COMMENTARY

Peter Burgess says: Your comment is awaiting moderation. November 29, 2011 at 3:15 PM Libya has very important resources … oil, water and sunny real estate, and a relatively small population. What should Libya do if the goal is for Libya to be the richest nation per capita on the planet in 150 years time? I think the answer is to exploit and export the minimum amount of oil and use the minimum amount of mined water to fund very good education, skills training and healthcare for the Libyan population, and for the Libyan population to rebuild the damaged housing, roads, buildings, infrastructure, etc with a minimum of help (skilled and unskilled) from migrant workers. Surplus moneys from export of oil should be saved in a Libyan Sovereign Fund for Future Generations and carefully invested (that is another subject). Most expert recommendations are likely to be about maximum export of oil as soon as possible, fast reconstruction using foreign contractors, rebuilding the military arsenal and so on … but this is more about profit for foreign entities than about an optimum development for Libya. In my view, the key to the future is making the people of Libya more important than the oil of Libya! Peter Burgess @truevaluemetric

Libya looks to build economy beyond oil

After eight months of war and 40 years of the often bizarre rule of Moamer Kadhafi, Libya’s new regime wants to move quickly to reshape a Libyan economy almost completely dependent on oil and gas.

“We have had our political revolution. Now we need an economic revolution,” interim Economy Minister Tahar Sharkass told AFP only days after being sworn in to office.

When under the thumb of Kadhafi, ousted and killed by forces of the National Transition Council who now run the country, the state controlled everything in Libya, but without necessarily following a coherent direction.

With Kadhafi, the economy was mostly a shambolic mix of the eccentric leader’s latest whims, a mix of socialism and capitalism that usually ended up in nepotism.

Centering around Kadhafi and his cronies, after four decades the Libyan economy was left a country with a private sector ignored and a public sector crumbling from neglect.

“It wasn’t a state. It was a mafia,” businessman Abdenasser Mohammed Okak said, describing a system that orbited the Kadhafi family and its associates.

Libya is a rich country, but its jobless rate passes 30 percent and whatever economic pulse existed was stopped cold by war. The banking sector is all but dead.

Petrol in Libya remains king, counting for more than 98 percent of export receipts.

With oil companies, both national and international, hard at work to reopen the taps, oil production should reach about 700,000 barrels a day by the end of the year, still only a fraction of the 1.6 million bpd that pumped out of Libya before the NATO-backed uprising started.

But oil and gas reserves will not last forever and it is therefore important to diversify the economy, Deputy Prime Minister Mustafa Abu Shagur told a group of business leaders during a recent meeting to discuss how to rebuild the economy.

The new government intends to promote private enterprise, but to do so requires a package of laws to undo the Kadhafi system.

“We must facilitate business and open the way for foreign investment,” minister Sharkass said.

“We are going to try to strike down any law that is not logical,” he said, though the minister could not say whether this will be done during the current transition period or not.

For now he said the priority was stability and a climate more likely to attract foreign investment back to Libya, where ragtag brigades bearing weapons now rule the streets after bringing down Kadhafi.

“What we want first is stability and security,” said Okak, the businessman.

“We also need to re-establish trust with investors,” he said.

“Before I worked in fear. We have to be sure that rules do not change overnight as they would during the old regime,” he added.

Minister Abu Shagur called for a system that introduces the private sector into the economy and that “encourages investors and protects priority rights”.

And in the long term, education, which was ignored in the old regime, needs to be revamped so that Libya can build the capacity suited to a modern economy, Abu Shagur said.

Libya, with a 1,700-kilometre (1,050-mile) long coastline and historic sites spanning millenniums, could also turn to tourism, though a conservative society and inadequate infrastructure could keep the plane loads of package tours still a few years away.

Source: AFP