The Liberian economy relied heavily on the mining of iron ore and on the export of natural rubber prior to the civil war. Liberia was a major exporter of iron ore on the world market. In the 1970s and 1980s, iron mining accounted for more than half of Liberia's export earnings. Following the coup d'etat of 1980, the country's economic growth rate slowed down because of a decline in the demand for iron ore on the world market and political upheavals in Liberia. Liberia's foreign debt amounts to more than $3 billion.

The 1989-1996 civil war had a devastating effect on the country's economy. Most major businesses were destroyed or heavily damaged, and most foreign investors and businessmen left the country. Iron ore production has stopped completely, and Liberia depends heavily on timber and rubber exports and revenues from its maritime registry program. Relatively few foreign investors have returned to the country since the end of the civil war due to the depressed business climate and continuing instability. Timber and rubber are Liberia's main export items since the end of the war. Liberia earns more than $85 million and more than $57 million annually from timber and rubber exports, respectively. Alluvial diamond and gold mining activities also account for some economic activity.

Being the second-largest maritime licenser in the world with more than 1,800 vessels registered under its flag, including 35% of the world's tanker fleet, Liberia earned more than $13 million from its maritime program in 2002. There is increasing interest in the possibility of commercially exploitable offshore crude oil deposits along Liberia's Atlantic Coast.

Liberia's business sector is largely controlled by foreigners mainly of Lebanese and Indian descent. There also are limited numbers of Chinese engaged in agriculture. The largest timber concession, Oriental Timber Corporation (OTC) is Indonesian owned. There also are significant numbers of West Africans engaged in cross-border trade.

Liberia is a member of ECOWAS. With Guinea and Sierra Leone, it formed the Mano River Union (MRU) for development and the promotion of regional economic integration. The MRU became all but defunct because of the Liberian civil war which spilled over into neighboring Sierra Leone and Guinea. There was some revival of MRU political and security cooperation discussions in 2002.

Historically, Liberia has relied heavily on foreign assistance, particularly from the United States, Japan, Britain, France, Italy, Germany, China, and Romania. But because of the corrupt nature of the Liberian Government and its disregard for human rights, foreign assistance to Liberia has declined drastically. Taiwan and Libya are currently the largest donors of direct financial aid to the Liberian Government. But significant amounts of aid continue to come in from Western countries through international aid agencies and non-governmental organizations, avoiding direct aid to the government.

The United Nations imposed sanctions on Liberia in May 2001 for its support to the brutal rebels of the Revolutionary United Front (RUF) in neighboring Sierra Leone.