Socialist People's Libyan Arab Jamahiriya : Country Economic Report
The Libyan economy is dominated by hydrocarbons and the public sector. Sizeable oil wealth has supported decent living standards for Libya's population and socioeconomic development compares favorably with standards in other Middle Eastern an...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2006/07/6989375/libya-country-economic-report http://hdl.handle.net/10986/23979 |
| Summary: | The Libyan economy is dominated by
hydrocarbons and the public sector. Sizeable oil wealth has
supported decent living standards for Libya's
population and socioeconomic development compares favorably
with standards in other Middle Eastern and North African
countries. Libya has the potential to raise oil production
and revenues significantly in coming years given its large
reserve base- but the main challenge for Libya is to promote
growth of the non-oil sector, and spur diversification of
its economy. Non hydrocarbon GDP growth has been weak and
oil revenue volatility has been transmitted to
non-hydrocarbon GDP growth. Weak non-oil GDP growth reflects
both insufficient private investment and low productivity of
capital Improving efficiency and productivity growth is a
precondition for faster growth and a greater investment
effort. Strong productivity growth is also a prerequisite
for competitive diversification out of hydrocarbons.
Projected high oil revenues will provide finance for growth
but will not necessarily spur sustained growth in the
non-oil sector. The decisions concerning public investment
in (social and economic) infrastructure would better be
de-linked from the presence of hydrocarbon windfalls. To
foster non-oil growth and job creation, the oil windfalls
should be used strategically, with the aim of facilitating
the transition to a competitive, market-led economy. Over
the long term, the intermediation of hydrocarbon windfalls
through the household and business sectors might produce
superior long run growth performance, but should go in
tandem with considerable strengthening of the investment
climate. Enhancing the quality of Libya's human
resources will also be essential to improve productivity,
diversify out of oil-especially in services-and compete in
the global economy. Improving the quality of governance
would also deserve particular attention because it underlies
the development reform agenda. This report focuses on
strengthening public financial management, the investment
climate in open markets, reforming state-owned enterprises,
priorities in financial sector reform, and enhancing social protections. |
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