Country Report - Zawya

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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 Outlook for 2010-11 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. Country Report August 2010 www.eiu.com © The Economist Intelligence Unit Limited 2010
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Country Report - Zawya

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