Libyan economy

Libya Population and Environment

Population and migration

The Libyan population has only 6.2 million people: the demographic density is very low, most of the population lives on the coast and is concentrated mainly in the areas of Tripoli and Benghazi. Population growth is sustained (the growth rate between 2005 and 2010 was 2%) and the youth group (between zero and 30 years old) is in the majority.

Libyans are predominantly of Arab and Berber ethnicity, but there are also significant Tuareg and Tebu tribal minorities. About 10% of the population is made up of immigrants, mostly from sub-Saharan Africa. It is estimated that about 97% of Libyans are Sunni Muslims; the few non-Muslims under Gaddafi’s regime were allowed to practice their faith with relative freedom. Since the fall of the regime there have been frequent attacks against places of significance for Westerners and Christians, but also against the sanctuaries of Sufism by jihadist Salafist groups.

Libya has long been a country of immigration, due to the high demand for labor in the oil and gas and construction sectors. Furthermore, Libya is still a transit country for immigrants from sub-Saharan Africa (Sudan, Chad and Niger) to Europe. Hence the interest of Italy and the European Union (E u), in putting a stop to the migratory phenomenon, by stipulating agreements with the African country capable of delegating to Tripoli the first competences in the field of coastal patrol. In this way, Libya has recently turned into a kind of ‘buffer’ country. The Italo-Libyan friendship treaty and the agreement between the Euand Libya in October 2010, suspended in 2016, aimed at strengthening Libya’s sea border controls and outsourcing part of the responsibilities in reducing migratory pressure. However, the conditions of immigrants in Libya have been harshly criticized by some human rights organizations: Libya does not have adequate legislation for the protection of refugees and asylum seekers and, although there are no official data on trafficking in beings to and from the country, the huge influx of irregular immigrants and the tightening of border controls have often created unsustainable living conditions. The Libyan crisis of 2011 implied a relative and momentary increase in immigration from the country, and very difficult living conditions for black minorities inside the country, considered supporters of the Gaddafi regime. During 2013, Italy launched the humanitarian military operation ‘Mare nostrum’ for patrolling with four navy ships in the Italian and international sea area between Italy and Libya. In 2014 Mare Nostrum was reabsorbed into the European Triton mission, while the flow of immigration from Libya to Italy, precisely because of the new conflict, reached a record figure of about 170,000 people. In April 2015, nearly 1,000 migrants died at sea following the shipwreck of the boat they were traveling on. The tragedy has aroused the reaction of the European countries who have decided to strengthen the ‘Triton’ operation.

Economy, energy and environment

The Libyan economy depends on revenues from the hydrocarbon sector, which contribute about two thirds of nominal GDP. The country has vast oil and gas fields and exports these products to Italy – the largest trading partner, which absorbs almost all gas exports and 27% of oil exports – Germany, Spain and France.

In particular, Libya boasts huge proven crude oil reserves: about 44 billion barrels, the largest in Africa and among the largest ever. Libya, however, does not have the necessary technology to develop the hydrocarbon sector and therefore remains dependent on investments from abroad: for this reason, the moderate change in Libyan foreign policy impressed on the country by Gaddafi in the first part of the 2000s offered companies foreigners the necessary guarantees so that they could settle with fewer worries. However, Gaddafi’s changing policy, which for example had threatened the nationalization of the hydrocarbon sector, the rather unfavorable conditions imposed by the Libyan government on international companies and, finally, the unstable security conditions that characterize the country in post-Gaddafi create uncertainty and discourage investors. Among the main investors, an important role is played by Italy, and in particular byEni. Once resumed, ties with the former Italian colony have become very close in recent years.¬†For Libya public policy, please check loverists.com.

The civil conflict of 2011 resulted in a blockage of oil and gas exports for a long part of the year and, therefore, a drastic decrease in revenues and annual GDP (-61%). Starting from October 2011 oil production Libya returned to growth and almost reached pre-war levels at the end of 2012, ie around 1.5 million barrels per day. However, the current situation of instability in the country is also having strong repercussions on the fundamental energy production sector. Since the beginning of June 2013, the extraction of hydrocarbons has suffered serious interruptions because of the intense strikes of the workers in the sector and the guards responsible for controlling the infrastructures or because they have been hit by sabotage by armed militias. 2014 even saw an important irregular sale attempt by the Cyrenaic autonomist group headed by Ibrahim Jethran who had occupied several energy plants. Jethran accused the Libyan Muslim Brotherhood of overthrowing the secular majority within the parliament and, at the same time, it claimed a greater redistribution of energy resources to Cyrenaica. In March 2014, the group surprisingly managed to sell a cargo of crude oil to the North Korean-flagged Morning Glory tanker, which a few days later, however, was blocked by the US Navy and returned to Libya. The operation was allowed thanks to resolution no. 2146 of the Security Council that prevents illegal crude oil sales. During 2014, the two Libyan governments also competed for control of the country’s most important economic institutions, including the Central Bank and the National Petroleum Company (LNOC). The uncertainty about who runs these institutions was evident when two different delegations showed up at the OPEC summit in Vienna in November. After a peak reached at the end of 2014, during 2015 oil production underwent a new reduction, returning close to 400,000 barrels per day, with a trend that closely follows the evolution of the political situation.

The growing instability that followed the end of the war has dealt a severe blow to hopes for economic recovery: GDP is decreasing (-6.1% estimated in 2015), infrastructure reconstruction following the war is at a standstill and foreign capital is in short supply. In 2013 the Monetary Fund had granted the Central Bank a temporary loan to avoid its insolvency, in 2015 both factions set up their own bank, further confusing the situation. Western oil companies continue to make payments through the Tripoli bank, while the Monetary Fund officially recognizes only the Tobruk bank.

Libyan economy

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