The Socialist People’s Libyan Arab Jamahiriya
Selected Issue: Medium-Term Economic Reform Strategy, and Statistical Appendix

This Selected Issues paper aims to present a medium-term reform strategy that could be pursued by Libya to accelerate its transition to a market economy. The paper reviews the main characteristics of the Libyan economy, and medium-term prospects under current policies. It examines the priority reforms that Libya needs to implement to accelerate its transition to a market economy, while maintaining macroeconomic stability. The paper also reviews a second set of reforms that aim to consolidate the reform process and advance the restructuring of the economy in favor of the non-oil sector.


This Selected Issues paper aims to present a medium-term reform strategy that could be pursued by Libya to accelerate its transition to a market economy. The paper reviews the main characteristics of the Libyan economy, and medium-term prospects under current policies. It examines the priority reforms that Libya needs to implement to accelerate its transition to a market economy, while maintaining macroeconomic stability. The paper also reviews a second set of reforms that aim to consolidate the reform process and advance the restructuring of the economy in favor of the non-oil sector.

Medium-Term Economic Reform Strategy for Libya 1

I. Introduction and Background

1. Libya is generously endowed with energy resources, but has one of the least diversified economies in the Maghreb region and among the oil producing countries. (Table 1, Figure 1). In the early 1970s, Libya opted for a command economy with essentially state-driven investment, a strictly controlled external trade, widespread price controls and subsidies, and an almost nonexistent private sector. The government’s stifling interference in the economy resulted in a continuous deterioration in the business climate, low economic growth, declining living standards, fragile macroeconomic conditions, and increased vulnerability to external shocks. Other impediments to economic development included weak institutions and poor governance. Economic conditions started to deteriorate in the mid-1980s with the fall in world oil prices, and worsened in the 1990s as a result of international sanctions.

Table 1.

Libya: Comparative Indicators, 2004

(In percent of GDP unless otherwise specified)

Sources: WEO; and staff estimates.

Maghreb: Algeria, Libya, Mauritania, Morocco, and Tunisia.

OPEC: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, and Venezuela.

Excluding Iraq.

Figure 1.
Figure 1.

Libya: Comparative Indicators, 2004

Citation: IMF Staff Country Reports 2006, 137; 10.5089/9781451823080.002.A001

Source: World Economic Outlook, 2005; and Fund staff estimates.

2. Since the freezing of the UN sanctions in 1999, Libya has been implementing measures to reform and open its economy, but progress in developing a market economy has been slow and discontinuous. Libya needs strong and sustained economic growth to meet the demands of its rapidly growing labor force, which requires high investment in physical and human capital, and an efficient use of the country’s resources. This can only be achieved through the implementation of far-reaching market-oriented structural reforms that would enhance the role of the private sector, improve the business climate, and promote economic diversification.

3. The purpose of this paper is to present a medium-term reform strategy that could be pursued by Libya in order to accelerate its transition to a market economy and achieve the above objectives. The paper is composed of four sections, including the introduction. Section II reviews the main characteristics of the Libyan economy, and medium-term prospects under current policies. Section III presents the proposed reform strategy in two subsections: subsection III-A examines the priority reforms that Libya needs to implement in order to accelerate its transition to a market economy, while maintaining macroeconomic stability; and subsection III.B deals with a second set of reforms that aim to consolidate the reform process and advance the restructuring of the economy in favor of the non-oil sector. The paper has four appendices: Appendix I (Revenue Administration); Appendix II (A Stabilization and Savings Fund for Libya); Appendix III (Bank Restructuring Strategy); and Appendix IV (Statistical Reforms).

II. Main Characteristics of Libya’s Economy

A. Recent Developments

4. The Libyan economy continues to be driven by the oil sector, which contributed about 56 percent of GDP in 2000-05. The remaining economic activities include services (28 percent of GDP) and the sectors of agriculture, industry, transportation, and construction, whose size remains very modest (about 4-5 percent of GDP each).

5. The predominance of the oil sector is also highly noticeable in the country’s external and fiscal accounts. During 2000-05, hydrocarbon exports accounted for about 97 percent of total exports receipts and were the main source of official reserves.2 Overall, the non-oil sector remains largely dependant on imports, as evidenced by the high non-oil imports- to non-oil GDP ratio (70 percent) and the low coverage of non-oil imports by non-oil exports (11 percent in 2004). On the fiscal front, coverage of government expenditure by non-oil revenue was less than 30 percent, resulting in a non-oil deficit of about 30 percent of GDP.

6. On the structural front, some progress in liberalizing the economy has been made in recent years, including unifying the exchange rate; passing a new banking law that enhances the role of the Central Bank of Libya (CBL) and opens up the banking sector to domestic and foreign competition; privatizing some state enterprises; simplifying procedures for business application; removing customs duty exemptions enjoyed by public enterprises; liberalizing most prices; removing restrictions on external trade; and allowing foreign investment in some sectors. More recently, in 2005, the government created an investment fund (IF) to manage part of the government’s foreign exchange holdings, and significantly streamlined the customs tariff. Also, as a first step toward improving transparency in and consolidation of public finances, the government abolished all extrabudgetary expenditure from the Oil Reserve Fund (ORF).3 Finally, the CBL partially liberalized interest rates, issued a number of decrees to improve the operations of commercial banks, and launched the privatization of a major bank, Sahara bank (see Box 1).

7. However, reform implementation continues to suffer from lack of coordination, including between the CBL and the Ministry of Finance (MOF). Also, effectiveness of reforms was affected by the absence of an overall reform strategy, serious human capacity constraints, and weak institutions. As a result, the Libyan economy remains largely state controlled, three quarters of employment are in the public sector, and private sector investment remains minuscule (2 percent of GDP).

Libya: Reform Measures Implemented in 2004–05

Year 2004

  • Approval by the government of the privatization of 360 state-owned enterprises.

  • Simplification of procedures for business application.

  • Submission to parliament of a plan to replace the current subsidy system with a cash subsidy.

  • Passage of a new banking law that enhances the role of the CBL and opens up the banking sector to the private sector (including foreign banks).

  • Passage of an Anti-Money Laundering law.

Year 2005

A. Management of Oil Revenues

  • Creation of an Investment Fund (IF) to manage part of government oil revenues.

B. Tax and Customs Policy

  • Simplification of the tariff schedule. The new import tariff has two rates (10 percent for tobacco products and 0 percent for all other products), and all imported goods are subject to a 4 percent service fee.

  • The production and consumption tax was increased to 25–50 percent for imported goods and reduced to 2 percent for domestically produced goods.

C. Revenue Administration

  • Beginning to put in place a three-year modernization plan for the tax and customs directorates.

D. Interest Rate Liberalization

  • (i) Unification of the CBL’s deposit rates; (ii) liberalization of the banks’ deposit rates; and (iii) replacement of the banks’ multiple lending rates by a ceiling 250 basis points above the CBL discount rate (currently at 4 percent).

E. Bank Restructuring and Banking Supervision

  • Initiation of the privatization of Sahara bank.

  • Various measures to strengthen banking supervision.

F. Trade Policy

  • Decree 12 of 2005 (which allowed the import of a number of consumption and investment goods only through an agent) has been replaced by Decree 190, which limits such restrictions only to six categories of imports for which after-sale service is necessary.

B. Medium Term Prospects Under Current Policies

8. Based on WEO’s latest oil-price projections and current policy stance, Libya’s outlook for 2006–10 remains favorable and does not raise sustainability concerns. Under these projections, both the fiscal and external current account balances will continue to register large surpluses during the period 2006-10.4 However, the non-oil fiscal deficit is projected to remain substantial (31 percent of GDP). Moreover, while the oil sector is projected to grow at an annual rate of 6-7 percent, the non-oil sector’s real growth would be about 3 ½ percent per year, and non-oil private sector investment would barely exceed 2 percent of GDP, as the current pace of government reforms will fall short of generating a sustained increase in private investment and non-oil output. This projected level of growth for the non-oil sector would not be sufficient to generate employment opportunities for the rapidly increasing labor force (about 4 percent per year) (Figure 2).

Figure 2.
Figure 2.

Libya: Diversification Indicators, 2000-10

Citation: IMF Staff Country Reports 2006, 137; 10.5089/9781451823080.002.A001

III. Medium-Term Reform Strategy

9. In view of the above, Libya needs a comprehensive medium term strategy (MTS) to reform its economy and make better use of its economic and financial potential, by diversifying the economy and reducing the country’s dependency on oil. The proposed MTS aims to maintain macroeconomic stability and rationalize the use of the country’s oil wealth, accelerate the transition to a market economy, and establish a solid basis for the development of the non-oil economy. It could be implemented over a 5–6-year period in two phases of 2–3 years each.

A. Phase One: Acceleration of the Transition to a Market Economy

10. Maintaining a sound macroeconomic framework, sending a clear signal to the market on the authorities’ commitment to reform, and implementing the reform measures for which IMF technical assistance (TA) has been provided5 will constitute major steps toward recapturing the confidence of the private sector and enhancing the country’s economic potential. To that effect, during the first reform phase, priority should be given to (i) consolidating public finances and streamlining budgetary management and procedures; (ii) enhancing the role of the central bank and implementing market-based monetary reforms; (iii) removing remaining external trade restrictions; (iv) completing price liberalization and rationalizing the subsidy system; (v) developing a vigorous and coherent privatization program; and (vi) improving the business climate.

Public Finance

11. Although the overall fiscal position is projected to remain comfortable over the medium term, the structure of the budget needs to be rationalized and fiscal policy will need to be geared toward maintaining macroeconomic stability. Three categories of reforms are required to achieve these objectives, including measures to (i) bring total control of fiscal policy under the responsibility of the ministry of finance and improve transparency in government operations; (ii) enhance the quality of government spending and broaden the non-oil tax base; and (iii) improve the management of the country’s oil wealth in order to reduce the overall fiscal vulnerability to oil shocks (Box 2).

12. The first category of reforms would require consist of (i) unifying the budget by integrating the administrative, development, and subsidies budgets and all extrabudgetary operations in a consolidated budget under the responsibility of the MOF; (ii) modernizing the treasury system; and (iii) strengthening budgetary procedures.6

13. The second category of reforms could be accomplished by broadening the tax base to enhance non-oil revenue collection, and strengthening expenditure management and control to improve the efficiency of public spending. Reforms on the revenue side include simplification of the tax system, tax cuts to reduce the costs of doing business, elimination of widespread exemptions, and improvement in revenue administration (Box 2-A and B, Appendix I). On the expenditure side, efforts would focus on reinforcing the budgetary process, strengthening expenditure management and control, and improving governance. The development of Medium Term Expenditure Frameworks (MTEFs) aimed at achieving long-term fiscal sustainability, and based on stable expenditure policies with quantifiable targets to be reflected in the government’s annual budgets, is an important step in that direction (Box 2-C). Also, the MTEF could be an efficient instrument for the reallocation of resources toward basic infrastructure, social services, and capacity building which have deteriorated significantly under the sanctions.

14. The third category of reforms will need to be centered on the establishment of an oil fund in the form of a stabilization and savings fund (SSF) to reduce the impact of volatile revenue on public finances and the economy, and save part of the oil revenue for future generations (Box 2-D, Appendix II). During upswings in oil prices, the existence of the SSF could help the government better manage its fiscal operations in line with the country’s absorptive capacity. During oil price downturns, the recourse to SSF resources would help maintain expenditure stability. For these reasons, strict rules governing the SSF’s revenue and expenditure policies would need to be established and fully enforced, and performance would need to be periodically assessed. Achievement of these objectives would enable the government to implement strong macroeconomic policies necessary to achieve strong, sustainable, and noninflationary economic growth.

Box 2.

Libya: Public Finances: First Phase Reforms (2006–08)

Monetary Reforms

15. Monetary policy should aim to maintain price stability, while allowing for an adequate expansion of credit to the economy at competitive interest rates. In this context, the recent partial liberalization of interest rates represents an important first step in the CBL’s progressive move to indirect monetary management. However, for this measure to produce its full impact, it is important that the CBL stop directed credit allocation and channel all credit subsidies through the budget.7

16. The CBL should develop indirect monetary policy instruments, starting with the issuance of CDs, and the reactivation of the interbank money market as a first step toward the development of open market operations. Also, the CBL needs to strengthen the monetary policy committee responsible for key policy decisions, improve the monetary policy framework with the strengthening of its database and economic monitoring capabilities, and reinforce its daily monetary management. Other reforms are needed, including the reorganization of the CBL in line with the requirements of the new banking law and the expected transformation of the domestic economic environment. These reforms, together with the gradual restructuring of the banking system, will create the conditions for an efficient allocation of credit, essential to jump-start private sector activities and increase the potential and efficiency of the non-oil economy (Box 3-A and E).

Bank Restructuring

17. A more efficient, market-oriented and sound banking system is also needed if Libya is to succeed in reforming its economy. This will require (i) enhancing banking supervision; (ii) restructuring the banking system; (iii) modernizing the domestic payment system; and (iv) revising the legal and regulatory frameworks.

18. The CBL should continue implementing the strategic work plan to strengthen banking supervision agreed on with the Middle East Technical Assistance Center (METAC), in order to accelerate the building-up of an effective banking supervision capability. The main objectives of this plan are to upgrade and improve the onsite and offsite inspection systems, develop new key prudential regulations in line with Basel banking supervision requirements and international best practice, and strengthen capacity building (Box 3-B).

19. Bank restructuring is urgently needed. Given that the CBL currently owns the main commercial banks, the first step should be to transfer the ownership of these banks to an independent government bank restructuring agency (BRA). The CBL would remain in charge of banking supervision, but would not be directly involved in the restructuring/privatization process. Its responsibilities would include ensuring that the new private owners are fit and proper, and that the banks meet all prudential requirements. The main tasks of the BRA would be to (i) exercise ownership rights over the banks currently owned by the CBL; (ii) safeguard the banks’ value and stability during the interim period before restructuring/privatization; (iii) organize and monitor a proper due diligence for each bank; and (iv) implement a resolution strategy for each bank (Box 3-C, Appendix III).

20. The reform of the domestic payment system is another key action in support of the restructuring of the banking system.8 The CBL should continue implementing its plan to modernize the payment system through the acquisition and use of automated systems and the introduction of noncash payment instruments that it has developed with the technical assistance of the World Bank. This plan, expected to be fully implemented by 2007, will enhance markedly banks’ performance by expanding and improving service delivery and reducing costs.

21. Finally, upgrading the legal, regulatory, and institutional framework for the banking sector in order to remove existing legal and other impediments to financial deepening will also be a key element of reform. In particular, opening up the banking sector to external competition; strengthening the judicial system to speed up and improve conflict resolution; and reforming the existing legislation in the areas of accounting and bookkeeping, and bankruptcy are critical to strengthen the development of, and competition within, the banking sector, and improve financial deepening. (Box 3-D).

Exchange Rate Policy

22. The absence of pressures on the exchange rate following the implementation of current account convertibility and the increased liberalization of external trade are indications that the current exchange rate of the Libyan dinar is broadly appropriate.9 While implementation of the MTS should reinforce non-oil production and export prospects, a close monitoring of the non-oil economy’s external competitiveness would need to be done to assess the appropriateness of the exchange rate policy, including the level of the peg.10

23. By the end of the first reform phase (2008), as structural and macroeconomic reforms progress and the non-oil economy starts to develop, the authorities could consider the desirability and feasibility of switching to a more flexible exchange rate regime that would give them more room of maneuver to respond to sharp changes in oil prices.

Box 3.

Libya: Money and Banking -- First Phase Reforms (2006-08)

Trade Reforms

24. The significant progress that has been made in recent months in reforming the trade system and in simplifying the trade regimes should be maintained. In particular, all remaining state monopolies on imports should be terminated;11 the remaining 10 nonreligious and non-health-related import bans should be replaced by import tariffs; and customs procedures should be simplified in line with international standards (Box 4-A).

25. WTO accession negotiations will require Libya to adjust its trade laws and institutions to conform to basic WTO norms. A number of reforms are to be accorded high priority, including inter alia (i) ensuring that all regulations are applied equally to foreign and domestic investors; (ii) incorporating the internal taxes that are levied on imports but not on domestically supplied goods in the tariff schedule; (iii) adopting WTO rules on customs valuation; (iv) limiting import licensing; and (v) bringing Libya’s Intellectual Property Rights (IPRs) regime in line with international best practice. In order to speed up the review of all laws, regulations, and policies that affect international trade and investment, and prepare the Memorandum of the Foreign Trade Regime, Libya could seek outside technical assistance, including from the World Bank, whose experts have prepared similar documents in other countries.

Pricing and Subsidy Policies

26. Price liberalization should continue with the lifting of the remaining controls on price and profit margins. A limited number of goods, which the authorities feel are not sufficiently exposed to competition, could remain under a temporary pricing formula; the number of these goods should, however, be gradually reduced and eventually eliminated.

27. Streamlining the subsidy system, which includes explicit subsidies (mainly for food items) and implicit subsidies in the form of low consumer prices (for petroleum products, natural gas, electricity, and water) should be high on the government’s agenda.12 In this context, the government’s plan to replace explicit food subsidies with cash payments should be better explained to the public in order to gain the support of the Basic People’s Congress. Moreover, at a later stage, the case could be made to reverse the universality of these subsidies and progressively restrict them to the most vulnerable segments of the Libyan population. The issue of implicit subsidies would also need to be addressed by undertaking a comprehensive study to assess their size, and by implementing a plan to gradually reduce them overtime and limit them to the poorest segments of the population (Box 4-B).

Privatization and Foreign Direct Investment

28. Encouraging private sector development, and in particular strengthening the small and medium-sized enterprises (SMEs), is key to promoting economic diversification, an objective that will require long and sustained efforts. To that effect, priority should be given to enhancing the government’s privatization strategy, ending all remaining monopolies and other impediments to economic competition, and attracting foreign investment.

Box 4.

Libya: First Phase (2006-08) -- Other Recommended Reforms

29. The strengthening of the government’s privatization strategy will consist of (i) enacting a privatization law that would give the privatization agency a legal existence and an explicit mandate; (ii) allowing investors to acquire a significant share of capital and have corporate control over the privatized companies; (iii) subjecting public enterprises slated for privatization to hard budget constraints, and strengthening their operational independence; and (iv) basing the sale process on competitive bidding.

30. The enhancement of the privatization process would need to be supplemented by actions aimed at improving the business climate, and encouraging foreign investment and technology in all sectors. These measures include (i) amending the law on foreign investment with a view to simplifying procedures and speeding-up the approval and registration process; (ii) regrouping all tax incentives in the tax code; (iii) streamlining the activities of the Libyan Foreign Investment Board; (iv) promoting a more competitive business environment by fostering easier access to land, strengthening bankruptcy laws, and simplifying administrative procedures, in addition to the other positive effects expected from reform efforts in other sectors (Box 4-C).13

Social Policies

31. While the extent of poverty in Libya is not known, it has probably increased in the last 15 years, as a consequence of the international sanctions and the deterioration of economic conditions. In this context, one priority measure will be to undertake a comprehensive study on poverty that would facilitate the design of a social safety net to protect the most vulnerable segments of the population against potential adverse effects of the reform process. This study, for which technical assistance from the World Bank could be sought, should be carried out soon, preferably in 2006, so that its recommendations are in place early in the reform process. Also, the authorities would need to develop plans to reform the education and health systems, and World Bank assistance in this endeavor would be useful as well (Box 4-D).

Strengthening the Statistical System

32. Libya’s statistical system remains weak, resulting in serious deficiencies that affect the capacity of the government to assess economic and financial conditions and develop appropriate policies. This situation requires the development of an effective long-term program of reforms to strengthen the institutional framework and build-up a strong and reliable statistical system. Key reforms include (i) establishing a National Statistical Council to ensure coordination among data-producing agencies, discuss and approve the national statistical work program, and monitor progress in building a high quality statistical system; (ii) creating a National Statistical Agency with the authority to produce and disseminate official statistics and coordinate the national statistical work program; (iii) increasing financial resources devoted to statistical activities and strengthening human resource development and training; and (iv) participating in the Fund’s General Data Dissemination Standards (GDDS), and using the GDDS as a framework for statistical development (Box 4-E, Appendix IV).

B. Phase Two: Consolidation of the Reform Process

33. The second reform phase will need to focus on (i) advancing economic diversification and promoting sectoral reforms in the agricultural, industrial, and services (including tourism) sectors; (ii) reforming the civil service and the social security system; (iii) further strengthening the social safety net; and (iv) improving governance (Box 5). As several of these reforms require technical work and large consensus building, preparations should start early in the reform process, so that implementation can begin before the end of the first phase of reforms.14

Requirements for the Diversification of the Non-oil Economy

34. Diversification is the biggest challenge for Libya, as it implies sustained efforts to promote SMEs in order to expand the country’s non-oil production and export bases, and create jobs to meet the demands of the rapidly increasing labor force. Policies to expand the production base should be centered on (i) land reform; (ii) the continuation of efforts to improve the legal and regulatory environment, including the reform of the labor code; and (iii) the reform and consolidation of the judicial system to streamline and speed up conflict resolution, and improve the private sector’s confidence in the country’s legal institutions.

Sectoral Policies

35. Government policies in the agricultural and industrial sectors should aim to enhance economic diversification and contribute to job creation, both in urban and rural areas. Agricultural policies should focus on increasing output and productivity by reforming the land law, improving government services, and encouraging trade through improvement in the road network in rural areas. As Libya does not yet have comparative advantage in large-scale industrial activity, reform efforts should target the development of SMEs in agro-processing and other light industries, transportation, telecommunications, and tourism. Labor market reforms should focus on the removal of existing rigidities with flexibility given to enterprises to control the quality and size of their labor force.

Civil Service

36. Because the move to a market economy will result in the easing of government control on the economy and the progressive shifting of economic decision making to the private sector, there will be a need to redefine and simplify the functions of government and to reform the civil service. The reform should aim at streamlining the civil service and reforming its statutes, and adapting government wage and recruitment policies to the new domestic economic environment.

Social Policies

37. In addition to the implementation of reform plans in the education and health sectors, the authorities will need to undertake a comprehensive study of the social security system. The latter covers about three-quarters of the labor force and has started to show signs of financial distress, with persistent operating deficits that are expected to grow overtime. Based on the findings and recommendations of this study, the government will be in a position to develop a comprehensive reform package to redress the system’s weaknesses, and ensure its financial sustainability while improving service delivery.


38. Finally the success in the implementation of the reform agenda outlined above will require substantial improvement in governance, with measures aimed at enhancing transparency and accountability in government operations, promoting predictability of regulations, and reinforcing the institutional framework (efficient judiciary and strengthening of the government’s audit body).

Libya: Second Reform Phase (2008-2010): Recommended Actions

A. Economic Diversification and Sectoral Policies

  • Continue efforts to build up a sound investment climate, with strong institutions to support open markets and a level playing field for all investors, and to strengthen the rule of law.

  • Complete the implementation of the privatization program.

  • Complete the restructuring of the banking system, and develop financial markets.

  • Develop a land reform plan and revamp the existing legal framework for industrial land.

  • Reform the labor code, in order to give more flexibility to enterprises to control the quality and size of their labor force.

  • Improve government services in the agricultural sector and improve rural infrastructure.

B. Civil Service

  • Initiate a reform of the civil service consistent with the new decentralized economy.

C. Social Policies

  • Implement comprehensive reforms in the education and health sectors.

  • Develop a reform package to restructure and strengthen the social security system.

D. Governance

  • Strengthen the institutional framework: strong and independent audit body, and efficient judiciary.

C. Implementation of the MTS and Technical Assistance

39. Implementation of the MTS will require its decomposition into annual programs, including the required technical assistance (TA) for the implementation of the recommended reforms and a performance monitoring system. Regarding the provision of TA by the Fund, two options could be considered: (i) the placing of short and long-term resident advisors; and/or (ii) frequent visits from Fund’s functional departments and METAC staff. While some TA could be provided by the Fund free of charge, Libya would have to cover most of the cost of the required TA. Concerning the financing of the latter, two options are available: (i) the TA provided by the Fund would be on a reimbursement basis; or (ii) Libya could establish at the Fund a TA-sub-account that would be used to finance the TA provided and/or arranged by the Fund.

D. Other

40. It is important that the authorities establish shortly a High Inter-Ministerial Economic Team (HIT) that will be in charge of coordinating the government’s reform efforts.15 The HIT could be aided in its task by a Technical Committee (HIT/TC), charged with data collection and analysis, and technical policy formulation. The HIT/TC could also be charged with providing regular reports to the government on the country’s economic and financial situation and the implementation status of the government’s reform program. The HIT and HIT/TC could (i) include representatives of the Prime Minister’s office, the General Planning Council, and the Ministries of Finance, Economy, Planning, Energy, the CBL and the Statistical Agency; and (ii) be assisted by outside advisors.

41. In the implementation of the MTS, Libya could benefit from the experiences of other countries that have succeeded in their transition to a market economy. To that effect, in addition to detailed documentation on these experiences that could be provided to them by IMF staff, the authorities are encouraged to organize information missions in the concerned countries for the members of HIT and HIT/TC.

42. Finally, the sustainability of the reform process requires public support, which could only be achieved by engaging the Basic People’s Congress on the need and merits of economic reforms. Also, it is important that the authorities establish a permanent and constructive dialogue with the civil society, including the business community, that would enable the government to explain its economic and social objectives and, hence, increase the adherence to, and the effectiveness of, its policies.

E. Next Steps

43. The successful implementation of the proposed MTS will boost the development of the non-oil sector, and lay the groundwork for the second critical transition for the Libyan economy, from an oil economy to a more diversified economy.

Appendix I Revenue Administration1

A. Introduction

1. Libya’s decision to open up and liberalize its economy will have a significant impact on the tax and customs departments. In particular, the recent decision of the General People’s Congress (GPC) to reduce the government’s budget reliance on oil resources will require major efforts to reshape and strengthen revenue administration.2

2. The current activities of the tax and customs departments are characterized by a wide network of regional and local operations, with most activity concentrated in the major urban centers. However, revenue collections are weak and among the lowest in the Middle East, reflecting major shortcomings in tax administration (Box 1).

Libya: Tax and Customs Administration—Current Status

Tax Administration

  • Widespread tax evasion; no taxpayer education, no information dissemination.

  • No registration data base, no taxpayer identification number (TIN).

  • Outmoded administrative tax assessment processes; almost no computerization; no uniform internal procedures and systems; lack of information systems; lack of skilled and trained staff.

  • No clearly defined organizational structure; degraded physical infrastructure and equipment.

Customs Administration

  • Extensive exemptions; no automation and computerization of processes.

  • Procedures that do not comply with WTO requirements; slow clearance of imports; heavy and redundant control procedures; no management information systems.

  • Limited capacity to improve current performance with existing skills and procedures.

  • Poor accommodation and equipment.

B. Reform Priorities for Tax Administration

3. The tax department needs to undergo an extensive modernization program. The sequencing of reforms must be carefully determined and take into account the tax department’s capacity constraints, the ability of staff and public to adjust to the reforms, and the need to ensure the effective management of current operations. A successful start in the implementation of reform is likely to facilitate implementation of later stages of the reform program and may impact revenue mobilization. The main steps in the proposed reform process are as follows:

Establish a steering committee to oversee the reforms.

Implement key tax policy reforms to establish a strong policy foundation on which to modernize tax administration.

Restructure the tax department: On a phased basis, beginning with headquarters, implement a function-based organizational structure. Restructuring at regional level will require moving from a tax-type structure (where each type of tax is administered by a separate division performing all administrative functions) to separate divisions for each major function (e.g., audit, taxpayer services, and so on).

Establish a large taxpayer office (LTO) in Tripoli to secure tax revenues and provide appropriate services to the large taxpayers. The LTO could also be used as a vehicle for introducing modern tax administration practices and systems. The LTO will need to be extended to cover other regions at a later stage.

Introduce self-assessment procedures and systems covering all key functional areas, including identification and registration of taxpayers; processing of returns and payments; collection enforcement; taxpayer services; taxpayer audits; and internal support systems. These new procedures and systems should be applied first to the largest taxpayers, and extended progressively to other categories of taxpayers.

Strengthen human resource development and training: Recruit, develop, and train staff in headquarters and regions.

Upgrade tax office buildings and equipment.

Develop necessary legislation: This includes enacting legislation to support introduction of self-assessment procedures. In the longer-term, consideration should be given to introducing a tax procedures code to consolidate key administrative provisions for all taxes.

C. Reform Priorities for Customs Administration

4. The customs department (CD) is in need of a deep reform of its procedures and systems. The latter are necessary if the CD is to comply with the requirements of the new, market-based economy that the authorities are trying to build. Implementation of these reforms will require new working methods, new skills, substantial training, and external technical assistance. The main steps in the proposed reform process are as follows:

Establish a high-level reform steering committee to monitor and manage the reform program. The committee should include representatives from tax and other stakeholder departments.

Develop a plan to communicate the vision of a modernized customs department to internal and external stakeholders.

Implement key customs policy and legislation reforms: implement IMF recommendations on tax policy; and amend the new customs law and introduce provisions that will enable new customs procedures, for example acceptance of electronic declarations and advance manifests.

Introduce risk-based controls: replace the current heavy and inefficient clearance system based on full documentary and physical examination of consignments with a more selective approach that targets customs resources to the areas of highest risk.

Introduce automation to customs import processing: Consider implementing internationally-used customs-processing IT application that could be adapted to meet the specific needs of the customs administration. In particular, replace the current systems by an integrated system that will process declarations and provide the operational and management information support necessary for a modern customs service.

Change procedures to meet WTO obligations: Reform the current customs valuation procedures, and adopt WTO requirements and recommended policies in this area. In particular, establish a post clearance audit unit whose purpose will be to review selected transactions, undertake audits, and issue reassessments where undervaluation is detected.

  • Strengthen human resource (HR) development and training.

  • Improve office buildings and equipment.

  • Develop management information systems and performance measures.

Appendix II A Stabilization and Savings Fund For Libya

A. Background

1. Libya’s budget is highly dependent on oil, which is estimated to have contributed about 80 percent to government revenue in 2000–05. Given the volatility and unpredictability of oil prices and their impact on fiscal cash flows, there is a strong macroeconomic case for Libya to save part of this wealth both to achieve long-term fiscal sustainability and for intergenerational equity. This could be done through the establishment of a stabilization and saving fund (SSF), the proper design and implementation of which are crucial if the above objectives are to be achieved. The purpose of this appendix is to discuss the situation of the Oil Reserve Fund (ORF) in Libya, and provide some suggestions for the design of an SSF.1

B. Libya’s Experience with the ORF

2. The ORF was established in 1995 with the objectives of (a) mitigating the impact of the short-term volatility of oil prices on government expenditure, and (b) shielding the budget from political pressure to spend when oil revenue is high. However, to this day, the ORF’s status remains unclear as no legislation has been enacted stating the ORF’s purpose, its operating principles, the agency that controls it, and the ORF’s relations with the budget. In practice, the ORF is not integrated in the budget, and its operations are governed by an accumulation rule—the ORF is the recipient of all oil revenues above a reference oil price set in the budget law—and the government has full discretion regarding the ORF’s spending decisions. In 2005, the authorities decided to eliminate all extrabudgetary spending from the ORF.

3. Libya’s experience with the ORF does not seem to have been consistent with the two main objectives assigned to it. Indeed, available information indicates that the non-integration of the ORF in the budget and the absence of an oversight authority have complicated fiscal management, led to an inefficient allocation of resources, and contributed to increased lack of transparency in government operations. Overall, the ORF has not constrained the government’s fiscal policy in any way: it has not helped stabilize government expenditure, nor has it performed any long-term savings function.

4. Available data summarized in Table 1 indicate that prior to the establishment of the ORF in 1995 and during the first two years of its existence, Libya pursued a rather prudent fiscal policy. In 1992–94, responding to a sharp drop in oil revenues (by some 12 percentage points of GDP), the authorities reduced the non-oil fiscal deficit by more than 3 percentage points of GDP and managed to contain the overall fiscal deficit at about 3 percent of GDP. In 1995–96, although oil revenues more than doubled in terms of GDP to about 27 percent of GDP, the non-oil deficit increased only by about 2 percentage points of GDP. However, starting in 1997–98, there was a break in the government’s fiscal discipline, which resulted in increased recourse to the ORF to finance discretionary extrabudgetary spending; the latter averaged some 6 percent of GDP in 1999–02, but increased to about 10 percent of GDP in 2003–05. These developments have weakened the ORF’s intended stabilization purpose and its long-term savings objective. They have also raised serious transparency issues, since large amounts of the ORF’s resources have been spent in off-budget operations, on most of which no information is available.

Table 1.

Libya: Main Fiscal Indicators, 1990-2005

(In percent of GDP, unless otherwise specified)

Source: Libyan authorities; and staff estimates.

NOR=Nonoil revenue.

Chart 1.
Chart 1.

Libya: Oil Revenues and Government Expenditure, 1990–2005

(In percent of GDP)

Citation: IMF Staff Country Reports 2006, 137; 10.5089/9781451823080.002.A001

5. The situation did not improve much in 2005. Indeed, while the government increased the oil reference price to US$26 (from US$22 in 2003-04) and decided to refrain from extrabudgetary spending, it allocated off-budget LD 3 billion of ORF resources to specialized banks, mainly to finance an ambitious housing program and provide subsidized loans to private farmers and entrepreneurs.2 Also, the government established a new extrabudgetary fund, the Investment Fund (IF), further complicating fiscal policy, already exacerbated by the existence of three different budgets (current budget, development budget, subsidy budget) managed by three different ministries (the ministries of finance, planning, and economy), and a multitude of off-budget operations.3

C. Why an SSF for Libya

6. There are many factors that would justify the establishment of an SSF in Libya. These factors include: (i) the high dependence of the budget on—and hence its vulnerability to—volatile oil revenues, which makes a stabilization fund highly desirable; and (ii) the limited absorptive capacity of the Libyan economy, the willingness of the authorities to reduce progressively the public sector’s share in the economy, the need to shield the economy against Dutch disease, and prudence and intergenerational equity, all of which indicate the need for a saving function.

7. The two main objectives of an SSF are: (i) to reduce the impact of volatile revenue on public finances and the economy; and (ii) to save part of the oil revenue for future generations. During upswings in oil prices, the existence of the SSF could help the government resist spending pressures by formally limiting the resources available to the budget, thus dampening inflationary pressures and containing the potential appreciation of the exchange rate. During oil price downturns, the recourse to SSF resources would help maintain expenditure stability. These objectives would enable the government to implement strong macroeconomic policies, and thereby achieve strong non-inflationary sustainable economic growth.

8. It has to be stressed, however, that the establishment of an SSF as such cannot substitute for the commitment of the government to pursuing a sound fiscal policy. In the case of Libya, an oil producing country, this means a sensible medium-term budget framework (MTBF) that focuses on the non-oil fiscal deficit. Without it, fiscal policy will fail with or without an SSF. Such a framework could help the government design multi-year expenditure plans based on stable expenditure policies, and focus on the requirements of long-term fiscal sustainability, which in turn could foster increased political support in favor of saving part of the oil revenue. More concretely, under this scheme, the government will first target a non-oil fiscal deficit, and then derive the level of the budget oil revenue—that is the amount of oil revenues to be earmarked to the budget—that would balance the budget.

D. The Establishment of the SSF

9. The SSF should be established by a comprehensive law that covers all the issues relevant to the success of the new fund.4 The law should:

•Include a clear definition of the purpose and objectives of the SSF, in order to facilitate performance evaluation and swift intervention if corrective action is needed, and its location.

•State the nature and source of the SSF’s resources, and the rules governing the accumulation and use of these resources. In particular, reference in the law to (i) a contingent budget rule for accumulation in the SSF can mitigate pressure on the government to spend and facilitate the political acceptance of safeguarding part of the country’s oil wealth for future generations; and (ii) a budget rule for withdrawal from the SSF would clarify the relations with the budget, including the instances when withdrawal from the SSF for budget financing purposes is allowed.5

•Address the issues related to the integration of the SSF in the fiscal framework, including the need to integrate the SSF in the budget process in a coherent manner that would preserve the unity of the budget and keep control of fiscal policy under the responsibility of the ministry of finance (MoF). In particular, all transfers to and from the fund should appear as explicit line items in the budget.

•Stipulate guidelines for the establishment of operating and asset management regulations for the SSF.

•Address the governance, transparency, and accountability issues related to the management of the SSF. The roles and responsibilities for managing the fund, the requirements for reporting, auditing (both internal and external), and evaluating performance (both management and financial), and the sanctions if rules and procedures are not followed should also be stated in the law.

E. Operating and Asset Management Regulations of the SSF

10. The operating and asset management regulations of the SSF should aim to preserve the fund from risky investments, or from being subject to poor governance, while ensuring full transparency in its operations. In this context:

•There is a strong case for the SSF’s resources to be invested abroad. Such an option could be justified by the need to sterilize these resources and hence avoid the destabilizing effect of their investment in domestic financial assets, through transmission of oil revenue volatility to the economy. Also, the noninvestment of the SSF’s assets domestically would be consistent with the government’s divestiture strategy and its strong willingness to enhance the role of the private sector in the economy, and the need to preserve the competitiveness of the non-oil economy.

•The SSF’s investment policies should be prudent. The SSF should not be permitted to borrow or to lend, and its assets should not be used as collateral for government borrowing.

•The SSF’s budget should be prepared annually and integrated together with the regular budget 6 in a consolidated budget that would be submitted to parliament for approval. The MoF could be charged with the responsibility of preparing the SSF’s budget, and ensuring its consistency with the regular budget and the overall macroeconomic objectives.

•The operating regulations of the SSF should provide for a mechanism that would allow withdrawals from the SSF to bridge the budgetary gaps that would result from budget oil revenues falling below target.

•Full transparency in SSF operations would require regular and frequent disclosure and reporting, as well as regular audits, preferably by independent agencies of international repute, with reports presented to parliament and the public on a timely basis.

11. Implementation of the proposed reform could require twelve to eighteen months and be completed by the time of the preparation of the 2008 budget, hence giving the government the opportunity to prepare and submit to Parliament a consolidated 2008 budget, including the regular budget and the SSF’s budget.

Appendix III Bank Restructuring Strategy

A. Background

1. The Libyan banking sector remains predominantly in the hands of the public sector, which represents 90 percent of Libya’s banking business. The government, through the Central Bank of Libya (CBL), fully owns three banks—the National Commercial Bank, Umma Bank, and Jamhouria Bank—and has a majority share in the capital of Wahda Bank (87 percent) and Sahara Bank (82.7 percent, before the start of the privatization). The private sector owns four banks and 48 small regional banks.

2. The banking sector is characterized by substantial excess liquidity and a high ratio of nonperforming loans (NPL), reflecting a limited financial deepening and an inefficient allocation of resources, resulting from a monetary policy dominated until recently by directed credit and interest rate controls.1 Also, it suffers also from the unfavorable business climate, which constrains private sector development, and the lack of expertise and modern banking skills.

B. Fund Staff’s Recommended Approach2

3. Restructuring Libya’s banking system is urgently needed and will require a comprehensive and properly sequenced program of reforms, and enhanced expertise. These reforms include the development of institutions, markets, and instruments; the building-up of an effective banking supervision capability; and changes to the legal and regulatory framework.

4. The transfer of direct ownership of the state-owned commercial banks to a Bank Restructuring Agency (BRA) is key to the success of the proposed approach. The BRA’s mission will be to serve as the owner of the public commercial banks during an interim period of a minimum of two years, but not to exceed five years. It will have the responsibility to appoint the boards and key managers of the banks, and issue general instructions. The BRA should have a clear written mandate and a board composed mainly of independent persons. In particular, its chairman should be a widely respected figure from the private sector or academia. The BRA should also be financially independent, with a budget that could be funded through a levy on the banks it manages. It should be given authority to hire the required expertise, both domestically and internationally, from consulting, accounting, and law firms, and investment banks.

5. Enforcement of adequate safeguards will be necessary during the interim period. The BRA should ensure that the substantial liquidity held by the commercial banks is carefully safeguarded before a decision is made about the future of each bank.

6. During the interim period, the concerned banks will need to undergo a process of operational restructuring that could start just after the establishment of the BRA, in parallel with the safeguards mentioned above. This process should include the introduction of modern techniques for interbank transfers and risk management and control, as well as merging or closing unprofitable branches and starting to consolidate redundant staff.

7. A proper due diligence will need to be undertaken, including at least two components: an audit of the financial statements based on internationally understood valuation norms; and an operational review to assess procedures and systems, including information technology. A preliminary assessment indicates that all public commercial banks have substantial bad assets in addition to their low operational efficiency. The CBL should initiate a due diligence process of all public commercial banks. Once the banks are transferred to the BRA, this agency should continue monitoring the due diligence.

•International best practices require a due diligence for public banks as a first step because, depending on the findings, there could be several possible resolution approaches, privatization being only one of them.

•Since external audits are now required by the new Banking Law, it is suggested that they be carried out for each bank’s last fiscal year; be performed jointly by two accounting firms, a local one and an international one; and be based on International Financial Reporting Standards (IFRS). This should apply also to Sahara Bank, regardless of the results of the privatization currently underway.

•The second component of the due diligence process—the operational review—should start at the same time as the audit, and be performed by relevant international firms.

8. The selection of a resolution strategy for each bank should follow the completion of the due diligence, and be made by the BRA, in coordination with the board and the management of the concerned bank. In doing so, the BRA could request the assistance of relevant specialized international firms. It is unlikely that the same solution will fit all banks. For each bank, all options should be considered, including operational and financial restructuring followed by a privatization, with or without the participation of foreign investors; merger; a split between good assets and bad assets; and even voluntary liquidation, after repayment of all liabilities. Any privatization strategy should also include which banks to privatize, when, and in what order. Once adopted, the strategy should be made public.

9. Banks’ financial restructuring, including management of bad assets, will aim to improve their financial structure to make them financially viable: solvent, profitable and liquid. For a weak public bank, this often includes removing bad loans and replacing them with good assets to allow the bank to focus on its normal business. In some cases, it might be appropriate to go further and split the bank into two parts, a good one and a bad one. Another BRA responsibility will be to take over and manage any bad assets removed from the banks as part of their financial restructuring, and to maximize their value.

10. The transfer of responsibility for each bank to its new owners and managers will be the last step. At this stage, the BRA’s responsibility for each bank can end. While the general objective is to complete the restructuring process expeditiously, the absorptive capacity of the potential investors and the level of interest of the targeted buyers, domestic or foreign, should also be taken into account to determine the timetable for the completion of this operation.

C. Additional Reform Measures

11. Reform the corporate and commercial laws. It is necessary to identify the reforms needed to improve the legal framework for the corporate sector and the financial markets. In particular, the government should repeal the legal provision that limits private ownership to 4 percent of capital for banks (and 5 percent for companies), which prevents the emergence of a leading shareholder. Also, the government should introduce a law that makes the share registry of larger private companies, including banks, publicly available, and treats local and international investors equally.

12. Develop a plan to open the banking sector to foreign banks. International banks will introduce advanced systems and techniques, and increase competition. The demonstration effect will be considerable domestically, and the signaling effect--that Libya is now open for business with the rest of the world--will be particularly strong.

13. Accelerate capacity-building in banking supervision, which is urgent, and will require substantial technical assistance. Also, the supervision of the specialized banks3 by the CBL should start immediately, as required by the new law, and the consolidation of the 48 regional banks into a single entity should be completed expeditiously.

14. Improve the environment for banking activities. The most important reforms include:

  • Further liberalizing interest rates.

  • Adopting the IFRS both for banks and other large corporate entities.

•Establishing a privately-owned Tripoli Stock Exchange (TSE). The TSE should be a separate legal entity, owned and controlled by the participants in the financial market. The privatization of Sahara Bank will provide the opportunity to start trading on a modest scale.

•Accelerating the modernization of the payment system, in order to enhance banks’ performance by expanding and improving service delivery and reducing costs.

Appendix IV Statistical Reforms1

A. Background

1. Libya needs a professionally operated statistical system to support its economic reforms, bolster economic policy decisions, and monitor the well-being of its population. At present, the data producing agencies work largely in isolation from one another, and core datasets are weak.

2. National accounts statistics follow the outdated 1968 System of National Accounts (1968 SNA) framework and are under the responsibility of the Ministry of Planning (MoP). Their compilation is hampered by ineffective legal and institutional arrangements, the absence of human resources, and lack of an efficient data collection program. Inadequate interagency coordination and methodological weaknesses are other impediments.

3. Government finance statistics are compiled by the Ministry of Finance (MoF), but overall responsibility for producing these data is not clearly established. At present, there is no comprehensive set of data that consolidate the three government budgets.2 Other shortcomings include the misclassification of expenditure items; non-coverage of the social security, social solidarity, and employment funds; and the non-recording of the Oil Reserve Fund (ORF) operations.

4. Monetary statistics are compiled by the Central Bank of Libya (CBL), but their institutional coverage is incomplete. In addition, weaknesses in the valuation and accrual accounting practices in the source data limit the reliability of the data and generate inconsistencies with balance of payments statistics.

5. The CBL has a well-established practice for collecting, processing, and compiling balance of payments statistics, but has no legal authority to do so. There are no discussions or cross-checks on balance of payments data with other institutions. Therefore, inconsistencies in methodological, recording, and valuation practices are not addressed by data producers, and formal regulations about the confidentiality of data are absent.

B. Adopt an Overall Vision for Statistical Development

6. The authorities’ expressed commitment to strengthen the statistical system is a basic condition for compiling official statistics in line with international standards. To that effect, a National Statistical Council should be created to discuss and approve the national statistical program and to monitor progress in building a high quality statistical system within the framework of the IMF General Data Dissemination System (GDDS). The data producing agencies must work together to ensure that data are consistent across datasets.

7. The GDDS, which is used in over 80 countries, offers a comprehensive approach and a vision to build official statistics. GDDS spells out international best practices in statistics and allows participants to set progress, in achieving these objectives, according to their own pace and through self-defined strategies. GDDS participation will serve Libya well.3

C. Create a Coordination Mechanism Among Data Producing Agencies

8. The data producing agencies must work together to ensure that data are consistent across datasets. A National Statistical Council should be created to discuss and approve the national statistical program, and to monitor progress in building a high quality statistical system within the framework of the GDDS.

D. Strengthen Real Sector Statistics

9. Real sector statistics are needed to monitor and analyze economic growth, business activity, inflation, labor market developments, household income and wealth, and other social developments. These statistics are closely related to other macroeconomic datasets and are derived from censuses, household and economic surveys, and administrative data sources.

10. The compilation of more accurate and reliable national accounts statistics should be given a high priority, and appropriate resources must be allocated. Compilation and dissemination of national accounts statistics should be combined into one organizational unit with other real sector statistics. This would allow integration with other data sources and the realization of efficiency gains. In the present circumstances, the Census and Statistical Department of the National Information, Documentation, and Telecommunication Authority (NIDA) appears to be the obvious choice for becoming the central unit for real sector statistics.4

E. Establish Government Finance Statistics

11. Government finance statistics are needed to determine the fiscal stance in a transparent way, to inform fiscal policy decision, and assess fiscal sustainability and vulnerability. The establishment of government finance statistics should be reinforced and the overall responsibility for fiscal statistics centralized in the MoF. The authorities should adopt the Government Finance Statistics Manual (GFSM 2001), which harmonizes the system used to report fiscal statistics with other macroeconomic statistical systems and most notably with the 1993 System of National Accounts (1993 SNA).

F. Develop External Sector Statistics

12. While the Libyan statistical legislation does not assign any responsibility to the CBL for the collection, compilation and dissemination of balance of payments statistics, the CBL has a well-established practice through the activities of the Research and Statistics Department (RSD). A Balance of Payments Division within the RSD and additional staff for this division would permit a formal designation of responsibilities and a clear separation of tasks for the compilation of a comprehensive set of external sector statistics in line with the Balance of Payments Manual, fifth edition (BPM5).

G. Strengthen Monetary Statistics

13. The format of monetary statistics compiled by the CBL’s RSD is broadly consistent with the structure of the Monetary and Financial Statistics (MFSM)’s Depository Corporations Survey. However, there is a need to broaden the institutional coverage and improve the valuation and accounting practices in the source data, in order to ensure greater consistency between monetary and balance of payments statistics.

H. Recommendations

14. Short Term

•Create a National Statistical Council to strengthen collaboration among agencies and to support the (future) national statistical agency.

•Amend the Banking law in order to set out provisions for mandatory reporting of data for BOP statistics.

•Move responsibility for national accounts statistics to the Census and Statistical Department. Start the process of strengthening national accounts statistics by creating 6-10 additional permanent staff positions.

•Establish a government finance statistics unit with 4-6 staff at the MoF, responsible for compiling a comprehensive set of fiscal data consistent with the GFSM 2001 framework.

•Create a balance of payments division in the Central Bank of Libya and appoint sufficient staff for this division.

15. Medium Term

•Establish a National Statistical Agency with authority to produce and disseminate official statistics and to coordinate the national statistical program.


Table 1.

Libya: Summary of Real Sector Statistics, 2000–05

Sources: Libyan authorities; and Fund staff estimates.
Table 2.

Libya: Sectoral Distribution of GDP at Current Prices, 2000–05

Source: Ministry of Planning, and staff estimates.
Table 3.

Libya: Sectoral Distribution of GDP at Constant 1997 Prices, 2000–05

Source: Ministry of Planning; and staff estimates
Table 4.

Libya: Gross Fixed Capital Formation by Economic Sector, 2000–05

(In millions of Libyan dinars at current prices)

Source: Ministry of Planning.

Includes Great Man-Made River project.

Table 5.

Libya: Labor Force and Employment, 1999–20041/

Source: Libyan authorities.

The GMR is included in agriculture and construction.

For 2004, the growth rate is over 2001.

Table 6.

Libya: Consumer Price Index (End of Period), 2000–05

(1999 = 100)

Source: Census and Statistics Department.
Table 7.

Libya: Consumer Price Index (Average), 2000–05 1/

(1999 = 100)

Source: Census and Statistics Department.

Based on a 1992 household expenditure survey.

Table 8.

Libya: Retail Prices of Selected Items in Tripoli, 2000–05

(In Libyan dinars)

Source: Census and Statistics Department.
Table 9.

Libya: Great Man-Made River Financial Operations, 2000–04

(In millions of Libyan dinars)

Source: Great Man-Made River Authority.
Table 10.

Libya: Domestic Production of Petroleum Products, 2000–04

(In thousands of metric tons)

Source: National Oil Corporation.
Table 11.

Libya: Domestic Consumption of Petroleum Products, 2000–04

(In thousands of metric tons)

Source: National Oil Corporation.