The_Open_Door_deel1

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$ 117 million were due for repayment before 1969 (44)« Virtually
all short-term public debts were owed to foreign banks and
companies (contractors and/or suppliers); the long-term debts
being owed to foreign governments or institutions owned or
controlled by,them (mainly U.S.A. and West Germany). The debt
service due in 1963 amounted to $ 33-6 million if no postponement
of repayment and/or interest payments were obtained,
"an amount not much less than the entire estimated government
revenue for that year" (45).
Early 1963 a comprehensive debt-rearrangement plan was prepared
with the assistance of the International Monetary Fund (I.M.F. ).
(The previous year Liberia had joined the I.M.F and the
International Bank for Reconstruction and Development, I.B.R.D.).
As a result of this re-arrangement of the public debt temporary
relief was granted to the Treasury enabling the Government to
introduce measures to improve the situation in the area of public
finance. The re-payment of the *bulk of the debt was postponed
until 1969, nevertheless making an immediate stand-by credit of
the I.M.F. necessary in 1963. The Liberian Government had
requested and obtained this I.M.F. assistance, including the
services of an I.M.F. representative in Liberia/Monrovia to
assist and advise the Government in carrying out an imposed
financial program as well as fiscal measures. The Government had
to and did promise in return for this I.M.F. assistance (i) to
refrain from any new commitments with maturities of less than 15
years, (ii) to try to increase revenues by improving existing
collection procedures and by introducing new taxes (i.a. an
Austerity Tax was introduced), (iii) to make regular transfers
from its own resources to a special account set up for the
purpose of servicing the debt, (iv) to limit its ordinary budget
expenditures and to introduce an Austerity budget, and (v) to
introduce a new budgetary system.
Until then, as was stated above, various budgets existed whereas
the ordinary budget did not specify expenditures with respect to
current operations and capital formation.
It is important to note here that one of the consequences of the
financial crisis was the gradual development of an Investment
Incentive Code (completed and enacted in 1966). Its goal was to
attract new investments and thus generate additional revenues
for the Treasury and to uniformize (concession) agreements with
investors with the aim of eliminating abuses and reducing loss
of potential revenues. Also in this period the idea germinated
of developing an "Industrial Park" outside Monrovia to
facilitate the location of private industries. With respect to
existing concession agreements the Government agreed to
investigate the possibilities of increasing revenues from these
sources.
In spite of the drastic cuts In expenditures, the enforcement
of existing tax legislation, the introduction of new sources of
revenues, and the Improvement of the administration (which of
course could not be realized overnight) the Government continued
to be confronted with substantial budgetary deficits.