Libya's Step towards Change

Abstract

This paper has offered a comprehensive analysis of the macro environment of Libya and the performance and evolution of commencing financial sector development in the national economy. Following the 1969 revolution, the economy witnessed three major systems: the nationalism and socialism period, an open door policy period and, latterly, the economic reform programme. The economy experienced rapid expansion during the 1970s and early 1980s as real GDP grew by more than 10 per cent on average. This expansion was mainly financed by the oil revenue sector. In the mid-1980s economic growth slowed and the Libyan government started to experience reversionary trends. These later trends saw the collapse of oil prices and the Gulf war in 1990/1991. Following the collapse of its economy, Libya was forced to re-examine its policies and redirect its development strategies. The challenges of devising a strategic policy aimed at achieving the sustainable development of the Libyan economy are particularly linked to current official tendencies for restructuring the economy through increasing the role of the private sector and by continuing the process of privatising the public sector within the country. That outline, if achieved, would transform life for all Libyan citizens in terms of daily activities and the business environment.