Country Report - Zawya

Country Report 

Libya 

August 2010 

Economist Intelligence Unit 

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Libya 1 

Libya 

Executive summary 

3 Highlights 

Outlook for 2010-11 

4 Political outlook 

5 Economic policy outlook 

7 Economic forecast 

Monthly review: August 2010 

10 The political scene 

12 Economic policy 

15 Economic performance 

Data and charts 

18 Annual data and forecast 

19 Quarterly data 

20 Monthly data 

21 Annual trends charts 

22 Monthly trends charts 

23 Comparative economic indicators 

Country snapshot 

24 Basic data 

25 Political structure 

Editors: Rory Fyfe (editor); David Butter (consulting editor) 

Editorial closing date: August 12th 2010 

All queries: Tel: (44.20) 7576 8000 E-mail: london@eiu.com 

Next report: To request the latest schedule, e-mail schedule@eiu.com 

Country Report August 2010 www.eiu.com © The Economist Intelligence Unit Limited 2010

2 Libya 

MEDITERRANEAN SEA 

TUNISIA 

Shahhat 

Dernah 

Al Bayda a 

Al Marj arj 

Al Bardi 

Tobruq 

Benghazi 

Gulf of Sirte 

TRIPOLI 

Zuwara ara 

Azzawiya Azzawiya 

Khums 

Zlitan 

Al-Aziziyah 

Al Aziziyah 

Gharyan 

Misurata 

Yefren 

Bani Walid 

Nalut ut 

Qaminis 

Ajdabiya 

Sirte 

Marsa Marsa al-Brega 

al-Brega 

Sidra 

Ghadames 

Al Jaghbub 

Jalu 

Raqubah 

Waddan 

Zillah 

ALGERIA 

LIBYA 

Birak 

EGYPT 

Sebha 

Awbari Awbari 

Country Report August 2010 www.eiu.com © The Economist Intelligence Unit Limited 2010 

Murzuq 

Al Qatrun 

Ghat 

Kufra 

Sahara Desert 

Main road 

International boundary 

Sahara Desert 

Main airport 

Capital 

NIGER 

Major town 

Other town 

SUDAN 

CHAD 

0 km 100 200 300 400 

0 miles 100 200 

© The Economist Intelligence Unit Limited 2010

Libya 3 


Monthly review 

Executive summary 

Highlights 

August 2010 

• Political power will remain vested in the Libyan leader, Muammar Qadhafi. 

Libya will retain its unique jamahiriya (republic of the people) system, but the 

structures of government will undergo halting reform. 

• Colonel Qadhafi's most likely successor is his son, Saif al-Islam Qadhafi, a 

reformer who has been put forward as the general co-ordinator of the Popular 

Social Command with powers over parliament and the executive. 

• Relations with the US and EU will be subject to periodic bouts of tension, 

despite the resolution of the Lockerbie affair and the scrapping of Libya's 

weapons of mass destruction programme. 

• The hydrocarbons sector will dominate the economy, but non-oil growth will 

be strong. However, the government's inconsistent and unwelcoming policies 

risk deterring international oil companies and other investors. 

• We forecast that real GDP growth will average 3.6% in 2010-11. Oil output is 

likely to rise modestly alongside strong non-oil-sector growth. 

• We have revised up our forecasts for inflation to an average of 3.9% in 2010-11 

owing to likely rises in international food prices following the Russian 

decision to ban grain exports. 

• The current account will record a surplus of 21.7% of GDP in 2010 and 21.3% in 

2011 as higher average annual oil prices help to boost exports. 

• A US Senate Foreign Relations Committee hearing into the release of 

Abdelbaset al-Megrahi has been postponed. It had been poised to investigate 

whether BP had lobbied for Mr Megrahi's release. 

• A South Korean diplomat has been deported for spying and trying to collect 

information on Colonel Qadhafi and his family. 

• Government figures have been released showing a higher than expected 

budget surplus owing to a failure to meet capital spending targets. 

• UniCredit has won a foreign banking licence, but the Central Bank has 

dropped plans to issue a second licence. Meanwhile, the Libyan Investment 

Authority has expanded its stake in UniCredit. 

• Poor families have benefited from the Wealth Distribution Programme that 

aimed to distribute oil revenue directly to the people. 

• Inflation has picked up owing to higher food and clothing prices. 

• The current-account surplus narrowed sharply in 2009, as expected, in line 

with lower oil export revenue, and FDI inflows have declined. 


4 Libya 

Domestic politics 


Political outlook 

The Libyan leader, Muammar Qadhafi, has ruthlessly repressed political 

dissent, and there are now few real domestic threats to his rule. He has now 

been in power for over 40 years. Colonel Qadhafi is likely to withdraw slowly 

from domestic politics, investing more time in symbolic roles, such as the "king 

of kings of Africa". There is no agreed process in place for the transfer of power, 

but the proposed appointment of Colonel Qadhafi's second-eldest son, Saif 

al-Islam Qadhafi, as general co-ordinator of the Popular Social Command in 

October 2009 has made him the most likely successor, and would give him 

powers equivalent to those of head of state, with control over parliament and 

the executive. Although the appointment has not been confirmed, the fact that 

Saif Qadhafi was put forward by his father strengthens his position and 

suggests that he has been given a mandate to implement his economic and 

political reform programme—he has long been in favour of creating a formal 

constitution and of implementing administrative reform. Other possible 

successors include one of Colonel Qadhafi's other six children, or someone 

may emerge from within the political elite. However, the succession is unlikely 

to become a pressing issue while Colonel Qadhafi retains power, which he is 

expected to do throughout the forecast period. 

Significant political reform is unlikely. Colonel Qadhafi remains wedded to 

Libya's opaque and ineffective jamahiriya (republic of the people) system and 

continues to manipulate its structure to maintain the illusion of democracy—as 

demonstrated in early 2009 by the apparent rejection by the local-level Basic 

People's Congresses and the General People's Congress (akin to a national 

parliament) of the Wealth Distribution Programme (WDP). The Libyan leader 

will continue to deny any individual minister the opportunity to build up a 

personal power base. Saif Qadhafi's proposed appointment could in part be 

intended to counterbalance conservative and vested interests within the regime. 

There is at present little immediate threat to the ruling elite. However, if the 

socioeconomic environment were to deteriorate through, for example, rising 

unemployment, collapsing oil prices or growing inequality, the government 

could be faced with increased unrest. Feelings of political exclusion have been 

exacerbated by the eradication of Libya's privately owned media, which were 

nationalised in June 2009. However, with the economy expected to remain 

relatively strong and the opposition, with the exception of domestic Islamists, 

either in exile or lacking clout and coherence, the prospect of any threat to the 

regime appears limited. 

The greatest fear for the authorities remains the potential challenge from homegrown 

Islamist militant groups, in light of regionwide concerns over the threat 

posed by al-Qaida affiliates and past Islamist-inspired assassination attempts 

against Colonel Qadhafi. Reconciliation and rehabilitation negotiations 

have proceeded secretly, and 214 Islamists, including 34 from the Libyan 

Islamic Fighting Group—the largest local militant organisation, which recently 


Libya 5 

International relations 

Policy trends 

renounced violence—were released from prison in March. This suggests that the 

local Islamist militant threat is declining. 

The Libyan government is likely to remain embroiled in unpleasant 

disagreements with various countries, although the majority of these will have 

no serious consequences. A dispute with Switzerland seriously damaged 

commercial and diplomatic relations after a son of Colonel Qadhafi was 

arrested in Geneva in 2008 for allegedly mistreating a maid. The disagreement, 

which has now been resolved, assumed international proportions when the 

Libyan government briefly suspended visas for citizens of EU countries within 

the Schengen visa area. Libya's past involvement in terrorist activities will 

continue to resurface, souring international relations. The case of a British oil 

major, BP, which has recently been accused by US senators of lobbying for the 

release of the man convicted of the 1988 bombing of a plane over Lockerbie, 

Scotland, is an example. Nonetheless, Colonel Qadhafi will continue to seek to 

strengthen ties with the US and the EU, particularly Italy, while sporadically 

voicing anti-Western rhetoric and engaging with countries viewed as rivals of 

the US, such as Russia. 

Efforts to integrate Libya into the international community will continue and 

the country was recently elected to the UN's Human Rights Council. Generally, 

economic imperatives, mainly in the oil and gas sectors, are likely to dictate 

relations with the West. Libya will also continue to have tense relations with 

other Arab states. A number of major regional leaders failed to attend the 

annual meeting of the League of Arab States in Libya at the end of March. Poor 

Arab relations have encouraged Libya to focus on ambitions to lead Africa 

towards continental unity. The growing wealth of the Libyan Investment 

Authority, a sovereign wealth fund, and its increasingly strategic objectives will 

help to increase Libya's international clout, particularly in Africa, which will be 

a focus for investment. 

Economic policy outlook 

Economic reform has been limited and is likely to remain so, despite recent 

proposals to liberalise the economy and privatise state companies. Even if Saif 

Qadhafi is elevated to a high political position, it will take considerable time for 

him to establish himself and to implement his vision for economic development. 

Any reform will face stiff resistance from vested interests, as some regime 

insiders are reluctant to relax their control over large swathes of the statedominated 

economy—which has slowed progress on increasing private-sector 

and foreign-investor participation. 

However, there have been some privatisations and reforms. Large public stakes 

in the banking sector have been sold off, with more to follow, and a new 

preliminary banking licence has been issued to UniCredit (Italy). However, this 

was instead of the two licences initially proposed, illustrating a lack of 

transparency in the process. Nonetheless, in conjunction with technical 

assistance from international organisations, this will help to modernise the 

sector. Bank lending to the private sector has increased significantly since 2007 

and is set to continue expanding, which will help the small private sector to 


6 Libya 

Fiscal policy 

Monetary policy 

grow. The partial privatisation of two telecommunications companies and an 

iron and steel firm has been proposed. An initial public offering for shares in 

the latter was reported in August to be going ahead. The government is also 

committed to streamlining the bureaucracy, but little action has been taken. Ten 

new laws have been introduced in 2010 to improve the business and 

investment environment, but are still awaiting executive regulations to clarify 

how they will be implemented. 

The whims of Colonel Qadhafi will continue to create uncertainty in 

policymaking. This will deter investors, who are unlikely to be assuaged by a 

proposed new hydrocarbons law. During 2009-10 the government suspended 

visas for EU citizens living within the Schengen visa area and hinted that it 

might nationalise the hydrocarbons sector. Despite the award of dozens of 

exploration permits, drilling success has been limited, and when exploration 

has been successful development of the discoveries has been impeded. This has 

dented the positive perceptions of investing in Libya's hydrocarbons sector and 

its entire economy more generally. Foreign investment, which is vital for 

development, is therefore likely to become harder and more expensive for Libya 

to obtain, and more major foreign oil companies may leave—particularly as a 

number of exploration permits lapse this year. BP has confirmed its intention to 

proceed with its own major exploration programme, although its deepwater 

exploration programme has been delayed, possibly as a consequence of safety 

concerns related to the oil spill in the Gulf of Mexico. 

The government has had a healthy budget surplus in recent years owing to high 

oil revenue and a tendency to fall short of spending commitments. The fiscal 

surplus shrunk in 2009 to 4.6% of GDP owing to lower average oil prices and 

revenue. The government expects to increase expenditure by 32% in 2010. 

Although current expenditure will increase, as efforts to cut the size of the civil 

service have been postponed, a public-sector pay rise is planned and subsidies 

will be kept in place to control consumer prices, capital expenditure is likely to 

fall short of targets. Combined with higher oil prices this will lead to an increase 

in the budget surplus in 2010 to 5.9% of GDP. In 2011 cutbacks in capital 

expenditure to meet existing government plans and spending restraint owing to 

lower international oil prices will lead to a further increase in the budget 

surplus to 10.2% of GDP. Lower than expected government expenditure in 2009 

has led us to revise up our estimates and forecasts for the fiscal balance. 

The currency is pegged to the IMF's special drawing rights (SDR), which 

restricts monetary policy flexibility. Nonetheless, the Central Bank of Libya 

cut benchmark interest rates by 2 percentage points in early 2009 and 

increased them back to 5% in early 2010. Pressure on the Central Bank to 

overhaul its approach to monetary policy and regulation of financial services is 

likely to increase as the banking sector is liberalised. Liquidity is excessive, 

and state-subsidised credit institutions are currently crowding out commercial 

bank lending. Efforts will be made to address these issues. 


Libya 7 

International assumptions 

Economic growth 

Economic forecast 

International assumptions summary 

(% unless otherwise indicated) 

2008 2009 2010 2011 

Real GDP growth 

World 2.8 -0.7 4.2 3.6 

OECD 0.6 -3.3 2.5 1.7 

EU27 

Exchange rates 

0.9 -4.2 0.8 1.1 

US$ effective (2000=100) 92.5 97.0 97.7 100.9 

US$:€ 1.470 1.393 1.258 1.193 

¥:US$ 

Financial indicators 

103.4 93.7 92.6 93.0 

US$ 3-month commercial paper rate 2.18 0.26 0.22 0.35 

€ 3-month interbank rate 

Commodity prices 

4.65 1.23 0.77 0.88 

Oil (Brent; US$/b) 97.7 61.9 80.0 78.5 

Gold (US$/troy oz) 

Food, feedstuffs & beverages 

871.8 973.0 1,187.3 1,242.5 

(% change in US$ terms) 28.3 -20.4 -3.4 0.0 

Industrial raw materials (% change in US$ terms) -5.1 -25.6 33.7 5.1 

Note. Regional GDP growth rates weighted using purchasing power parity exchange rates. 

The Economist Intelligence Unit forecasts that world real GDP growth (at 

purchasing power parity exchange rates) will be 4.2% in 2010, declining to 3.6% 

in 2011, as the effect of government stimulus packages fades. Growth in the 

euro area, the main market for Libyan exports is only forecast to average 0.8%. 

The benchmark dated Brent Blend is forecast to rise to US$80/barrel in 2010 but 

to fall back to US$78.5/b in 2011. 

Libyan real GDP contracted by 0.7% in 2009, which was well below potential 

and suggests that growth is being limited by structural constraints, such as the 

inefficiency of the bureaucracy. We therefore forecast that real GDP growth will 

be relatively weak in 2010-11 at an average of 3.6%. The Libyan economy will 

continue to be dependent on the hydrocarbons sector for future expansion and 

growth will be further limited by minimal increases in crude oil production. 

Development work and new oil exploration will move forward slowly in an 

attempt to boost production capacity, although export volumes will grow 

slowly in the short term owing to sluggish demand and OPEC production 

quotas. Investment and imports related to oil and gas developments will 

therefore grow to some extent in 2010-11, provided that international oil 

companies are not significantly deterred by the recent threats to nationalise 

foreign oil operations or by subsequent regulations that aim to give the Libyan 

government greater control over the development of the country's 

hydrocarbons assets. 

There is potential for rapid growth in the non-oil sector, albeit from a low base, 

supported by government infrastructure investment programmes, particularly 

in the construction, utilities and transport sectors. There is strong foreign 

interest in Libyan investment opportunities, and although reform tends to be 

slow and unpredictable, the government appears committed to encouraging 


8 Libya 

Inflation 

Exchange rates 

External sector 

private-sector participation. Moves to raise the proportion of locals in the 

workforce could stimulate greater private consumption, and strong growth in 

bank lending to the private sector could help to kick-start private-sector 

economic activity. However, these factors are not yet having a major impact on 

overall economic growth. 

After years of negative or low inflation, consumer prices picked up sharply in 

2007-08 but fell again in 2009, mainly because of lower international food 

prices—food is the dominant component of consumer price inflation. Inflation 

is forecast to pick up to an annual average of 3.9% in 2010-11, as consumer 

confidence returns and higher oil revenue increases domestic liquidity, but it 

will not reach the highs of 2008, as the government maintains subsidies and 

increases in international food prices are less dramatic. We have revised up our 

forecast for inflation as poor grain harvests around the world, particularly in 

Russia, are likely to lead to higher international food prices than previously 

expected. A stronger euro against the Libyan dinar could also add to 

inflationary pressure in 2010-11. 

The dinar is pegged to the SDR and is managed through tight official controls. 

The country's huge stocks of foreign reserves—US$97bn in March 2010—mean 

that the authorities will be able to defend the exchange-rate regime should any 

pressure on the currency arise over the forecast period. We expect the SDR to 

depreciate against the US dollar in 2010-11, mainly owing to a depreciation of 

the euro, which is a component of the SDR. The dinar is therefore forecast to 

depreciate to an average of LD1.28:US$1 in 2010 and LD1.33:US$1 in 2011. 

The current account is dominated by hydrocarbons exports. Earnings from 

goods exports are expected to grow to an average of US$47bn in 2010-11, from 

US$37bn in 2009, owing to higher oil prices and production increases. Goods 

imports will rise to an annual average of US$25bn in 2010-11, lifted by demand 

for inputs for government development projects. Consequently, we forecast that 

the trade surplus will average US$22bn in 2010-11. 

The most important element of the services account is oil-sector payments 

abroad, which are expected to stagnate in line with development of the sector. 

We therefore expect the services deficit to remain steady at an average of 

US$4.4bn in 2010-11. The income surplus is forecast to increase owing to growth 

in dividends from Libya's rapidly expanding investments abroad and low 

growth in profit repatriation by foreign oil companies. The current-account 

surplus is therefore expected to widen to an average of US$17bn (22% of GDP) 

in 2010-11. 


Libya 9 

Forecast summary 

(% unless otherwise indicated) 

2008 a 2009 a 2010b 2011b 

Real GDP growth 2.7 -0.7 3.3 4.0 

Oil production ('000 b/d) 1,721 1,550 1,567 1,620 

Oil exports (US$ bn) 60.7 35.8 44.7 45.6 

Consumer price inflation (av) 10.4 2.4 3.2 4.6 

Consumer price inflation (year-end) 9.8 0.4 5.3 4.7 

Deposit rate 2.5 2.5 2.5 3.0 

Government balance (% of GDP) 23.7 4.6 5.9 10.2 

Exports of goods fob (US$ bn) 62.0 37.2 46.1 47.1 

Imports of goods fob (US$ bn) 21.7 22.0 24.1 25.0 

Current-account balance (US$ bn) 35.7 10.1 17.2 17.4 

Current-account balance (% of GDP) 37.5 14.6 21.7 21.3 

External debt (year-end; US$ bn) 5.6 c 5.9 c 6.3 6.7 

Exchange rate LD:US$ (av) 1.22 1.25 1.28 1.33 

Exchange rate LD:€ (av) 1.80 1.75 1.61 1.58 

Exchange rate LD:¥100 (av) 1.18 1.34 1.38 1.43 

Exchange rate LD:SDR (av) 1.94 1.94 1.90 1.93 

a Actual. b Economist Intelligence Unit forecasts. c Economist Intelligence Unit estimates. 


10 Libya 

BP is embroiled in accusations 

over the release of Mr Megrahi 

Monthly review: August 2010 

The political scene 

A US Senate Foreign Relations Committee hearing into the release of 

Abdelbaset al-Megrahi, the only man convicted of the bombing of passenger 

airline over Lockerbie in 1988, from a Scottish jail in August last year, due to be 

held on July 29th, was indefinitely postponed after all the witnesses it 

requested to appear declined the invitation. A committee member and 

Democratic senator, Robert Menendez, had called on the former British justice 

secretary, Jack Straw, the Scottish justice minister, Kenny MacAskill, and the 

former BP chief executive, Tony Hayward, to testify at the hearing. But as the 

committee has no jurisdiction over non-US nationals, all declined to attend. 

The hearing sought to examine the interplay between the British and Scottish 

governments and about the communications between the British government 

and BP in this matter. They have made clear that they hoped the process could 

result in Mr Megrahi being sent back to jail and in BP being prevented from 

proceeding with its contract to invest US$900m in oil and gas exploration in 

Libya. They have also urged the British government to launch a formal inquiry 

and to investigate in particular a letter sent in July 2009 by Lord Trefgarne, the 

head of the Libyan British Business Council—of which BP is a member— 

stressing to Mr MacAskill that there would be serious implications for UK- 

Libyan relations if Mr Megrahi were to die in prison. Lord Trefgarne said last 

year that there would be benefits to UK businesses from the release of 

Mr Megrahi. 

US Senators have suggested that Lord Trefgarne's letter may have facilitated BP's 

operations in the Libyan market. According to another senator, Kirsten 

Gillibrand, the committee has seen "an abundance of circumstantial evidence 

that the British and Scottish governments may have circumvented justice and 

organized his release in order to secure a lucrative oil drilling concession for BP". 

BP has denied direct involvement in Mr Megrahi's release, although admits it 

lobbied the UK government over the signing of a prisoner transfer agreement 

(PTA) with Libya in 2007, arguing that delays in the PTA would have a "negative 

impact on UK commercial interests". It is also important to point out that BP's 

drilling concessions remain far from proven to be lucrative. Instead they are a 

major commitment and investment in Libya with no certainty of returns, which 

undermines the argument that BP would have needed to secure the release of 

Mr Megrahi. However, it is plausible that the Libyan authorities could have 

made it easier for BP to operate in the country by, for example, removing 

obstacles to importing equipment, on the basis that the company had helped to 

secure the release of Mr Megrahi. Similar allegations were made at the time of 

Mr Megrahi's release. 

In support of BP, the Scottish Executive denied having any contact with BP, and 

the British foreign secretary, William Hague, stated in a letter to John Kerry, 

chairman of the Senate Foreign Relations Committee, that there was no 

evidence to support the allegations being made that BP and the Scottish 


Libya 11 

South Korean diplomat 

is deported 

Executive had colluded on the release of Mr Megrahi. Nevertheless, the US 

senators, Mr Menendez and Ms Gillibrand called on BP to suspend its drilling 

plans in Libya until an investigation takes place. Possibly in response to this 

request, BP announced on August 11th that it had delayed its plans for the 

offshore Libyan drilling, which would not begin until later this year. Previously, 

BP and the National Oil Corporation (NOC)—Libya's state-owned oil company— 

had confirmed that a rig was in place to start drilling the first offshore well. 

Onshore drilling is set to commence later this year. 

Offshore drilling had been supposed to begin in July, although separate 

concerns over the environmental impact have delayed operations, since the 

offshore drilling is in deep water and sensitivities are running high after the oil 

spill in the Gulf of Mexico. BP's announcement of delays to offshore drilling 

might have been aimed at soothing these sensitivities. Shokri Ghanem, head of 

the NOC, has said that he retains full confidence in BP. However, there is 

domestic support for resource nationalism, and many Libyans have been less 

forgiving of BP. These elements have taken the opportunity to fight for the 

expulsion of BP from Libya and have launched a campaign on the Facebook 

social networking website, called "BP Get Out". However, given that Libya has 

not lived up to its exploration potential in recent years, the country retains the 

need for foreign expertise in deepwater drilling and for the large exploration 

commitments that BP has made. Final judgement on the company will come 

once a full investigation has been made into the Gulf of Mexico oil spill. 

The fact that the interest of US legislators in the Lockerbie case has been revived 

in the aftermath of the oil spill suggests that the senators may be preoccupied 

with trying to find another stick with which to beat BP. However, it also arises 

from the resentment at the circumstances of Mr Megrahi's release from prison 

and from lingering doubts about the Lockerbie verdict itself. More broadly, it 

provides a reminder that major dealings with the Libyan government risk 

becoming embroiled in the country's murky past. 

It came to light in late July that the Libyan authorities had expelled a South 

Korean diplomat for spying, or more specifically, trying to collect information 

on the Libyan leader, Muammar Qadhafi, and his family. According to South 

Korean news sources, the diplomat had been followed for three months before 

his arrest. The strain that this placed on relations between the two countries 

was immediately evident when South Korean officials questioned the Libyan 

authorities' actions after they reportedly started following numerous other 

South Koreans working in Libya. In response, Libya withdrew its entire staff 

from its Economic Co-operation Bureau in the South Korean capital, Seoul. 

According to subsequent uncorroborated reports, Libya then demanded US$1bn 

in compensation for South Korea's espionage activities, which Libya wanted to 

be paid through construction works. It was unclear whether a power plant 

project deal, announced in early August, was related to Libya's compensation 

claims. Daewoo, a South Korean construction firm, has said that it secured a 

contract to build a 750-mw power plant in Zuweitina, south-west of Benghazi, 

for US$438m. The contract has taken over 10 years to negotiate. A Daewoo 

spokesman told the press that "a diplomatic row is one thing and business is 


12 Libya 

Spending constraints lead to 

larger budget surplus 

NOC claims large rise 

in reserves 

another". South Korean companies have heavily invested in Libya and have 

carried out a huge amount of construction work for a number of years. It is 

therefore important for them to establish Libya's probable policy direction and 

who is likely to succeed Colonel Qadhafi. 

Economic policy 

The government has released provisional budget data for 2009, which show 

that expenditure was lower than expected. Administrative expenditure fell by 

10% from 2008 to LD14bn (US$11bn), and development expenditure fell by 39% 

to LD18bn. However, a new category of "other expenditure" was included, 

which totalled LD8.9bn. Assuming previously announced government capital 

expenditure plans are correct, this should be included as part of capital 

expenditure, which, in this case would total LD27bn. 

Meanwhile, revenue was broadly in line with expectations. Oil revenue fell by 

45% from 2008 to LD35bn, which was 80% of total revenue, down from 88% in 

2008. These developments were a consequence of lower average oil prices. 

Non-oil revenue increased by 7.9% to LD9bn as a result of a higher tax take. The 

increase was primarily due to an increase of LD651m (US$509m) in customs tax 

revenue. Although the government has tended to cut tariffs in recent years, an 

increase in services import tax from 4% to 10% and also increases in 

consumption taxes on imported products in 2009 are probably responsible for 

this. In total, the budget was LD4bn, or 4.6% of GDP, in surplus, considerably 

lower than the LD28bn (24% of GDP) in 2008 as a result of lower oil revenue. 

80,000 

70,000 

60,000 

50,000 

40,000 

30,000 

20,000 

10,000 

0 

Public finances 

(LD m) 

Budget revenue 

2005 

06 

Budget expenditure 

Sources: Central Bank of Libya; Economist Intelligence Unit forecasts. 

Budget balance 


07 

According to the head of the NOC, Mr Ghanem, oil companies met with 

considerable success during 2009 and the first half of 2010 in their 

hydrocarbons exploration efforts. Mr Ghanem claimed in early August that of 

the 65 new wells drilled last year, the NOC, in concert with international oil 

companies (IOCs), found recoverable reserves of either oil or gas in 51% of 

them. As a result, the country's oil reserves rose by 653m barrels, which was 

more than total production in 2009 of around 566m barrels. Mr Ghanem also 

claimed that gas reserves had increased by 782bn cu ft. Libya's exploration 

programme has seemingly had even greater success over the first six months of 

08 

09 

10 

11

Libya 13 

this year with an additional 612m barrels of oil and more than 1trn cu ft of gas 

having been found. Based on statistics from BP, proven reserves at the end of 

2009 were 44bn barrels of oil (3.3% of total world reserves) and 54trn cu ft of 

gas (0.8% of total world reserves). 

Mr Ghanem also claimed that recent drilling operations had indicated an 

additional 20 potential oil wells and he expected reserves to be further boosted 

by the end of this year. Particularly since the drilling activity in the first half of 

2010 only represented 40% of this year's total programme. 

Companies that have made discoveries include the predominantly US-owned 

Oasis Consortium; Agoco (Libya); TPIC (Turkey); Tatneft (Russia); Medco Energi 

Internasional (Indonesia); Sirte Oil Company (Libya); Zueitina Oil Company, an 

international consortium including Occidental (US), OMV (Austria) and the 

NOC; and Sonatrach (Algeria). 

Until these additional reserves are confirmed by a globally recognised 

independent energy organisation, there will remain doubts over their veracity. 

Libya has good reason to talk up its reserves; in recent months a number of 

international oil companies have either relinquished their concessions, or 

hinted that they would do so, on account of growing concern over a lack of 

exploration success, the NOC's hard bargaining and the threat that awkward 

political demands may be made of operators in the sector. 

In focus 

UniCredit awarded banking licence after LIA increases its stake in the bank 

On August 9th the Central Bank of Libya announced that UniCredit, an Italian bank, 

had won preliminary approval to open a joint venture in Libya. The bank will be 

permitted a maximum stake of 49% in the local company, although it will receive full 

management control. The Central Bank had originally stated that it would award two 

new foreign banking licences, but it said that it had decided to only issue one, citing 

changes in the global financial environment. This decision will come as a 

disappointment to HSBC, the UK-based bank that was thought to be almost certain 

to win one of the licences, especially after a senior Libyan official said in July that he 

was 99% sure that HSBC would be awarded a licence (July 2010, Economic policy). 

The recent furore surrounding the case of BP, a British oil major, and the release of 

the man convicted of the bombing of a plane over Lockerbie in 1988, Abdelbaset 

al-Megrahi, may have put the Libyan leadership off more involvement with major 

British companies. Alternatively, HSBC could have determined that it would be 

better not to announce any involvement in Libya until the release of Mr Megrahi is 

receiving less media attention. Neither HSBC nor the Central Bank has commented 

on why the UK-based bank was not successful. 

There were also three gulf banks in the running for the licences—Mashreq Bank 

(UAE), Emirates NBD (UAE) and Qatar Islamic Bank—and these banks have also been 

rejected. It could be the case that the authorities are extremely cautious owing to 

concerns about exposing the local banking sector to foreign competition. The local 

banking sector is undeveloped with a lack of infrastructure, poor service quality and 

backward business models. If this is the real reason behind the withdrawal of the 

second banking licence, it might also take some time before the preliminary approval 


14 Libya 

Poor families benefit from oil 

wealth redistribution 

that UniCredit has received is translated into the actual establishment of a joint 

venture. 

Earlier in August it was announced that the Libyan Investment Authority (LIA), a 

sovereign wealth fund, had increased its stake in UniCredit to 2.075% of the bank's 

capital. Recent data suggest that the Central Bank already owns around 5% of the 

bank, taking the Libyan government's holding to around 7%. The award of the licence 

so close to the announcement of the increased stake of the LIA in UniCredit is bound 

to attract some criticism and accusations of preferential treatment. This also poses the 

possibility that vested interests within the regime could be responsible for derailing 

HSBC's bid for the licence. Libyan political machinations are often cast as a battle 

between reformers, whom the central bank governor, Farhat Bengdara, is widely 

regarded to be among, and a conservative "old guard" that aims to maintain the 

status quo. Backroom dealings and power plays between these camps are often used 

to explain unusual outcomes or unexpected actions of the Libyan authorities and 

may be applicable in this instance. 

The LIA, which has around US$65bn at its disposal, is becoming increasingly 

acquisitive, taking advantage of the period of low global asset prices. In recent 

months, it has acquired holdings in a Russian Aluminium company, RUSAL; in the 

world's largest brickmaking firm, Wienerberger of Austria; and in a British media 

group, Pearson. It is particularly interested in financial services, not least to gain inhouse 

expertise at managing its assets. To this end, it was reported in early August 

that it had handed over "a few hundred million dollars" to a newly created asset 

manager in London, FM Capital Partners, for it to manage, while at the same time 

training up Libyan staff in the field of asset management. The intention is that the 

Libyan team will then take hold of the asset portfolio after five years. FM Capital 

Partners will make most of its investments in the traditional areas of equities, foreign 

exchange, derivatives and commodities. But it will also have a strong focus on Africa, 

were about 40% of its investments would be made. Indeed, it is understood that the 

Libyan African Investment Portfolio (LAP), a subsidiary of the LIA, put up most of 

the funds for the scheme. Africa is a key area of investment for Libya; it already has 

significant assets in the sub-Saharan region and at the summit of the Community of 

Sahel-Saharan States held in the Chadian capital, N'Djamena, in mid-July, the Libyan 

Leader, Colonel Muammar Qadhafi, announced that he was looking to invest 

considerably more. He told the audience that "the Libyan Jamahiriya [republic of the 

people] has US$90bn waiting for investment markets. The Libya market can absorb 

only part of this money. We started by focusing our attention on Africa hoping that it 

would absorb these huge sums of money." But he added a caveat, saying that Libya 

was looking for markets in the region that had "stability, peace, security, confidence, 

real independence, political will and corruption free environment", which provides 

additional reasons for not investing in Libya itself. 

Local news sources have revealed that Colonel Qadhafi's oil wealth plan, by 

which he intended to allocate part of the country's oil revenue directly to poor 

families, has benefited 230,815 such families since the scheme's launch in 2006. 

According to the report in a Libyan newspaper, Al Jamahiria, 45,912 three-person 

households received LD30,000 (US$23,587) each, while 34,362 four-person 

households were each allocated LD40,000, and 150,588 households of five or 

more people were given LD50,000. In total, the programme has reportedly 

distributed funds worth LD10.3bn (US$8.1bn). However, in the government 


Libya 15 

Consumer price inflation 

(% change, year on year) 

budget figures only US$2.7bn was spent on wealth distribution when the 

programme was launched, and nothing was spent in 2009. 

Economic performance 

Year-on-year inflation showed a significant jump at the end of the second 

quarter, with the consumer price index rising by 3.4% over the 12 months to 

end-June, compared with just 0.2% to end-March. The rise was most marked in 

the food and beverages and clothing and footwear categories—the most heavily 

weighted items—which increased by 3.9% and 10.5% respectively. Education and 

culture and personal services also rose strongly, but their weighting in the 

overall basket is limited. The narrow range of movement in housing and 

healthcare reflects the raft of subsidies which protect prices in these sectors. 

2009 2010 

3 Qtr 4 Qtr 1 Qtr 2 Qtr 

Food & beverages 0.1 0.1 -0.6 3.9 

Clothing & footwear 1.0 6.5 8.0 10.5 

Housing -0.3 -0.5 -0.1 0.1 

House furniture 4.0 3.4 2.5 2.5 

Healthcare -0.1 -0.1 0.0 0.0 

Transport 0.4 0.1 -0.6 -1.0 

Education & culture 4.8 9.5 8.1 7.8 

Personal services 1.5 3.3 4.3 5.6 

Consumer price inflation -0.6 0.4 0.2 3.4 

Source: Central Bank of Libya. 

Inflation picks up in 

second quarter 

The strong rise in the second quarter led to average inflation of 1.9% in the first 

six months, compared with 2.4% for the whole of 2009. Much of Libya's 

inflation is imported; everyday items such as food and clothing are increasingly 

brought in from outside the country and are therefore subject to global market 

forces. Higher global commodity prices have exerted upward pressure on 

domestic prices, which is likely to persist for the rest of the year, particularly 

with seasonal rises in prices during the Islamic holy month of Ramadan. 

7.0 

6.0 

5.0 

4.0 

3.0 

2.0 

1.0 

0.0 



-1.0 

Jan 

2009 

Feb Mar Apr May 



Jun 

Jul 

Aug 

Sep 

Oct 

Nov 

Dec 

Jan 

10 

Feb 

Mar 

Apr 

May 

Jun

16 Libya 

Current-account surplus 

narrows sharply 

The impact of the global economic downturn is fully reflected in data recently 

released by the Central Bank of Libya showing Libya's external position. With 

oil and gas exports constituting some 96.4% of total exports, Libya's trade 

surplus was severely dented in 2009, as both global demand and prices 

slumped. Total export revenue fell from a record LD76bn (US$59bn) in 2008 to 

LD47bn last year; a decline of 39%. Conversely, imports continued to grow. 

Since Libya's reintegration into the global community, its demand for foreign 

manufactured goods has grown unabated, as the access to global markets has 

exposed the country's shortcomings in terms of manufacturing output. It will 

take some years for Libya to develop a viable manufacturing base of its own; 

until that point, Libya's demand for imported goods will continue to rise. As a 

result of the shift in trade flows, Libya's trade surplus narrowed markedly, 

declining to LD19bn in 2009, down from LD49bn the previous year. 

Rising consumption and demand for foreign manufactures will also take its toll 

on Libya's non-merchandise account in the form of services debits. These are 

constituted chiefly of import-related services costs—such as insurance and 

freight—and so, as Libya's imports continue to rise, so will the ancillary services 

payments. Just as Libya's imports have risen by 75% over the past four years, so 

its services bill has almost doubled. 

Current account 

(LD m) 

2006 2007 2008 2009 

Exports 51,552 63,181 75,959 46,630 

Oil & gas 50,269 61,706 74,182 44,932 

Imports -15,674 -22,371 -26,807 -27,623 

Trade balance 35,878 40,810 49,152 19,007 

Services -2,751 -3,231 -4,672 -5,529 

Credits 145 247 273 824 

Debits -2,896 -3,478 -4,945 -6,352 

Income 1,506 1,838 1,938 1,120 

Credits 4,014 5,482 4,885 2,515 

Debits -2,508 -3,644 -2,947 -1,395 

Current transfers 435 -276 -1,285 -1,971 

Credits 1,603 686 -94 -264 

Debits -1,167 -962 -1,191 -1,707 

Non-merchandise balance -810 -1,669 -4,019 -6,379 

Current account balance 35,068 39,140 45,133 12,628 


The effect of reduced oil export earnings is that oil companies operating in 

Libya post reduced profits and so repatriate fewer funds to their home 

countries. This is reflected in the income account, which shows a 52% fall in 

debits. Income credits, most probably representing interest accrued on Libyan 

assets overseas also showed a decline in 2009, as global interest rates fell as the 

credit crunch set in. Conversely, current transfers debits—made up mostly of 

remittances paid by immigrant workers back to their countries of origin—rose 

markedly as Libya's project development programme continued apace, and 

continued to attract increasing numbers of expatriate labourers. 


Libya 17 

FDI declines 

As a result, Libya's non-merchandise deficit grew by 60% to record levels of 

LD6.4bn (US$5bn). However, with the value of merchandise trade—made up 

almost entirely of oil exports—many times greater than non-merchandise trade, 

the composition of Libya's current account clearly shows the country's total 

dependency on oil to bring in hard currency and support its balance of 

payments. Overall, Libya's current-account surplus was cut by almost three 

times, falling from LD45.1bn in 2008, to LD12.6bn last year, equivalent to an 

estimated 15% of GDP. 

According to data from the latest World Investment Report from the UN 

Conference on Trade and Development (UNCTAD), inward foreign direct 

investment (FDI) into Libya in 2009 declined by 35%, from US$4.1bn in 2008, to 

US$2.7bn last year. Much of the fall was due to the global economic downturn, 

with investment falling globally; in North Africa, total inward investment fell 

from US$21.4bn in 2008 to US$14.9bn in 2009. 

However, Libya's share of FDI into North Africa has fallen from a high of 21% in 

2007, to 18% in 2009, suggesting that there are other factors at play. These are 

likely to be concerns amongst the investment community over political risk in 

Libya, particularly the highly politicised nature of the business environment. 

Incidents such as the spat with Switzerland, temporary bans on EU Schengenarea 

visas and threats to nationalise the hydrocarbons sector are likely to have 

had a deterrent effect. In addition, the slowdown is likely to reflect the decline 

in oil and gas investment over the period; this peaked in 2007, but has since 

subsided, possibly as a result of the ever-harder bargain that has been driven by 

the NOC, forcing international oil companies to question the competitiveness 

of Libya as an investment destination. 

Foreign direct investment inflows 

(US$ m unless otherwise indicated) 

2005 2006 2007 2008 2009 

Algeria 1,081 1,795 1,662 2,646 2,487 

Egypt 5,376 10,043 11,578 9,495 6,712 

Libya 1,038 2,013 4,689 4,111 2,674 

Morocco 1,653 2,450 2,804 2,388 1,331 

Tunisia 782 3,312 1,618 2,761 1,688 

North Africa 9,931 19,613 22,350 21,400 14,892 

Libyan % share in North Africa 10 10 21 19 18 

Source: UNCTAD. 


18 Libya 

Data and charts 

Annual data and forecast 

e g c Pl ease se ra phi bel ow 

2005a 2006a 2007a 2008a 2009 a 2010b 2011b 

GDP 

Nominal GDP (US$ m) 50,394 59,925 73,387 95,246 68,837 79,194 81,397 

Nominal GDP (LD m) 65,934 78,716 92,661 116,540 86,289 101,203 108,092 

Real GDP growth (%) 

Expenditure on GDP (% real change) 

10.9 5.6 5.0 2.7 -0.7 3.3 4.0 

Private consumption 8.9 3.9c 3.8c 4.2c 4.1 c 4.4 4.3 

Government consumption 7.7 8.5c 10.5c 13.0c -0.4 c 7.0 3.0 

Gross fixed investment 30.5 8.5c 7.5c 13.1c 9.0 c 8.6 8.0 

Exports of goods & services 1.6 8.6c 6.3c -7.0c -12.0 c 0.1 2.3 

Imports of goods & services 

Origin of GDP (% real change) 

3.0 8.5c 9.0c 8.2c 4.5 c 8.9 5.2 

Agriculture 7.6 9.8 4.0 2.4 2.5 2.4 2.3 

Industry 10.0 4.4 3.6 1.1 -4.4 2.7 3.7 

Services 

Population and income 

13.1 7.7 7.9 6.0 5.7 4.6 4.7 

Population (m) 5.9 6.1 6.2 6.3 6.4 6.5 6.7 

GDP per head (US$ at PPP) 

Fiscal indicators (% of GDP) 

13,493 14,304c 16,068c 17,190c 18,186 c 18,697 18,433 

Public-sector revenue 56.7 59.8 58.4 62.4 51.4 54.6 57.3 

Public-sector expenditure 28.9 27.2 33.5 38.7 46.7 48.6 47.1 

Public-sector balance 27.8 32.7 24.9 23.7 4.6 5.9 10.2 

Net public debt 

Prices and financial indicators 

5.9c 4.6c 3.6c 3.0c 3.9 c 3.4 3.3 

Exchange rate LD:US$ (end-period) 1.35 1.28 1.22 1.25 1.23 1.29 1.33 

Exchange rate LD:€ (end-period) 1.59 1.70 1.79 1.74 1.77 1.54 1.58 

Consumer prices (end-period, %) 2.9 1.8 6.3 10.4 2.4 3.2 4.6 

Stock of money M1 (% change) 31.8 15.5 42.4 51.4 18.1 35.0 18.0 

Stock of money M2 (% change) 29.0 14.1 38.0 49.2 22.4 32.0 16.5 

Lending interest rate (av; %) 6.3 6.7 6.0 6.0 6.0 6.5 7.0 

Deposit interest rate (av; %) 

Current account (US$ m) 

2.1 2.5 2.5 2.5 2.5 2.5 3.0 

Trade balance 20,184 25,968 29,269 40,292 15,148 22,086 22,116 

Goods: exports fob 31,358 39,187 46,970 61,950 37,162 46,145 47,084 

Goods: imports fob -11,174 -13,219 -17,701 -21,658 -22,013 -24,059 -24,968 

Services balance -1,815 -2,075 -2,556 -4,136 -4,404 -4,402 -4,397 

Income balance -281 -595 2,017 586 891 1,057 1,248 

Current transfers balance -634 586 -219 -1,040 -1,572 -1,544 -1,604 

Current-account balance 

External debt (US$ m) 

17,454 23,884 28,511 35,702 10,064 17,196 17,363 

Debt stock 4,291c 4,456c 4,957c 5,611c 5,891 c 6,326 6,700 

Debt service paid 978c 1,095c 1,172c 1,249c 1,327 c 1,607 1,677 

Principal repayments 790c 840c 890c 940c 1,015 c 1,290 1,340 

Interest 

International reserves (US$ m) 

188c 255c 282c 309c 312 c 317 337 

Total international reserves 39,702 59,483 79,599 92,508 99,220 102,191 109,330 

a Actual. b Economist Intelligence Unit forecasts. c Economist Intelligence Unit estimates. 

Source: IMF, International Financial Statistics. 


Libya 19 

Quarterly data 

Pl ea se se e g ra phi c bel ow 

2008 2009 2010 

3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 

Prices 

Consumer prices (2003=100) 124.7 126.8 127.7 125.5 125.4 128.2 128.7 129.2 

Consumer prices (% change, year on year) 

Financial indicators 

9.8 8.8 5.8 2.5 0.6 1.1 0.8 3.0 

Exchange rate LD:US$ (end-period) 1.24 1.25 1.29 1.24 1.22 1.23 1.27 1.31 

Deposit rate (av; %) 2.5 2.5 2.5 2.5 2.5 2.5 2.5 n/a 

Lending rate (av; %) 6.0 6.0 6.0 6.0 6.0 6.0 6.0 n/a 

Money market rate (av; %) 4.0 4.0 5.0 5.0 5.0 5.0 5.0 n/a 

M1 (end-period; LD m) 32,796 33,323 31,110 36,473 41,762 39,338 39,212 n/a 

M1 (% change, year on year) 70.8 51.4 37.9 22.2 27.3 18.1 26.0 n/a 

M2 (end-period; LD m) 37,534 38,653 37,193 42,194 47,018 47,330 47,314 n/a 

M2 (% change, year on year) 

Sectoral trends 

65.8 49.2 39.8 22.9 25.3 22.4 27.2 n/a 

Crude oil production (m barrels/day) 1.68 1.72 1.59 1.54 1.55 1.52 1.61 1.62 

Crude oil production (% change, year on year) 

Foreign trade & reserves (US$ m) 

-1.2 -1.1 -9.8 -11.6 -7.7 -11.4 1.4 5.4 

Exports fob 18,342 10,775 7,124 8,288 10,003 10,351 n/a n/a 

Imports foba -5,709 -4,686 -4,531 -4,968 -5,222 -5,306 n/a n/a 

Trade balance 12,633 6,089 2,593 3,320 4,781 5,045 n/a n/a 

Reserves excl gold (end–period) 97,605 92,313 91,075 91,663 100,219 99,026 97,117 n/a 

a Data do not include defence imports. 

Sources: International Energy Agency (IEA), Monthly Oil Market Report; IMF, International Financial Statistics, Direction of Trade Statistics. 


20 Libya 

Monthly data 


Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 

Exchange rate LD:US$ (av) 

2008 1.22 1.22 1.18 1.18 1.19 1.19 1.18 1.22 1.24 1.28 1.30 1.27 

2009 1.27 1.30 1.30 1.29 1.27 1.25 1.25 1.24 1.22 1.22 1.21 1.22 

2010 1.23 1.26 1.27 1.27 1.30 1.32 1.29 n/a n/a n/a n/a n/a 

Exchange rate LD:US$ (end-period) 

2008 1.21 1.20 1.18 1.19 1.19 1.18 1.19 1.23 1.24 1.30 1.30 1.25 

2009 1.28 1.32 1.29 1.29 1.25 1.24 1.24 1.23 1.22 1.22 1.20 1.23 

2010 1.24 1.26 1.27 1.28 1.31 1.31 1.28 n/a n/a n/a n/a n/a 

Exchange rate LD:€ (end-period) 

2008 1.80 1.82 1.86 1.85 1.86 1.86 1.86 1.81 1.75 1.65 1.65 1.75 

2009 1.64 1.67 1.71 1.71 1.76 1.75 1.78 1.77 1.78 1.79 1.80 1.77 

2010 1.72 1.72 1.72 n/a n/a n/a n/a n/a n/a n/a n/a n/a 


2008 54.4 50.9 46.4 57.7 99.6 81.9 69.6 40.2 70.8 49.9 57.5 51.4 

2009 42.7 44.2 37.9 35.0 14.8 22.2 31.4 50.5 27.3 27.8 17.8 18.1 



2008 44.2 42.7 40.9 52.9 85.6 71.8 62.6 37.8 65.8 50.0 53.6 49.2 

2009 45.7 45.1 39.8 34.3 16.6 22.9 31.8 47.2 25.3 25.6 21.7 22.4 


Deposit rate (%) 

2008 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 

2009 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 


Lending rate (%) 

2008 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 

2009 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 


Goods exports fob (US$ m) 

2008 5,305 4,797 4,952 5,643 5,406 6,365 6,999 6,517 4,826 4,715 3,072 2,988 

2009 2,397 2,570 2,157 2,747 2,676 2,866 3,267 3,409 3,326 3,710 3,214 3,427 

2010 3,436 2,855 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 

Goods imports cif (US$ m) 

2008 1,225 1,216 1,452 1,579 1,647 1,620 2,138 1,802 1,769 1,807 1,413 1,467 

2009 1,402 1,369 1,760 1,587 1,690 1,691 1,722 1,706 1,794 1,758 1,659 1,889 


Trade balance fob-cif (US$ m) 

2008 4,080 3,581 3,500 4,064 3,758 4,745 4,860 4,716 3,057 2,908 1,659 1,521 

2009 995 1,201 397 1,159 986 1,175 1,546 1,703 1,532 1,952 1,555 1,538 


Foreign-exchange reserves excl gold (US$ m) 

2008 82,276 83,293 87,143 89,049 89,983 90,802 94,510 94,365 97,605 89,864 89,223 92,313 

2009 90,401 90,423 91,075 93,996 93,635 91,663 95,378 98,682 100,219 99,673 102,184 99,026 

2010 98,337 97,431 97,117 n/a n/a n/a n/a n/a n/a n/a n/a n/a 

Sources: IMF, International Financial Statistics; Direction of Trade Statistics; Haver Analytics. 


Libya 21 

Annual trends charts 

12.0 

10.0 

8.0 

6.0 

4.0 

2.0 

0.0 

-2.0 

-4.0 

35.0 

30.0 

25.0 

20.0 

15.0 

10.0 

5.0 

0.0 

-5.0 

Others 

36.0% 

Spain 

7.9% 

France 

8.4% 

Real GDP growth 

(% change) 

2005 

Budget balance 

(% of GDP) 


Annual trends charts 


(av; %) 

Source: Economist Intelligence Unit. Source: Economist Intelligence Unit. 

2005 

Libya 

Libya 

06 

06 

Middle East and North Africa 

07 

08 

09 


07 

08 

09 

10 

10 

Current-account balance 

(% of GDP) 


Leading markets, 2009 

Leading suppliers, 2009 

(share of total) (share of total) 

Italy 

37.6% 

Germany 

10.1% 


World 

11 

11 


16.0 

14.0 

12.0 

10.0 

8.0 

6.0 

4.0 

2.0 

0.0 

45.0 

40.0 

35.0 

30.0 

25.0 

20.0 

15.0 

10.0 

5.0 

0.0 

Others 

55.1% 

2005 

Libya 

Libya 

2005 

06 

06 


07 

08 

09 


07 

08 

09 

10 

10 

World 

11 

11 

Italy 

17.1% 

China 

9.9% 

Turkey 

9.0% 

Germany 

8.9%

22 Libya 

Monthly trends charts 

14.0 

12.0 

10.0 

8.0 

6.0 

4.0 

2.0 

0.0 



-2.0 

Jan 

2007 

Apr Jul 

8,000 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

18.0 

16.0 

14.0 

12.0 

10.0 

8.0 

Oct 

Jan 

08 

Source: Economist Intelligence Unit. 

Foreign trade 

(US$ m; goods only) 

Exports 

0 

Jan 

2007 

Apr Jul 

Apr 

Jul 


Natural gas: Europe price 

(US$/BTU m) 

6.0 

Jan 

2007 

Apr Jul 

Oct 

Oct 

Jan 

08 

Imports 

Jan 

08 

Apr 

Apr 

Jul 


Jul 

Oct 

Oct 

Jan 

09 

Oct 


Apr 

Balance 

Jan 

09 

Jan 

09 

Apr 

Jul 

Apr 

Jul 

Monthly trends charts 

Oct 

Jul 

Oct 

Jan 

10 

Oct 

Jan 

10 

Apr 

Jan 

10 

Apr 

Monetary aggregates 



Foreign-exchange reserves 

(US$ m) 


Oil: Brent crude price 

(US$/b; av) 



120 

100 

80 

60 

40 

20 

105,000 

95,000 

85,000 

75,000 

65,000 

55,000 

Jan 

2007 

Apr Jul 

140 

120 

100 

80 

60 

40 

M1 

0 

Jan 

2007 

Apr Jul 

20 

Jan 

2007 

Apr Jul 

Oct 

Oct 

Oct 

M2 

Jan 

08 

Jan 

08 

Jan 

08 

Apr 

Apr 

Apr 

Jul 

Jul 

Jul 

Oct 

Oct 

Oct 

Jan 

09 

Jan 

09 

Jan 

09 

Apr 

Apr 

Apr 

Jul 

Jul 

Jul 

Oct 

Oct 

Oct 

Jan 

10 

Jan 

10 

Jan 

10 

Apr

Libya 23 

Comparative economic indicators 

Saudi Arabia 

Iran 

United Arab Emirates 

Israel 

Egypt 

Algeria 

Kuwait 

Qatar 

Morocco 

Iraq 

Libya 

Sudan 

Syria 

Oman 

Tunisia 

Lebanon 

Yemen 

Jordan 

Bahrain 

Qatar 

Lebanon 

Syria 

Morocco 

Egypt 

Iraq 

Sudan 

Yemen 

Bahrain 

Tunisia 

Jordan 

Algeria 

Oman 

Israel 

Iran 

Saudi Arabia 

Libya 


Kuwait 


Gross domestic product 

(US$ bn; market exchange rates) 

Gross domestic product 


Comparative economic indicators, 2009 

0 50 100 150 200 250 300 350 400 

Sources: Economist Intelligence Unit estimates; national sources. 

-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 



Saudi Arabia 

Gross domestic product per head 

(US$ '000; market exchange rates) 

0.0 5.0 10.0 15.0 20.0 25.0 30.0 


Consumer prices 




Qatar 

Kuwait 

Israel 

Bahrain 

Oman 

Libya 

Lebanon 

Iran 

Algeria 

Tunisia 

Jordan 

Morocco 

Syria 

Iraq 

Egypt 

Sudan 

Yemen 

Iran 

Egypt 

Sudan 

Algeria 

Yemen 

Saudi Arabia 

Kuwait 

Tunisia 

Oman 

Israel 

Bahrain 

Syria 

Libya 


Lebanon 

Morocco 

Jordan 

Iraq 

Qatar 

59.3 

38.2 

36.8 

13.5 

11.8 

11.3 

-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0

24 Libya 

Land area 

Population 

Main towns 

Climate 

Weather in Tripoli 

Language 

Measures 

Currency 

Time 

Public holidays 

Country snapshot 

Basic data 

1,759,540 sq km 

6.16m (2007 mid-year estimate, IMF) 

Population in '000 (2003 estimates, National Authority for Information and 

Documentation) 

Tripoli (capital) 1,149 

Benghazi 636 

Misurata 360 

Al Mirqab 328 

Al Bitnan 142 

Sebha 126 

Hot and dry with mild winters 

Hottest month, August, 22-30°C (average daily minimum and maximum); 

coldest month, January, 8-16°C; driest month, July, 1 mm average rainfall; wettest 

month, December, 94 mm average rainfall 

Arabic 

Metric 

Libyan dinar (LD) = 1,000 dirham. Average official exchange rate in 2009: 

LD1.21:US$1 

2 hours ahead of GMT 

Commercial offices and government establishments are closed on Fridays. 

Other than the usual Islamic celebrations, national holidays include Declaration 

of the People's Power Day (March 3rd); Evacuation Day (June 11th); Revolution 

Day (July 23rd); and National Day (September 1st) 


Libya 25 

Official name 

Form of state 

Head of state 

Executive 

Legislature 

Key ministers 

Secretariat of the General 

People's Congress 

National Oil Corporation 

chairman 

Central Bank governor 

Political structure 

The Great Socialist People's Libyan Arab Jamahiriya 

Since 1977 Libya has been a jamahiriya (republic of the people) in accordance with the 

Third Universal Theory propounded by Muammar Qadhafi in his Green Book, which is a 

blend of socialist and Islamic theories inspired by tribal traditions. The jamahiriya system 

defines the political and social order, which is also governed by the Holy Quran. The 

General People's Congress is the highest legislative body. In 1992 Colonel Qadhafi 

changed the political structure by dividing Libya into 1,500 mahallat (communes), each 

with its own budget and legislative and executive powers, formerly vested in the Basic 

People's Congresses. The mahallat and the congresses are supervised by Revolutionary 

Committees directed by secretaries, who are chosen personally by Colonel Qadhafi 

Colonel Qadhafi was appointed supreme leader by the General People's Congress in 

March 1990 after taking power in a coup in 1969. Saif Qadhafi was put forward as general 

co-ordinator of the Popular Social Command in October 2009 with power over the 

legislature 

In 2000 Colonel Qadhafi abolished most central government executive functions, 

devolving responsibilities to the 26 municipal councils that make up the General People's 

Congress. Centralised control is maintained over the economy, finance, defence and 

security, energy, infrastructure, foreign affairs, social security and trade portfolios, the 

heads of which all report directly to the prime minister's office 

The General People's Congress, delegates to which are chosen by the Basic People's 

Congresses 

Secretary of General People's 

Committee (prime minister) Baghdadi al-Mahmudi 

Agriculture & fisheries Abu Bakr al-Mabruk al-Mansouri 

Communications Mohammed Ali Zeidan 

Economy, industry & trade Mohammed Ali al-Huwaij 

Education & scientific research Abdel-Kabir al-Fakhri 

Energy Ali Shamikh Mohammed 

Finance & planning Abdel-Hafez Zleitni 

Foreign affairs & international 

co-operation Mousa Kousa 

Health & environment Mohammed Mahmoud al-Hijazi 

Industry & mines Ali Yusuf Zikri 

Justice Mustafa Mohammed Abdel-Jalil 

National security Abdel-Fattah al-Ubaidi 

Social affairs Ibrahim al-Zarruq 

Utilities Matouq Mohammed Matouq 

Foreign affairs Suleiman Sasi al-Shahumi 

Popular Committees Huda Fathi bin Amir 

Popular Congresses Ibrahim Abderrahman Abjad 

Secretary (speaker) Mohammed Abdul Quasim al-Zwai 

Shokri Ghanem 

Farhat Omar Bengdara

Country Report - Zawya

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