Libya

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Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of general economic information | Political outline

Economic indicators

Libya is taking advantage of high economic growth. 8% is forecasted for 2009 (but will probably be revised downwards); it was more than 5% between 2003 and 2007. Thanks to the high price of oil and the wealth of its reserves, exports of hydrocarbons allow the Libyan economy to advance very fast (the oil sector represents 30% of GDP).

Another beneficial factor for Libyan growth is the lifting of trade sanctions against the country by the United States and the European Union. Since 2003, through increased involvement in international trade, over and above the tension on the energy markets, Libyan growth has risen strongly.

Mechanically, this growth has raised Libyans' standard of living and this has been progressing constantly since 2000 (whereas it had dropped by more than 50% between 1980 and 1995). Libya has become one of the richest countries in Africa (GDP/inhabitant reached 10 200 USD in 2007 for a population of 5.8 million).

The growth of the non-petroleum sector continues (7.5% of GDP in 2007) thanks to the government's policy since 2003 which, with the advice of the IMF and with a view to joining the WTO, encourages the liberalization of the economy and the partial privatization of the Libyan public sector. The government has, in addition and thanks to the income from the petroleum sector, been able to undertake a vast public investment scheme in infrastructures (telecommunications, roads, ports, health...).

Concerning hydrocarbons, the government continues its policy of allocating exploration fields by public auction and intends to raise production from 1.7 million barrels a day since 2006 to 3 million barrels a day in 2012. On the other hand, the Libyan economy is finding it hard to diversify as direct foreign investment concerns mainly the petroleum sector and inflation continues to rise, reaching 10% in 2008. If the price of the barrel is too low, Libyan growth will be substantially limited.

Main indicators	2006	2007	2008	2009	2010
GDP (billions USD)	55.08	69.87e	100.07	62.93	74.04
GDP (constant prices, annual % change)	6.7	6.8	6.7	1.1e	2.8
GDP per capita (USD)	9,225e	11,475	16,115	9,937	11,462
Inflation rate (%)	1.4	6.2	10.4	6.5	4.5
Current Account (billions USD)	25.23	23.62e	39.22e	5.24e	8.69
Current Account (in % of GDP)	45.8	33.8e	39.2e	8.3	11.7e

Source: IMF - World Economic Outlook Database

Note: (e) Estimated data

Main sectors of industry

In spite of efforts to diversify the economy and encourage private sector participation, factors such as lack of credit, price control, little trade and exchange control limit growth. Import restrictions and inefficient allocation of resources have caused periodic scarcity of basic goods and foodstuffs. Although agriculture is the second-largest sector in the economy, Libya imports about 75% of its food products. Farming is severely limited by scarcity of fertile soil and the lack of rainfall, while rising income and a growing population have caused food consumption to rise. Domestic food production satisfies about 25% of demand.

Breakdown of the economy:

Agriculture: products - wheat, barley, olives, dates, citrus fruit, vegetables, peanuts, soya; livestock. About 75% of Libyan foodstuffs are imported. Industry: types - oil, food processing, textiles, crafts, cement. Commerce: exports (2006) - 37.02 billion USD: crude oil, refined petroleum products.

Major markets (2005):

Italy (38%), Germany (15.1%), Spain (9.3%), Turkey (6.2%), France (6.2%), United States (5.2%). Imports (2006 estimate) - 14.47 billion USD

Breakdown of economic activity by sector	Agriculture	Industry	Services
Employment by sector (in % of total employment)	-	-	-
Value added (in % of GDP)	-	-	-
Value added (annual % change)	-	-	-

- last available data.

Monetary indicators	2003	2004	2005	2006	2007
Lybian Dinar (LYD) - Average annual exchange rate for 1 USD	1.29	1.30	1.31	1.31	1.26

Source: World Bank - World Development Indicators

Indicator of economic freedom

Score:: 43.5/100
Position:: repressed
World Rank:: 171 out of 179
Regional Rank:: 17 out of 18

Distribution of Economic freedom in the world
Source: 2008 Index of Economic freedom, Heritage Foundation

Country risk

See the country risk analysis provided by Ducroire.

Foreign trade in figures

Since the lifting of the US trade embargo, Libya has started coming back to the international trade scene. In terms of cooperation, Libya is an active member of the AMU (Arab Maghreb Union). It has also applied for WTO membership. The top three import partners of Libya are: Italy, Germany, and Japan. The commodities mainly imported are iron and steel, industrial machines, vehicles, cereals, and other food products. The EU is Libya’s largest trade partner; the ‘Barcelona Process’ has been launched to create a free-trade area between the Mediterranean zone and the European Union.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	7,200	8,768	11,174	13,219	17,701
Exports of goods (millions USD)	12,878	17,425	28,849	37,473	46,970
Imports of services (millions USD)	1,597	1,914	2,349	2,564	2,666
Exports of services (millions USD)	442	437	534	489	99
Trade Balance (millions USD)	5,678	8,657	17,675	24,254	29,269
Trade Balance (including service) (millions USD)	4,523	7,180	15,860	22,179	26,702

Source: World Bank

See more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of general economic information

Ministries
Statistical Office
Central Bank: Central Bank of Libya
Stock Exchange
Search Engines: Libya search engines
Economic portals: General portal

Political outline

Executive Power: The Revolutionary Leader Col. Muammar Abu Minyar al-QADHAFI is the de facto head of the state, although he holds no official title. He enjoys all the executive powers. The head of the government is called the Secretary of the General People's Congress and is elected by the country's parliament, and has no fixed term of office, as long as he enjoys the confidence of parliament. Parliament also selects the members of the General People's Committee.

The Libyan regime and in particular its political and economic system is based on the Green Book, founding work of Colonel Gaddafi, who sees in this book a third universal theory of synthesis between liberalism and Marxism. This political system is the fruit of a slow evolution which lasted between 1969, when Colonel Gaddafi came to power, and 1977, when the revolutionary committees and the Jamahiriya system (State of the masses) were set up.
This system of a State of the masses also has double local representations: basic popular Congresses (which could be the equivalent of a local parliament), and basic popular Committees (equivalent to a local executive). These two institutions are responsible for transmitting information, measures and decisions to the national authorities: the General People's Congress and the various general popular Committees.
Libya has also been going through a decentralization process since 2000 with transfers of skills and means as the government has transferred part of its prerogatives to provincial cells of popular committees. This phenomenon is growing in Libya with the recent growth of the cha'biyat, new local administrative entities (34 in number today).
Legislative Power: The legislature is unicameral in Libya. The parliament consists of the General People's Congress (GPC). Its members are elected representatives (called secretaries) of around 600 local bodies called ‘basic popular congresses', and serve a term of four years. Only the Revolutionary Leader has the power to dissolve parliament or veto its enactments . The people of Libya have very limited political rights.
Main political parties: Political parties have been banned in Libya since 1971. However the establishment of non-governmental organizations (NGOs) has been allowed but these need to work under strict government control.
Current political leaders: Revolutionary Leader: Col. Muammar Abu Minyar al-QADHAFI (since September 1969, gained power through a military coup)
Secretary of the General People's Committee (Prime Minister): Al-Baghdadi Ali al-MAHMUDI (since March 2006)
Next election dates: No information

Indicator of freedom of the press

World Rank:: 160/173
Evolution:: 5 places down compared to 2007

Source: Worldwide Press Freedom Index 2007, Reporters Without Borders

Indicator of political freedom

Ranking:: Not Free
Political freedom:: 7/7
Civil liberties:: 7/7

Map of freedom 2007
Source: Freedom House

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