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LIBYA


  
   

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 34,137    34,136 57
  n/a     n/a
GNI per capita
 US $
Ranking is given out of 208 nations - (data from the World Bank)

Books on Libya

REPUBLICAN REFERENCE

Area (sq.km)
1,759,540

Population
5,499,074

Capital
Tripoli

Currency
Libyan dinar 

Leader 
Col Mu'amar al-Qadhafi


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Background:
The Great People's Socialist Libyan Arab Jamahiriya 
Modern Libya, the Jamahiriya, has grown as the political experiment of an idiosyncratic vision that has been more concerned with the implementation of its ideology than the construction of appropriate institutions to manage the state. So long as an adequate inflow of oil revenues could be sustained, the 'experiment' has been able to gain a degree of public tolerance, if not support, thanks largely to the dispersal of public welfare. Ultimately, the Jamahiriya's political institutions have fostered the perpetuation of a kinship based society. As tribal loyalty has supplanted civil society, the grass roots political activity that would typically be organized around business, social, or religious concerns has been suffocated. An effective repressive apparatus has ensured the eradication of civil society and effectively precluded the rise of a sustained opposition movement of any kind. 

Pariah State? 
Although Libya has earned international condemnation, President George W. Bush stopped short of including Libya in his 'Axis of Evil' paradigm pronounced during his 2002 State of The Union Address. Indeed, Libya's idiosyncratic and flamboyant leader Col. Mu'amar Qadhafi was among the first leaders to condemn the September 11th 2001 attack on the World Trade Center and the Pentagon. Yet Libya remains one of America's favorite 'Pariah States'--along with Cuba, Syria and Iran--and its leader is an icon of comedians and variety show hosts' personifications of 'nut-case' evil, bordering on the grotesque. Libyans, and those who are familiar with their country, however, might be puzzled by America's concerns over Libya. Not only is the current Libyan military capacity limited in terms of equipment, and even more so in management, but Qadhafi has been waging a campaign against political Islam since the time G. W. Bush was still prancing around as a fraternity huckster at Yale. Indeed, it might be correct to suggest that Bush and Qadhafi have been consumed by similar passions in recent years. The Libyan leader has long considered Islamists to be the greatest threat to the regime and publicly denounced them as being a disease to be eliminated, "worse than cancer or AIDS". 

Political Opposition and Economic Reform
Moreover, Qadhafi's peculiar political structure and ideology have, in fact, made it difficult for any opposition movement to sustain a successful campaign against the regime. The violent opposition that has sporadically taken place, has largely been a reaction to the ill-conceived economic reforms that have been implemented since 1986 - as oil prices fell to record lows. The reforms have failed to fulfill the intended liberalization of the economy and critically curtailed the State's distributive largesse. This has alienated the poorest elements of society that had typically been Qadhafi's most vociferous supporters. Yusuf al-Muqariyif of the National Front for the Salvation of Libya (an Opposition Group based outside Libya) has even suggested that Qadhafi has created the Islamist threat himself to gain support from Tunisia and Egypt toward the easing of international sanctions, the idea being "either me or fundamentalism". Anti-government protests, by Islamists or others, have not been ideologically motivated. Rather, these have been symptomatic of the fact that Libya's income and distributive network have relied on a single resource. The abrupt shrinking of the public sector showed the vulnerability of this policy and proved unsustainable to most Libyans, who had become accustomed to a high standard of living. Oil revenues have made it possible for Libya to experience a significant political, social and economic transformation since independence and especially since 1969.
The regime that was established as a result of the 1969 revolution has made great efforts to distribute the wealth accumulated from oil production among the population through public services and subsidies for a variety of consumer products. It has promoted large scale, if somewhat misguided, development projects in infrastructure, education and ISI industry. The Great Man Made River (GMMR) designed to facilitate irrigation for agricultural production along the Libyan coastline via an artificial 4000 km river based on Sahara groundwater is a multi-billion dollar monument to Libya's material infrastructure since independence, the result of an extensive program of welfare spending. Radical egalitarian principles based on Qadhafi's Green Book since 1978 improved the material living conditions of the vast majority of Libyans as enterprises were nationalized and housing rental payments were outlawed.
However, the combination of a 50 % drop in oil revenues in the mid-1980's that created a current account deficit have hurt the State's distributive capacity. While the economy's nationalization process continued, the State responded by applying austerity measures and limiting imports of consumer goods. Libyan consumers, who had become accustomed to the availability of a wide range of consumer goods, reacted badly to the austerity measures, sometimes venting their anger through popular protest and by damaging and burning government supermarkets. The depth of the economic crisis was such that the foreign labor force had to be reduced. Typically, the expulsion of Egyptians and, in particular, Palestinians that was masked in political rhetoric over the Arab-Israeli peace process, has more often than not resulted from economic difficulty. This made it necessary to curtail spending and adopt a measure of economic reforms to stimulate greater private sector involvement in the economy. The reforms effectively served to retract the distributive network of subsidies and state employment that had provided the Government's principal source of support from the population. 
Therefore, for a majority of Libyans, the 'reforms' have only contributed to deteriorating standards of living. The failure of these reforms has highlighted the institutional shortcomings of the regime that enacted them and promoted increasing opposition to it that the Libyan government has often blamed on what it has called Islamic 'radicals'.

Political Structure and Risk
The General People's Congress (GPC), a body similar to a parliament in the Jamahiriya, also served as a forum of public discontent over the austerity programs. In an unprecedented move, the regime responded to the criticism with a series of policies designed to address the grievances which was adopted in 1988 at the yearly session of the GPC. It provided the framework of a more liberalized economy, curbed the authoritative excesses of the Revolutionary Committees (RC) and assumed the title of Great Green Charter of Human Rights in the Age of the Jamahiriya. Despite this lofty title, the institutional infrastructure of the Jamahiriya failed to implement the Charter in a manner worthy of its name. The Libyan economy has lacked the necessary institutional infrastructure and administration in order to function properly. The mere elimination of state dirigisme, as occurred in Libya, has not sufficed to generate alternative sources of economic growth. 
Free trade and the removal of price subsidies, coupled with international sanctions from 1992 to 2000 caused price inflation for most consumer goods while average wages remained stagnant. The only beneficiaries of the economic reforms were the private merchants who controlled the import and the sale of various types of merchandise. Meanwhile, worker cooperatives known as tasharrukiyyat entailed a form of privatization that was adapted as best as possible to the Green Book's economic ideology. These allow for the sale of state production assets to one or more individuals, who agree to share equally in the management and profits of their enterprise. By and large this system has not enjoyed much success beyond the small service sector in such areas as appliance or automobile repair, hairdressing shops and photography laboratories where ownership is usually limited to single individuals. In these types of activities earnings are higher but thus far privatization has not resulted in a significant diversification of the economy. Property rights have not been guaranteed and neither has privatization been officially sanctioned in law. In the end it has been far harder to create the necessary regulatory framework to support national markets. This requires financial, legal, and civil institutions in order to provide a free exchange of information and enforce contracts. Another very significant problem is the abnormal lack of any reliable statistical information concerning economic indicators or demographics and it is often necessary to 'play by ear'' in order to 'read' the country's economic performance.
Nevertheless, the end of the UN embargo, which had been enforced since 1992, and increased oil demand have helped increase revenues. Reportedly, GDP has risen steadily since 1995 from 7.8 to 12.6 US$ billion in 1999 while consumer inflation has dropped from the estimated 30-35 % that persisted throughout most of the past decade to 12 %, while in 2000 it is rumored that there was a current account surplus of US$ 1.3 billion. Not surprisingly, domestic opposition to the regime, even in the economically depressed Benghazi region, has been limited since 1998 because of the improved economy. Most Libyans have been able to continue enjoying relatively high material living standards. As promising as the situation appears, the Libyan economy under the Jamahiriya has not made significant progress and has grown ever more dependent on oil exports and strong external demand for its product. The fickleness of world oil markets mean that when they're low and there is a threat of an economic crisis, the regime is not institutionally prepared to manage it, raising the prospect of political instability. 
A more significant political risk than even the price of oil is posed by Libya's tribal structure. More than ceding to an Islamist or secular opposition, in the event of collapse of the current leadership, the country would fracture along tribal lines. There has already been direct evidence of opposition motivated by tribal interests and it partly explains the Libyan leadership's foot-dragging over the Lockerbie incident. Indeed, the Warfalla tribe organized one of the most significant coup attempts of the past decade in October 1993. The tribe is well represented in the regime as one of its members is Major Jalud, an original member of the Revolutionary command Council (RCC) that led the 1st September, 1969 coup, which brought Colonel Qadhafi to power. The coup was a response to the regime's considering handing over the suspects implicated in the bombing of the Pan Am B-747 over Lockerbie, Scotland in 1988 to normalize relations with the West. One of the suspects was a member of the Warfalla tribe and Jalud opposed any normalization plans on that basis. 
Islamist politics in Libya, contrary to Egypt or Tunisia, have not developed successfully. Qadhafi has never provided the opportunity for Islamists to carry out any measure of political discourse as its neighbors have by way of elections and official representation. However, Qadhafi's speeches in the period between 1989 and 1993 when economic hardships were hardest, and violent confrontations between citizens and security forces more frequent, indicated his fear of Islamists operating in Libya. In addition; in April 1993, Qadhafi reversed his unorthodox position and presented himself as a defender of Islamic law. He encouraged the adoption of traditional Islamic punishments for murder, theft and fornication. Alcohol consumption, which had been tolerated in the 1980's, was again condemned. In many ways he adopted the defining elements of what he thought was the Islamists' agenda. Qadhafi's Islamic revival, nonetheless, precluded removing the Green Book as the de-facto constitution of the Jamahiriya. 
Libya's unique political system has been envisaged to function according to the precepts of the Green Book. The system has ideally been intended to function as a direct democracy and to guarantee economic and social equality. However, while a measure of economic equality has existed in Qadhafi's Libya, its political system has perpetuated a kinship based social organization and impeded the political development of the population. These combined characteristics have served to hamper the rise of an effective and united opposition. Essentially, direct "democracy" in Libya works through a peculiar infrastructure that involves grass roots discussion and approval of the general ideas pertaining to policy, defined and made plain by Qadhafi, in a manner that resembles more a consultative than a legislative body. Ultimately, the informational and organizational vacuum that exists in Libya has precluded the necessary degree of coordinated action capable of sustaining a real threat to the regime. 
Libyan citizens are fearful and apprehensive and the Revolutionary Committees have had a de-facto mandate to keep them this way! Libyan society has remained fragmented since the Revolution as exclusion from political activity and the official repression of civil society has promoted kinship as the primary mechanism of social organization. There has been little political evolution among the population and therefore little popularity for more radical alternatives to Qadhafi himself.
Officially, Qadhafi himself does not hold any political office and he is simply referred to as the Brother Leader of the Revolution Akh al-Qa'id al-Thawra and, most recently, as the Philosopher of the Revolution. However, his role is in fact one of supreme authority which he exercises through the Revolutionary Committees. These in fact 'bring' Qadhafi's ideas to the Basic Congresses and Committees for approval, while taking back valuable information on the people's perceptions of certain policies, that are sometimes reversed if these are perceived to threaten wide scale, politically dangerous opposition. While there is no formal Constitution as such, the dictates of the Green Book serve a similar purpose. The Green Book promotes many of the themes common to Arab Nationalism and contemporary Islamic thought such as anti--imperialism, and dependence on the West, social injustice and exploitation and advocates a return to Islam to restore Arab/Muslim power.
Kinship based social organization principles have persisted in Libya as a result of the official encouragement of tribe and family and the prohibition of alternative organizational principles. Economically, the Green Book's "Partners not Wage-Workers" (la-hujara', sharika !) slogan is one of the ideological pillars of the Jamahiriya. The egalitarian ideal of this principle is to prevent labor exploitation but has served to forbid capitalist development in real estate, commercial enterprise or industry. Consequently, enterprises have been limited to small size and family ownership where self -sufficiency has been the guiding principle. No one may obtain more than the property to satisfy basic needs. Really, only the Revolutionary Committees, staffed by officers from Qadhafi's six main sub-tribes retain any real authority and they are the only group that resembles a political party. This is what some observers have referred to as the basis of the Jamahiriya's present 'stateless' society. In fact, however, 'stateless society' meant that those who argued for long term social investment, prudent administration, reduced military spending and greater efficiency were kept at bay.
This tendency is fully confirmed by the fact that a constitutional reform in March 2000 has abolished twelve General People's Secretariats (GPS), the equivalent of ministries in more conventional governmental structures, including the very important GPS for Oil. Analysts have interpreted this move as an attempt by Qadhafi to further de-centralize power to the provinces where the Colonel's extended family members wield important posts in the army and provincial government. The concept of a formal head of state has also been revised in favor of designating an official leader. Initial analysis of the significance of this latest political transformation suggests that there has been a concerted effort to diminish the influence of the technocrats, who were instrumental in negotiating the termination of the UN embargo in 1999, in favor of the ideologues of the revolutionary cadres. Certainly this is in accordance with the pattern of power distribution that has prevailed in Libya since the al-Fatah revolution.
Similarly, educational institutions have also suffered from ideological infiltration; in fact the universities became the largest recruiting ground for the Revolutionary Committees as these stressed the teaching of Arabism at the expense of more pragmatic issues such as the management of an oil economy. The weakness of the educational system has not simply been a matter of odd curricula that, until recently, allowed for such ideological intrusion as the imposition of such courses such as 'Econometrics according to the Green Book' at Tripoli's al-Fatah University. There is also the matter of the difficulty that Libyan students have faced in studying abroad because of their country's international perception as a Pariah state making it difficult for them to keep up to date with global technical and scientific developments.

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Update No: 008 - (30/06/04)

The Final Step
As the United States was getting ready to hand over authority, and the former president Saddam Hussein, to an Iraqi government it also officially and formally re-established full diplomatic relations with Libya after a 24-year hiatus filled with rhetoric and diffidence on both sides. The assistant Secretary of State William Burns made the announcement on June 27th, when he visited the Libyan capital Tripoli along with an official American delegation. The move represents the final step in the process of rehabilitation of Libya in American diplomacy since the Libyan leader Col. Qadhafi announced that he would disband his weapons of mass destruction program. Until the recent announcement, Libya and the United States had been managing their newly established relationship from representative offices in other countries' embassies. While not yet an embassy, the US will maintain for the time being a liaison office in Tripoli and has invited Tripoli to do likewise in Washington. The liaison office will ostensibly also serve as a base whence the process of weapons dismantlement will be monitored. However, the visit by Mr. Burns came in the wake of allegations that Col. Qadhafi had approved a plot to murder Crown Prince Abdullah of Saudi Arabia in 2003, just as he was announcing his plans to restructure the economy and rehabilitate Libya's diplomatic relationships with the West. Secretary Burns handled the allegations diplomatically shifting focus to what Washington considers the progress made by Libya in restoring international confidence by rejecting the pursuit of military ambitions.
Nevertheless, the United States has yet to remove Libya from its list of states that sponsor terrorism. The Crown Prince story has been widely reported in the Saudi press and the United States may consider this to confirm suspicions that Col. Qadhafi is still engaged in sponsoring or aiding subversive organizations. However, while there is no love lost between Col. Qadhafi and the Saudi Royal family, the very notion of an brewing Saudi - Libyan dispute may also have repercussions at the OPEC level. It is not hard to see Libya attracting proportionately far more investment in oil infrastructure and drilling than Saudi Arabia in the short term. Saudi Arabia has become a more dangerous place in the past months and it is at the heart of an area made more volatile by the American invasion of Iraq. Moreover, Libya has made it very clear that it intends to release parts of the oil sector to the market, facilitating investment into the country. While entirely speculative, it cannot be discounted that the murder attempt ploy is being used as a warning to the United States by Saudi Arabia that Col. Qadhafi cannot yet be fully trusted. According to the American law, no country's name can be lifted from the terrorism list unless Washington testifies that this country has not supported terrorism for a period of six months.

The Opportunity for Humanitarian Aid - and Good Public Relations
While Arab states have been quietly criticized for not intervening or even paying much attention to the ongoing ethnic strife in the Sudan, Libya has used the tragedy to secure one of its first diplomatic favors to honor the renewed relationship with the United States. It has agreed to help United States aid convoys reach the area of Darfur in western Sudan. Darfur is close to the Libyan border. The area is serving as an area for refugees, while aid convoys have been blocked from other directions. Darfur is rapidly becoming the site of a looming humanitarian crisis because of the 16-month long struggle between regional black tribesmen from the region and government-backed ethnically Arab militias. U.S. officials have called it 'ethnic cleansing,' an effort to force out the desolate region's African - black majority. The United Nations says more than 30,000 have been killed and 1 million displaced since this latest in a series of similar ethnic struggles began. The United States convoys had also tried to use a route from another country, which has recently made some headway with the Superpower, Chad. However, Chad is landlocked and makes the delivery and transfer of supplies form the US difficult. Libya is geographically better suited for the task with its extensive coastline. Aid could be transferred by sea and then delivered by road and desert track to the Sudan. It is interesting to note that not six months ago, before the relationship between the United States and Libya improved to reach the current renewal of diplomatic relations, it would have been almost laughable that such a scheme could be devised. No doubt the aid scheme will also buy some public relations points with those, who remain overly realistic and believe that the Libyan-American 'friendship' is cynically only about oil.

The Mediterranean instead of Africa and the Middle East
Meanwhile, in other diplomatic maneuvering Qadhafi's flirtations with African unity, which reached a high point in the late 90's, have ended. After having promoted Arab unity since the 1969 Revolution, a disillusioned and tired Pan-Arabist Col. Qadhafi focused his attention to African relations since 1997. He even encouraged Libyan women to marry African men, telling them that their country was truly a part of the continent. However, Col. Qadhafi's grand vision was to become the benevolent ruler of a United States of Africa. He often challenged the President of South Africa Mbeki at African Union summits and this became a source of contention. However, economic realities and the plan to bring Libya into the fold of economic globalization have seen Col. Qadhafi focus his attention increasingly toward the Mediterranean and the links the basin holds to European trade and investment. It is not surprising then that Muammar Gaddafi's announcement that he would not attend this year's African Union summit in Addis Ababa because the organization was on track and no longer needed 'his guidance'. Analysts have suggested that Qadhafi has shunned the African Union because the latter has rejected some of his proposals. In a related and perhaps more surprising declaration Col. Qadhafi has de-linked North Africa from the Middle East stressing the difference between the Maghreb and the Middle East and 'its problems'. He stressed that the Arab Maghreb has nothing to do with the Middle East. Col. Qadhafi currently chairs the Arab Maghreb Federation, and hinted that the Maghreb's geographical partner of choice should be Europe. Apart from the obvious strategic thinking behind this statement in view of the closer cooperation with the European Union that Qadhafi has discussed with Romano Prodi in March, the statement might also be an effort to distance whatever support for causes from the Palestinian to the Iraqi, among fellow Arabs of North Africa. The new friendship with the United States could become somewhat embarrassing for a leader that made his mark in fiery revolutionary rhetoric.
 

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AVIATION

Libya to spend US$1 billion to modernise airline

President of Libyan Arab Airlines says one billion dollars will serve to modernise fleet over next decade.
Libya plans to spend one billion dollars over the next decade to buy 22 new aircraft, ranging from 14-seaters to jets with a capacity of 350 seats, for Libyan Arab Airlines, the company's president said recently.
"One billion dollars will serve to modernise the fleet of Libyan Arab Airlines, through the purchase of 22 new planes of different sizes, able to carry from 14 to 350 passengers," said Hassan Dabnun.
He said the project would be completed within 10 years.
The president added: "We have established contacts with major builders, including Airbus and Boeing, and talks are going ahead," he said.
The airline chief said he had discussed the question of buying Boeing aircraft and spares along with the training of Libyan pilots at a meeting in early June during a visit by the US deputy secretary of commerce, William Lash.
Dabnun asked Washington to ease measures imposed on Boeing to enable the US firm to sell aircraft to Tripoli and its national carrier.
In April, Washington lifted many of the sanctions imposed on Tripoli from 1986, but a ban remains on direct flights between the two countries and the US State Department still lists Libya among states which allegedly support terrorism.
Dabnun said Lash promised to put the Libyan request to the State Department.

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ENERGY

Oil News

Libya has invited Indian oil firms to operate its old refineries and also offered New Delhi rights to explore oil in the country. The Indian state owned firms to upgrade its 220,000 barrels per day refinery at Ras Lanuf and 8,400 barrels per day in the Brega refineries. Indian companies have also been asked to build a new 20,000 barrels per day refinery in Sebha, which would process crude from the nearby Murzuq field, largely explored by the Spanish Repsol in the mid and late 90's. The request comes as Libya wants to take advantage of its rehabilitated status to re-build or re-vamp the refineries ruined by lack of parts and maintenance during the embargo. 

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