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The Libyan economy now wants to move beyond oil and gas which has been the heart of the economy since the last 40 years under Moamer Kadhafi. The new economy after the end of Khadhafi’s reign is looking forward to diversify its economy and not be at the sole mercy of the gas and oil industry. Under Khadafi’s rule, the economy was solely run by the state. However, there was no reason and rhyme to their running the economy. It was run by the whimsical leaders fancy resulting in an economy marked with capitalism and socialism. Relatives, close family was given priority to top designations and key roles. The interim government of Libya is hoping for an economic revolution after witnessing the country still heavily leans on investment in oil and petrol still remains the cause for drawing more than 98 percent of the cash receipts. After decades of tyranny Libya is now an economy with a wounded private sector and a public sector taking its last breath. Businessmen now state that the rule was of Mafia with Khadafi’s cronies given prominence in the economy. Libya is a country, rich in natural resources however; the rate of unemployment in Libya crosses over 30 percent. The little life that was left in the economy was killed by the cold war. The companies with oil investments in Libya are trying hard to rework the oil wells and start production soon. However, in spite of efforts to raise the production, the maximum production that will be reached by the end of this year will be around 700,000 barrels a day. This figure still remains a fraction of the oil produced by Libya before the uprising backed by NATO took place in Libya. Recent meetings to rebuild the economy portray the sentiment that it is crucial to diversify the Libyan economy. Oil and gas wells alone cannot sustain the economy forever. The new government endeavours to accelerate the private enterprise but first has to unravel the laws under Khadafi’s rule. Foreign interests will be encouraged by the new government. In an environment where rag trade brigades rule the streets after the fall of Khadafi, it is crucial to establish an atmosphere of stability and a favourable business climate to bring back foreign investors. Businessmen are also of the opinion that stability and security should take centre stage in the current economic climate. Till now, oil investment has been the only economic backbone of Libya. However, Libya has much scope to diversify its economy. With a large coastline and many historic sites it could revamp itself as a tourist destination. This dream however may take many decades to materialise. Kyles Humphrey is an experienced columnist in oil related fields, who periodically writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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