Economy of Libya

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Libya's centrally planned economy depends primarily upon revenues from the petroleum sector, which contributes practically all export earnings and over half of GDP. These oil revenues and a small population give Libya one of the highest per capita GDPs in Africa. Since 2000, Libya has recorded favourable growth rates with an estimated 8.1% growth of GDP in 2006. Grew about 57%

Contents

Macro-economic trend

The GDP per capital of Libya soared by 676% in the 1960s and a further 480% in the 1970s. However such fantastic growth rates proved unsustainable in the face of global oil recession and international sanctions. Consequently the GDP per capital shrank by 42% in the 1980s. Successful diversification and integration into the international community helped current GDP per capita to cut further deterioration to just 3.2% in the 1990s.

Below is a chart of trend of gross domestic product of Libya at market prices estimated by the International Monetary Fund with figures in millions of Libyan dinars (LYD).

Notes:
1. For purchasing power parity comparisons, the US Dollar is exchanged at 0.77 Libyan Dinars only.

Mean wages were $9.51 per manhour in 2009.

Oil Sector

Libya is an OPEC member and holds the largest proven oil reserves in Africa (followed by Nigeria and Algeria), 41.5 Gbbl (6.60×109 m3) as of January 2007, up from 39.1 Gbbl (6.22×109 m3) in 2006. About 80% of Libya’s proven oil reserves are located in the Sirte Basin, which is responsible for 90% of the country’s oil output.[1] The state-owned National Oil Corporation (NOC) dominates Libya's oil industry, along with smaller subsidiaries, which combined account for around 50% of the country's oil output. Among NOC's subsidiaries, the largest oil producer is the Waha Oil Company (WOC), followed by the Agoco, Zueitina Oil Company (ZOC), and Sirte Oil Company (SOC). Oil resources, which account for approximately 95% of export earnings, 75% of government receipts, and over 50% of GDP. Oil revenues constitute the principal foreign exchange source. Much of the country's income has been lost to waste, corruption, conventional armaments purchases, and attempts to develop WMD, as well as large donations to developing countries in attempts to increase Qadhafi's influence in Africa and elsewhere. Despite the country's relatively high per capita GDP, government mismanagement has led to high inflation and increased import prices, resulting in declining living standards. Reflecting the heritage of the command economy, three quarters of employment is in the public sector, and private investment remains small at around 2% of GDP.[2]

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