Libya

Libya

Libya: Market Profile

Major Economic Indicators

Table: Major Economic Indicators (Libya)
 
Table: Major Economic Indicators (Libya)
  • Located in the northern part of Africa, Libya is the fourth largest in size among all African countries. The country has the longest coastline that stretches along the Mediterranean Sea with Sahara Desert as its most prominent natural feature. Most of the population is concentrated along the coast, where its capital Tripoli is located.
  • The Libyan economy is mostly dependent on the oil and gas industry, which represents more than 80% of the total exports and about 60% of the country’s GDP. A small population, backed by substantial revenues from the energy sector, has made Libya one of the highest GDP per capita countries in Africa.
  • Libya, with largest crude reserves in Africa, is one of the member countries under the Organization of the Petroleum Exporting Countries (OPEC). OPEC reached a production cut deal with major non-OPEC oil producers in 2016, committed to remain oil output at a level of about 1.2 million barrels a day. Libya is one of the countries that are exempted from the cut deal, in addition to Nigeria. The agreement has been extended until the end of 2018.
  • While other members continue to manage oil supplies, Libya seemed to be the biggest gainer, which its export revenue showed a 94% increase from 2016 to 2017. Despite speculation that Libya would be pressured to be part of the deal, the country is still targeting to boost its daily production to over 2 million barrels by 2023, according to Mustafa Sanalla, Chairman of the state-owned National Oil Corporation.
  • Libya is a member of the Greater Arab Free Trade Area (GAFTA) and Common Market for Eastern and Southern Africa (COMESA). It has also entered the Global System of Trade Preferences among Developing Countries (GSTP) in 1988, with the aim to promote intra-developing-country trade. To date, 43 countries have entered into the Agreement, including seven least developed countries (Bangladesh, Benin, Guinea, Mozambique, Myanmar, Sudan and Tanzania).
  • EU is the largest export market for Libya, which accounted for more than half of the country’s exports, yet it is the only Mediterranean country besides Syria that has not yet concluded a Free Trade Agreement with the EU. Libya is still not a member of World Trade Organization (WTO) although it has started negotiation with on its membership since 2004.
  • In early 2011, the uprising against Muammar al-Gaddafi, Arab’s world longest ruling leader, has turned Libyan Revolution into a civil war. Following that, the country entered into the state of transition without a strong centralized authority and the last seven years has been characterized by instability and brutal conflict in the country. According to the UN Refugee Agency, there is an estimated 1.3 million people in Libya that in need of humanitarian assistance which basic needs such as drinking water, shelter and health care are of limited access.
  • Libya provides free education, which is compulsory starting from the age of six, resulting in the highest literacy rate (91% for those aged 15 years or above) among North African countries. Yet, the endless cycle of social unrest and lack of funding has hindered the progress of education in the country as many schools have been destroyed or stopped operating.
  • The United Nations (UN) has proposed an action plan last year to provide solutions for political crisis such as organizing a national conference for all Libyan stakeholders and holding presidential elections by the end of 2018. China has showed support towards this plan as well as provided financial aids to Libya, including US$6 million to support the medical sector.
  • Security deterioration in Libya in 2011 has caused a lot of Chinese firms to suspend development projects which mainly engaged in transport and building infrastructure. Despite that, Huawei and ZTE, the two Chinese telecommunication companies, remained their operations in Libya. The first phase of optical fibre network project was completed in 2012 but has been suspended since then. General Authority of Communication and Information in Libya is currently working with the two Chinese firms and seeking to resume projects.
  • Early July this year, Libya signed a memorandum of understanding (MOU) with China for its participation in the Belt and Road Initiative to further develop the bilateral relationships in various fields and attract Chinese investments.
  • Cumulative FDI stock in Libya amounted US$493 million in 2016. China’s outward FDI in Libya reached US$211 million in 2016, almost doubled the amount in 2015.
Table: Hong Kong’s Trade with Libya