NS4053 Spring Term 2017 Conflict in Libya

Pre-Conflict I 1970-2010 Economy of Libya depends on oil for Almost all export earnings 80% of government revenue and Half of GDP As a result per capita income in 2010 was $11, 934, higher than the MENA average and close to the highest in Africa Government supported the same Arab social contract as the rest of the Arab countries providing citizens Free health and education Public sector jobs and Food and fuel subsidies In return for limited voice and freedom

Pre-Conflict II Following the lifting of UN sanctions in 2003 economic activity increased steadily for seven years During 2004-10 average real GDP growth was approximately 5% Annual consumer inflation averaged less than 4% and Official foreign exchange assets increased from $20 billion at end of 2003 to $170 billion at the end of 2010 More than 80% of the formal labor force worked in the public sector The limited private sector that existed was handicapped by the dominance of the state and crippling institutions

Pre-Conflict III Consequently Governance indicators remained poor Job creation was lackluster as it was heavily reliant on public sector, while Dependence on expatriate workers increased. A combination of these factors led to the 2011 Arab Spring uprising

Economy of Pre-Conflict Libya

Civil War (2011-present) I Similar to other Arab countries, Libya made good progress in education and health Life expectancy increased from 46.9% in 1970 to 75.1% in 2010 Rate of literacy among adults rose to 89.5%, with 99.5% of youth between 15-24 were literature in 2010 The under 5 mortality rate also fell from 139 in 1970 to 28 in 2010

Civil War (2011-present) I The war, insecurity and violence have impacted more than 3 million people across Libya (half the population) 2.4 million are in need of protection and humanitarian assistance. These include 241,000 internally displaced persons 437,000 non-displaced with special needs and 125,000 refugees fleeing the country to Europe and Italy in particular.

Civil War (2011-present) II ISIS is still present on the ground Battle has led to a large number of deaths and injories among civilians In 2016 alone about 498 were dead or injured between January and October Only four hospitals are performing above 75% functionality People lack clean water and sanitation facilities, proper housing, education services (558 schools are either no longer functional or partially functional) and Food (17% of IDPs are food insecure)

Libya: Vulnerable People by Sector

Civil War (2011-present) III Physical Costs Libya is fully dependent on oil and gas and the six year conflict has blockaded the oil terminals and ports, with some tribes shutting down the fields of the government Estimates by the EU show that militia control of major oil terminals for almost three years has cost Libya over $100 billion in lost revenue Among cities Benghazi has the highest rate of damages to buildings due to the war and militia attacks Overall between August 2015 and April 2016 about 3,344 structures were identified as destroyed, severely damaged or moderately damaged with additional 1,152 identified as possibly damaged.

Overall Damages to Structures in Benghazi

Civil War (2011-present) IV Economic Costs Six years of war in Libya has significantly undermined achievements made in health and education Economic activity has been disrupted and the social fabric torn by increased violence The economy has remained in recession for the fourth consecutive year in 2016 Libya produced more then 1.6 million barrels per day of crude oil prior to the uprising in 2011 That has fallen to around 380,000 today The non-hydrocarbon output remains weak due to Disruptions in the supply chain Insecurity and Lack of adequate investment

Civil War (2011-present) V Real GDP is estimated to have declined by 8.9% in 2015 and shrank further by 2.5% in 2016 Per capita income has fallen to less than $5,000 in 2016 compared to almost $13,000 in 2012 Inflation reached unprecedented levels of 26% in 2016, up from 10% in 2015 driven by high food prices Lack of funding to finance imports, especially food, led to shortages in basic commodities and expansion of black market activities

Civil War (2011-present) VI Few Libyans work outside the government and the public sector has not been able to provide jobs for new entrants in the labor market Libya has recorded high unemployment rates for the past two decades Official unemployment rate stood at 13.5% in 2010 with youth unemployment double that rate Oil revenues have fallen sharply to only a fifth of their pre-revolution levels while spending has remained high The share of the public wage bill in GDP was about 53% in 2016

Civil War (2011-present) VII Investments have been insufficient for sustaining adequate public provision of health, education, electricity, water and sanitation services Foreign reserves have remained the main source fo financing of the budget deficit.