Special edition: Libya

Special edition: Libya

Until the 1950s, Libya was one of the poorest countries in the world, above all as a result of the infertility of its land. But in 1959 its economy was transformed with the discovery of its first hydrocarbon reserves, thus starting production activities at Libyan oil fields, which were nationalised in 1970. These developments triggered exponential GDP growth to the point that Libya in 1977 had the highest pro capita annual income in Africa.

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Oil is therefore the foundation of Libya’s economic development. Now the second-largest producer in Africa after Nigeria, the oil is almost all of its exports. Under Gaddafi, oil and gas generated 70% of Libyan GDP, 95% of exports and 90% of government income.

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After the death of Muammar Gaddafi – a leader who led the country for 42 years as a tribal leader and without giving his rule a real structure – Libya fell into chaos and a bloody internal conflict: battling city-states, loosely formed militias, two governments and a raft of external interests. Outside of the country, no one bothered much about the internal Libyan conflict until ISIS arrived in the country and found little resistance from other militias, at this point all but worn out. Meanwhile, with the slump in crude oil prices from $110 to $55 a barrel and Libyan output cut by half, oil’s contribution to GDP, exports and state income were proportionately reduced. The economy today is half of what it was before the conflict, without counting the damage caused by ongoing warfare.

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Italy plays a vital role for the Libyan economy given that it depends to a large extent on revenues from oil and gas produced by Eni, totalling about 200,000-250,000 barrels equivalent of oil a day. Countries like Italy and France are not only concerned about ISIS but also the exodus of migrants, their numbers swollen by the Libyan war, making their way on a daily basis to our shores.

To learn more about the situation in Libya, we have selected a series of articles and features:

 

Country insights Africa (BP Statistical Review of World Energy)

Libyan oil pipeline sabotaged, gunmen storm Sirte offices (Reuters)

Political instability in Lybia (Council on Foreign Relations)

Country profile Lybia (Tony Blair Foundation)

Libya oil, gas and security overview – Security in Africa (Think Security Africa)

Libya’s Oil Sector Is In Freefall As The Country Collapses (Business Insider)

Libya overview (IEA)

Libya: Oil Giant, Collapsing State (The National Interest)

Libya instability, disruption of oil production – price for NATO intervention (RT)

Foreign Policy, Archive Libya (Foreign Policy)

With Oil Fields Under Attack, Libya’s Economic Future Looks Bleak (npr)

As Libya spirals toward chaos, the west has financial levers to stop the fighting (Forbes)


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