Libyans told to shake up economy

[tolibya]

Reuters:

Libyan leader Muammar Gaddafi has criticised his country’s over-reliance on oil, foreigners and imports, and told local businesses to start “manufacturing things people need”.

The statements, made in a recent series of speeches, have stirred interest in a forthcoming annual September 1 address to be made to the country’s 5-million people to mark the 1969 coup d’etat that brought Gaddafi to power.

“We don’t produce anything. We sell only oil and consume everything,” he said, condemning what he said was a consumer society destined for a sorry future when oil finally runs out.

“The kind of trade in which you produce nothing and import goods in exchange for oil, is a catastrophe,” Gaddafi was quoted as saying.

Libya could have become an economic power like Japan were it not “socially backward”.



Reformist rhetoric is nothing new from Gaddafi, but Libyans say it is unusual for such speeches to be made so frequently and to such a variety of audiences, from professional groups and state planners, to teachers and religious students.

The flurry of stern comments suggests his September 1 address may unveil further reforms to modernise the country.


Experts say there is hope the nonoil sector of the economy may finally be on the mend in a country long enfeebled by international sanctions.


Foreign and domestic factors offer Libya the chance to diversify its old-fashioned command economy, long hobbled by a primitive banking sector and red tape, experts say.

The foreign factor is the revival of diplomatic relations with the US.

In May, the Bush administration said it would restore formal ties with Tripoli.

This was a reward for Libya’s scrapping its weapons of mass destruction programme.

While most US sanctions were lifted in 2004, the revival of formal ties loosens the remaining financial curbs placed on US-Libya investment.

Repaired relations with US companies could lift confidence among investors of other nations.

The domestic factor is that Gaddafi’s economic outspokenness is now being echoed in public by his son, Saif al-Islam, the most high profile of his children, whose public statements have until now focused mainly on social policy and foreign affairs.

Islam told youth groups this month that Libya had no free press and its political system was not as democratic as he would like.

“We say Libya is paradise on earth, it’s heaven. What kind of paradise? We have no infrastructure. There are cities with no water,” Islam said.

His father’s speeches have taken aim at a wide range of targets — Muslim fundamentalists, civil servants who hold two jobs, bureaucracy, begging and the dirty condition of many towns.

But the main theme has been economic self-reliance and reforms to fight an unemployment rate of at least 13%.

He said future work on the Great Man-Made River Project, a 20-year-old venture to pump water from beneath the Sahara to northern cities, should be done almost exclusively by Libyans.