en the numier of prodootien of all feed tomeadinies. Peodeotios aeclades seed and fsend and tiokete told darting tie year. Ivcfoding admissions to dortee-in rtnnmtas ft on calendor year basis. Tommedities inner prlmary gOode (e.g. s-ugarcane and mabire niss. Instead of togae) mitch eare dible and onrtelnnurienets (e.g. coffee aed tea are etchluded). Aggregate production of tact enesy is based en Ldi0t FORCE nonfatal average prdodue prlotweights; i961-65, 1970, and 191f data. ctal Labor Force (thousands) - Tconeomlhaly anctive persoes, Info d6ng Per ropita supply of caloriet (percent of requirements) - Campured from armead gfors amd uoe=ployed ban etc lading bouseatves, students, etc. energy equoivalent of Ott fond sapplies availabl e in tuerry per capire covering ypoplationa of all ages. - efteiin me in norloot counvtriem ore per day. Available sapylies co=mprise demeavie pronductton, imports LoSt noct comparabil; 1961, 1970 end 19t0 dmta. exports, and ohanges in stoch. Her sopplies eotiude animal feed, tends, Pemale (pertrnt) - Pemale laber force am percentage of total labor fonte. quantitiws useed in feud proeesing, end losses in distribution. toqaire- AgeIculfane (perteent) - Labor foerte in Teeming, forestry, hueting and me nts mere est tmanea by PAl based as physiological needs foe mnomal atti- fishing aso peroctercage of total labor forte; 1910, 1910 and t9HH data. vthy and health coesidering emnvironmental temperatire, body weights, age Industry (partner) - Lbier feece In =Iting, ennnecer cion, manusfetirieg and meni diattrbatfee of popaldlotan, and allowing 1C percent for easto at atd elootois ity, sorer and gay as percentage of total iaboe forte; household tevel; 1961-65, 1970 and t977 data. 1960, t971 and 19fO data. Per capita supplY of peroein (groam pen day) - Pentefe centrest pf pen capita ParricirarfeisnRae (prercent) - totat, mate, and femate - Parricipatian or see mupply of food per day. Hat nupply or food is defined as above. He- activity rates are conputed as ftoal, male, and femafle faber foree as qofremeesm for all reset ries sstablished by USDAm provide foe mietmam parcertagos of total, male and femaie popuiatifoe of all ages rempectively atloeances of 60 grams of total prorrin yet day and 20 gnomEB of eviTal end i960, 1970, and 19gO dora. These are based on IL0d s ponniotpasten ratem poise proteit, of vhich 10 grama olveld be animal prefain. Them:e stood- refilectiag age-lee strortere of the populatiom, and long timet reed. A. ards are later than these of 75 grams of total protein and 23 grawos of fee estimates are Teem national soerces. animal protsin as 00 anerage Toe tne world, proposed by PAt ic the Third bconoe=i lependeonc tatie - forts if papalation undee 15 and 65 aed aver gorld Peed surney; 1961-is, 1970 and 1977 dorm. en the total tabor force, Per soelta profein topply from snima I sd eats e- Proeein topply of foud det- rived teem animals and pulses is grams per day; 1961-65, 1970 aod t3ll da a. INCaOh DISTRIBUTION Child (ages 1-4) Iolb ia-e (pee thousand) - Annoai deaths per tbousand in Percennege of Private Inreme (inn in cash and hind) - Received by riehem age group 1-4 yeses, to chidren in shin age troop, toe mast deveilopleg counc- 5 percent. richest 20 percent, poorest 20 pernent, snd poorest 40 pereeee tries data deeied from lfe rabies; 1960, 1970 tad 19gO dots. of households. HtHd,TH POVIRTiIi TARGNTi GROUtPS Life inpeanmiry at i2 to (rearm) - Average number of yetes of life ratrtivtg The elloawing estimatam aee oery appronimace measoues of poverty lenls, or birt; 16960, 1970 and 1981 data, and should be rn-e peeted eIth considerable neetton. Infant normality Rate (- t 1touandd) - nostdl deaths of Infants ande 'roe tear stimaed Absolute Povsrby Inroms Level (il w no pins) -urban and earur - of age per thousand line births; 1960, 1970 and 1980 data. Absolurs ponerty itceet lenet is that it.ome level baelo ahich a minima icesso tot afe Wat re (ereent of poeulattin) - tatal, utbae, and uorat - fNs- ntritionaily adeqote dIet plus emmeetiat non-food reqafrements is ens bee of people (tonal. cr6an, aed total) mith reaon4able maC eas tn sale affordabie. maer auppiy (includegstewated sorfaceemeterm at aenpeared hot unoneaamisarod istimated Atelaitie Pmoverty Iscee LBend (1i$ peero cpita) - arhananderural - mater such am shot item pretested boorholes, springs, and sanirary melts) an tota relative po1e-ty innate tenet is one-third of average pee wapita perenteagem af their respenivtt paptes ions. I=eat arhan areapa pblin personeatlenome of the country. Uebae lieael in deeived teem the rueal fosntaie or standpost lotated not mere than 203 seteem fronaahosme may ha level nubh adjomimesi for big her Coam of lining in orbant areas, ceneidered as betng within amtsomdbie aenssm of that houae. In canal areas Bstimated Poesianis gelom Astnolute Poverty tera- Lsv1el (pettent) - ueban reasonable arrest eouid ilply that the ho-memife ar mesIert of -tbe iotehold snderua - Portent of p-palatia j (urban mad total) vho are "abolue do nor hate to spend a diapeaparenaamte pmer at nhs day in fetching the pet",. family a mater neteds. Iteme- to Esereta Diaramal (perent t o- tbeClarNSM) - total, merIs, and carat - Metrer of peaple (total, atrbtt, aed coral) served by emewre. dispomal at pereentages at their remspetive pepsiattensm tatreim disposai sasy Iteatde mIs mailettim mand dispasal, with am ettame>t irearsemi. af bi tma eararta mmd naste-meire hy eahew-bonse lyitemat the ate of pit pnivint and o idi- tar instaliarinne. Peestattem pee Phnslttan - Popatation dittded by .ater at .ma.timing phy.it' Ewataiw sad tocist gate Ilini.lom otam .gmqpltgied togs a mediwat sehoal as amitremity tenet. teo7asia lAtalysia mad Peejewitena bepartain Peemlatteet ra Yurehng Preman - Paymiasies divtded by Puaber at pemotisteg Ray 19d2 mPte md Peale grmdmetee narses, atamei -t arma, pmatiwat mincer. Bsd aerate5 emotitairies.   FOREWORD (i) This report, Liberia - Recent Economic Developments and Medium Term Prospects, reviews recent macroeconomic and sectoral trends, identifies key issues in the major sectors and assesses prospects for the economy. The discussion, and in particular the assessment of prospects for sectoral growth, draws on more detailed analysis contained in background papers, which are available on request. (ii) Considerable economic and sector work on Liberia has already been undertaken by Bank Staff in the recent past. It has formed a basis for a dialogue with the Liberian authorities. and prior to the discussions of the Green Cover draft with the Government, some of the recommen- dations in this report had already been discussed with the Liberian authorities in the context of a short-term economic recovery program. Another major Bank report on Liberia "Liberia - Agricultural Sector Review" is currently under preparation and will be forthcoming soon. The report contains a much more detailed analysis of the agricultural sector problems and issues and maps out a strategy for the development of the sector. (iii) This report is based on the findings of a mission comprising Messrs. G. Alibaruho, principal author, I. Husain (Leader), J. Kisa G Lamb, N. Chhim and T. Klein who visited Liberia in October/November 1981. The data was updated following a staff mission to Liberia in May/June 1982. In addition, the following staff members contributed the sector reviews: Mr. S. Husain - Agriculture; Mr. H. Moritz - Manufacturing; Mr. N. Pijl - Transport and W. Meijer - Urban.  - ii - INTRODUCTION, SUMMARY AND CONCLUSIONS Introduction 1. Three main objectives underlie the preparation of this report: (a) updating the Bank's information on the Liberian economy; (b) review-ing selected sectors of the economy so as to highlight major problems and issues related to sectoral performance; (c) identification of a feasible set cf poli- cies that need to be pursued so as to steer the economy back to a path of growth. 2. The last Country Economic Memorandum on the Liberian economy was written in December 1979. 1/ That report pointed out the strains the Liberian economy was experiencing in the late seventies due to poor export markets, rising energy costs, and a stiff debt burden. These problems were inherited by the Government that came to power in 1980. But also, the economy experi- enced new shocks internally and externally following the change of Govern- ment. Against this background, this report reviews the recent performance of the economy and assesses medium-term prospects. In order to point the way to restructuring the economy and its key sectors, a detailed review of selected sectors was undertaken and is available, on request, in the form of background papers. The conclusions and recommendations in these papers have been taken into acccount in the identification of key sectoral issues and the assessment of the prospects for sectoral growth undertaken in this report. Other recent Bank reports on the Liberian economy that have formed a basis for the on-going policy dialogue with the Liberian authorities are: Liberia-Concession Sector Study (Report No. 3905-LBR, April 15, 1982); Public Corporation in Liberia (Report No. 2902-LBR, February 28, 1980). 3. The Civilian Government in Liberia was overthrown in April 1980. The Military Government which took power inherited a sluggish and strained economy in which GDP growth had only averaged less than 1.0 percent per annum between 1974 and 1979. The economy was suffering from a heavy oil import bill and stiff debt burden at a time when external demand for Liberia's products was depressed. In addition, in its very early life, the new Government made inap- propriate policy decisions that further depressed investor confidence and escalated the fiscal crisis. Although the Government has since made a com- mendable effort to pursue sound policies, disinvestment or withholding of investment decisions in the private sector, inadequacy of counterpart funds for public investment projects, the initial exodus of experienced personnel following social-political disturbances, placement of less qualified people in management positions, occasional harassment and interference in the running of 1/ Liberia, Current Economic Situation and Prospect Report No. 2662- LBR, December 28, 1979.  - iii - private firms and autonoomous departments and agencies are still hurting the economy. Analysis of these and other issues as well as additional measures that could be taken in order to redress the situation are the main focus of this report. Summary and Conclusions 4. Liberia enjoyed rapid rates of economic growth in the sixties (over 6.0 percent per annum) and early seventies (over 4.0 percent per annum) due to spectacular increases in value-added and output in the iron ore and rubber sectors and the improvement in the terms of trade, but, with the unprecedented rise in energy prices since the mid-seventies and the subsequent recession in the industrialized countries, demand for iron ore and rubber weakened, slowing do-"n economic growth to less than 1.0 percent per annum in 1974-79. A serious policy mistake was also made in the seventies to expand inefficient public sector enterprises. Although public investment through these corporations must have partially offset the decline in GDP that resulted from lower world demand and prices for Liberian exports, on a net basis the cost to the economy was heavy as the enterprises became inefficient and a drain on scarce budget revenue. There were signs of economic recovery in the late seventies (1978 and 1979), when GDP grew by 4.0 and 5.7 percent, respectively. This temporary development was associated with the partial recovery in prices of iron ore, rubber and timber as well as a flurry of OAU-related construction activity that, however, resulted in a build up in debt. But weak external demand persisted, and the economy started deteriorating markedly in 1980. With further dislocation by the revolution, real GDP declined by 4.7 percent in 1980 and 5.0 percent in 1981 and medium-term prospects without improvement in the external environment and sustained policy actions appear bleak. 5. The economy continued to suffer from a heavy commercial debt burden contracted by the Tolbert government to finance the facilities and services for the OAU Conference of 1979, and also, following political instability before and after the coup d'etat of April 1980, capital flight was devastat- ing. The depletion of the banking sector deposit base, restricted external credit lines and a general liquidity crisis pervades the economy. A large import bill for oil and rice, in addition to a doubling of public sector mini- mum wages, produced a fiscal crisis for the Government. The public sector balance of payments has deteriorated to crisis proportions as only a small proportion of Governnent revenue is earned offshore, and the National Bank of Liberia no longer has the external assets to enable it to transfer local deposits overseas in payment for oil, debt service and public sector import bills, including imports of U.S. currency equivalent to about half the total wage bill. Even in the private sector, commercial banks no longer freely and without delay transfer unlimited private deposits to overseas accounts, because of their heavy indebtedness to their head offices. Thus, despite use of the U.S. dollar in the country, Liberia now faces a real foreign exchange problem. 6. Associated with the poor performance of the economy was the decline in the total domestic savings rate from 27 percent in 1979 and 1980 to 17 percent in 1981. The national savings rate fell by 35 percent over the same  - iv - period, from about 20 percent to 13 percent. All savings in recent years have been in the private sector. The investment ratio, too, has declined since 1979 from 30 percent to 18 percent in 1981. Domestic investment declined in real terms by 34.4 percent between 1979 and 1981. Public sector investment, which was largely financed by borrowing, especially in 1978 and 1979, part- ially offset the decline in private investment since the mid-seventies but, as the Government's capital budget was squeezed since 1980 and private capital flight persisted, disinvestment became a prominent feature of the Liberian economy. Therefore, the recent exceptionally poor investment performance reflects a worsening resource mobilization effort in the public sector, an attempt by Government to live within the spending limits negotiated under IMF Standby Arrangements in effect since mid-1980, a persistence of the confidence crisis, and poor price prospects for Liberia's principal exports. But, with the recent improvement in policy-making and the commitment of the Government to an open door policy, the climate for private investment is likely tc improve in the future. 7. The balance of payments has deteriorated recently, despite some improvement in the trade balance, due to the poor investment climate and capital flight. The current account deficit has continued to narrow since 1978, largely due to the decline in real imports as export prices and quanti- ties have been erratic and unfavorable with the possible exception of 1980, when export prices increased modestly. Nevertheless, the terms of trade index has fallen by over 24 percent since 1978. The current deficit declined, from $158.2 million in 1978 to $65.4 million in 1981, but the major problem has been on the capital account. As the summary table below indicates, capital flight reduced the capital account surplus from over $135 million in 1978 to only $16 million in 1981, thus accounting for most of the deterioratior. in the overall balance. The overall deficit in 1981 of $49.3 million was equivalent to about 7.0 percent of GDP. As noted, nowhere is the balance of payments problem manifested more dramatically than in the Government's difficulties in meeting offshore payments. Timely payments have been few and far apart, making it necessary to seek emergency arrangements to avert outright default. SUMMARY OF CAPITAL ACCOUNT, 1977-81 ($ Million) 1977 1978 1979 1980 1981 Capital Account Balance 131.5 135.5 87.4 40.2 16.1 Net Government Borrowing (76.5) (27.2) (114.3) (88.9) (45c0) Direct Foreign Investment (55.0) (108.2) (-26.9) (-48.7) (-28.9') Source: Ministry of Planning and Economic Affairs, Monrovia, Liberia.  8. The deflationary conditions of the economy are, of course, reflected in the money and banking sector, with a decline in the economy's liquidity (by over 33 percent since 1979) and depletion of the deposit base (by over 40 per- cent since 1979). The primary issue here is what policy and institutional reforms may be necessary in order to ensure sufficient liquidity in the eco- nomy and also to mobilize domestic resources more effectively. 9. The National Bank of Liberia's external position has continued to deteriorate, especially since 1980, when external credit lines were curtailed following the coup of April. Net external assets, which were a negative $12.5 million in 1979, declined to a negative $110 million in 1981. Concurrently, the National Bank of Liberia was financing an alarming Government debt, which, together with heavy commercial bank lending to public corporations, meant an unprecedented deterioration in public sector finances. The net foreign posi- tion of the commercial banks also continued to decline from a negative $27 million in 1979 to a negative $40.7 million in 1981. Also, the first indigenous commercial bank, the Bank of Liberia, collapsed in 1980, due mainly to inability to recover its loans and to political interference in its manage- ment. Although depositors have been fully paid, an important issue is how to safeguard the integrity of locally chartered banks. Another issue is how to restrict credit to the public sector so as to free resources for private sector investment. 10. There have been no reliable estimates of employment and unemployment since 1979. Therefore, the data on the labor force and employment in Tables 8.1, 8.2 and 8.3 of the Statistical Appendix must be treated with extreme caution. The lack of reliable data on internal migration after 1976 and on informal sector employment adds to the difficulty in reaching sensible conclusions about employment trends. The unemployment statistics generated from these figures are similarly suspect. 11. The 1979 labor force of Liberia was estimated at 508,000 (" Liberia: Current Economic Situation and Future Prospects", IBRD Report No. 2662-LBR, December 1979, p.45), with an open unemployment rate of 13.8 percent. Even if no reliable estimates can be made, it is evident from the rapid decline of the economy that the employment base has been deteriorating rapidly, weakening the underlying demand for labor since 1979. Considering that Government services provided the major source of employment growth in the 1970s, and that a freeze on employment in Government has been in force since July 1981, the overall unemployment situation must have worsened. Added to this was the rise in the minimum wage to an unrealistic level and the wage employment expectations of the rural population in the wake of the 1980 revolution, which induced further flows to Monrovia, even though labor shortage at $4-$5 per man-day prevails on the farms. As a result the open unemployment rate in Monrovia is estimated in excess of 30 percent by informal and unofficial statements reported in the local press. Even if this is an exaggeration, it is indicative of the severity of the problem. Combatting unemployment will depend on adopting a realistic wages policy and the success of the economic recovery program. 12. Fiscal imbalance and the dearth of public savings are major problems. In the period before 1980, when private investment was drying up,  - vi - public investment partially took up the slack, and the economy continued to grow. But since 1980, current expenditure has exploded with the doubling of public sector minimum wages and high interest payments; few resources are left over for public investment. Over-expenditure and large budgetary deficits resulted in excessive Government borrowing, which however, the stabilization program with the IMF has done much to contain. But, inspite of excessive personal income taxation, there is a persistent shortage of public sector investment resources. Also, the upward wage movement initiated in the public sector in 1980, being so out of tune with productivity, has been a contri- butory factor in further discouraging private investment. On December 1, 1982, the Government announced salary adjustments for employees in the Divil Service and State Corporations effective January 1st, 1985. Graduated salary cuts range from 16.7 percent for workers earning less than $750 per month to 25 percent for workers earning more than $1,449 per month. This measure was a courageous one and necessary to close the widening fiscal gap. With the assitanee of the IMF, the Government has made considerable progress in zurbing the growth of recurrent expenditure. In addition to purely fiscal consLdera- tions, wage-related issues in the major productive sectors indicate that further progress needs to be made on the wage bill. Public Sector employment levels should be reduced to generate further savings. Besides the need to generate current savings to finance development projects and meet the develop- ment Plan targets, wages for unskilled workers should be reduced further in light of the prevailing unemployment and low productivity. Other major fiscal issues relate to the administration of customs duties, corporations and partnership taxes and forestry stumpage fees. Revenues from these sources could improve substantially with more vigorous enforcement and, possibly, some technical assistance. 13. In an effort to tackle the fiscal and monetary issues raised above and stabilize the economy, the Government has had a Standby Arrangement with the Fund since mid-1980. Expenditure and borrowing ceilings are twin pillars of the current and past programs. Through the programs, the Government has taken a number of politically difficult measures e.g., abolishing the rice subsidy and freezing public sector employment, which have helped the fiscal situation. Liberia has continued to meet the performance criteria, partly adopting some extra-ordinary measures, such as withholding up to two months pay for civil servants. Furthermore, Government recently concluded negotia- tions for the current one-year program, which became effective at the end of September 1982. The IMF programs as well as budgetary support funds from the USA have been vital in averting a potential financial crisis and will continue to be needed over the next couple of years. 14. Liberia's external debt position deteriorated considerably in recent years as total disbursed and outstanding debt grew at 25.0 percent per year since 1976 to reach $592.3 million at the end of 1981 or 82.8 percent of mone- tary GDP. High interest and short maturity loans contracted in 1977 and 1978 to finance OAU activities placed an undue burden on Liberia's debt servicing capacity but, with restrictions on new commercial borrowing under the standby programs with the IMF, recent borrowings came entirely from official multi- lateral and bilateral sources. Nevertheless, debt service payments grew at an average annual rate of 26 percent in 1976-80 and amounted to $40 million in  - vii - 1980, equivalent to 22 percent of budget revenue, an exceedingly high burden. In December 1980 and 1981 Liberia sought and obtained debt relief under the Paris Club arrangement, thus easing the debt service burden to $34.4 million or 5.4 percent of budget revenue in 1981. Further debt relief is expected soon when the London Club agreement signed in December 1982 becomes effective. 15. Although inflation has been on the rise in Liberia since 1977, it has been relatively mild compared to most African countries. The rise in the cost of fuel and power were major elements in the rising price level, but recently fuel prices have stabilized somewhat or declined, and the money supply has fallen by over 30 percent since 1979. Therefore, the rise in the price index has slowed, and inflation is estimated at about 8.6 percent for 1981. 16. In the productive sectors, the performance was poor in the recent past. The agricultural sector, which grew at 3.9 percent per annum, in 1974-79, stagnated in 1980 and declined in 1981 by 7.8 percent (non-subsis- tence agriculture by 22 percent) due to the continuing poor performance in rubber and the exceptionally large decline of 46.5 percent in log output. In spite of this, agriculture has potential for expanding aggregate output and employment in the medium term. The major potential sources of growth in the medium term are forestry, rubber, and upland rice. Price prospects for rubber and timber are projected to improve in the mid-1 980s and the potential for increasing output is good, if the policy changes and other actions recommended in this report are implemented. In particular, rubber producer prices need to be raised through improvements in processing efficiency and effective sub- sector planning and monitoring by the proposed Rubber Development Board. In forestry, strengthening of FDA, facilitating better planning, monitoring and control of forest resources, serious market promotion efforts by FDA and con- cessionaires to increase log exports of secondary species, and rational expan- sion of domestic wood processing are needed. For upland rice, the major constraint is the shortage of improved seed (LAC-23). This constraint could be overcome through acceleration of the IFAD-financed Smallholder Rice Seed Project. 17. Other crops that are unlikely to have a major impact in the medium term but are promising sources of growth in the long term are swamp rice, cassava, oil palm, and coconut. But unattractive financial returns and high labor requirements are major constraints on adoption of improved swamp rice techniques. Although research into labor-saving techniques has a high prior- ity and available labor-saving techniques should be extended, rice price policy should also be a major instrument for import substitution. A gradual increase in retail rice prices through tariffs on imported rice could reduce urban rice consumption and facilitate substitution of other food crops such as cassava. With higher prices, there would be greater financial incentives to farmers to adopt riskier but socially profitable rice production techniques, and reducing rice smuggling out of Liberia. Cassava could also be important as an export item. A feasibility study of the cassava-feed industry for export should, therefore, be initiated as a high priority. A feasibility study for coconut (for exports) and further investment in oil palm are also recommended. Other important measures needed in the sector are reorganization and improvement of parastatals and privatization of some of their functions,  - viii - rehabilitation of plantations (mainly those producing rubber) confiscated by the Government in 1980, reorganization and strengthening of the Ministry of Agriculture, and formation of a donor's working group to facilitate formula- tion and implementation of a more coherent and clearly defined sector assis- tance strategy. 18. Iron ore dominates the mining sector, where production has been declining since 1974 due to weak demand and prices. The most important tssue in the mining sector is whether LAMCO-JV will go ahead with the development of the ores in the Western area or opt for the integrated project with Mifergui Nimba in Guinea. In each case, especially the latter, the Liberian Government will require sophisticated negotiating expertise to arrive at arrangements that most benefit Liberia and other concerned investors. This kind of expertise is in short supply, and perhaps technical assistance should be sought. In the forestry sector, world market prices of logs have been increasing, and future prospects look promising. Production, except in 1981, responded positively to the attractive prices. The main issue in the sector is the preservation of forest resources i.e., how to obtain a sustained yield at a certain defined production level, expressed in productive forest area and output in cubic meters. A long-term land-use policy should be developed and implemented as a project of the MOA for the purpose of separating permanent forest areas from agricultural land, to avoid encroachment and indiscriminate felling of trees. 19. As in the past, performance in mining, forestry and plantation rubber will depend on concession sector activities. In this sector, the main issue is enforcement of concession agreements. If this were worked out, other important issues, such as low value-added and weakness of linkages between the sector and the rest of the economy, could be partially resolved. On the basis of net foreign exchange contribution and value-added retained in Liberia, rubber production by concessions on estates needs to be stimulated. In the timber sector, more vigorous enforcement of concession agreements needs to be pursued to collect revenues that are legally owed the Government as well as better management of the physical resources to prevent illegal felling and over-exploitation of primary species and to promote secondary species. En- forcement of concession agreements and, indeed, negotiating such agreements in the best mutual interest of Liberia and investors require strengthening cf the Concession Secretariat, possibly with technical assistance. Another important issue is the wage rate. Because of excessive wage grants by the Government in 1980 and the pressures exerted then on the concessions to act similarly, wages have grown beyond productivity changes and trends in competing countries. The Government should at a minimum avoid adding to pressures for excessive wage increases and could provide concessionaries with incentives to upgrade the training programs for Liberians, so that they can qualify for higher technical and managerial jobs. 20. The manufacturing sector in Liberia is small, contributing less than 9.0 percent to GDP at present. Manufacturing enterprises rely heavily on foreign capital and management, but, due to lack of investor confidence, there is practically no new foreign investment at present. Government participation had been limited in the past but has increased since 1980 through confiscation of private companies that belonged to prominent members of the previous  -ix - regime. Average value-added in manufacturing is low, and there is a strong dependence on imported inputs. 21. Like many other sectors, the performance of the manufacturing sector in recent years has been declining, compared to the early seventies, and the political events of 1980 accelerated this trend. Capacity utilization is estimated at well below 50 percent, labor productivity continues to slide, and the sector is plagued by a shortage of skilled labor. The main issues in the manufacturing sector are how to attract investment in small and medium-size enterprises and how to resuscitate confiscated industries the Government may intend to keep in the public sector. The Government is currently addressing these issues. Given the limited capital availability, skills and management capability and in order to stimulate output and employment in the sector, the Government adopted a strategy of promoting small and medium-scale enterprises and set up a Small and Medium Scale Enterprises Department within the National Investment Commission (NIC). Sucessful promotion of private investment in small and medium-size enterprises will require, at a minimum, resolution of the problems that have beset the IDA--assisted SME project. In particular, the NIC's SME Department needs strengthening as does the National Bank's Credit Guarantee Scheme. Efforts should continue to resolve the start-up problems that have delayed full implementation of the project. Also, the review and revision of the Investment Incentives Code, which has been on- going, need to be finalized. Then, in future, the code should be vigorously administered to enforce the provisions of any "incentive contracts" granted to investors. The Government recently took measures to restore some confiscated industries to their previous owners. This was a step in the right direction and should be followed by further action to provide efficient management for those companies, such as the Mesurado Group, that have remained in the public sector. 22. Recent performance in the transport sector has been poor due to the generally poor state of the economy but also due to poor planning, scarcity of qualified personnel at senior and middle management levels, inadequate funds for maintenance and repair, and lack of coordination among ministries and agencies responsible for sector policies and strategies. In the road sub- sector, several donor-assisted projects have stalled due to the Government's inability to provide adequate counterpart funds, resulting in cost overruns, and delayed and reduced benefits. Despite an adequate, though poorly main- tained stock of equipment, ample unskilled labor, and sizeable technical assistance, minimum road maintenance needs have not been met over the past years. This is mainly due to: insuffficient funding, resulting from a shortage of materials and supplies; underemployment of unskilled workers, and lax administrative and accounting controls, which cause waste and diversion of scarce resources. The road maintenance backlog and lack of preventive main- tenance and repairs of equipment have led to an accelerated deterioration of capital invested in the roads sub-sector. A long-term solution to the problem of road maintenance should be found; a fund could be built from road user charges earmarked for road maintenance. Furthermore, to implement the Govern- ment's objective of creating a more diversified agricultural-based economy, additional investment will be required to provide feeder roads to support rural development and increase port capacity.  23. The Liberian public enterprises sector grew too fast in the 197Cs, and, since the 1980 coup, some of the confiscated companies the Governmert did not return to previous owners, as noted above, have de facto become public enterprises as well. All these enterprises now constitute an important element of the present budgetary problem and are a key constraint to economic recovery. In the last three financial years, net Government expenditure on public enterprises has averaged about $38.0 million per annum while the banking system's claims on public corporations grew from less than $2.0 million per annum before 1978 to over $33.0 million in 1981. 24. Unsatisfactory performance results from three broad factors: non.- professional management of many enterprises resulting in weak financial controls; late or non-payment for services provided by enterprises to the Government or its agencies (causing reserve erosion and recurring cash crises, overemployment, laxity in inventory management, and inadequate billing and collection procedures); socio-political obligations that inhibit efficient commercial performance, and lack of autonomy. The public enterprise sector, therefore, needs reform, and the Government is considering policy options to this end with the assistance of the Bank Group. The Bank Group, at the request of the Government, is considering a public enterprises project to assist the Government's efforts to privatize some of the enterprises and arrange professional management for those companies that will remain in the public sector. 25. In human resources, although the Government over the last two decades has made progress in improving access to and the quality of education and training, there is considerable need for further improvement. First, the Government needs to coordinate educational and manpower planning better. Second, enrollment ratios at the primary level are low, and there are serious regional disparaties in access to primary education. Third, the educational system is inefficient and characterized by low-quality institutions unable to produce sufficient numbers of qualified graduates in key fields. Finally, there is the question of how the Government, in this period of financial constraints, can muster the financial resources required to improve education and training. 26. Government has recently begun to implement a series of measures to address the above problems. These include strengthening the Agricultural and Industrial Training Bureau, supporting the expansion of primary education, and launching major textbook and teacher training programs for the primary level. Success in dealing with the main sector issues will depend on Government's ability over the medium term, not only to carry out the above measures, bit also to: (a) improve the quality and efficiency of secondary and postsecondary education; (b) make key training programs fully operational and better address sectoral training requirements and (c) mobilize additional financial reso-urces for the sector. 27. The health status of the majority of Liberians remains poor--life expectancy at birth is only 54 years, and morbidity and mortality are high. The existing health care system is inadequate, inequitable and unsuited to the country's health problems. In particular, poor health and malnutrition  - xi - continue to plague vulnerable segments of the population, especially pregnant and lactating women as well as young children. Although the country's popula- tion is small in comparison with other West African countries, the high rate of population growth is a major problem. Already, this high growth rate, about 3.4 percent per annum, is creating major social and economic problems. It has put pressure on social services and, in a declining economy, urban unemployment has risen, especially in Monrovia. The high child dependency ratio implies that substantial savings could be realized in future through a decline in the fertility rate. Family planning programs, which at present are nascent, need to be bolstered and an overall national population policy carried out. 28. Government has adopted a primary health care approach to improve access to and broaden the delivery of medical services, but a number of issues need to be resolved for the program to be a success: inadequate budgetary allocations, especially for development, maintenance and repairs; possible cost recovery through user-charges; institutional changes in the Ministry of Health aimed at further strengthening rural county health organizations; and an adequate training program for physicians' assistants. The Government also needs to implement a selective set of interventions in the field of nutrition e.g., introducing nutrition and health education in schools and the mass media, aimed at, especially, children, pregnant women and lactating mothers. 29. In development administration, the current situation of severe budgetary difficulties requires that efficiency in carrying out administrative responsibilities in the Government bureaucracy be a paramount objective. The present administrative practice is weak. Liberia needs clear strategies for administrative development, emphasizing better coordination, improved finan- cial and operational control, and better structures for spreading development opportunities throughout the country. 30. In order to accomplish the above objectives, key officers should be exposed to policy-level decision-making and be trained in financial management and expenditure control to improve fiscal planning, budget administration and accountability. These could be integrated in a national education and train- ing strategy to be implemented through a project. There is also a need to reconcile the objective of an incentive compensation policy aimed at improving job performance and the necessity to contain the wage bill pressure on the budget. In particular, job grading is out of tune with remuneration since, following the doubling of the minimum wage in 1980, no revision was made to remuneration of higher categories. But, the downward revision of the un- skilled wage is an even more urgent matter. Projections 31. Medium-term prospects for the economy will depend largely on a com- bination of external factors and the strength of Government policy perfor- mance. Projections of world market demand for Liberia's principal exports indicate that price prospects will not improve markedly soon and, therefore, policy performance must excell in order to reverse the current decline in the economy.  - xii - 32. Projections show that, even with quite optimistic assumptions regard- ing the growth of exports, prospects for the economy, in the absence of sus- tained policy initiatives, would be disastrous. The current decline in CDP and per capita consumption would persist, the latter through 1986. The fiscal imbalance would remain serious. Government would therefore be advised to implement a sustained program of reforms. 33. In overall terms, the policies should aim at restoring balance in the fiscal accounts by further reducing the wage bill and increasing non-personal tax yields. Government should also aim at stimulating exports, increasing real imports, attracting overseas investments, arresting capital flight, ameliorating the liquidity squeeze on the economy, ensuring growth and better allocation of the development budget, and reforming public administration and public sector enterprises. Details and specific actions for attaining these objectives in the recovery program are discussed throughout this report. A recommendation of overriding importance in the economic recovery program that needs emphasizing is the urgency to review further and reduce the minimum wage and public sector employment levels. 34. As noted, the Government recently announced graduated cuts in public sector salaries. From a purely fiscal and egalitarian point of view, these cuts are well designed. But from other important points of view, further review is necessary. For example, the level of unskilled wages are respons- ible for the disproportionately high wage bill component of recurrent expendi- tures and for insufficient funds for maintenance and repairs of expensive capital assets and equipment. The high Civil Service wage bill is responsible for the negative public sector savings, a shrinking development budget and the diversion of increasing levels of domestic credit from productive private sector activities to the public sector. High labor wages in the concessiDns, which are out of tune with productivity, are traceable to the uneconomically high unskilled wages in the public sector. Also, rural farm labor shortage, alongside open urban unemployment is traceable to the wage policy. 35. In the early projection period, before the full economic recover;y program is in place, GDP could grow at a modest average annual rate of abo:ut 2.1 percent between 1981 and 1984, rising to 3.7 percent per annum betweena 1984 and 1986 as the program is fully implemented. In this projection, agri- cultural sector growth could increase from about 3.2 percent per annum between 1981 and 1984 to 4.0 percent per annum between 1984 and 1986. Industry (mnanu- facturing, mining, construction, electricity and water) could grow at about 2.2 and 3.0 percent per annum over the same time periods. Services, which declined by 5.6 percent per annum between 1979 and 1981, could grow at 3.0 percent between 1981 and 1984, with growth increasing to 4.0 percent there- after, as the economy. and the financial sector in particular, pick up (Table 9). 36. Even with such performance, the decline in per capita income cou:Ld persist until 1984 and, although total consumption would begin to grow again in 1985, the decline in per capita consumption would persist until 1986 due to the high rate of population growth. Imbalance in the fiscal and external payments accounts would persist, while resource transfer to Liberia would  - xiii - remain unsatisfactory. The efficiency of capital as measured by the ICOR would, on average, remain very low -- about 9 over the projection period, largely because a decline in the economy is projected for 1982, and growth is expected to remain sluggish until 1984. 37. The above possible outcome points to the necessity for additional measures such as extra care in project selection and further privatization of public sector ind,ustries to improve efficiency of investment. It also under- lines the not-surprising fact that complete recovery of the Liberian economy will depend not only on good policy performance but also on the recovery of commodity prices on the world market. As was the case during the period between the mid-sixties and mid-seventies, with good policies and a better external environment, higher growth rates than those projected are possible; associated with such a better performance would be more efficiency in the use of capital (lower ICORs) 1/ and higher rates of consumption. 1/ The average ICOR for 1965-69 was estimated to be about 3.1 and for 1970 to 1973, about 4.   LIBERIA RECENT ECONOMIC DEVELOPMENTS AND MEDIUM TERM PROSPECTS CHAPTER I - RECENT ECONOMIC DEVELOPMENTS Overall Growth 1. The military government that came to power in April 1980 inherited a sluggish and strained economy. World market demand for Liberia's major exports, especially iron ore, rubber and timber, was weak due to the recession in the industrial countries. Value added in iron ore and rubber industries had been declining at more than 3.5 percent per annum, and the oil import bill, had more than doubled since 1974, undermining the fiscal and public sector balance of payments position. The burden of the commercial debt that financed the 1979 OAU Conference was beginning to be felt. GDP growth was less than 1.0 percent per annum between 1974 and 1979, compared with a population growth rate of over 3.0 percent per annum. 2. Although the economy had been sluggish since the mid-seventies, public investment and consumption expenditures grew at 20 and 7 percent per annum respectively in real terms between 1974 and 1979. This growth in public investment and expenditure partially offset the negative impact of the external environment on the economy. Public investment was undertaken through the operating ministries as well as newly created or expanded public sector enterprises. But this strategy soon proved to be ineffective and, in the case of public enterprises, very costly to the economy. 3. Besides the continuing weak external demand for Liberian exports and poorly conceived economic strategies, the socio-political disruptions associated with the revolution accentuated the problems of the economy and in particular, caused massive capital flight, erosion of the deposit base and external assets of the banking system, and a liquidity crisis. To make matters worse, the new Government made serious errors in the management of the economy: the rise in public sector employment, the doubling of the minimum wage, which accentuated the fiscal crisis and introduced serious distortions in the economy; the confiscation of several enterprises owned by people who had lost political power disrupted production; the partnership of the People's Redemption Council and the Cabinet in running the economy was not well-defined, and the composition of the economic management team kept changing. Public corporations came under inefficient management and were forced to expand employment, thereby becoming increasingly inefficient and a drain on budgetary resources. Fiscal discipline in Government departments was missing, and the already strained economy started deteriorating. With public consumption and investment expenditures restrained under the stabilization program, GDP fell by 4.7 percent in 1980 and a further 5.0 percent in 1981. Most major sectors recorded a decline in those years; iron ore production was only 17.9 million tons in 1981 compared with 24.8 million tons in 1974; rubber production was still below the output realized in 1973. Furthermore, with the terms of trade falling (and the population growing at the rate of about 3.4 percent per annum), real per capita income declined by more than 17 percent between 1979 and 1981 and private consumption by about 14.0 percent in real terms.  -2- 4. Gross domestic investment has declined in real terms since 1976 except in the years of construction activity related to the OAU Conference, when total investment rose by about 10.2 percent between 1978 and 1979. After the conference, the declining trend re-emerged; between 1979 and 1981 invest- ment declined by about 37 percent in real terms. The investment to GDP ratio, which had averaged about 31 from 1975 to 1980, plummeted to only 18 in 1981. The decline in investment reflected not only the post OAU slow-down, but also the persistence of the confidence crisis in Liberia since the coup of April 1980, Government expenditure restraint under the stabilization program, and poor price prospects for Liberia's principal exports. In light of the persistent flight of private capital and weak demand for Liberian exports, the economy has few sources of growth left. 5. In spite of the above problems and difficulties and in spite sf the need for further measures, the Liberian Government has made considerable progress in restoring domestic and external confidence. With politically difficult measures, such is elimination of the rice subsidy and a freeze on civil service employment, the budget has been brought under control, thus meeting the performance criteria under the 1980/81 and 1981/82 Standby Arrange- ments with the IMF. An economic policy Co-ordinating Committee of the Cabinet has been formed to improved the management of the economy. This Committ;ee, especially if given support with a technical assistance project, would be well placed to ensure continuity and consistency in policy formulation. 6. Growth in the sectors has been poor in the recent past (Table 1), indicating a clear turn for the worse since 1979. Mining, the most important sector in the monetary economy, has declined since the mid-1970s (although from 1979 to 1980 there was a partial recovery in iron ore due to modesil increases in world demand). During that period, iron ore production grew by 6.7 percent in 1979 and 5.1 percent in 1980 compared to -11.4 percent per annum between 1974 and 1978. But the weakness of world demand persists, and production declined again in 1981 by 7.0 percent. Whereas the agricultural sector attained a respectable growth rate of about 5.9 percent per annurm in 1974-79, it has since declined on average at 10.6 percent per annum, mainly due to the decline in rubber production and the disastrous performance of the logging industry in 1981. Rubber value added and production have been declining since 1974, and the partial recovery in 1980 was due only to higher world prices; production level in 1981 was still only about 96 percent of what it had been in 1973. Performance was better in forestry than in the other sectors until 1980, due to stronger demand and better prices. Production of round logs increased from 406.3 thousand cubic meters in 1974 to 774,,6 thousand in 1978. But growth tapered off in 1979-80, and then the sector began experiencing a dramatic decline due to weak demand and disruption of production as the future of some confiscated ("reacquired") timber companies remained uncertain. The sector declined by 46.5 percent in 1981. Other sectors, manufacturing, construction, electricity, water, and services, have all declined since 1979.  -3- Table 1: RATES OF GROWTH AND SECTORAL SHARES IN GDP Rates of Growth % p.a. Share in Total GDP 1974-79 1979-81 1981 1981 Agriculture 5.9 -10.6 -21.6 11.0 Rubber -4.6 2.7 1.4 5.0 Forestry 26.3 23.9 -46.5 3.0 Other 6.5 -9.2 -16.8 4.0 Mining -8.2 3.0 -6.0 24.0 Iron Ore -7.8 2.8 -7.0 23.0 Other -9.8 0 14.0 1.0 Industry 1/ 5.3 -20.0 2/ n.a. n.a. Other Sectors mainly services) 5.0 -11.3 2/ n.a. n.a. Traditional Economy 3.1 2.2 3.0 19.0 Monetary GDP (factor cost) 0.9 -4.9 -5.0 81.0 Total GDP (factor cost) 0.7 -3.5 -3.5 1/ Manufacturing, construction, electricity and water. 2/ 1980 only. Balance of Payments and External Trade 7. The balance of payments has deteriorated in recent years as a result of a rapid fall in the capital account. In spite of the reduction in the current account deficit, the overall deficit has more than doubled since 1978 (Table 2) or just about 7.0 percent of GDP in 1981. The seriousness of the imbalance was reflected mainly in the public accounts, as shown by the inability of Government to pay for oil and rice and to service its debt on time. While the overall deficit expanded, the current account deficit fell steadily from $158.2 million in 1978 to $65.4 million in 1981, due mainly to an improvement in the trade balance as a result of a reduction in real imports and higher  -4- rubber and timber prices (also iron ore prices in 1980). Although the terms of trade continued to become less favorable, the trade surplus increased from only $5.6 million in 1978 to $51.8 million in 1981. The real resource transfer to Liberia has declined, as is shown in Table 2. On the capital accourt, the substantial surplus that Liberia traditionally enjoyed has been steadily depleted since 1978 from $135.5 million to only $16.1 million in 1981, due to capital flight and uncertainty regarding the future of the Liberian eccnomy. Table 2: SUMMARY OF BALANCE OF PAYMENTS, 1977-81 (million dollars) 1977 1978 1979 1980 1981 Exports of Goods & Non-factor Services 459.0 500.0 553.6 613.5 540.7 Imports of Goods & Non-factor Services 521.9 548.6 587.4 614.0 549.0 Resource Balance -62.9 -48.6 -33.8 -0.5 -8.3 Trade Balance (-16.1) (5.6) (30.1) (66.5) (51.8) Factor Services -104.2 -139.2 -136.4 -139.6 -125.2 Current Transfers 26.8 29.6 34.7 35.7 68.1 Current Balance -140.3 -158.2 -135.5 -104.4 -65.4 Capital Accounts 131.5 135.5 87.4 40.2 16.1 Net Government Borrowing (76.5) (27.2) (114.3) (88.9) (45.0) Direct Foreign Investment (55.0) (108.2) (-26.9) (-48.7) (-28.9) Capital Grants - - - - - Overall Balance -8.8 -22.7 -48.1 -64.2 -49.3 8. The deterioration in the capital account and the overall balance of payments is related to the recent behavior of foreign investment. As Table 2 shows, foreign investment, which stood at $108.2 million in 1978, was wiped out and the economy suffered a vast magnitude of foreign disinvestment to tae tune of about $35.0 million per annum on average since 1979. Capital outflow has been of such magnitude that not even the heavy government borrowing abroad in 1978-79 associated with the OAU Conference was offsetting, and in any event this borrowing has weighed heavily on debt service. The negative private investment rate is a fundamental factor in the recent decline of GDP and any economic recovery program has to aim at reversing this trend.  -5- 9. Factor income payments abroad constitute an important element and largely explain the large divergence between domestic and national economic indicators. Net factor income payments abroad are currently equivalent to about 17 percent of GDP. This magnitude reflects the extreme openness of the Liberian economy and the importance of foreign capital and expertise in running it. It underlines the urgency for implementing training programs so that more Liberians can assume higher technical and management positions in the private sector. Exports 10. Although exports are a very large component of domestic expenditure, accounting for about 63.5 percent of monetary GDP and 47.5 percent of total GDP between 1978-1981 (compared, with only 27.0 percent for middle income oil importing African countries), the export base is narrow, thus exposing Liberia to fluctuations in world market conditions. Iron ore is the leading export commodity, followed by rubber and timber. Together, these three constitute about 80 percent of all exports. Although the share of iron ore has declined since the mid-1970s from 74.4 percent in 1975 to 61.5 percent in 1981, its importance in export and overall economic performance is still overwhelming. As Table 3 shows, rubber and timber, diamonds, coffee, and cocoa are the only other significant exports. 11. Most of Liberia's exports are sold to five countries, West Germany, USA, the Netherlands, France and Italy. The five absorb about 76 percent of all exports. The Federal Republic of Germany and the USA are Liberia's principal customers, buying a total of about 45 percent of the total exports. This direction of trade results partly from the dominance of US and German- based companies in the mining and rubber sectors, particularly iron ore. Because of the sluggish growth of Western economies due to the recession, concentration of exports in these markets is an important factor in the poor performance of Liberian economy. Imports 12. Imports in Liberia are dominated by: food, mainly rice; fuel and lubricants; manufactured goods and machinery and transport equipment. Crude oil imports rose from $48.3 million in 1974 to $84.6 million in 1978 and about $130 million in 1981 (27 percent of import bill representing 24 percent of export proceeds). Since 1978, expenditure on oil has grown by more than 50 percent, and oil has outpaced machinery and transport equipment as the number one import. Rice imports increased from 36.2 thousand tonnes in 1976 to 64.3 thousand tonnes in 1979 and over 90 thousand tonnes in 1981, account- ing for $42.9 million or 9 percent of the import bill. As Annex Table 2.5 shows, the above major imports account for over 80 percent of GDP, with fuel alone accounting for more than 18 percent. Other significant imports are chemicals and, to a lesser extent, beverages and tobacco. The current dominance of fuel and rice imports means that less of Liberia's external resources are spent on growth-generating imports of capital goods and inter- mediate inputs. In fact, imports of capital goods declined by 30 percent between 1978 and 1981.  Table 3: VOLUME, VALUE AND UNIT PRICE OF MAJOR EXPORTS, 1976-81 MAJOR EXPORTS 1976 1977 1978 1979 1980 1981 Iron Ore Value ($ million) 328.7 273.5 274.4 290.0 310.2 325.4 Volume: Million L. Tons 20.5 17.4 20.8 19.6 16.9 20.4 Unit Price: $ Per L. Ton 16.03 15.72 13.19 14.80 18.36 15.95 Rubber Value ($ million) 53.3 59.1 69.2 87.8 102.2 86.7 Volume: Million Lbs 161.5 153.6 158.0 165.3 168.7 169.2 Unit Price: (,/Lb. 33.0 38.5 43.8 53.1 60.5 51.2 Diamonds Value ($million) 16.6 21.3 30.3 39.6 33.5 23.4 Volume: 1000 Carats 320 326 307 302 298 336.0 Unit Price: $ Per Carats 51.88 65.64 98.62 131.13 112.12 69.64 Logs Value ($ million) 32.4 25.9 46.7 50.1 65.3 36.8 Volume: 1000 Bd. Ft. 113265 78748 130930 136583 166208 94128 Unit Price: $11000 Bd. Ft. 268.1 328.9 357.0 366.2 387.5 390.9 Coffee Value ($ million) 6.6 43.5 25.3 27.1 33.0 19.4 Volume: Million Lbs. 9.3 22.2 19.1 18.1 28.0 18.3 Unit Price: q/Lb. 71.0 193.7 132.8 149.7 117.6 106.0 Cocoa Value ($ million) 4.1 6.1 14.4 11.0 10.5 13.8 Volume: Million Lb. 5.5 4.5 8.9 7.5 8.2 14.8 Unit Price: