Libya

Overview

Libya has a vast territory and a population of approximately six million, one-third of which are under 15 years old. In 2006, it ranked 64th out of 177 countries on the annual Human Development Index, mainly due to its high per capita income and an average literacy rate of 82.6%. Libya is also endowed with large oil reserves, and its dominant hydrocarbons sector represents 95% of export earnings and contributes to 60% of all public sector wages. Recent oil discoveries promise rapid foreign and domestic investment and an expansion of the hydrocarbons sector.

Since the normalisation of external relations, marked by the 2003 and 2004 lifting of UN and US economic sanctions, the government has embarked on a clear path of economic reform.  It is committed to opening up the state-dominated economy by expanding the private sector and encouraging foreign direct investment. Libya has taken initial steps to move from a socialist-oriented to a market-based economy. It has applied for WTO membership, reduced some domestic subsidies and announced plans for privatisation (the government still employs some 70% of all national employees). Economic reforms, though, have been sporadic and subject to periodic reversals.

A broad cabinet reshuffle in 2007 established the Economic Development Board (EDB), which immediately announced a number of reforms, such as an across-the-board increase in public sector salaries, an increase in housing/social welfare allowances, the creation of a personal savings and retirement scheme and a new law to encourage local entrepreneurs by providing loans for small enterprises. Also in 2007, an initiative to streamline the public sector was launched to encourage the development of the private sector and cut down the government’s massive wage bill by releasing 400,000 employees (one-third of the workforce). As compensation, released employees will be offered retraining and provided loans to set-up their own business.

Expatriate workers from other Arab countries and Sub-Saharan Africa are thought to number more than one million, some illegal. New regulations to limit illegal workers in Libya were introduced in 2007, mainly requiring all immigrants to apply for work visas and pay increased charges on foreign workers. A deadline was fixed for all illegal workers to leave, resulting in some 35,000 Egyptian workers returning to Egypt in early 2007.

The economy displays the classical features of an oil-rich economy: lack of economic diversification and significant reliance on immigrant labour. These two features must be effectively addressed before Libya tackles its serious structural unemployment problem. The unemployment rate is as high as 30% and predominately affects youth and women.

Activities

• Employment
  • Supporting the development of a national vocational training system
  • Promoting entrepreneurship culture, through training trainers specialized in entrepreneurship and management training, using ILO training tools for micro - and small entrepreneurs.
• Social protection
  • Capacity building of ILO constituents in accessing Occupational Safety and Health (OSH) information worldwide
  • Facilitating networking with European OSH institutions on-going.