VZCZCXYZ0006
RR RUEHWEB

DE RUEHMV #0047/01 0131156
ZNR UUUUU ZZH
R 131156Z JAN 10
FM AMEMBASSY MONROVIA
TO RUEHC/SECSTATE WASHDC 1570
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUCPCIM/CIMS NTDB WASHDC
RUEHZK/ECOWAS COLLECTIVE

UNCLAS MONROVIA 000047 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/IFD/OIA - DAHN 
PLEASE PASS OPIC AND USTR 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ETRD ELAB ECON PGOV OPIC USTR KTDB LI
SUBJECT: LIBERIA: INVESTMENT CLIMATE STATEMENT 2010 
 
REF: STATE 124006 
 
¶1. There is growing investor interest in Liberia, particularly in 
agriculture, construction, the extractive industries and tourism. 
UN sanctions were lifted on timber exports in 2006 and on diamond 
exports in early 2007.  Liberia is now Kimberly Process compliant. 
The removal of sanctions opened the door to investment activity in 
those sectors.  Liberia has demonstrated consistent annual progress 
since its 2007 debut in both the International Finance Corporation 
(IFC) "Doing Business" ranking and the Transparency International 
corruption index.  Liberia climbed 18 places in 2009 on the IFC's 
survey to 149, and jumped from 138 to 97 on TI's corruption meter. 
The National Investment Commission announced $100 million in new 
investment during the first half of 2009.  And the total number of 
businesses registered reached nearly 7,500 in 2009, an increase of 
5.5% over the previous year.  (Note:  All currency amounts are in 
U.S. dollars.  End note.) 
 
¶2. Seven years of peace have helped Liberia recover from the ravages 
of civil war.  Much of Liberia's infrastructure -- including roads, 
electrical grid, and communication systems -- remains in ruins, but 
progress, supported by the substantial infusion of international 
development assistance, continues.  Facilities for foreign visitors 
are adequate in the capital, Monrovia, but virtually non-existent in 
the rest of the country.  There is a tremendous demand for jobs. 
Employment in the formal economy is estimated at only 16% of the 
available labor force, while most other Liberians are self-employed 
in the informal sector or contribute to a family business or farm. 
Most labor is unskilled, and the illiteracy rate is estimated to be 
45%.  While there are no landline phones, cell phone service is 
widely available and coverage is being extended into rural areas. 
Although satellite Internet access is available, it remains 
unreliable and relatively expensive, especially for high-speed 
connections.  Major foreign investors typically are expected to 
include support for schools, clinics, and other social services as 
part of any concession agreement. 
 
¶3. There are three serious challenges the Liberian government must 
address as it works to ensure equitable economic growth and reduce 
poverty:  land tenure disputes, corruption, and the related factor 
of a dysfunctional judicial system.  Expanded investment in 
promising sectors such as agriculture, forestry, mining, or tourism, 
and the ability to provide affordable housing for more Liberians, 
depends on rapid clarification of the tangled land tenure regimes 
and a significantly improved judicial system. 
 
Openness to Foreign Investment 
------------------------------- 
 
¶4. The impact of years of violence and bad governance underQned 
rule of law and created unchecked opportunities for corruption.  The 
government benefited from the Governance and Economic Management 
Assistance Program (GEMAP), which sought to institute 
accountability, responsibility, and transparency in the fiscal 
management of the government in key state-owned enterprises.  GEMAP, 
which concluded in 2009, has had a positive effect in many areas 
that influence foreign investment decisions, including mining and 
forestry policies, and transparency in the procurement process. 
However, lack of training, inadequate salaries and a culture of 
corruption have created a judicial system that actively hampers 
investment. 
 
¶5. Liberia improved by 18 spots on the IFC's "Doing Business" 
ranking in 2009, reaching number 149 out of 183 countries.  The 
Liberia Better Business Forum, a public-private initiative 
established in late 2007, is guiding proposals to further improve 
the business climate.  However, the government continues to wrestle 
with finding the balance between an open, nationality-neutral 
investment climate that would encourage the energy, ideas, and 
capital that create jobs and provide lower prices and higher value 
for consumers, and "empowering" domestic businesses. 
 
¶6. Seeking to empower Liberian businesses, the government in 1975 
promulgated a "Liberianization Policy," an Act to amend the General 
Business Law.  The Act set aside 12 business activities exclusively 
for Liberians.  An amendment in 1998 increased the number of sectors 
reserved for Liberians to 26.  These businesses include: 
 
-- Block making with cement, clay or like materials 
-- Supply of sand, stone and granite 
-- Operation of gas stations 
-- Peddling 
-- Ice cream manufacturing 
-- Commercial printing 
-- Travel agencies 
-- Advertising agencies 
-- Graphics and commercial arts 
-- Distribution in Liberia of locally manufactured products (this 
provision shall not prevent manufacturers or producers from 
transporting or otherwise distributing their products to Liberian 
citizens or qualified persons for resale) 
-- Cinemas 
-- Production of poultry products 
-- Importation or sale of second-hand or used clothing 
-- Retail sale of rice 
-- Ice making or sale of ice 
-- Operation of water purification or bottling plant valued at less 
than $100,000 or the sale/distribution of water purified in Liberia 
-- Importation and sale of used cars 
-- Tire repair 
-- Auto repair shops with investments of less than $50,000 
-- Entertainment centers not connected with established hotels 
-- Retail sale of animal and poultry food 
-- Taxi and trucking 
-- Shoe repair 
-- Retail sale of timber and planks 
-- Bakeries 
-- Retail sale of pharmaceuticals 
 
¶7. The Act is still iQforce but has not been effective in 
increasing Liberian participation in commercial industries, nor has 
enforcement been consistent. (Note: The draft revision to the 
Investment Code opens 15 of the 26 reserved sectors to foreign 
investment over a threshold of $500,000 and adds video clubs to the 
list of sectors reserved only for Liberians. The National 
Legislature is expected to pass this amended Investment Code when it 
resumes in mid-January 2010.  End note.) The Liberianization Act 
mandates that qualified Liberians be employed at all levels, 
including upper management of foreign-owned companies.  Some 
businesses owned by non-Liberians operate in contravention of the 
law.  Using the Liberianization law, the Ministry of Labor has 
delayed work permits for expatriates and intervened in hiring 
decisions. 
 
¶8. To obtain a concession for new investments requires a lengthy, 
multi-step process, but much progress has been made to ensure that 
procedures and requirements are transparent to potential investors. 
First, the concession entity prepares a request for Expression of 
Interest and an invitation to bid, based on the National Competitive 
Bidding regulations. The President appoints an Inter-ministerial 
Concession Committee (IMCC), including the Ministers of Justice and 
Finance and the Chairman of the National Investment Commission, to 
handle the bidding process and award the contract.  The IMCC selects 
a technical team, including representatives of the contracting 
agency, to handle the technical aspects of the bid.  A technical 
evaluation committee, also from within the IMCC, will evaluate the 
bidders and award the contract. The President sends the contract to 
the legislature to be ratified. 
 
¶9. The following table indicates Liberia's ranking according to 
various metrics of transparency and good governance in 2009: 
 
Measure      Index/Ranking 
 
Transparency Int'l Corruption Index  97 
Heritage Economic Freedom    48.1 
World Bank Doing Business    149 
MCC Government Effectiveness   26% 
MCC Rule of Law     35% 
MCC Control of Corruption    88% 
MCC Fiscal Policy     74% 
MCC Trade Policy     12% 
MCC Regulatory Quality    18% 
MCC Business Start Up    40% 
MCC Land Rights Access    8% 
MCC Natural Resource Management   37% 
 
 
Conversion and Transfer Policies 
-------------------------------- 
 
¶10. Both Liberian and U.S. dollars are legal tender.  Most business 
and government transactions (such as taxes) are conducted in U.S. 
dollars; most street transactions are in Liberian ("Liberty") 
dollars.  The Investment Code allows the transfer of funds 
associated with investments, including profits.  There are no 
restrictions on converting or transferring investment funds. 
However, the Central Bankof Liberia conducts a foreign exchange 
auction only once per week, and its US dollar sales, which rarely 
exceed USD 1,000,000 are often oversubscribed, so large investors 
may find it takes more than one week to exchange large sums of 
money.  ATMs are not connected to global electronic banking networks 
and traveler's checks and credit/debit cards are rarely accepted. 
 
¶11. The Central Bank of Liberia regulates foreign exchange 
transfers.  Transfer of sums in excess of $10,000 must be reported 
to the Central Bank of Liberia, and no more than $7,500 in foreign 
currency banknotes can be moved out of the country at one time. 
Larger sums must be transferred via bank draft or other financial 
instruments.  Persons without a Liberian bank account are limited to 
two outgoing $5,000 over-the-counter cash wire transfers per month. 
 
 
Expropriation and Compensation 
------------------------------ 
 
¶12. The Embassy is aware of one claim by a U.S. firm of 
expropriation (looting) by LURD rebels who attacked Monrovia in 
2003, before the current government was elected.  The claimant has 
not been in touch with the Embassy since 2004.  The Government of 
Liberia hopes to burnish its image as a destination for foreign 
investment, so appropriation of foreign assets by the current 
government remains highly unlikely. 
 
Dispute Settlement 
------------------ 
 
¶13. Liberia's legal system is similar to the criminal and civil law 
in the United States, but laws are not implemented consistently or 
predictably.  Investors cannot rely on the court system as a fair 
arbiter of disputes.  Judges and other judicial officers are poorly 
paid, courthouses are in disrepair, and administrative support is 
weak.  Judgments can be purchased, and foreign firms tend to be at a 
disadvantage.  In 2008 an unreasonable court finding caused a major 
foreign rubber company to cease operations, and frivolous suits have 
been used to harass other investors.  Due to the backlog of cases, 
it can be years before a hearing takes place.  The Sirleaf 
government is committed to judicial reform, and there are plans 
underway to expand Alternative Dispute Resolution mechanisms, but 
reform will take time. The Ministry of Commerce, in collaboration 
with the IFC-sponsored Liberia Better Business Forum, has initiated 
programs aimed at commercial law reform.  Liberia does not have 
general bankruptcy law to protect creditors' rights.  There is a 
provision in the Central Bank's New Financial Institutions Act of 
1999, which deals with voluntary and compulsory liquidation of 
financial institutions. 
 
Performance Requirements/Incentives 
------------------------------------ 
 
¶14. The Investment Incentive Code of the Republic of Liberia (the 
Code), adopted in 1966 and revised in 1973, prohibits 
nationalization of private enterprises and aims to attract foreign 
investment.  The Government is revising the Code, but under the 
current Code, approved projects must ensure the employment of 
Liberians at all levels and expand employment and training 
activities as the enterprise grows.  In addition, investors must 
permit Liberians to purchase shares or otherwise participate in the 
ownership of the enterprise, include a local value-added content of 
not less than 25% of the value of gross output, and utilize Liberian 
origin raw materials and other supplies.  An approved investment 
should use imports only when local products are not available in 
sufficient quantity and/or its quality or price is not comparable to 
the intended import, as determined by the Government.  However, 
given Liberia's limited productive capacity following years of civil 
conflict, requirements for Liberian employment and local raw 
materials are not strictly enforced. 
 
¶15. Investment incentives may include exemption from customs duty 
and tax exemption on all profits re-invested in fixed assets and 50% 
of the remaining profits.  There is also provision for loss 
carry-over and accelerated depreciation of fixed assets.  Many large 
foreign investors negotiate further tax incentives on an ad hoc 
basis.  The National Investment Commission of Liberia (NIC) 
implements the Code, and more details are available on the NIC 
website:  http://www.nic.gov.lr/ 
 
Right to Private Ownership and Establishment 
--------------------------------------------- - 
 
¶16. Land ownership is restricted to Liberian citizens.  Chapter III, 
Article 22 of Liberia's Constitution states: 
 
"Every person shall have the right to own property alone as well as 
in association with others, provided that only Liberian citizens 
shall have the right to own real property within the Republic. 
Private property rights, however, shall not extend to any mineral 
resources on or beneath any land or to any lands under the seas and 
waterways of the Republic.  All mineral resources in and under the 
seas and other waterways shall belong to the Republic.  Non-citizen 
missionary, educational and other benevolent institutions shall have 
the right to own property, as long as that property is used for the 
purposes for which acquired; property no longer so used shall 
escheat to the Republic." 
 
¶17. The 2006 Forestry Reform Law states that natural forests are 
owned by the Republic, with two exceptions (Chapter II, Section 
2.1).  Rights to land ownership and to use of resources such as 
minerals and timber are likely to evolve in coming years, and the 
government has established a Land Commission to address questions of 
land tenure. 
 
¶18. Many foreign businesses have entered into long-term leases, but 
disputes over land ownership and squatters' rights remain 
contentious, particularly for large concessions.  Violence based on 
land disputes erupted in Nimba County in late 2008.  There was no 
reported land dispute in 2009 and the government established the 
National Land Commission in August 2009. 
 
Protection of Property Rights 
------------------------------ 
 
¶19. Conflicts between customary and statutory land tenure systems 
have not been reconciled.  The official archives, including property 
deeds and secured property interests, were looted during the war and 
disputes over real estate ownership are difficult to adjudicate. 
The lack of adequate facilities and salaries for judicial officers 
also degrades enforcement of property rights as judges sometimes 
decide cases in favor of the highest bidders.  The Ministry of 
Lands, Mines and Energy, which is in charge of survey and validation 
of land claims, has established an office for implementing a 
national mining cadastre that could eventually incorporate land 
title registrations.  There have been cases of fraud by 
government-licensed land surveyors. 
 
¶20. Liberia is a member of the World Intellectual Property 
Organization (WIPO) and a contracting party to international 
conventions and treaties on the protection of intellectual and 
industrial pQperty rights, including the Berne, Paris, Lisbon, 
Vienna and Washington conventions and the Madrid Agreement.  The Act 
adopting the New Copyright Law of Liberia, approved in July 1997, 
provides the legal and administrative framework for protection of 
intellectual and industrial property rights.  The Copyright Office 
(CRO) and the Industrial Property Office (IPO) manage these issues, 
but lack the capacity to function effectively. 
 
¶21. All imports of intellectual property must be so identified on 
the import permit (rather than being identified as "general 
merchandise").  All businesses dealing in intellectual property must 
reflect that on their business registration form.  Holders of 
intellectual property rights have access to judicial redress but 
enforcement is minimal.  In 2009, the Liberia Copyright Office 
recorded 89 businesses, including songwriters, movie producers, and 
authors, holding intellectual property rights.  Infringement of 
intellectual and industrial property rights is prevalent.  Movies 
and music are duplicated.  Counterfeit drugs, apparel, cosmetics, 
and computer software and hardware are sold openly. Broadcasters do 
not tend to pay royalties for use of protected material. 
 
Transparency of the Regulatory System 
------------------------------------- 
 
¶22. The Liberian government continues to improve Liberia's ranking 
in the "Doing Business" index by making regulations more 
transparent, accountable, and effective.  For example, in 2009, the 
government opened "one-stop shops" to streamline bureaucratic 
procedures such as those for licenses and permits, with an eye to 
facilitating imports and investment.  The government's 
implementation of GEMAP and agreement with policy prescriptions 
advanced by the International Monetary Fund (IMF) are showing 
results.  New regulations are improving the transparency of the 
government's Public Procurement and Concession Commission (PPCC): 
http://ppcc.gov.lr .  Harmonization of the regulatory environment 
across ministries and agencies with conflicting rules and 
regQations is ongoing.  However, regulators can still be arbitrary 
or heavy-handed, and limited capacity means existing regulations are 
not always enforced. 
 
¶23. Proposed legislation is not formally published for public 
comment, but the National Legislature has held some public hearings 
on issues of widespread interest, such as the Investment Code. 
 
Efficient Capital Markets and Portfolio Investment 
--------------------------------------------- ----- 
 
¶24. The Liberian banking system provides basic banking services but 
there is no effective capital market or options for portfolio 
investment.  Financial institutions are undercapitalized and unable 
to meet the credit demands of the business community.  While credit 
is allocated on market terms to foreign and domestic investors 
alike, the historically high rates of non-performing loans mean 
banks grant only short-term (less than 18 months), high-interest 
loans that constrain capital investment and limit new business 
development.  Total assets of the eight commercial banks were 
approximately $279 million in 2009.  Minimum capital requirements 
were raised to $8 million in 2009, and will be further increased to 
$10 million in 2010.  The minimum capital adequacy ratio was 
increased from 8% to 10% in 2008.  Banks have continued to reduce 
the proportion of non-performing loans since 2003 and loan quality 
is improving as banks expand their operations in the rural areas of 
Liberia. 
 
¶25. The Liberian market offers the private sector few credit 
instruments.  Liberia cannot issue debt instruments until it reaches 
Completion Point under the Highly Indebted Poor Countries (HIPC) 
Initiative, which is expected in 2010.  Private companies also do 
not issue debt, in part because there is no government benchmark, 
and in part because there is a perceived lack of appetite for such 
investment instruments. 
 
¶26. The weak judicial system means financial institutions find it 
difficult to recover bad loans through the courts.  In addition, 
there is no effective credit rating system, and many firms lack the 
business records necessary for credit approval. The obstacles to 
domestic travel and communication increase the risk in accepting 
collateral outside Monrovia and the lack of reliable land title 
hampers access to credit. 
 
¶27. The United States has programs to support investment in small 
and medium Liberian companies, some of which provide services, such 
as lodging, communications, and construction, which improve the 
overall investment climate.  In 2007, the Overseas Private 
Investment Corporation committed $20 million to the Liberia 
Enterprise Development Finance Corporation (LEDFC) to support small 
and medium Liberian enterprises.  LEDFC, which works closely with 
the commercial banks, is the first non-bank financial institution 
licensed by the Central Bank of Liberia to support small and medium 
enterprises.  This program should strengthen the financial sector 
and improve access to capital by growing Liberian firms.  The United 
States African Development Foundation (USADF) has invested $1.67 
million in Liberia to stimulate job creation and improve income 
levels by supporting cooperatives and enterprises, including farmer 
cooperatives.  USADF's portfolio in Liberia consisted of 10 
investment projects in 2009. These projeQs provide sustainable 
jobs, technology transfer, financial and general management 
training. 
 
Competition from State-Owned Enterprises 
---------------------------------------- 
 
¶28. Liberia has approximately 15 state-owned enterprises, 
parastatals and regulatory agencies.  The history of SOEs in Liberia 
is characterized by a high level of corruption, cronyism and 
mismanagement.  However, President Sirleaf's administration has 
embarked upon a series of vigorous reforms since taking office in 
¶2006.  A number of SOEs, including some autonomous agencies, have 
been granted minimal budget allocations that will ensure their 
eventual dissolution.  The GEMAP framework and other initiatives are 
improving financial and operational performance at several SOEs, 
notably the National Port Authority (NPA), Roberts International 
Airport (RIA), the Forestry Development Authority (FDA) and the 
Liberia Petroleum Refinery Corporation (LPRC). 
 
¶29. The government plans a two-pronged restructuring strategy for 
SOEs before 2012.  Firstly, it intends to dissolve or privatize SOEs 
that have become obsolete, unnecessary or appropriate for private 
ownership.  Secondly, there are ongoing plans to improve efficiency 
and economic governance at those remaining SOEs. 
 
Corporate Social Responsibility 
------------------------------- 
 
¶30. Foreign investors typically are expected to offer social 
services to local communities where they operate as a gesture of 
goodwill.  Concession contracts often specifically outline what 
services an investor is expected to provide, such as road building, 
school construction or maintenance of health clinics.  Even after a 
concession is ratified by the legislature, some investors find that 
communities expect them to negotiate separately with local leaders 
for additional services, a process that can be cumbersome or lead to 
delays. 
 
¶31. A consortium of large foreign investors launched a Corporate 
Responsibility Forum in Liberia in 2009.  While the initiative is 
still in the early stages, it provides information and resources to 
foreign investors on how to follow generally accepted CSR principles 
such as the OECD Guidelines for Multinational Enterprises. 
 
 
Political Violence 
------------------- 
 
¶32. There has been no significant political violence since the 
signing of the Accra Comprehensive Peace Agreement in 2003 and the 
deployment of 15,000 UN peacekeepers throughout Liberia.  The former 
Armed Forces of Liberia (AFL) was completely demobilized and with 
USG assistance a modern, professional force is being trained.  By 
the end of 2010, the AFL will reach initial operational capability, 
but will still rely on international support.  The LibeQan National 
Police is also being restructured and includes an Emergency Response 
Unit (ERU), which has the ability to respond rapidly and to address 
sudden tactical police emergencies.  The UN troops, which now number 
8,500, are gradually being withdrawn as Liberia's security forces 
gain in strength and experience.  Increasing freedom and 
transparency for the Liberian people has lead to vigorous pursuit of 
perceived rights, which results in active, often acrimonious, but 
non-violent political debate.  Access to land remains a volatile 
issue that has led to violent disputes on the local level. 
 
Corruption 
---------- 
 
¶33. The government is tackling corruption, but it remains systemic. 
In 2009, Transparency International rated Liberia 97th of 180 
countries on its corruption perception index, up from 138th place 
the previous year.  Among sub-Saharan African nations, Liberia 
ranked 13th in 2009 compared to 30th in 2008.  The 2009 Mo Ibrahim 
African governance index showed Liberia as "most improved" in West 
Africa since 2005, and the 2009 World Bank Worldwide Governance 
Indicator cited Liberia for progress over the past two years in 
"control of corruption," political stability and absence of 
violence.  Although corruption is being addressed, travelers may 
encounter officials who solicit bribes (often euphemistically 
referred to as "cold water" or "my Christmas"). 
 
¶34. There have been improvements in the transparency of government 
procurement, and the 34.5% increase in government revenues in 
FY2008-09, on top of the 47.7% increase in FY2007-08, reflects 
progress in corralling revenue leaks.  Since taking office, the 
Sirleaf administration has boosted civil service salaries over 200% 
and continued payments of salary arrears incurred by past 
governments.  However, the starting government salary is still only 
$80 per month, and despite efforts at reform delays in paying 
government employees persist.  The Sirleaf administration faces the 
dual pressure of controlling government expenditures while at the 
same time providing civil service salaries that constitute a living 
wage that will limit corruption. 
 
¶35. Liberia is signatory to two important international instruments: 
the UN Convention against Corruption (UNCAC) and the African Union 
Convention on Preventing and Combating Corruption (AUCPCC).  In 
2006, the government, along with Liberia's international partners, 
designed the national anti-corruption strategy, which paved the way 
for the establishment of the Liberia Anti-Corruption Commission 
(LACC) in 2008. 
 
Bilateral Investment Agreements 
-------------------------------- 
¶36. Liberia has a few bilateral trade agreements, but some of the 
agreements have remained inactive for years.  The country does not 
have a definite trade policy, which has prevented it from joining 
regional and international trade organizations.  Liberia attained 
World Trade Organization observer status in 2007, but a transparent 
trade regime has become a pre-requisite for full WTO membership. 
¶37. In October 2009, the government began a series of 
capacity-building programs, in collaboration with ECOWAS, to 
formulate a trade policy that would qualify Liberia for WTO 
membership.  The draft Policy is currently being reviewed by a 
Technical Committee, headed by the Ministry of Commerce and 
Industry.  In February 2007, Liberia signed the Trade and Investment 
Framework Agreement (TIFA) with the United States to reduce trade 
and investment barriers between the two countries.  Liberia is 
eligible for trade benefits under the African Growth and Opportunity 
Act (AGOA), though the country did not make use of AGOA trade 
preferences in 2009.  Liberia has long-standing trade agreements 
with the European Economic Community (EC), ECOWAS, and neighboring 
Manor River Union (MRU) countries. 
 
OPIC and Other Investment Insurance Programs 
-------------------------------------------- 
 
¶38. OPIC provides coverage for investors in Liberia.  The U.S. 
restored Liberia's eligibility for the Generalized Systems of 
Preferences in February 2006. 
 
¶39. The Liberian dollar is a fully-convertible currency and operates 
on a free float with no predetermined path.  It is therefore 
unlikely that OPIC would ever be required to pay an inconvertibility 
claim.  However, there is some risk of currency depreciation in 
2010, as Liberia lacks strong foreign exchange reserves and 
continues to run a large current account deficit. 
 
Labor 
----- 
 
¶40. The Liberian labor force is predominantly illiterate and 
unskilled, and most Liberians lack basic computer skills.  The 
literacy rate is believed to be about 15% for those below age 
thirty-five.  Many skilled professionals have emigrated.  The 
employment rate in the formal sector is approximately 16%. 
 
¶41. Employees enjoy freedom of association, and they have the right 
to establish and become members of organizations of their own 
choosing without previous authorization or coercion.  In this 
regard, no employer shall discriminate against an employee because 
of membership in a labor organization.  The Ministry of Labor 
requires employers to demonstrate a goodwill effort to hire a 
qualified Liberian before it will grant work visas to foreigners, 
and some foreign investors find this process to be a lengthy one. 
 
¶42. Labor legislation was revised in 2007, repealing a decree that 
prohibited workers from striking and repealing section 1508 (3), 
which permitted employees to be dismissed without cause.  According 
to Liberian law, labor organizations and associations have the right 
to draw up their constitutions and rules, to elect their 
representatives in full freedom, to organize their administration 
and activities, and to formulate their programs.  The labor law 
specifies that no industrial labor union or organization shall 
exercise any privilege or function for agricultural workers and no 
agricultural labor union or organization shall exercise any 
privilege or function for industrial workers. 
 
Foreign Trade Zones/Free Trade Zones 
------------------------------ 
 
¶43. In 1976, the government of Liberia created the Liberia 
Industrial Free Zone Authority (LIFZA) to promote industrial and 
corporate growth, but no FTZs are active now.  Almost no 
manufacturing is done in Liberia. 
 
Foreign Direct Investment Statistics 
---------------------------------------- 
 
¶44. Investment and commercial activity continue to increase.  The 
National Investment Commission reported $100 million in new 
investment by July 2009, achieving its 2009 target of $100 million 
during the first half of the year.  Business registration data 
confirm the sharp increase in investment activity. According to 
statistics from the Bureau of Domestic Trade at the Ministry of 
Commerce, partial year figures of total businesses registrations as 
of December 15, 2009 (foreign and domestic) increased 5.5% over the 
previous year, from 7,056 firms in 2008 to 7,445 firms. The Ministry 
registered 984 foreign owned businesses in 2009, about 15% increase 
over the 2008 figure. (Note: businesses must register annually.  End 
note.) 
 
¶45. Detailed investment statistics are not available.  However, 
according to International Financial Statistics, the stock of 
foreign direct investment in Liberia from 2004 (when statistical 
estimates resumed after the civil conflict) through 2009 is $641 
million.  According to an IMF estimate of $880 million for 2009 GDP, 
FDI stock is 73% of GDP and 2009 FDI flows represent 11% of 2009 
GDP.  Liberia has limited, if any, foreign direct investment abroad. 
 
 
 
 
THOMAS-GREENFIELD