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Economic Development

Growing and Diversifying the Economy

Home / Development Pillars / Economic Development / Growing and Diversifying the Economy

Pillar Objectives

The large role the government plays in the economy, weak public institutions, and regulatory deficiencies have led to barriers for private sector development. The experience of other emerging nations has shown that industrial clusters are an effective strategy for catalyzing local and national economic development alongside reforming the enabling environment for business and investment. Libya can broaden and deepen its economy by consolidating its leading position in the energy sector while developing industrial clusters in new sectors with future potential such as renewable energy, tourism, agriculture, business process offshoring, and transport and logistics.

Next Objective:

Enhancing Economic Stability

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Transformation Projects for Growing and Diversifying the Economy

Transformation Project Profile

The creation of industrial zones is an effective tool for catalyzing local and national economic development. Industrial zones enhance the pace of economic growth by diversifying the economy, creating high value-added jobs, and attracting investment.


Transformation Project Objective

  • Support the establishment of a comprehensive framework for industrial planning and zoning
  • Enhance the living standards of the communities where industrial parks are established by attracting capital and generating high value-added jobs
  • Attract new businesses by providing an integrated infrastructure in one location

Transformation Project Profile

Delivering on Libya’s ambitious growth plans will require overcoming the significant barriers faced by small and medium businesses. These difficulties include lack of access to capital, difficulty registering companies and lack of training opportunities. The government must prioritize the educational, financial, and regulatory support needed by entrepreneurs through the creation of incubators , enhancing access to funding, and introducing and enforcing business-friendly legislation.

Transformation Project Objective

  • Support the diversification of the economy away from the hydrocarbon sector and into priority growth areas
  • Lower the level of unemployment in the country and promote private sector employment
  • Support the role of the private sector in the Libyan economy

Transformation Project Profile

Recognition and respect for property rights through a national land use policy is critical to diffuse conflicts that have emerged as a result of unclear property rights. Land-use policies will facilitate the process of land administration, digitization of land registries, the establishment of national spatial data infrastructure to track land use, and support an enhanced legal framework for resolution of land disputes.

Transformation Project Objective
  • Develop a land use policy to ensure efficient, equitable, and sustainable utilization and management of land and resources
  • Implement improved and simplified procedures for transfer of privately owned land
  • Develop better legal frameworks for land registration and adjudication
  • Establish a legal framework for the adjudication of property disputes

Transformation Project Profile

To support the diversification of the economy and compensate for decades of mismanagement, the government must invest heavily in hydrocarbon infrastructure. Increased revenues from an expanded capacity to export can contribute critical funding for improving public services and infrastructure while fueling growth in other sectors.

Transformation Project Objective
  • Expand Libya’s oil and gas production capacity
  • Maximize fiscal revenues to fund improvements in government services and infrastructure
  • Facilitate the restructuring of Libya’s economy away from hydrocarbon dependence

Transformation Project Profile

The government remains deeply involved in the country’s key economic sectors such as utilities, oil and gas, agriculture, education, transportation, construction, real estate, and manufacturing. Experience from other post-socialist countries shows that gradual privatization of state-owned enterprises and sales of state assets if transparently executed, can promote private sector development.

Transformation Project Objective
  • Liquidate, sell, or attract strategic partners for state-owned entities under a comprehensive, transparent reform program with specific targets and timelines
  • Liquidate or merge non-viable state-owned entities
  • Determine the role of foreign companies and foreign direct investment in the privatization process
  • Establish procedures that ensure the transparent and equitable privatization of state-owned enterprises

Transformation Project Profile

The government's interference in the past has led to a decline in the efficiency of the use of water and land resources, and the failure of the private sector investors to invest in commercial agricultural projects and irrigation technologies, and the infrastructure of transportation and storage operations was not sufficient to enable local producers to keep up with national consumption and export to regional and international markets. The result was insufficient domestic agricultural supplies to meet domestic demand, and the attendant decline in agricultural exports.

Transformation Project Objective
  • Create a strategic plan for agricultural development
  • Improving Libyan food security and reducing import dependence
  • Providing job opportunities in rural and remote areas to reduce regional tensions and reduce pressure on cities
  • Opening new markets for the export of Libyan agricultural products

Transformation Project Profile

Libya must develop a science, technology, and innovation framework that channels resources to scientific research, improves the technical capabilities of the national workforce, and raises the quality of teaching in science, technology, engineering, and mathematics fields. Joint initiatives between the public and private sector to create research centers and increase research funding must also be considered.

Transformation Project Objective
  • Support Libyan scholarly, scientific, and professional organizations
  • Increase national research and technology transfer funding
  • Encourage public-private partnerships to establish R&D centers
  • Incentivize and promote private sector R&D particularly amongst SMEs
  • Recognize and award research achievements