Libya introduces economic reforms.

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.

Update

 Yes, that’s right, the Democrats have a plan to confiscate, (or socialize as the speaker puts it) the American oil industry.

 Perhaps the Democrats would be better to make Gadhafi their nominee, he makes better economic sense for a start, and he doesn’t seem to have all those embarrassing hangers on.

 No communist dictators like Chavez support him, nor does he seem to have the backing of terrorist organizations like Hamas, extremists like Farrakhan, urban terrorists like Bill Ayers, or racist lunatics like Wright and Sharpton, all of whom seem to be supporting their current likely nominee.

 Gadhafi on the face of it would probably be far more acceptable to the more moderate patriotic Democrats.

9 thoughts on “Libya introduces economic reforms.

  1. Good post Jim.

    I’m intrigued at the change in Gaddafi’s approach to both the management of his country and his relations with the world.

    He was once a defiant supporter of anti-west terrorism. It is well known there were PLO training camps operating in Libya, from which terrorists went on missions to hijack planes and ships and plant bombs. He ran his country with an iron fist and thumbed his nose at the free world.

    The change began when Ronald Reagan sent in the bombers, narrowly missing Gaddafi but killing a number of key staff and his son. That stopped the overt stuff. Then came Lockerbie and the discovery of direct links with the bombers. It was obvious that even the covert stuff was getting him in the shit, with sanctions and opprobrium galore.

    Perhaps it was no more than a young firebrand getting older and realising he really wasn’t achieving much. Perhaps he was worried there would be another Ronald Reagan one day who might not miss next time. I have also read that the invasion of Iraq and removal of Saddam was ‘highly motivating’.

    Whatever the reason, there has been a remarkable transformation. Libya has opened up to the world and is engaging in a way it was never thought possible. This Wall Street Journal report suggests Gaddafi is even reconsidering his socialist convictions.

    I know democracy and political freedom are not yet a reality, but I suspect economic freedom and growing prosperity will hasten demands for these. That seems to be how it works.

  2. I’m more intrigued by the wests change of approach to Libya. They are only good guys now because somebody decided they are no longer the bad guys of choice.

  3. Hmmm… just saw the update video. What a stupid woman. I’d have loved to hear them respond, “you’ll have to take it from my cold, dead hands, bitch!” 🙂

  4. I’m more intrigued by the wests change of approach to Libya. They are only good guys now because somebody decided they are no longer the bad guys of choice.

    Somebody decided? On what grounds? I mean, apart from the fact that they are no longer training or supporting terrorists, agreed to hand over the Lockerbie bombers, have opened up their country to investors, joined the international monetary systems and started behaving like a normal country.

  5. This is good, but Reagan should have invaded.

    It is quite strange to see this is one thing Bush got right: places like Taliban controlled Afghanistan need regime change.

  6. David,

    Twaddle. You can do all those things and still be isolated as bad guys. Or you can be praised as being on the right path. It all depends on circumstance. Saudi Arabia is perpetually cast as good guys in spite of being a backward home for terrorist nut jobs. Iran gives women the vote and should be higher up the ladder of nations than Saudi Arabia in the good book but is instead the perpetual bad guy. The reason investors are now going to Libya no doubt has something to do with the fact that Libya is no longer subject to economic sanctions. The funny thing is investors also returned to Iraq once economic sanctions ended. And if we ended economic sanctions against North Korea that country would also be more open. It stands to reason that if you open a window then more wind blows in.

  7. And if we ended economic sanctions against North Korea that country would also be more open. It stands to reason that if you open a window then more wind blows in.

    No they wouldn’t Terje; To get investors in you have to offer an environment where that investment is secure. North Korea has about the same security of investment climate as Zimbabwe.

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