Libya is in a crucial phase of its history: after years of deadlock, an executive body represented by a new Presidential Council and a new Prime Minister has finally been appointed. Now that this important step is complete, Libyans feel that they deserve to have their future political and economic prospects better explained. With the experience of a decade marred by tension, wars, and hard living conditions fresh in their minds, Libyan citizens want to know if this new political track will bring the better days ahead that they have been promised.
Dr. Atiya Fituri, a Professor of economy at the University of Benghazi in Libya, points out that the reserves of the Libyan Central Bank (LCB) reached a total of 45.5 billion dollars at the end of year 2020. But these are only the official reserves available and this number does not include other available liquidities. The LCB would also be in a capacity to take profits off an additional 35 billion dollars or so that are divided as follows:
– 25 billion dollars in the equivalent of its issued currency, the dinar;
– the equivalent of 2.3 billion dollars deposited at the IMF (25% of which is comprised of dollars);
– and 116.6 tons of gold, valued at 7 billion dollars at the current market
Dr. Fituri adds that the LCB can claim further availabilities, since its foreign currency assets that are invested outside of Libya and/or deposited in foreign banks such as the Arab Banking Corporation are worth another 10 billion dollars.
Libya’s general wealth even goes beyond that. The Libyan Investment Authority (LIA), another important Libyan economic institution, has a separate strategy from the LCB. The LIA is placed under the control of the Council of Ministers, and its assets are worth around 68 billion dollars. This amount is important, especially when considering external debt. Libya does not accumulate the level of external debt that is often seen often seen in many other countries. According to Dr. Fituri, there is no doubt that Libya’s wealth is a considerable advantage: it indeed possesses the largest oil reserves of the African continent. That said, the prevailing obstacles in the country are huge. Many Libyans remain deprived of functioning infrastructure, while they suffer unemployment in a context of growing general inflation. Patterns of mismanagement and corruption have only added to the difficult state of play in Libya. Conflict and economic circumstances have left more than 200,000 people displaced internally. The humanitarian situation is further complicated by the more than 275,000 people that have returned after previously fleeing their home country and a large number of refugees hoping to cross the Mediterranean via Libya’s northern coast.
Still, Dr. Fituri believes that the new Libyan government has an opportunity to steer things in the right direction and create a new context for its citizens. Through concerted efforts, the new government has the opportunity to introduce deep and efficient reforms that would allow all sectors of the Libyan population to finally enjoy a quality of life closer to that found in many countries that do not necessarily have the same means at their disposal.
Mohammed Sreit is a Libyan journalist and researcher.
To quote this article, please use the following reference: M. Sreit (2021), “Will a new government carry Libyans to a brighter future?”, https://crisesobservatory.es/will-a-new-government-carry-libyans-to-a-brighter-future-m-sreit/
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