The Liberia Project — mutuality will grow the economy

Mauricio L. Miller
May 23 · 12 min read
Road-side entrepreneurship

Corporations and the rich are not the only ones that create jobs and grow the world’s economies. How did former slaves come to build successful townships after slavery including their own “wall street” in Tulsa Oklahoma? How did the Jewish community work together and dominate the garment industry in NY and how did Cambodian refugees learn and help one another to own over 80% of the donut shops in California in the 1990’s. How do the kids of movie stars and business people follow their parents into similar areas of work? It has to do with the advantages that come from people within social networks sharing opportunities and financing. Where social networks are tight, these micro economies are referred to as collective, enclave, or ethnic economies and on the whole we will refer to these as “mutuality economies” and are subsets of the general economy. Basically everyone gets a boost from their social networks.

After every devastation, segregation, isolation and degradation people come together to rebuild, help one another, build homes, and create jobs to feed their families. In poor communities they don’t wait for the corporation to locate a plant there. They save together and help each other start new businesses. They sell what they can on the street corner or flea market. When you visit a Chinatown you see that dollars circulate within the community many times before those dollars are spent with vendors outside the community. Research has shown that micro-economies grow the more times that the currency circulates within a community. That is how the above examples have happened.

Now there is a chance to promote the mutuality upon which enclave economies are based to demonstrate how to grow the economy of an entire country. That opportunity is in Liberia where 80% of the people have already had to create their own jobs after a civil war and Ebola outbreak. The country is small enough so that tracking increases in tax revenue, job creation or wage gains at the local level can be seen to impact the entire country. The Liberia project will provide a visible example of the strengths of the people themselves. The economic activity of the low-income is harder to see in developed economies but an increase in entrepreneurship can be more clearly seen in a country like Liberia. The investments required are also much smaller and people already rely on social capital, helping each other.


Population: 4.8 million (2018). Average family size is 5

Less than 1 million families, about 900,000 considered indigenous

Population in Capital of Monrovia: 1 million or 200,000 families,

Buchanan: 25,000 or 5,000 families

Lebanese, Indian, and other ethnic minorities in Liberia ~ 100,000 (10% of population) and they control some of the larger and better developed businesses.

GDP: $2.4 B (2018)

Budget for 2018: $570 million in U.S. dollars.

Taxes on goods and services make up about 25% of the government revenues.

Diaspora: Annual Remittances to Liberia: $500 million, about $350 million from diaspora in the U.S.

There are Liberian’s all over the world trying to help their home country. This project will look at using technology and leveraging some of the remittances sent to the entrepreneurs in Liberia we will target.

Tracking progress:

- We will track the growth of Tax revenues on Goods and Services, as well as other economic indicators.

- Most Liberian families earn less than $5 per day and we can track the rise in wages as well as # of jobs being created. Most of these will be impacts created by the poor in Liberia since 80% are poor.

The Liberia Project’s Broader Goal: To demonstrate the contributions that even those in the worst situations make to society and the economy by working together, purchasing from one another and helping one another. What the Liberia project will test is how outsiders can play a supportive role without taking the power and control from the indigenous population and their efforts.

This project, part of a Community Independence Initiatives, CII, world-wide initiative, will document those ground up efforts and the potential roles of outsider support and aid. Just as enclave economies have succeeded and created jobs, we expect that Liberians will do the same as we recognize and invest in their self-determined efforts.

The Community Independence Initiative, CII — Liberia

Developing an Investment System to grow an economy from the ground up

The key to the successful enclave economy is the circulation of economic and social capital WITHIN that economy. The primary role of CII will be to recognize and encourage mutuality. To support people sharing their goals and skills with one another. To encourage purchasing from one another and investing in one another’s efforts whether in business or taking care of children. That mutuality will be the primary, though not the only, measure for investing in entrepreneurship.

It will be important for neighborhood businesses to have the capital to grow, but the majority of that capital must come from the residents themselves or they will lose control of the growth. Outside interventions too often disrupt the natural process the has built an enclave economy and break up the social and trusting connections people have with one another. A spirit of mutuality will lead to the circulation of local currency multiple times within the enclave. It is important, therefore, to understand how groups of neighbors or church members, of enclaves, rely on one another for economic activity and spiritual support. Consider the following example:

Mary is a citizen in Liberia, working at a Lebanese owned modern supermarket. When she receives her monthly pay, less than $5 per day, she saves some of it in her local Susu, an informal group savings account. She catches a ride home on a motorcycle (taxi) and pays the driver who is also a member in her Susu and church. He is saving to someday own a few motorcycles as his taxi business. On the way home, she stops at a neighborhood Liberian owned Medicine Store where the owner is looking for ways to grow her business that sells women’s products and medicine. Then Mary stops to buy vegetables at the neighborhood market where items are cheaper than the Lebanese supermarket. She, like most of her neighbors, shops mostly in the shops owned by neighbors.

She pays the Liberian owner for her food and vegetables and what happens to the money she spent there? a) part of it goes to pay for the store lease — which may or may not involve payment to another Liberian. b) part of it goes to pay to restock the store inventory which the store owner’s cousin does for her. This cousin worked for a Lebanese owned distribution center and is now using the connections and experience from that job to start his own small wholesale and distributor business in the neighborhood. c) part of what Mary paid goes to store employees — most of whom will also be part of that neighborhood enclave of Liberians, many seeking opportunities to be entrepreneurs rather than employees. d) part of it goes as profit for the store owner/operator, e) this profit and the funds the owner gets from her Susu, when it is her turn to use the pooled funds, are used by the store owner to expand their house for relatives coming from the poorer northern villages, f) for the house expansion she uses concrete blocks made by the man in the neighborhood that started a concrete block business. (I visited such a business in Liberia that had larger potential but lacked investment)

The concrete block maker is also a member of Mary’s church and is saving his profit. Combined with money from the remittances he gets from family in the U.S. he plans to buy a truck so he can sell more concrete blocks at a higher price to the wealthier Lebanese who are building new stores. This concrete block maker could have grown the business years ago if there had been investors that would match the funds he saved. As the business grows he continues to create jobs and employ more young workers who later want to also start their own businesses. g) and most of them send some of what they make to family members living in the Northern villages where there are very few opportunities to earn to improve their farms or irrigation systems.

Utilizing existing family social networks to reach the poorest of the poor in the poorer villages is why the Liberia project will start with family members near economic centers who are often sent from villages to earn and help those left behind. It is a natural process that I’m familiar with since my family sacrificed all to get me to college with the obligation to help the rest of the family. The proposed Liberia Project will follow and reinforce that natural social process that also strengthens the sense of family and community.

The Lebanese minority in Liberia own some of the larger businesses and these were developed with this enclave approach of Lebanese investing and helping one another. You find these ethnic, enclave economies in most developing countries, but also within the low-income neighborhoods in the U.S. I previously wrote about how the man cutting my grass referred me to cousins and friends doing construction, electrical work and house cleaning. Mutuality within social networks is the key that we must invest in.

Diffusion of Innovation and Social Signaling

This example has many obvious social threads and entrepreneurship to invest in. The entrepreneurship of one leads others who trust or know that person to also try harder and get practical lessons. Sometimes in the same business, but since talents vary, the businesses started by others may vary or even complement the initial role model. When one Cambodian refugee, Ted Ngoy, started a donut shop in California, many also started donut shops as well as distribution or equipment supply enterprises to support the donut shops.

What is shared is not just the business concept but the skills in running a business. Again, peers running something more efficiently or finding better sources of supplies or investment signals to others they can do the same or access the same connections. Diffusion of Innovation theory has documented that a Positive Deviant, often inspires others to become Early Adopters who test and develop the idea. With enough early adopters, the entrepreneurship and its skills grow, can reach a tipping point, and spread to the level that the Lebanese minority enterprises have developed. The next generation is thus raised in a community with more hope and skills.

The premise is that because of social networks and tradition, people work together and buy from one another. Every time that the money changes hands it creates economic activity — a little profit or earnings — which can grow an economy in the neighborhood. To the extent that it changes hands within the confines of a particular enclave of people that have gotten to know one another it creates an enclave economy or micro economy[1]. This is basically how the Lebanese (and other minorities in other countries) initially helped one another, circulated money internally and have grown to control significant sectors of the Liberian economy. What is also significant is that these groups also benefit from capital and intellectual investments from others in their home country.

Investment Capital for Liberian entrepreneurs

The Liberians lack that focused outside support and investment.

Equity, not debt is needed:

CII investments will come in as ‘equity’, not debt, provided in small increments in multiple rounds based on progress. No one that is privileged would hope to truly succeed by primarily taking on debt. Debt can play a secondary or supportive role. Equity requires an eventual return and CII expects that return to be measured by the jobs created and wage increases[2]. CII will also incent the diaspora to co-invest with CII. Those residents seeking investments from CII must have ‘skin-in-the-game, significant time or their own dollars, before CII invests. When people have their own money and efforts at risk they will do all they can to make things work. This ultimately protects CII’s investment by leaving leadership in the hands of the recipient.

CII will also play a role by highlighting successful efforts to inspire others and to attract additional investments when needed. These successful efforts or ventures are referred to as Positive Deviants. CII will track whether others are then inspired to make similar efforts or to work together. This is the ‘ripple’ effect that can lead to a ‘tipping point’ with much broader adoption. It is because of this ripple effect that we expect to have a greater impact on the economy.

The CII investment portfolios must be wide ranging to increase the probability of successful ventures that can grow. I’m an engineer so probability works for me. The entrepreneurs being targeted are the poorest in Liberia (those averaging ~$5 per day) who have become entrepreneurs out of necessity but are as smart as anyone. The first set of investments should be ‘angel’ investments in small amounts to match the size of the business, the Susu (group savings), or of the size of the association or church funds. Finding a way to “match” the dollars put in by the entrepreneur or association is one of the easiest methods of investing. The participants having ‘skin in the game’ means they will work to protect the investment. We have experience in this from our work with FII in the U.S..

The funds must go to a variety of businesses as the example above illustrates so that they reinforce one another. That is how the black townships were built after slavery in the U.S.. When investing into associations such as those that Tony Pipa and I visited, for example — the lumber yard run by 132 families — it will be important to have the ability to invest in the trucking business that will need to bring more trees as the lumber yard business grows. Again, the amounts should be small and timed based on growth or demand so as not to distort the natural process. Later, when a business is maturing, larger investments, more like venture capital, can be made available. Micro-loans should only play a supportive role, but it will be the choice of the entrepreneur.


Cell phones can be used to collect progress data directly from families. In the U.S. FII developed both a journaling and social networking web based platform to serve this need. A more basic technology system will need to be developed for this project. Funds that CII invests in the families can be used by the participants to pay for data plans so that we and they, can share the data.

The data provided by the families can be verified at different times to establish a “reputation” or “Yelp” type score. Validation from other association and church members can add to the score. This reduces the need for increased staffing as the project grows. FII in the U.S. has developed a “hustle score” and we can learn from that. Verified progress can trigger further investments and so on. The intent here is to establish a longer-term relationship with the entrepreneurs so that their “reputation” increases trust and reduces the need for bureaucracy.

Cell phones can also be used to get investments directly to the families. Those involved can also share expertise, look at their own progress and share funds with family in more isolated villages in Liberia. Lastly, the radio in Liberia is already playing a role in encouraging people to work together and share successes. Others, world-wide, are developing new apps and wanting to experiment with blockchains to eliminate institutional barriers. Liberia will be fertile ground for merging technology with the mutuality of social networks.

Do No Harm

Outside efforts have too often done more harm than good by hiding or replacing native initiative. It will be important to capture data and analyze whether our investments and approach are helping or distorting the market. We will need to assess that we don’t distort a naturally growing micro-economy. Therefore, the first year will focus on learning what people are already doing for themselves and in helping others. That information will shape who and what we invest in on future investment rounds.

What we want is that over a 5-year period the growth in income in the enclave, the taxes paid and the jobs created can be documented to demonstrate the economic growth as well as the strengthening of a sense of mutuality and community. History shows it can be done. African Americans after slavery successfully used this enclave mutuality approach to build the black townships and black colleges in short time periods.

Finding the Entrepreneurs in Liberia:

We initially want to target distinct neighborhoods or fishing areas and invest through those identified in micro-credit programs, business associations, and church groups in those enclaves. We know efforts have already been started from a church in Buchanan, an economic center outside of Monrovia. In Buchanan the concept of helping one another is already happening in some churches. This initiative, also called CII, was started by a Reverend who was in the FII-Boston project. Hundreds of families seem to already be aware of this approach but lack funds and information to invest in positive deviant efforts.

In a visit in 2017 Tony Pipa and I visited at least 3 types of businesses that were formed as an association and taxed by the government. Our understanding is that there are thousands of these associations and most members in the associations are likely also church members. The government will have a listing of all the associations and the taxes and fees they pay. This can be utilized to not only reach entrepreneurs but to also track if those associations are growing.

[1] There are many studies on the recirculation of dollars in ethnic communities. One is

[2] Trying to start or expand a business with micro-loans, with debt, is not a sound strategy and why even in Bangladesh while micro-loans have helped single entities, they have not had the broader economic impact expected.

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His “Alternative Project”challenges the negative stereotype that low income families are “takers” from society. He received a MacArthur Fellowship in 2012

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