The Absence of Economic Oversight in Libya
Mohamed Eljarh, a nonresident fellow at the Atlantic Council’s Rafik Hariri Centre for the Middle East, recently gave an interview for the World Politics Review on Libya’s deteriorating economic situation. In the interview Eljarh describes how the absence of a fully functioning central government has impacted economic oversight:
With the ongoing political and institutional divide in Libya, there is no real oversight or regulatory framework for the economy, and the shadow economy is flourishing. The Central Bank, which gets its money from oil and gas revenues and by tapping Libya’s foreign currency reserves, has turned primarily into a national payment system dispensing salaries to the 1.2 million public sector employees, as well as paying for subsidies and different ministries and departments.
After the rupture in the unity government in 2014, Libya has been politically divided between two capitals in Tripoli and Tobruk, with each struggling for control of resources and key state institutions. National debt has been rising, with deficit levels reaching 75 percent in 2015 and falling back to 60 percent in 2016. Libya is burning through its currency reserves, with estimates indicating reserves dropped from $113 billion in 2013 to $58 billion in 2016.
To read the interview in full click here.