Economy of Libya

Infobox Economy
country = Libya

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width = 290px
currency = Libyan dinar (LD)
year = calendar year
|organs = OPEC, Common Market for Eastern and Southern Africa
|rank = NA
|gdp = profit$67 billion (2005)
|growth = 8.5% (2005 est.)
|per capita = $11,630 (2005 est.)
|sectors = agriculture (7.6%), industry (49.9%), services (42.5%)
|inflation = less than 1% (2005 est.)
|poverty = NA% (2006 est.)
|labor = 1.64 million (includes unemployed) (2005)
|occupations = agriculture 17%, industry 23%, services and government 59% (2004 est.)
|unemployment = 30% (2004)|
industries = petroleum, steel, iron, food processing, textiles, cement
|exports = $30.79 billion (f.o.b., 2005)
|export-goods = crude oil, refined petroleum products, natural gas
|export-partners = Italy 37.2%, Germany 16.6%, Spain 11.8%, Turkey 7.1%, France 6.2% (2004)
|imports = $10.82 billion (f.o.b., 2005)
|import-goods = machinery, transport equipment, semi-finished goods, food, consumer products
|import-partners = Italy 25.2%, Germany 11%, South Korea 6%, UK 5.4%, Tunisia 4.7%, Turkey 4.6% (2004)
|debt = $4.267 billion (2005)
|revenue = profit$25.34 billion
expenses = $15.47 billion, including capital expenditures of $5.6 billion (2005)
aid = recipient ODA $4.4 million (2002)
cianame = us

Libya's socialist-oriented economy depends primarily upon revenues from the petroleum sector, which contributes practically all export earnings and over half of GDP. These oil revenues and a small population give Libya one of the highest per capita GDPs in Africa. Since 2000, Libya has recorded favourable growth rates with an estimated 8.1% growth of GDP in 2006.

Macro-economic trend

The GPA per capita of Libya soared by 676% in the 1960s and a further 480% in the 1970s. However such fantastic growth rates proved unsustainable in the face of global oil recession and international sanctions. Consequently the GDP per capita shrank by 42% in the 1980s. Successful diversification and integration into the international community helped current GDP per capita to cut further deterioration to just 3.2% in the 1990s.

Below is a chart of trend of gross domestic product of Libya at market prices [http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001 estimated] by the International Monetary Fund with figures in millions of Libyan dinars (LYD).

Notes:
1. Amounts in barrels per day.

Diversification

In 2007, mining and hydrocarbon industries accounted for well over 95 per cent of the Libyan economy. Diversification of the economy into manufacturing industries remain a long-term issue.

Although agriculture is the second-largest sector in the economy, Libya depends on imports in most foods. Climatic conditions and poor soils severely limit farm output, and domestic food production meets only about 25% of demand. Domestic conditions limit output, while higher incomes and a growing population have caused food consumption to rise. Because of low rainfall levels in Libya, agricultural projects such as the Al Khufrah Oasis rely on underground water sources. Libya's primary agricultural water source remains the Great Manmade River (GMMR), but significant resources are being invested in desalinization research to meet growing demand. Libyan agricultural projects and policies are overseen by a General Inspector; there is no Ministry of Agriculture, "per se". ["Doing Business In LIBYA: A Country Commercial Guide for U.S. Companies", March, 2006]

Labor Market

Libya posted a 3.3% rate of population growth during 1960-2003. In 2003, 86% of the population was urban, compared to 45% in 1970. Although no reliable estimates are available, unemployment is reportedly acute. Over 50% of the population under the age of 20. Moreover, despite the bias of labor market regulations favoring Libyan workers, the mismatch of the educational system with market demand has produced a large pool of expatriate workers, with typically better-suited education and higher productivity. However, because of shortages for manual labor, Libya has also attracted important numbers of less skilled immigrants. Expatriate workers represent an estimated fifth of the labor force. [Although, in the absence of a labor force survey, estimates are surrounded by considerable uncertainty] Although significant, the proportion of expatriate workers is still bellow oil producing countries in the Persian Gulf. Foreign workers mainly come from the Maghreb, Egypt, Turkey, India, the Philippines, Thailand, Vietnam, Poland, Chad, Sudan, and Bosnia and Herzegovina [http://www.seenews.com/news/latestnews/bosnia_senergoinvestsees2007profitunchanging_signscontractsinlibya_-151444/ Bosnia's Energoinvest Sees 2007 Profit Flat, Signs Contracts in Libya, Algeria] [http://www.arabianbusiness.com/506991-bosnian-firm-clinches-52mn-libya-deal?ln=en Bosnian firm clinches $52mn Libya deal] . They tend to earn relatively high wages, taking either skilled or hard manual jobs. Census data for 2000 show the share of expatriates earning over LD 300 (US$230),???? per month was 20%, compared to 12% for Libyan nationals. A campaign encouraging conversion of qualified civil servants to entrepreneurs, in the face of public sector over employment and declining productivity, does not seem to be producing the desired results thus far. [World Bank 2006]

External trade and finance

The Government is in the process of preparing a financial sector reform program. Recent legislation setting corporate governance standards for financial institutions makes progress towards better management and greater operational independence of public banks. However, Libyan public banks still lack management structures supported by skills in critical areas like credit, investment, risk management, and information and control systems. The new banking law reinforces the independence of the Central Bank of Libya (CBL) and offers a legal framework for regulating banking activities, even if some provisions call for improvement. Despite progress brought by the new banking Law that specifies and limits its duties and responsibilities, the CBL remains the owner of the public banks, with the associated potential conflict of interest between ownership and regulation.

Financial sector reform has also progressed with partial interest rate liberalization. Interest rates have been liberalized on deposits, while a lending rate ceiling has been set above the discount rate. The Libyan Stock Exchange, established in 2007, is the first exchange of its kind in the country.

tatistics

Household income or consumption by percentage share:
"lowest 10%:"NA%
"highest 10%:"NA%

Industrial production growth rate:NA%

Electricity - production:14.4 billion kWh (2003)

Electricity - production by source:
"fossil fuel:"100%
"hydro:"0%
"nuclear:"0%
"other:"0% (1998)

Electricity - consumption:13.39 billion kWh (2003)

Electricity - exports:0 kWh (2003)

Electricity - imports:0 kWh (2003)

Agriculture - products:wheat, barley, olives, dates, citrus, vegetables, peanuts, soybeans, cattle, corn

International rankings

Notes

References

*Energy Information Administration (2007) [http://www.eia.doe.gov/emeu/cabs/Libya/pdf.pdf "Libya: Country Analysis Brief"]
*World Bank (2006), [http://siteresources.worldbank.org/INTLIBYA/Resources/libyacountryeconomicreport.pdf "Libya: Economic Report"] , Social & Economic Development Group
*P. Mobbs (2002) [http://minerals.usgs.gov/minerals/pubs/country/2001/lymyb01.pdf "Mineral Industry of Libya"]
*T. Ahlbrandt (2001) [http://pubs.usgs.gov/bul/b2202-f/b2202-ftextonly.pdf "Sirte Basin Province: Sirte-Zelten Total Petroleum System"] USGS
* [http://www.cbl-ly.com/eabout.htm Central Bank Of Libya Economic Bulletin] Socialist People’s Libyan Arab Jamahiriya
*National Authority for Information and Statistics, Socialist People’s Libyan Arab Jamahiriya.
*Pilat D., "Innovation and Productivity in Services - State of the Art", Organisation for Economic Co-operation and Development, Directorate for Science, Technology, and Industry, Paris. 2000
*GSPLA. "Agriculture achievements in 20 years". Secretariat of Agriculture Land Reclamation and Animal Wealth. 1989
*GSPLA. "Agriculture in Libya". Facts and Figure 1970.
*Mohamed Al Genedal. "Agriculture in Libya". Arab Book Publishers 1978.
*Ali Rahuma. "Cost of barley and wheat production in some state managed agricultural projects". J. Agric. Res. 1989
*"Future of food economics in the Arab State". Vol. 4. Statistics. 1979.
*"Statistical index 1970". Ministry of Economic and Planning.

External links

*dmoz|Regional/Africa/Libya/Business_and_Economy/Economic_Development
* [http://www.libyaconnected.com/Business.html Libya Connected - Business in Libya]