“Boom times have arrived in Libya,” declares this analysis of the country’s economy in Revenue Watch.
The tangible and intangible proof is there. Cafes and restaurants are heaving and US franchises are choosing to open along Tripoli’s beautifully historic, and untouched streets.
There are high hopes for the future, Revenue Watch says:
In 2012, Libya’s economy grew by 122 percent, by far the fastest growth rate in the world. One reason for such high growth is the economy’s collapse during the revolution; however, GDP is expected to grow another 17 percent this year, faster than all but a handful of countries.
But much more needs to be done, say economists and bankers on the ground.
Rebel Economy spoke to Alaa El Huni, a Libyan investment banker who was part of the opposition’s economic team during the revolution. Their work was often described as constituting the “Rebel Economy”. He explains that Libya has a long way to go before boom times.
- 1) We are already seeing signs of major reconstruction along the coast and a boom in consumerism. As Libya rebuilds after its revolution, do you see the country transforming into a tourist haven with foreign companies taking a dominant role?
B) Investment from the private sector: Coupled with investment from the government sector, private sector investment is a clear requirement. Complementary services from the hospitality industry are needed (restaurants, entertainment etc)
C) Travel and Logistics: Currently, Libya is seen as one of the toughest countries to secure a tourist visa for. The costs are very high, the procedure is very bureaucratic and opaque, and it applies to a very large amount to foreign countries.
- 2) Is the government spending money in the right places?
- 3) Libya will provide Egypt with the equivalent of one million barrels of crude per month at world prices to support the economy. It has also provided $2 billion to support Egypt’s central bank. How have Libyans reacted to this financial support at a time when their own country needs massive reconstruction and investment?
AH: There was a clear public backlash, but I truly believe the real mistake was the PR and Communication initiative behind this decision. There was no clear message sent to the Libyan or Egyptian people regarding this matter.
Much of the Libyan public sentiment was that a deal was brokered between the Libyan and Egyptian governments. They believe that there is a direct correlation between the extradition of key members of the old Gaddafi regime that are residing in Egypt and the financial pledge from Libya to Egypt. In essence, it is like Egypt sold these people back to Libya. The key individual that Egypt was meant to hand over was Ahmed Qadhaf Al Dam. This belief is similar to the one voiced by the Libyan public over the hand over of Baghdadi (Tunisia) and Abdullah El Senussi (Mauritania).