ECONOMY
The government dominates Libya’s socialist-oriented economy through complete control of the country’s oil resources, which account for approximately 97% of export earnings, 75% of government receipts, and 54% of the gross domestic product. Oil revenues constitute the principal source of foreign exchange. Much of the country’s income has been lost to waste, corruption, conventional armaments purchases, and attempts to develop weapons of mass destruction, as well as to large donations made to developing countries in attempts to increase Qadhafi’s influence in Africa and elsewhere. Although oil revenues and a small population give Libya one of the highest per capita GDPs in Africa, the government’s mismanagement of the economy has led to high inflation and increased import prices. These factors resulted in a decline in the standard of living from the late 1990s through 2003.
Despite
efforts to diversify the economy and encourage private sector
participation, extensive controls of prices, credit, trade, and
foreign exchange constrain growth. Import restrictions and inefficient
resource allocations have caused periodic shortages of basic goods
and foodstuffs.
Although
agriculture is the second-largest sector in the economy, Libya
imports most foods. Climatic conditions and poor soils severely
limit output, while higher incomes and a growing population have
caused food consumption to rise. Domestic food production meets
about 25% of demand.
On
September 20, 2004, President George W. Bush signed an Executive
Order ending economic sanctions imposed under the authority of
the International Emergency Economic Powers Act (IEEPA). U.S.
persons are no longer prohibited from working in Libya, and many
American companies are actively seeking investment opportunities
in Libya. The government has announced ambitious plans to increase
foreign investment in the oil and gas sectors to significantly
boost production capacity. The government is also pursuing a number
of infrastructure projects such as highways, railways, telecommunications
backbones, and irrigation.
GDP
(2003 est.): $35 billion.
Per capita GDP (2003 est.): $6,400.
Natural resources: Petroleum, natural gas, gypsum.
Agriculture: Products--wheat, barley, olives,
dates, citrus, vegetables, peanuts, soybeans; cattle; approximately
75% of Libya's food is imported.
Industry: Types--petroleum, food processing,
textiles, handicrafts, cement.
Trade: Exports (2003 est.)--$14.32 billion: crude
oil, refined petroleum products. Major markets (2003)--Italy (39.4%),Germany
(13.6%), Spain (13.6%), Turkey 6.6%, France (6.2%). Imports (2003
est.)--$6.282 billion: machinery, transport equipment, food, manufactured
goods. Major suppliers (2003)--Italy (27.2%), Germany (10.3%),
Tunisia (7.7%), U.K. (6.9%), South Korea (6.9%), France (5.8%).
