Why Liberia is SO expensive

Our first clue that Liberia was going to be an expensive trip was the quoted rent from the government, while we were planning: 1,000-1,500 USD. This being on par with rent in New York, we were quite shocked. Though we also thought this was unique to places with security where they like to place Americans. We found out when we got here this is not necessarily the case. There are of course inexpensive living options. We heard rumors of a Scottish employee of one of the ministries that lives in a single room without electricity or running water for 20 USD a month. We are still looking for permanent residence and hopefully will pay somewhere in between.

Second we were surprised that most prices are dollarized. The only time we have used the local Liberian Dollar (LD) is once for a taxi and when we have bought items from vendors on the street. Most food in restaurants is in USD, and is no less expensive than in America. You pay 5-12 USD per meal and we have spent 20 USD per day on food since arriving. We hope to have a place soon, with a kitchen so that we can limit our food expenditures. Lucky for me Travis and Kenneth are good cooks.

In short we have found that high prices are (in part) due to the large number of foreigners working for the government and NGOs - their salaries usually subsidized by an outside agency or fellowship program – and of course the large UN presence.

If or when international interest in Liberia wanes or the UN phases down their presence, there will be much less USD coming in from the outside and it seems that a large part of local demand will evaporate. I can only assume that prices will decrease and incomes will as well. I’m left with the question what will this mean to the stability of the political economy?