ABSTRACT

The foundation of Liberia took place during the early 1820s when Christian colonization societies from the United States began to settle former American slaves in West Africa. The dominant social group consisted of descendants of repatriated American slaves called Americo-Liberians. The Liberian Development Company used the money to purchase a small steamboat as well as two motorcars and constructed an unpaved road of 15 miles leading to its rubber plantations. For the Liberian economy, however, the investments turned out to be of little value: after a few years, the badly built road fell in decay and became impassable and the cars had broken down. Liberia's heavily export-based economy was hit hard by worldwide stagflation from 1974 onwards, which posed a serious threat to an elite finding its economic base in an export sector consisting of few primary commodities. Debt-service incapacities of the Liberian government were often caused by stagnating or declining export earnings and the resulting drop in state income.