Liberian Devastating Civil War

The spread of violence caused every party involved in the conflict to become hungry which caused the fighting to become more violent and the political arena to become even more unstable. This is caused by public resources being administered from social programs to sectors that involve the war effort. The world has seen civil conflicts, especially the Liberian conflict can destroy a country’s agriculture sector. This is evident because before the civil conflict Liberia’s agriculture sector accounted for forty percent of its GDP and during the war fell to as low as ten percent.

This causes the country to experience a loss in human and physical capital. Civil War disrupts everything in the country: trade will decrease which is usually a mainstream supply line for the government, and growth will come to a halt. This also contributes to a conflict spreading, an example of this occurring is in Liberia. This resulted in their GDP declining by over 90% in less than twenty years, it is one of the largest economic collapses in the world since the end of World War II (Radelet).

The fighting has destroyed much of Liberia’s economy, and roads and other infrastructure around the country have been badly damaged. Also, investments and businessmen have pulled out of the country and thus taken the taking capital and expertise with them.

This Civil War was devastating for Liberia, but it had greater consequences for Sierra Leone because of the spillover effect. Liberia caused a Civil War in Sierra Leone by the main rebel group in the Liberian Civil War also being involved in the Sierra Leone conflict.

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The rebel group, National Patriotic Front of Liberia stationed in Liberia, led by Charles Taylor, provided weapons and funds to the rebels called Revolutionary United Front (RUF), who were fighting toagainst e Sierra Leonean government, in an attempt to overthrow it. Murdoch and Sandler also look into the spillover effect, they theorize that when neighborhood spillovers are substantial, this assistance may have to be “augmented to counteract civil war externalities for an aid-recipient nation to stay on its path to a higher steady-state level of gross domestic product (GDP) per capita, but in the short run growth spillover hurts it”( Murdoch and Sandler). This conflict situation is a perfect representation of spillover that has a negative effect because the Liberian Civil War and its spread to Sierra Leone, particularly since 1995, caused a total collapse of their economy. The country was troubled economically because the black market in Sierra Leone was used frequently meaning people were buying products at the same rate as the legal market, it increased in the lawless conditions of civil war. Sierra Leone’s economy was in crisis mode, mainly in the years leading up to the civil conflict. The economy was very unstable with economic growth rates fluctuating between 7% and -7%, but during the civil war, the growth rate dipped as low as -17% (Trading Economics). Investments in Sierra Leone also decreased as a result of the conflict spillover. Today, Sierra Leone reported steady growth in foreign direct investment but in 2012, an Ebola epidemic slowed growth until 2017.

Bayer and Rupert looked into International Trade during the years 1950-1992, One key finding from their analysis is that, “of 120 countries between 1950 and 1992 is that civil wars decrease trade between states by at least one-third” and is not restricted to just the host country, but the whole region economically is affected (Bayer and Rupert). This is critical in my analysis because they connect their paper with Murdoch and Sandler’s which states there is an economic spillover effect. Civil Wars will make entry into the war-torn country’s markets by a new trader difficult because there is pressure to stay away from the conflict. Current traders in the market will try to keep out new traders since they want most of the market share, this also applies to the investments in a country.