Liberia has historically maintained an "open door" policy toward foreign investment, but since 1989 this policy has given way to the protectionist practices of the government. It has allowed a limited period of exemption from certain types of taxes and permits an unrestricted flow of dividend payments, but only in certain sectors. A 1975 "Liberalization" Law prohibits foreign ownership in many small and medium operations (such as travel agencies, gas stations, beer and soft drink distributors) and mandates the employment of Liberians at all levels. The law is often ignored but can also be invoked at any time.
In 1989, interest on long-term debt stood at 105% of exports. Attempts to bring financial stability to the economy failed dramatically in the early 1990s with the failure of the US-sponsored oversight mission and the breakdown in relations between Liberia and the IMF. Liberia plunged into a civil war from 1990 to 1997, which besides causing upwards of 150,000 deaths and displacing hundreds of thousands, destroyed the country's infrastructure. The end of the fighting, with Charles Taylor's accession to power as the only way to deter his followers from further destruction, brought little relief since his administration has not fulfilled promises to fix what they had "broke." Professions of adherence to principles of free trade and an open door to foreign investment have also rung hollow as the state has established monopolies in rice growing, gasoline distribution, cement import, and cement production. The free port at Monrovia has continued to operate, but stevedore services have been monopolized by the National Port Authority, canceling the contracts of seven other companies. Corruption reaches to the highest levels.
Most of Liberia's principal enterprises were foreign owned before the civil war, with US investment—about $300 million in 1987—foremost. Substantial investments were also made by the British, French, Swedish, Israelis, Swiss, Dutch, Italians, and Lebanese. After the civil war, some US companies resumed (Firestone) or began operations (some gold mining companies). However, most investors have been deterred by the regime's failure to meet IMF targets, pervasive corruption, arbitrary administration, and the reemergence of violent rebellion.
In 1997 and 1998, foreign direct investment (FDI) inflow averaged $15.5 million a year. From 1999 to 2001, average FDI inflow was $11.3 million