Economy of Libya

Mother Earth Travel > Country Index > Libya > Map Economy History

The government dominates Libya's socialist-oriented economy through complete control of the country's oil resources, which account for approximately 95% of export earnings, 75% of government receipts, and 30% 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, resulting in a decline in the standard of living.

Libya's gross domestic product grew in 2001 due to high oil prices, the end of a long cyclical drought, and increased foreign investment following the suspension of UN sanctions in 1999. 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 depends on imports in 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. 

Although UN sanctions were suspended in 1999, foreign investment in the Libyan gas and oil sectors has been severely curtailed due to the United States' Iran and Libya Sanctions Act (ILSA), which caps the amount any foreign company can invest in Libya yearly at $20 million (lowered from $40 million in 2001).

GDP: purchasing power parity - $45.4 billion (2000 est.)
GDP - real growth rate: 6.5% (2000 est.)
GDP - per capita: purchasing power parity - $8,900 (2000 est.)
GDP - composition by sector:
agriculture: 7%
industry: 47%
services: 46% (1997 est.)
Inflation rate (consumer prices): 18.5% (2000 est.)
Labor force: 1.2 million (1997 est.)
Labor force - by occupation: services and government 54%, industry 29%, agriculture 17% (1997 est.)
Unemployment rate: 30% (2000 est.)
Budget:
revenues:  $6.85 billion
expenditures:  $4.4 billion (2000 est.)
Industries: petroleum, food processing, textiles, handicrafts, cement
Electricity - production: 18.9 billion kWh (1999)
Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1999)
Electricity - consumption: 17.577 billion kWh (1999)
Agriculture - products: wheat, barley, olives, dates, citrus, vegetables, peanuts; beef, eggs
Exports: $13.9 billion (f.o.b., 2000 est.)
Exports - commodities: crude oil, refined petroleum products
Exports - partners: Italy 33%, Germany 24%, Spain 10%, France 5%, Turkey 4%, Tunisia 4% (1999)
Imports: $7.6 billion (f.o.b., 2000 est.)
Imports - commodities: machinery, transport equipment, food, manufactured goods
Imports - partners: Italy 24%, Germany 12%, Tunisia 9%, UK 7%, France 6%, South Korea 5% (1999)
Debt - external: $4.1 billion (2000 est.)
Economic aid - recipient: $8.4 million (1995)
Currency: Libyan dinar (LYD)

SOURCES: The World Factbook, U.S. Department of State

Mother Earth Travel > Country Index > Libya > Map Economy History