Economy of Libya

By Congrong Zheng

Fareed Zakaria mentioned in his book, The Post American World that ,” in the two decades since the end of the Cold War, we have lived through a paradox, one we experience every morning when reading the newspapers. The world’s politics seems deeply troubled, with daily reports of bombings, terror plots, rogue states, and civil strife. And yet the global economy forges ahead”.

Libya has gone through exactly pathway the author mentioned in his book. Libya’s economy is structured primarily around the nation’s energy sector, which generates about 95% of export earnings, 80% of GDP, and 99% of government income. Substantial revenue from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa. Even though Gaddafi’s dictatorship existed in Libya for such a long time, Libya’s economy situation was still ahead of lots of Africa countries. Libya’s economy did face challenges when UN lifted Sanction imposed on Libya. Libya was pretty much isolated and their energy sector could not function anymore. At the last five years of Gaddahfi’s regime, Libya announced abandon the program of build weapon with massive destruction. Since then, Libya attract greater foreign direct investment, especially in the energy and banking sectors. Libyan oil and gas licensing rounds drew high international interest.  Even after Civil war and Gaddahfi was killed, Libya which is under the transaction, does not drop to the bottom.

Here is a story about Libya’s economic situation made by Alqarra TV an Africa new’s agency. They mentioned the oil producing were back to normal after two years of the war. However inflation rate, unemployment has gone up dramatically. Economy still need rely on a secured country environment.

Another special fact of Libya economy, during Gaddahfi’s government, Libya is a heavily subsidized country,which has helped to prevent the increase of poverty. Subsidy also caused a lot of issues in Libya, the new government has tired different solutions to remove subsidy and recently, they announced to raise the wage in public sectors about 20% to help achieve their goal.

http://www.libya-businessnews.com/2013/09/07/public-sector-wages-to-jump-20/

Public Sector Wages to Jump 20% (from Libya business news)

Libya is a member of United Nations. Libya has submitted application at 2004 for WTO but has not been approved. From WTO website, “The General Council established a Working Party to examine the application of Libya on 27 July 2004. Libya has not yet submitted its Memorandum on the Foreign Trade Regime. The Working Party has not met”.

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