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Libya's economy is dominated by the petroleum industry.
It accounts for an estimated 75% of the country's income. In 1959, when oil
was first discovered, Libya was one of the world's poorest countries and many
people were unemployed. Following the discovery of oil, people began to abandon
rural life and move to cities to work in the oil industry. After the revolution,
the state spent oil revenues to develop housing, health care, education and
public works such as sanitation, roads and water. New jobs were created and
people earned better wages. When the demand for oil is strong and prices are high, Libya's economy prospers. Lower oil prices in the 1970s and 1980s were the result of a decreased demand for oil and increased competition among oil-producing countries. These conditions, together with the sanctions imposed by the United Nations, have weakened the Libyan economy. |
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In the late 1980s, when it became clear that the
nationalization of business and property had failed to improve the economy,
the government began introducing privatization programs. The lack of small
businesses had hurt the economy and caused a shortage of some necessary goods.
The government has also attempted to diversify the Libyan economy so that
it does not depend so heavily on the oil industry. The lifting of the United
Nation sanctions will probably encourage further improvements. The majority of Libya's workforce is employed by the government or by government agencies. The estimated unemployment rate is 30%. Libya's manufacturing sector is dominated by the production of petroleum products and petroleum-derived chemicals. Other important areas of manufacturing include the production of cement, steel and processed foods. |
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Traditionally, agriculture was the basis of Libya's
economy. Today, it accounts for about 5% of Libya's income. Many farmers
live in urban areas and commute each day to commercial farms outside the
city. The government has undertaken a major irrigation program to increase
the amount of land for agriculture. Libya produces wheat, barley, dates,
olives, almonds, beans, tobacco and citrus fruits.
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