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May 25, 2008

Libya introduces economic reforms.

picture; Sarkozi and Gadhafi.

I owe David Leyonhjelm for bringing this to my attention. There appears to be significant change afoot in Libya, and not the usual ‘Oh shit’ change, but real change for the better. This is not only in the economic area, but also to a limited degree socially.

Since December 2003, when Libya announced that it had agreed to reveal and end its programs to develop weapons of mass destruction and to renounce terrorism, relations with the West have improved to the point where relatively normal relations exist with them. Come to think about it, it seems kind of odd not having Gadhafi making a bloody nuisance of himself.

Gadhafi will never be acceptable in polite society owing to some of the extremes he went to during his pariah years, but will probably get along with governments just fine. I am willing to give him the benefit of the doubt as far as the reform to his character but his past will always make him thoroughly reprehensible.

Free market style reforms will do a great deal to improve the economy as it has done in a number of countries in the past. The massive oil revenues of Libya will of course be used by the left as a smokescreen to excuse themselves from having to make any embarrassing admissions.

The left of course still blame the poor conditions of the third world on bad luck, corruption, and exploitation by ‘greedy capitalists,’ after all it cannot be the fault of the totalitarian system, can it? Imagine the chaos that would exist if enterprise was initiated by anyone who had a good idea instead of the experts in central planning.

While commentators will criticize the regime as undemocratic, democracy is not absolutely necessary for freedom to exist. There has been a theory around for a long time of enlightened absolutism, under which a despot is sufficiently enlightened to realize that real liberty among the people will advance the prosperity and with it the power of the domain.

This is like many theories rather impractical, owing to the type of character required to become a dictator. It is in fact as impractical as the theory that says that a democratic government will not try to erode the freedoms of the people.

Gadhafi is not and will never be a ‘benevolent despot’ but if he can enhanse the economic and social freedoms of Libya during his watch, he will have mitigated a lot of the damage he has done in the past.

An article in The Wall St Journal by Jay Soloman, “Gadhafi Revamps Libyan Economy,” is an eye opener: -

Five years after the lifting of United Nations sanctions on Libya, Col. Moammar Gadhafi is overseeing a vast reshaping of his nation's economy. Fed by the soaring price of oil, he is sharply shrinking Tripoli's bureaucracy, privatizing state assets and spending billions of dollars on new roads, bridges and ports.

At the same time, Libya hasn't matched its economic transformation with significant political reforms say activists and diplomats. Col. Gadhafi's willingness to open up his country's politics as well as its economy will likely determine whether Libya becomes a modern state from one historically seen as a rogue.

Col. Gadhafi's desire for economic change was laid out in an annual speech he made in March in which he lambasted Libya's bureaucracy for corruption and inefficiency. The North African strongman, 66 years old, who holds no formal government job, said his nation must shrink the size of the state and shift Libya's oil wealth into the hands of the population. He also said private sector firms would be better positioned to provide services to the public than the government. …..

The International Monetary Fund projects Libya's economy will expand by nearly 9% during the current calendar year, compared with 6.8% in 2007. Tripoli's foreign reserves, swelled by the oil boom, are projected to double to $115 billion in 2008 from two years earlier. …….

Col. Gadhafi has offered few signs that he will allow Libya's political system to transform on pace with economic liberalization. Human-rights groups charge Tripoli with continuing to use torture while detaining political activists without trial. Libya's security forces enjoy nearly limitless leeway in defining who counts as a subversive.
The bloated nature of the bureaucracy is immediately apparent when the size of 900,000 as quoted in the above article is compared with the population figures from the CIA Fact book.

The July 2008 estimate is close to 6.2 million people, of whom 62.6% are in the 15 to 65 year age group, or around four million working age, although working age may be higher or lower there.

Figures for female participation in the workforce tend to be either old or contradictory, but it generally seems that despite a 97% Muslim population, women have a reasonably good access to education, and have better access to employment opportunities than elsewhere in the Muslim world.

The following is from the Federal Research Division of the Library of Congress, but is a 1987 document: -
The continued and accelerating process of urbanization has broken old kinship ties and association with ancestral rural communities. At the same time, opportunities for upward social movement have increased, and petroleum wealth and the development plans of the revolutionary government have made many new kinds of employment available--for the first time including jobs for women. Especially among the educated young, a growing sense of individualism has appeared. Many of these educated and increasingly independent young people prefer to set up their own households at marriage rather than live with their parents, and they view polygamy with scorn.

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