Liberia's debate over the export of unprocessed rubber is not really about rubber. It is about whether we are finally prepared to break a habit that has kept this country poor for generations.
The figures presented by the Ministry of Agriculture should concern every Liberian. Our six rubber processors require about 36,600 metric tons of rubber every month to keep their factories operating efficiently. Instead, they receive only 14,000 metric tons because approximately 22,000 metric tons are exported in raw form. The result is predictable: factories operate below capacity, expansion plans are delayed, and workers face the threat of losing their jobs.
President Joseph Boakai's Executive Order No. 166 seeks to reverse that trend by keeping Liberia's rubber in Liberia long enough for it to be processed before export. The policy has naturally drawn criticism from brokers and some farmers who fear it could reduce competition and place too much power in the hands of a few processors. Those concerns deserve serious attention. But they should not distract us from the larger question before the country.
What is Liberia trying to become?
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No country has become prosperous simply by exporting its raw materials. Wealth is created by adding value to those materials before they leave the country. That is where the higher incomes, the better jobs, the technical skills and the larger tax revenues are found.
Consider cocoa. According to UN Trade and Development, raw cocoa beans sell on international markets for roughly US$2.50 per kilogram. Process those same beans into cocoa butter and their value nearly doubles. Turn them into chocolate and the value rises even further. The difference is not the cocoa itself. The difference is processing.
The same principle applies to rubber.
When Liberia exports raw rubber, another country transforms it into industrial products, medical supplies, vehicle components and tyres. Their factories employ engineers, chemists, technicians, electricians, accountants and marketers. Their governments collect taxes from every stage of production. Liberia receives payment for the raw material, but most of the economic opportunity leaves with it.
This is not unique to rubber. It is the story of Liberia's economy. We export iron ore and import steel products. We export timber and import furniture. We export gold and import finished jewellery. We export cocoa and coffee while others sell the finished products at several times the value of the raw commodity.
The World Bank has repeatedly warned that Liberia remains trapped in a resource-based economy where growth depends largely on exporting unprocessed commodities. Such an economy creates income, but not enough jobs. It earns foreign exchange, but not enough industrial capacity. It generates exports, but too little prosperity.
That is why this debate must not be reduced to whether one processor benefits more than another, or whether one broker loses business. The national interest is much larger than that.
At the same time, government cannot ignore the legitimate concerns of farmers. If raw rubber exports are restricted, farmers must never become captives of a handful of local buyers. The official pricing mechanism must be transparent and closely tied to international market prices. Payments must be prompt. Competition among local processors should be encouraged, not discouraged. A policy designed to promote industrialization must not end up punishing the very people who produce the rubber.
Likewise, local processors have responsibilities of their own. If they ask government to reserve Liberia's raw materials for domestic industry, they must invest accordingly. They must expand production, create more jobs, improve technology and move beyond exporting crumb rubber toward manufacturing higher-value finished products. Protection should never become an excuse for complacency.
Industrialization is never painless. Every country that has successfully moved from exporting raw materials to exporting finished products has experienced periods of adjustment. Some businesses lose old markets while new industries emerge. But the destination is worth the journey because value addition multiplies opportunity throughout the economy.
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Mr. Upjit Sachdeva captured the essence of the issue when he told lawmakers, "If we are exporting our raw material, then we are exporting our jobs."
That observation extends well beyond rubber. Every shipment of unprocessed rubber, iron ore, timber, cocoa or coffee that leaves Liberia represents work that could have been done by Liberians, taxes that could have been collected by the Liberian Government and skills that could have been developed in Liberian factories.
For too long, Liberia has been content to export what nature gives us and import what human ingenuity produces. That model has never delivered broad-based prosperity.
If this country is serious about creating jobs, growing industries and expanding its tax base, then adding value to our natural resources is no longer optional. It is essential.
The real wealth of Liberia is not in the rubber tree. It is in what Liberians are able to make from it.
