Muammar Gaddafi - Economic Policies

Economic Policies

The country of Libya enjoys large natural resources, which Gaddafi utilized to help develop the country. Under Gaddafi's Jamahiriya "direct democracy" state, the country's literacy rate rose from 10% to 90%, life expectancy rose from 57 to 77 years, equal rights were established for women and black people, employment opportunities were established for migrant workers, and welfare systems were introduced that allowed access to free education, free healthcare, and financial assistance for housing. In addition, financial support was provided for university scholarships and employment programs. Gaddafi also initiated development of the Great Manmade River, in order to allow free access to fresh water across large parts of the country. The country was developed without taking any foreign loans, and, as a result, Libya was debt-free.

Despite his role in developing the country, critics have accused Gaddafi of concentrating a large part of the country's high gross domestic product on his family and his elites, who allegedly amassed vast fortunes. Many of the business enterprises were allegedly controlled by Gaddafi and his family. Despite the regime providing financial assistance for housing, segments of the population continued to live in poverty, particularly in the eastern parts of the country.

When the rising international oil prices began to raise Gaddafi's revenues in the 1970s, Gaddafi spent much of the revenues on arms purchases and on sponsoring his political projects abroad. Gaddafi's relatives adopted lavish lifestyles, including luxurious homes, Hollywood film investments and private parties with American pop stars.

The Economy of Libya was centrally planned and followed Gaddafi's socialist ideals. It benefited greatly from revenues from the petroleum sector, which contributed most export earnings and 30% of its GDP. These oil revenues, combined with a small population and by far Africa's highest Education Index gave Libya the highest nominal GDP per capita in Africa. Between 2000 and 2011, Libya recorded favourable growth rates with an estimated 10.6 percent growth of GDP in 2010, the highest of any state in Africa. Gaddafi had promised "a home for all Libyans" and during his rule, new residential areas rose in empty Saharan regions. Entire populations living in mud-brick caravan towns were moved into modern homes with running water, electricity, and satellite TV.

At the time Gaddafi died, some of the worst economic conditions were in eastern Libya. 97% of urban dwellers have access to "improved sanitation facilities" in Libya, this was 2% points lower than the OECD average, or 21% points above the world average. During Gaddafi's rule, infant mortality rates went from 125 per 1000 live births, about average for Africa at the time, to 15 per 1000, the best rate in Africa.

Libyans have described the Great Manmade River, a project initiated by Gaddafi, as the "Eighth Wonder of the World". The Great Manmade River also holds the record as the world's largest irrigation project. Gaddafi also initiated the Libyan National Telescope Project, costing about 10 million euros.

On 4 March 2008, Gaddafi announced his proposal to dissolve the country's existing administrative structure and disburse oil revenue directly to the people. The plan included abolishing all ministries; except those of defence, internal security, and foreign affairs, and departments implementing strategic projects. His reason for this plan was because he believed that the ministries were failing to manage the country’s oil revenues. Gaddafi claimed he was planning to combat corruption in the state by proposing reforms where oil profits are handed out directly to the country's five million people rather than to government bodies, stating that "as long as money is administered by a government body, there would be theft and corruption." Gaddafi urged a sweeping reform of the government bureaucracy, suggesting that most of the cabinet system should be dismantled to "free Libyans from red tape" and "protect the state's budget from corruption." According to Western diplomats, this move appeared to be aimed at putting pressure on the government to speed up reforms. Gaddafi claimed that the ministries were failing to manage the country’s oil revenues, and that his "dream during all these years was to give power and wealth directly to the people."

A national vote on Gaddafi's plan to disband the government and give oil money directly to the people was held in 2009, where Libya's people's congresses, the country's highest authority, voted to delay implementation. The General People's Congress announced that, out of 468 Basic People's Congresses, 64 chose immediate implementation while 251 endorsed implementation "but asked for (it) to be delayed until appropriate measures were put in place." This plan led to dissent from top government officials, who claimed it would "wreak havoc" in the economy by "fanning inflation and spurring capital flight." Gaddafi acknowledged that the scheme, which promised up to 30,000 Libyan dinars ($23,000) annually to about a million of Libya's poorest, may "cause chaos before it brought about prosperity," but claimed that "Do not be afraid to experiment with a new form of government" and that "This plan is to offer a better future for Libya's children."

In December 2009, Gaddafi personally told government officials that Libya would soon experience a "new political period" and would have elections for important positions such as minister-level roles and the National Security Advisor position (a Prime Minister equivalent). He also promised to include international monitors to ensure fair elections. His speech was said to have caused quite a stir. These elections were planned to coincide with the Jamahiriya's usual periodic elections for members of the Popular Committees, Basic People's Committees, Basic People's Congresses, and General People's Congress, in 2011 2012.