Though the Arab Spring brought a form of political liberation to Libya, it also led to a GDP loss of around 28.3 percent, or USD 6.5 billion for the Libyan economy.
Before the Arab Spring, Libya exported 1.8 million barrels of oil per day, along with significant amounts of natural gas. As quoted by the CIA World Factbook, the total energy production accounted for 95 percent of total export earnings within the country, 60 percent of total GDP, and 80 percent of government revenue. This is why the violence that tore the country apart in 2011 destroying port cities, drilling stations, and refineries, had a profound effect on the economy.
The economic conditions in Libya are presently deteriorating by the day. While the oil sector is likely to suffer negative impacts in the long run, the country is now seeking to exploit other sectors to speed long term financial recovery.
In the attempts to contribute to economic stability, Libya is seeking to invest USD 140 billion in projects over the next decade. Developmental projects aiding in the efforts will be deployed across critical infrastructure, energy, utilities and industry sectors that will accelerate rebuilding efforts in Libya.
Major projects planned for Libya:
- Gecol’s capacity building programme in the power sector which will see installed capacity rise from about 13,000MW in 2012 to 19,000-20,000MW by 2020
- In aviation, the newly-installed government has planned a $2.5bn upgrade of Libya’s busiest airports aimed at expanding capacity to 28 million passengers a year from an estimated 5 million
- To cater to the housing shortfall of 500,000 units expected by 2020, the Housing & Infrastructure Board (HIB) has been tasked to deliver 200,000 new homes, with supporting infrastructure in the next seven years
These projects have been announced under the banner Libya Projects 2013, a conference organised for June 2013, by MEED in association with Business Mirror (BM). However, in the attempts to make these efforts successful, Libya needs to create a conducive environment for conducting business.
“(Libya) needs to reform the banking sector to free capital for business and it needs to drastically improve the doing business environment in Libya.” — Sami Zaptia, Managing Editor for the Libya Herald and director/shareholder in a number of Libyan companies
Either way, the proposed long term plan for the next 10 years is the step in the right direction. The responsibility now lays upon the government to not only introduce significant reforms for a business friendly environment but also lead a stable economic atmosphere that will expedite the effort.