After two decades of isolation, Libya has reemerged as an extremely fertile investment opportunity for several reasons. First, Libya has historically been Europe’s gateway to Africa and an ideal steppingstone to enter emerging markets on the African continent. Second, after years of isolation, Libya is making investments in its infrastructure an attractive scheme for foreign investors. Third, Libya has great potential to become a leading tourist destination, with the longest coast on the Mediterranean (1,700 km), a great historical heritage, and a very attractive climate. Finally, Libya holds the largest oil reserves in Africa and the ninth-largest oil reserves in the world. This is essential in the context of geopolitical and economic discussions occurring around the world since the demand for oil is high.
Libya is officially known as the Great Socialist People’s Libyan Arab Jamahiriya and is situated in north Africa. It lies south of the Mediterranean Sea, between Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west. The capital city of Libya is Tripoli on the coast of the Mediterranean Sea. Other major cities are Banghazi, Surt, Zawarah, Ghadamis, Sabha, Tobruk, and Al Jawf.
Libya is the fourth-largest country in Africa with almost 700,000 sq. mi. (1.8 million sq. km). Ninety percent of Libyan territory is desert with a dry and hot climate. Climate along the Mediterranean coast is warm during the summers and rainy during the winters.
Libya is one of the least densely populated countries of the world, where 90 percent of the population lives in less than 10 percent of the area. Most inhabited areas are along the coast and urban centers, with more than 50 percent of the population residing in Tripoli and Benghazi. Approximately 6 million people—indigenous Berbers and Arabs— live in Libya. The population in Libya is young with a median age of 23 years and more than 50 percent of population younger than 15. Population growth rate is 2.2 percent.
Until fairly recently the peoples of Libya have been subjected to the control of foreign powers. Phoenicians, Greeks, Romans, and Ottomans left their imprint on the history and landscape of Libya. During the first half of the 20th century (1911–43) Libya was controlled by Italy. After Italy was defeated in World War II, Libya was put under the protectorate of the United Nations. Libya declared independence on December 24, 1951.
In 1969 a small group of military officers led by Muammar Al-Qaddafi overthrew King Idris, abolished the monarchy, and proclaimed the new Libyan Arab Republic. Al-Qaddafi emerged as the chief of state, a political role he still occupies today. Libya’s confrontational foreign policies and support of terrorism in the 1980s led to increased tensions and consequent sanctions by the West. In 1999 Libya surrendered two suspects in the 1988 Pan Am 103 bombing and in 2003 publicly announced its wish to stop producing and storing weapons of mass destruction. These two events contributed to lifting the sanctions against Libya, with the West once again seeing it as a potential political partner and a recipient of future foreign investments.
Economy and Liberalization
The discovery of large oil reserves in 1959 enabled Libya to transition from one of the world’s poorest countries to one of the wealthiest in Africa (per capita gross domestic product [GDP] is $13,100 [PPP]). Today the Libyan economy depends almost exclusively on revenue from the oil sector. Oil sector revenues contribute around 95 percent of export earnings, 60 percent of public sector wages, and 25 percent of GDP.
Libya is on a path to liberalize its command economy and transition to a market economy by applying for World Trade Organization (WTO) membership, reducing subsidies, and starting a privatization process. However, the liberalization process is not without obstacles. Despite efforts to encourage private sector participation, extensive controls of prices, credit, and trade constrain growth in Libya. Access to food and water are additional problems. Currently Libya imports 75 percent of all food and only around 30 percent of the population have access to safe drinking water. Despite these obstacles, Libya’s potential is immense. It is home to a welcoming and well-educated population, valuable natural resources, and natural beauty that could assure growth in years to come.
- CIA, “Libya,” World Factbook, www.cia.gov (cited March 2009);
- International Monetary Fund, Socialist People’s Libyan Arab Jamahiriya: 2008 Article IV Consultation: Staff Report, Public Information Notice on the Executive Board Discussion, and Statement by the Executive Director for the Socialist People’s Libyan Arab Jamahiriya. IMF Country Report (n.8/302, 2008);
- Lorenzetti and J. M. Stell, “Libya Says It Is ‘Open for Business’ to US Firms,” Oil and Gas Journal (v.102/19, 2004);
- S. Department of State, “Background Note: Libya,” www.state.gov (cited March 2009);
- Dirk J. Vandewalle, Libya Since 1969: Qadhafi’s Revolution Revisited (Palgrave Macmillan, 2008);
- Jonathan Wallace and Bill Wilkinson, Doing Business With Libya (Kogan Page, 2004).
This example Libya Essay is published for educational and informational purposes only. If you need a custom essay or research paper on this topic please use our writing services. EssayEmpire.com offers reliable custom essay writing services that can help you to receive high grades and impress your professors with the quality of each essay or research paper you hand in.