Libya

The State of Libya is a North African country that borders the Mediterranean Sea, Egypt, Sudan, Chad, Niger, Algeria, and Tunisia. The United Nations’ human development index classifies Libya as a high human development country [Page 913]among the North African countries. Currently, the country’s population is approximately 5.6 million, with a decline in those under age 15. There is also a larger percentage of people in the 25-to-29 age group, which presents some poverty-related challenges. These include more people out of work and unprepared to work. Almost 90 percent of the country’s economy is oil based, and most consumer goods are imported from other countries. Although oil provides wealth and favorable economic figures in theory, in practice, the country suffers from several issues, ranging from democracy deficits, poverty, inequalities, and socioeconomic exclusion. According to the United Nations, almost 40 percent of Libya’s people are struggling to survive below the international poverty line, with no financial incentive from the country’s oil reserves, the largest in Africa and the ninth largest in the world.

Since the lifting of the economic sanctions by the United Nations and United States, foreign investment has increased, and it has helped the economy return to prewar levels. According to the International Monetary Fund (IMF), the annual per capita gross domestic product (GDP) has reached $13,800 per year. Even so, many of Libya’s citizens struggle to survive. There are several reasons why poverty is an issue in a country that has massive natural resources. The government fails to provide basic services to its citizens. Also, Libya’s economy is planned by the central government, thus limiting the ability for private entrepreneurship. A country that has been closed to the rest of the world because of civil war, and exports and tourism have been severely affected, leading to reduced job availability and more poverty.

The economy of the country is mainly centered on the energy sector, estimated to generate up to 95 percent of earnings from foreign exchange, and almost 100 percent of government budget earnings. The small population and substantial energy sector–dependent revenue makes Libya one of the African countries with the highest per capita GDP, but the central government has yet to fully utilize its financial resources in developing the infrastructure or economic diversity, resulting in a significant number of citizens living in poverty. Like many African countries with large natural resources, Libya is suffering from a resource curse, where the natural resources do not translate into reduced poverty. Almost one out of three people are living below the national poverty benchmark. Since the discovery of oil in Libya, there has been one conflict after another, and even a Libyan revolution, and a number of challenges still stand in the way of alleviating and eradicating poverty in Libya.

An interrupted economy is one issue facing the country; though the Libyan economy has been stable because of oil reserves, the six-month civil war adversely affected the economy. The withdrawal of foreign energy companies in 2011 resulted in the country losing up to 60 percent of its GDP; for a country that depends on oil exports to maintain its economy, this was a heavy blow. Though oil production returned to its pre-revolution levels, loss of labor in the sector still threatened to slow the growth down. Economic analysis suggests that the major challenge faced by Libyan leadership is sustainable management of the natural resources and oil market of the country. Another major challenge faced by the Libyan people is underequipped health systems; in 2011, the health ministry requested several forms of aid from the World Health Organization. With fewer than 1,500 primary health care outlets serving over 6 million people, health care is a major concern for poverty alleviation. The exodus of many foreign health care workers during the Libyan civil war took a toll on the poverty rate.

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