The_Open_Door_deel1

THE 1963 - 1978 PERIOD
Revenue Performance
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I|ji
In 1978 Liberia's domestic revenues were more than five times
the 1963 figure but revenue performance in general was disap-
|j pointing during the 1963 - 1978 period. The most important source
Ij of revenue consisted of charges on international trade of which
! import duties formed the chief component. There were only five
| years during which revenues directly originating from the eco-
,v!i nomic Open Door Policy were larger (see Table 36).
j The average annual contribution of external trade charges in the
j . 1963 - 1977 period slightly exceeded the average combined (di-
| rect) payments to the National Treasury of the Forestone Planta-
I tions Company, the iron ore mining companies, the logging com-
| panies and the Liberian registered ships, and were nearly onethird
of total domestic revenues. It should be noted, however,
that for various reasons the fiscal contribution of a number of
j foreign companies was not included in Table 37. Examples of these
| companies are the rubber plantations (other than Firestone) and a
t
few industrial companies. Their insignificance with respect to
j actual contribution to the Treasury and the lack of data were ali
ready presented in earlier chapters. On the other hand, stumpage
. fees as presented in Table 37 include payments by Liberian owned
logging companies. Furthermore, the Table includes payments made
j by the majority Liberian owned N.I.O.C. For these reasons the
i conclusion seems justified that in the years 1963 through 1977
j direct payments to the Treasury by the foreign concessions, and
; including the Flag of Convenience, approximated one-third of the
i total domestic revenues.
Roughly fifty percent of these payments were made by only three
. companies: L.M.C, B.M.C. and the LAMCO Joint Venture. The dan-
| gers inherent in such an extremely narrow basis of revenue were
; referred to before. If world economic conditions cause profits
from iron ore mining operations to fall, the Government's income
will automatically be considerably affected. This will not necessarily
result in a decrease in domestic revenues but certainly
! cause a slowing down of the growth rate of these revenues. With
\ yearly increasing expenditures of the Liberian Government this is
; bound to create financial difficulties.
j This is what actually happened after 1975 and the closing down of
I L.M.C. enhanced the consequences. Obviously, the depletion of the
| ore reserves and the consequent withdrawal of the mining companies
: in the long run form the most serious threat to future Government
revenues. The weakness of this revenue structure makes it therefore
all the more imperative to give high priority to the financing
of the development of the country's productive capacity with
j the proceeds of these depletable resources. (This will be dealt
i with in more detail in the next section, "Development Planning
i and Expenditure Patterns").
I The financial contribution of companies engaged in the production