The_Open_Door_deel1

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which occurred in the real value of G.D.P. Unfortunately, due to
the absence of reliable indices showing the development in the
cost of living, the second phenomenon is not known.
As can be observed from Annex 49, in some years the value of
G.D.P. at factor cost (constant 1971 prices) even diminished.
This was notably the case in 1975 and in 1977. The explanation
lies in the declining activities in the export-oriented sector
which since 1974 had continued to decline in real terms. In some
years this declining output of the enclave or concession sector
had been offset by the growth of the domestic-oriented sector.
This can be observed in the years 1976, 1978 and 1979. However,
figures for 1979 should be handled carefully since their reliability
appears doubtful: how can it be explained that the total
value of the output in the domestic sector is presented whereas
the output of two of its four components is not known? This clearly
confirms the "guesstimate" character of the calculation of
G.D.P. referred to above.
The Monetary Economy At The End Of The T970's'
The decline of the export-oriented sector is linked to falling
iron ore prices and the slump in the international steel market.
In fact, the iron ore mining companies are facing a difficult
future. In 1977 the oldest iron ore mine, L.M.C., pulled out after
having produced iron ore since 1951. One of the three remaining
companies in operation, the National Iron Ore Company, was in
that year on the brink of bankruptcy as it had reached the point
where it could no longer honour its debts. The Government, which
holds 50 percent of the shares of this company, had to come to
its rescue by granting overdraft facilities. In an attempt to
solve its problems, the World Bank, at the end of the 1970's,
considered assisting this majority Liberian owned mining company.
In 1977 the N.I.O.C. could report a profit of almost $ 1.5 million
but accumulated losses over the preceding five years amounted to
nearly $ 5 million.
The financial results of the two major iron ore mining companies
(the LAMCO J.V. and the Bong Mining Company) cause even more concern
as they are of much greater importance to the national economy.
The former company reported a loss of about $ 16 million
over 1978 whereas B.M.C, suffered a $ 20 million loss in that
year. As the Government participates in both companies and as its
income from these companies is based on profit sharing, the repercussions
for the Liberian Treasury are obvious. Income from the
iron ore mining companies still had contributed $ 28 million and
$ 20 million to total Government Revenue in 1976 and 1977, respectively.
With these losses reported for 1978, the Government's income
from the iron ore sector in 1978 may not exceed about $ 10
million of which approximately $ 7 million will consist of royalty
payments by the companies. Government's revenues in the coming
years look grim as the companies will carry forward these losses
of 1978 whereas the end of the international recession is not yet
in sight.
Thus, the share of the iron ore mining companies in G.D.P. fell