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LIBYA

 
  
  

 

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 19,131     71
     
GNI per capita
 US $ n/a n/a
Ranking is given out of 208 nations - (data from the World Bank)

Books on Libya



Update No: 041 - (28/03/07)

Thirty Years for the Jamahiriya: Political Surrealism
On March 2, 1977, Libya stopped being a 'republic' and became what its leader Col. Qadhafi coined the Jamahiriya, which is roughly translated as a 'massocracy' or 'state of the masses'. The Jamahiriya experiment's ideological underpinnings lie in Qadhafi's Green Book and the 'Third Universal Theory'. The artistically acute political observer could be forgiven for thinking modern Libya to have been inspired by the surrealist art movement. Thirty years later, the Jamahiriya still exists, in name, and in accordance with the Theory, the state lacks real institutions (except for oil and the internal security apparatus), which is reflected by the sorry state of the legal system, and services from healthcare to education. As Libya has embarked on a well publicized series of economic reforms, the anniversary celebrations masked a question that must have perturbed even the 'Brother Leader', as he is called, Qadhafi himself: how can the economic system change without political change? In order to promote the participation of all citizens in the state, Libya is organized in 3,000 committees that meet twice a year to discuss issued related to the economy, or education, while a 3,000 members strong committee provides guidance on issues that need to be addressed and assigns budgets. The paradox is that countries, such as Morocco or Tunisia with far less revenue than Libya in the same Maghreb region offer their less 'participatory' populations far better services from health to education and infrastructure. While, this reality raises questions about the long term development prospects of oil dependent economies, as with most recent Libyan developments, Col. Qadhafi refrains from criticizing the Jamahiriya's mechanisms, allowing his son Seif ul-Islam to speak in less 'revolutionary' terms. 

Indeed, while the Jamahiriya's idiosyncrasies were being celebrated, Seif ul-Islam al-Qadhafi, was hosting foreign consultants advising the government on Libya's often touted economic reform process. The consultants included Michael Porter, the Harvard competitiveness expert, but even he was forced to abide by the Libyan golden rule which is to never criticize the country's political system. Surely, even Porter must have been confused, because while the Libyan leadership makes bold announcements of cuts to the bloated public sector, other than the retail sector, the private sector is incapable of absorbing the 120,000 jobs that are to be eliminated. The conservative resistance to reform, led by the Revolutionary committees and its appendages, represent the main obstacles to real reforms and limit the leadership's room for maneuver. There have even been reports that some Libyans have been asked to spy on foreigners, and to ensure they are not representative of 'greedy imperialist forces'. Conservative elements, such as the Popular Committees, ripe with revolutionary zeal in many cases, are at once praised for upholding the values of the Jamahiriya by Qadhafi, and then criticized for their corruption. This must surely remain a major concern for investors, who have been considering taking advantage of non-oil related opportunities in Libya such as tourism. 

High oil prices allow the government to contain resistance, by paying salaries for three years to those, who are laid off, but so long as reforms do not include Libya's political structure, Libya will have to find its own model and until then, it is difficult to imagine what Western consultants and think-tanks can suggest that could possibly achieve true economic reform. Of course, money has helped Libya patch up the system's failures and the country announced that it would finance a massive infrastructure improvement (mostly to the oil refining facilities) last month that includes roads and an EUR 8 billion and 4,800 km long rail line linking its eastern border with Egypt to the western border with Tunisia - where there is a developed private sector - and a southern line to Niger. Libya is also investing more into trans-Maghreb trade, helping to build an oil refinery as well as pipelines in Tunisia. The Libyan government has also distributed money to 200 households in form of cash and equity from a fund established in September 2006 and which has reached the value of 6.5 billion dinars, in accordance with promises Qadhafi made in a speech last November. The fund is to be boosted by the accrued interest of an estimated 600 million dinars. Qadhafi also urged oil companies to help the country's poorest citizens, presumably through taxation and redistribution. Italy's ENI, for instance, is putting $150 million into hospitals, schools, and archaeological work, and has agreed to train 150 Libyan engineers to work at its subsidiaries worldwide. Nevertheless, the reality is harder. While oil has made Libya one of the richest countries in the world with a current GDP of some USD 75 billion, unemployment is estimated at 40%, and 97% of the 60% who are employed work for the government. It seems unlikely that the government economic program of transforming Libyans to become entrepreneurs in construction and tourism will work 'seamlessly' to facilitate the goal of drastically reducing the public sector. The visiting consultant, Porter, said that the Libyan Economic Development Board established last February to help new startups, trained 250 Libyan businessmen and government workers to be "entrepreneurs of the future". 

The Theatre to the Rescue
As noted in previous updates, the saga of the Bulgarian nurses who faced a death sentenced for allegedly infecting 400 children with HIV/Aids at a Benghazi hospital, also serves as a red flag to potential foreign investors. All injustice aside, (which consideration is really not possible) the case suggests that the Libyan legal system cannot be trusted. In March, there were reassurances from the leadership that the medics implicated in the case would not executed, as Seif ul-Islam Qadhafi hinted last February. However, limited by way of institutions, there are signs that the Libyan public would not object to releasing the medics, as riots before the trial last December suggested. Popular culture suggests that many Libyans are well aware of the real culprit in the case, which is the decrepit healthcare system. A Libyan play, titled "Hospital," takes a decidedly sarcastic and critical look at the state of hospitals and health care in Libya. The play's author, Dawoud al-Houty, is the father of one of the more than 400 children who were infected in the infamous case of the Benghazi HIV/Aids case. The play is said to have been very popular in Benghazi and Tripoli. This suggest the regime is starting to tolerate non-official forms of criticism, even though Seif ul-Islam Qadhafi himself has stated in interviews that Libya needs far better services and infrastructure than it currently has. 

In another paradox, however, two Libyan police officers - Juma Mishri and Osama Awedan - and a doctor - Abdulmajid Alshoul - are asking for up to USD 5 million each in compensation in a slander case over the medics' claims that they were tortured in prison for the nurses' torture accusations. These are the policemen whose successful if disingenuous defence to the torture accusations from the nurses, was that because in Libya torture is against the law - then it could not have happened! This means that even if the six medics were to be released, they would have to face the additional slander allegations. Accordingly, a Libyan prosecutor has asked the court to give the medical workers the maximum sentence, which could mean an additional six-year prison term and financial compensation. Another Libyan police officer, Osama Awedan, has joined the slander lawsuit, the court heard on Sunday. Awedan is asking for $5.4 million in compensation for distress caused by the torture allegations. This implies that these custodians of the law can sniff money on the breeze, and look to get their share.
In this context, Libya and the United States have been discussing a deal to build a nuclear energy facility. The Americans conceded that they have been approached to assist in the development of nuclear energy, but they have denied having reached any such agreement. Libya's news agency JANA said such a deal is in the works and that the General People's Committee (GPC) approved the plan. The agreement "aims at establishing a nuclear station in Libya to produce electricity, desalting water, and developing the radiochemistry performance at energy researches centre." It also provides for Libyans to be trained in nuclear technology in the US. American officials hinted that the nuclear cooperation the Libyans may be speaking about involves 'nuclear medicine'. The conflicting statements on nuclear power suggest that there are pending matters to be resolved, from the American standpoint, before the US agrees to a wider scope of nuclear cooperation. The question begs: could that matter be the case of the jailed medics?
OIL

Bindra Thusu, an earth sciences professor at University College London and consultant to Libya's National Oil Corp (NOC) said that some 65 billion barrels of oil could be discovered in Libya. Exploration has increased considerably since the US removed sanctions in 2004. Exxon Mobil Corp. shall survey the seabed block that it won in January, while Shell PLC is searching for gas in Sirte Basin, planning to spend $100 million refurbishing a liquid natural gas plant. In March, NOC also announced a new oil deposit in the Ghadames basin. NOC's chairman Shokri Ghanem said the acreage, located south of the country's capital Tripoli close to the Algerian border, could initially produce 15,000 barrels a day of crude oil and has the potential for large production volumes. Arabian Gulf Oil Co. or AGOCO, made the discovery. AGOCO is one of Libya's largest oil companies and is financed by NOC. It currently pumps close to 450,000 b/d. 

Meanwhile, BP has met difficulties in securing gas blocks because of Libya's aggressive terms. BP wants gas blocks in the Sirte and Ghadames basins, but the company has failed to make inroads with Libyan officials after almost two years of talks. Seif ul-Islam says the fields in question would "constitute the largest fields in the history of exploration". Talks between BP and NOC have not broken down entirely, but Libya is not eager to give up the fields easily, considering there is huge interest in Libyan oil and gas now. 

   

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