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Martin Kobler, head of the UN Support Mission in Libya, told the Security Council 13 September 2016 that oil production was down to about 200,000 barrels per day, compared with 1.4 million barrels after the 2011 revolution that ousted former dictator Moammar Gadhafi. The country is running a 75 percent budget deficit, Kobler added. He said Libya would not be able to rely much longer on its foreign reserves. Oil production must resume and expenditure must be commensurate to the needs of the country, he said. To do so, it is imperative that the pipelines open, Libyan financial institutions become unified, and a national budget is approved.

While the duplication of the National Oil Corporation and the control of oil facilities by armed groups had a significant impact on the countrys primary source of revenue, by 2016 no illicit export of crude oil has been reported by the Libyan authorities to the Security Council Committee established pursuant to resolution 1970 (2011) concerning Libya, nor had any evidence of such exports been provided.

The Libyan financial system has been weakened by the competition between the two rival Governments over the control of State financial institutions. The policies of the Central Bank in 2015 reflected its physical proximity to Operation Fajr and the General National Congress, showing a more lenient attitude towards the priorities of Tripoli. Subsequently, the interim Government stepped up its attempts to gain control of the financial system, further undermining the unity of the institution. By 2016 the state of the financial system was no longer tenable and it urgently needed oversight from, and protection by, the Government of National Accord.

As in the case of other national institutions, there are rival manifestations of both the Libyan Investment Authority and the Libyan Africa Investment Portfolio, based in Tripoli and Malta. Panel sources indicate that it is those under the control of the interim Government of Libya, based in Malta, that have access to the assets of those wealth funds.

The eleven-month long blockade of Libyas oil facilities by federalist and tribal militias brought the countrys oil output to stop, depressing GDP by an estimated 14 percent in 2013 and a projected 20 percent in 2014. Prices remained largely unaffected due to predominance of imports in the consumer basket. The large fiscal and trade balances of 2012 turned into deficits. The government is expected to post a deficit in excess of 50 percent of GDP in 2014 with the current account deficit exceeding 27 percent of GDP.

Libya presented an increasingly challenging investment climate. While Prime Minister Zeidan strongly advocated for greater foreign investment, by late 2013 growing concerns about the governments control over armed groups across the country and its willingness to enact security sector reform detered companies seeking investment opportunities. Questions also remained about the governments review of contracts signed prior to the revolution that began in February 2011 and whether or not these outstanding contracts will be honored.

In 2012, the Libyan economy experienced an impressive economic recovery and was expected to continue recovering in 2013, with the rapid recovery of oil production and exports, after the war of liberation. After contracting by almost 60 percent in 2011, the year of the uprising, the economy grew by 120 percent in 2012, thanks to oil output returning almost to where it was before the rebellion erupted. The International Monetary Fund forecast a 16 percent growth rate for 2013 and the same for every year until 2018.

The size of the Libyan economy was estimates of $ 80 billion in 2010. The Libyan government took several measures to strengthen the role of the private sector, it decreased the interest rates to encourage the demand for loans by the private sector, and encouraged private investment both domestic and foreign, and put a new tax law into force, and canceled tariff concessions for public institutions, and cut taxes on imports.

Libya's economy is heavily dependent on hydrocarbons. Because of economic policies pursued during the 42 years of Col. Moammar Gadhafis dictatorship, Libya lacks a diversified economy and has only a fledgling private sector. Half of all of those in the labor force are on the government payroll. According to the International Monetary Fund (IMF), oil and natural gas account for nearly 96% of total government revenue and 98% of export revenue in 2012. Roughly 79% of Libya's export revenue comes from crude oil exports, which brought in around $4 billion per month of net revenues in 2012. EIA's OPEC Revenues Fact Sheet has net oil export revenues also at $4 billion per month from January to June 2013. During the 2011 civil war, the drop in oil and natural gas production led to an economic collapse, and real GDP contracted by 62% for the year.

Following the Paris Conference on Libya, held on 1 September 2011, the United Nations, together with the European Union, the World Bank, the International Monetary Fund (IMF) and other international partners, agreed with representatives of the National Transitional Council on a framework for a coordinated needs assessment to assess transitional requirements. The assessment would be conducted under the leadership of the National Transitional Council, in accordance with principles of post-conflict needs assessment agreed among the United Nations, the European Union and the World Bank, and would be undertaken in an accelerated manner. The assessments of transition requirements would be structured around sectors, each of which would be led by a National Transitional Council focal point with the support of a designated lead international organization. The objective of the assessments would be to define critical transitional needs and responses, in line with timelines defined by Libya, and to ensure coherent and demand-driven international engagement.

The government dominates Libya's socialist-oriented economy through complete control of the country's oil resources, which account for approximately 95% of export earnings, 75% of government receipts, and 30% of the gross domestic product. Oil revenues constitute the principal source of foreign exchange. Much of the country's income has been lost to waste, corruption, conventional armaments purchases, and attempts to develop weapons of mass destruction, as well as to large donations made to developing countries in attempts to increase Qadhafi's influence in Africa and elsewhere. Although oil revenues and a small population give Libya one of the highest per capita GDPs in Africa, the government's mismanagement of the economy has led to high inflation and increased import prices, resulting in a decline in the standard of living.

Libya's gross domestic product grew in 2001 due to high oil prices, the end of a long cyclical drought, and increased foreign investment following the suspension of UN sanctions in 1999. Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange constrain growth. Import restrictions and inefficient resource allocations have caused periodic shortages of basic goods and foodstuffs.

Although agriculture is the second-largest sector in the economy, Libya depends on imports in most foods. Climatic conditions and poor soils severely limit output, while higher incomes and a growing population have caused food consumption to rise. Domestic food production meets about 25% of demand. The U.S. Government has prohibited the importation of Libyan crude oil into the United States since March 1982, as well as strict controls on U.S.-origin goods intended for export to Libya. On January 7, 1986, the U.S. imposed economic sanctions against Libya which broadly prohibit U.S. persons from engaging in unauthorized financial transactions involving Libya, including, in part, the following: the export to Libya of all goods, services, or technology; the import of goods or services of Libyan origin; engaging in the performance of a contract in support of an industrial, commercial, or government project in Libya; or dealing in any property in which the Government of Libya has any interest. The economic sanctions also prohibit U.S. persons from working in Libya.

Although UN sanctions were suspended in 1999, foreign investment in the Libyan gas and oil sectors has been severely curtailed due to the United States' Iran and Libya Sanctions Act (ILSA), which caps the amount any foreign company can invest in Libya yearly at $20 million (lowered from $40 million in 2001).

Libya is hoping to reduce its dependency on oil as the country's sole source of income, and to increase investment in agriculture, tourism, fisheries, mining, and natural gas. Libya's agricultural sector is a top governmental priority. Hopes are that the Great Man Made River (GMR), a five-phase, $30-billion project to bring water from underground aquifers beneath the Sahara to the Mediterranean coast, will reduce the country's water shortage and its dependence on food imports.

At the 2003 General People's Congress (held in Sirte from 6-13 June), Qadhafi signalled that he was prepared to consider economic reform of the country by appointing the reform-minded Shukri Ghanem as the new Prime Minister. He urged Libya to take advantage of the opportunities of globalisation and for the first time suggested that Libya should adopt 'capitalist' policies.

On September 20, 2004, President George W. Bush signed an Executive Order ending economic sanctions imposed under the authority of the International Emergency Economic Powers Act (IEEPA). U.S. persons are no longer prohibited from working in Libya, and many American companies in diverse sectors are actively seeking investment opportunities in Libya. In 2008, the government announced ambitious plans to increase foreign investment in the oil and gas sectors to significantly boost production capacity from 1.2 million barrels per day (bpd) to 3 million bpd by 2012, a target that the National Oil Corporation now expects to slip to 2017. The government is also pursuing a number of large-scale infrastructure development projects such as highways, railways, air and seaports, telecommunications, water works, public housing, medical centers, shopping centers, and hotels.

Libya faces a long road ahead in liberalizing the socialist-oriented economy, but initial steps, including applying for World Trade Organization (WTO) membership, reducing some subsidies, and announcing plans for privatization, are laying the groundwork for a transition to a more market-based economy. The non-oil manufacturing and construction sectors, which account for more than 20% of GDP, have expanded from processing mostly agricultural products to include the production of petrochemicals, iron, steel, and aluminum. Climatic conditions and poor soils severely limit agricultural output, and Libya imports about 75% of its food. Libya's primary agricultural water source remains the Great Manmade River Project, but significant resources are being invested in desalinization research to meet growing water demands. Government officials have also indicated interest in developing markets for alternative sources of energy, pharmaceuticals, health care services, and oil production byproducts.

The severe drop in oil prices from peaks in late 2008 caused the government to abandon several economic reform projects and revise the budget downward. The expected weakness in world hydrocarbon prices throughout 2009 constrained Libyan economic growth and further delayed infrastructure development projects. Oil revenues constitute the principal source of foreign exchange. Much of the country's income has been lost to waste, corruption, conventional armaments purchases, and attempts to develop weapons of mass destruction, as well as to large donations made to developing countries in attempts to increase Qadhafi's influence in Africa and elsewhere. Although oil revenues and a small population give Libya one of the highest per capita GDPs in Africa, the government's mismanagement of the economy has led to high inflation and increased import prices. These factors resulted in a decline in the standard of living from the late 1990s through 2003, especially for lower and middle income strata of the Libyan society.

Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange constrain growth. Import restrictions and inefficient resource allocations have caused periodic shortages of basic goods and foodstuffs.

On September 20, 2004, President George W. Bush signed an Executive Order ending economic sanctions imposed under the authority of the International Emergency Economic Powers Act (IEEPA). Under the 2004 order, U.S. persons were no longer prohibited from working in Libya, and many American companies in diverse sectors actively sought investment opportunities in Libya. In 2008, the government announced ambitious plans to increase foreign investment in the oil and gas sectors to significantly boost production capacity from 1.2 million bpd to 3 million bpd by 2012, a target that the National Oil Corporation later estimated would to slip to 2017. In February 2011, the U.S. and UN imposed sanctions on Libya following the outbreak of political violence.

The government had been pursuing a number of large-scale infrastructure development projects such as highways, railways, air and seaports, telecommunications, water works, public housing, medical centers, shopping centers, and hotels. Despite efforts to diversify the economy and encourage private sector participation, extensive controls of prices, credit, trade, and foreign exchange have constrained growth. Import restrictions and inefficient resource allocations have caused periodic shortages of basic goods and foodstuffs, shortages that are worsening as the political unrest continues. Libya faces a long road ahead in liberalizing the socialist-oriented economy and recovering from the losses of the ongoing conflict, but initial steps, including applying for World Trade Organization (WTO) membership, reducing some subsidies, and announcing plans for privatization, have laid the groundwork for a transition to a more market-based economy. The non-oil manufacturing and construction sectors, which account for more than 20% of GDP, have expanded from processing mostly agricultural products to include the production of petrochemicals, iron, steel, and aluminum. Climatic conditions and poor soils severely limit agricultural output, and Libya imports about 75% of its food. Libya's primary agricultural water source remains the Great Manmade River Project, but significant resources have been invested in desalinization research to meet growing water demands. Government officials have also indicated interest in developing markets for alternative sources of energy, pharmaceuticals, health care services, and oil production byproducts.

The Libyan people demonstrated exceptional resilience and a strong capacity throughout the conflict to meet the majority of the humanitarian needs of those affected. Across the country, local councils and communities mobilized to support the humanitarian needs of internally displaced persons, with the assistance of national and international humanitarian partners. To support them, the Humanitarian Coordinator has taken steps to ensure that residual needs of vulnerable groups will still be met while the overall humanitarian effort in Libya was winding down. As commercial activity resumed, food commodities became readily available, schools reopened and essential services, including water and electricity, had been mostly restored. However, the lack of liquidity and increased prices reduced purchasing power and have served to increase the food insecurity of the poorer and more vulnerable segments of Libyan society.



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