The Impact of Foreign Rubber Concessions on the Liberian Economy, 1966–1971

Abstract

Many less-developed countries are richly endowed with natural resources but, due to their lack of domestic savings, must depend on foreign capital for the exploitation of these resources. The industries which are established usually produce primary products and are geared to export markets, since the host countries, particularly the ‘small’ ones, lack a broad domestic market. Thus for many L.D.C.s the relevant question is how the export-oriented primary products can make the maximum contribution to broadly-based economic development.1 Countries which fail to produce domestic capital goods are said to have incomplete economic systems, but the export industry, by making available foreign exchange for capital goods imports, can be regarded as a quasi-capital goods sector. The same argument holds more generally for manufactures or, indeed, for goods in which a country has a comparative disadvantage. As Henry Wallich puts it in his study of sugar in the Cuban economy, exports and imports may assume the roles played by investment and saving in developed countries, with exports being the main generating force in national income.2