Lessons from foreign investments in Liberia
Conclusion 1a:

Supply-oriented companies are reluctant to transfer technology in order to protect their interests


One of the major conclusions of the study1 is that in spite of a long history of foreign investments, Liberians, in general, still lack the basic skills and experience to satisfactorily perform the management and technical duties which expatriate managers, mining engineers and other technicians, administrators and bookkeepers hold in foreign companies operating in the country.2  The multinational corporations could have contributed more substantially to the growth and development of the Liberian economy than they actually did.

The disappointing results of the transfer of technology teach us that guest companies will collaborate with the host country for the establishment of vocational training centers. They will also finance fellowships abroad or other activities, which are in the interest of the company involved since these may eventually reduce local costs. However, these companies are reluctant to collaborate in cases where their immediate interests are at stake. In general, their investments are supply oriented. This means that the produce is meant for overseas markets where it is processed and used as an input to manufacture final products.3 As we have seen in the past, the nature of these investments made some control over the nationís natural resources imperative. A clear example of this conclusion is provided by Firestoneís investment and financial policies in Liberia.

In protecting their commercial and financial interests, the foreign investors found important allies within the governing elite of the country. Both groups feared the majority of the Liberian people which could reduce or even eliminate the privileges they both enjoyed in case they would come in control of the political system. Despite their common interests a potential controversy existed between the foreign investors and the ruling minority of Liberia since the former also rejected the idea of being controlled by Americo-Liberians while exploiting the countryís natural resources. The latter had no choice but to accept the economic domination of foreign capital and manpower if they wanted to survive politically in a country where the tribal population outnumbered them more than fifty times.


'The Open Door Policy of Liberia - An Economic History of Modern Liberia' by Dr. Fred P.M. van der Kraaij (Bremen, 1983)

2) Whereas this was written in 1983, it may still hold true in the early 2000s. It is very likely that the number of trained Liberians has considerably increased since the early 1980s, but many of them fled the country during the 14-year civil war and settled elsewhere, in particular in the USA.




3) Examples are the rubber produced by Firestone and Goodridge and the iron ore exported by LMC, the LAMCO JV and Bong Mines.











Lessons from Foreign Investments



© fpm van der kraaij