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much faster, in general, than expenditures on the importation
of (net) investment goods. Between 1975 and 1979 the
importation of consumption goods rose by nearly 80 percent
whereas that of investment goods (gross investments) by
only about 40 percent. The sharpest increase in imports of
consumption goods occurred in 1977 (a 47.8 percent rise
with respect to the preceding year).
(15) The imports of food products constitute nearly 50 percent
of all imported consumption goods. Generally, their share
in total imports is rising. The most important food product
which is imported into Liberia is rice. The increase
in rice imports illustrates one of the most dramatic
trends in the post-war development of the Liberian economy.
Rice imports rose from 2,273,883 pounds in 1942 to
163,167,000 pounds in 1979 (see Annex 50).
(16) In the light of the rising import bill of Liberia it is of
extreme importance to have a close look at the Liberian
Government's policy of granting duty free privileges to
foreign investors, to the diplomatic corps, and to religious
groupsa although the first mentioned form by far the
largest group with duty free privileges. Even with the
generally low level of import duties in Liberia, the Treasury
, during the years 1975 through 1979, lost an amount
of nearly I 300 million as a result of this policy of
granting duty free import privileges. This means that yearly
an amount averaging almost $ 60 million of potential
revenues was never collected which represents about 40 percent
of the yearly average Domestic Revenue of the Liberian
Government.
CONCLUSION
The weak structure of the Liberian monetary economy, which is the
result of too heavy a dependence on few commodities, endangers its
functioning in international trade. Liberia's international trade
was characterised between 1965 and 1975 by rising surpluses, but
the monetary instability of the U.S. dollar which was followed by
a reduced output of the country's iron ore mines - which produce
the country's most important export item - in the late 197O's are
liable to result in deficits which throw a particular light on the
country's development efforts. The continuously rising imports of
the country are caused by an increase in real consumption demand
rather than by an increase in real demand for investment (capital)
goods. As Liberia hardly produces consumption goods, the increased
demand for these goods was met by increased imports. The failure
to increase the nation's productive capacity contributed to a slow
growth in the National Product (see the following section). In
combination with the Foreign Factor Payments this may have resulted
in a deficit on the current account. Increased borrowing abroad may
temporarily offset this but it seems unavoidable that a growing
portion of these loans will be on commercial terms. Given Liberia's
level of indebtedness at the end of the 1970's which is already