Dependence on extractives revenues in Libya

Although Libya has been a significant producer of crude oil since the 1960s, it displays lower social and economic indicators when compared with other developing oil and non-oil producing economies

On achieving independence in 1951, Libya's economy was mainly based on agriculture, animal husbandry and other sectors such as textiles and handicrafts. However the beginning of oil exports in 1961 proved a turning point and since then, according to industry researcher Issa Saleh Ali, the economy has been heavily dependent on the oil sector. From then onwards, per capital income increased and the economy shifted from being a deficit to a surplus economy. Between 1970-2007 an average of 70 percent of total government revenue came from oil. Through the same period oil exports accounted for 95 percent of total exports.

After Muammar Gaddhafi came to power in 1969, reducing Libya's dependence on oil was the government's major economic policy objective, according the the US State Department. By their analysis, the failure to achieve this goal was down to ill-advised policy decisions and obstacles to economic diversification in a country lacking in both basic infrastructure and water resource.

According to US State Department figures, by the time of the 2011 revolution, oil accounted for approximately 75 percent of government revenue, 95 percent of exports, and 25 percent of gross domestic product (GDP).

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