Peace in Libya, if maintained, will yield huge economic gains, not only for Libya but also for its neighbouring countries, which are expected to reap up to $162 billion by 2025. This is one of the main results of a new study issued today by the United Nations Economic and Social Commission for Western Asia (ESCWA), entitled: “Benefits of eace in Libya: Neighbouring Countries and Beyond.”

The study highlights the positive development which the country is witnessing, which will materialize into economic growth and an increase in investment and job creation in Libya and its neighbouring countries, in particular Egypt, Tunisia, Algeria and the Sudan. Achieving peace in Libya will, in effect, launch reconstruction efforts in the country, which will contribute to reviving economies in neighbouring ones given their strong economies ties with the Libyan economy.

Tarik Alami, Head of the authoring team, underlined that ESCWA “has been shedding light on the socioeconomic repercussions of the Libyan conflict since its onset, not only through the quantitative assessment of the devastation it has caused, but also through the calculation of the benefits of peace on Libya and the neighbouring countries”. “We hope that this will boost dialogue among Libyan parties and with regional and international actors,” he added.

The study also shows that by 2025, economic gains may reach $100 billion in Egypt; $22 billion in the Sudan; $10 billion in Tunisia; and $30 billion in Algeria.

In addition, peace in Libya will have positive spillover effects at the international level, especially for the country’s main trading partners. By 2025, gains are likely to reach $13 billion for Italy, $7.5 billion for Germany, $6 billion for France, and $5.5 billion for Turkey.

The study analyses the quantitative impact of peace through a set of key indicators, including the anticipated effect of reconstruction on growth and the ensuing impact on investments, resumption of exports to Libya and job creation in neighbouring countries,” Alami explained. “By 2025, unemployment is projected to decrease by 14% in the Sudan, 9% in Egypt, 6% in Tunisia, and 2% in Algeria”.

The study is the product of the second phase of the ESCWA project on assessing the impact of peace and reconstruction in Libya, carried out in the context of the Libya Socioeconomic Dialogue launched by ESCWA to stir a debate on alternative socioeconomic frameworks for sustainable development in Libya. ESCWA had previously issued a study on the “Economic Cost of the Conflict in Libya,” which had warned of a sharp increase of the cost of conflict in Libya in the absence of a peace agreement.


ESCWA launches the second phase of its Libya Socioeconomic Dialogue project to support the Libyans in formulating a development vision for their future

The United Nations Economic and Social Commission for Western Asia (ESCWA) launched the second phase of its “Libya Socioeconomic Dialogue Project” in a first online session, which brought together a number of Libyan citizens from various backgrounds representing the different segments of Libyan society. This inceptive discussion centered on “balanced and sustainable spatial development, and local participation”, a topic forming part of the economic segment of the dialogue, which will tackle ways to achieve sustainable economic development for an inclusive and diverse economy.
The Libya Socioeconomic Dialogue Project of ESCWA provides a platform for Libyans to formulate an inclusive, comprehensive and achievable vision to transition from ending the conflict to building sustainable peace. It was put forth by ESCWA because it considers the absence of such a common national socioeconomic vision of the State and society as one of the most important challenges that have stalled the transitional process in Libya for over a decade. ESCWA has thus embarked on helping the Libyans to form such a vision and find a balance between their priorities to develop appropriate strategies and policies towards permanent peace in the country.

To secure full Libyan ownership of the project, ESCWA has started work on it by assigning Libyan specialists to collect data and prepare studies on the current state of the society, economy and institutions in Libya. Based on these studies, ESCWA has then prepared for the dialogue phase, determining the topics that it will address in continuous consultation with the Libyans.

During the first consultative dialogue session, relating to sustainable development for an inclusive and prosperous economy, participants expressed the need to develop unconventional solutions in view of the exceptional circumstances in Libya. They identified a number of economic priorities, including:

  • Transitioning to a diversified Libyan economy, based on productive efficiency, through restructuring the economy and giving a greater role to the private sector in development and production processes;
  • Focusing on developing the local economy, particularly in marginalized albeit resource-rich regions, giving broad mandates to municipalities and helping to build and demonstrate their capabilities;
  • Changing the structure of oil revenues management in Libya and diversifying sources of income through activities diversification.

Participants also stressed that it was necessary to focus first on the Libyans suffering from violence and deprivation, and care for them by putting an end to that violence and securing their basic needs, as no development can be achieved without focus on its first and foremost target: the human being.
During the dialogue, ESCWA presented the project and its goals, and shed light on the research phase in which prominent Libyan experts had participated. It highlighted the project’s role in providing a platform for dialogue for the largest possible share of the Libyan population, emphasizing that the purpose was not to give precedence to one point of view over another or to reach consensus, but rather to conduct a scientific and technical dialogue in order to discuss ideas and develop them into specific, integrated policies.
The Libya Socioeconomic Dialogue project is grounded in the accumulated experience of ESCWA in the field of development in the post-conflict phase. It benefits from the participation of a wide range of Libyan, as well as international experts and regional partners.

The cost of the conflict in Libya since its outbreak in 2011 exceeds 783 billion Libyan dinars (LYD), i.e. $576 billion according to the official exchange rate.

The cost of the conflict in Libya since its outbreak in 2011 exceeds 783 billion Libyan dinars (LYD), i.e. $576 billion according to the official exchange rate (bearing in mind that different rates coexist in the Libyan market). This is one of the key findings of a new report issued today by the United Nations Economic and Social Commission for Western Asia (ESCWA) on the “Economic Cost of the Libyan Conflict”.
According to the report, the conflict in Libya has drastically shrunk the economy as reflected in the large decline in gross domestic product (GDP) and in investment rates. Consumption has also decreased owing to the massive return of foreign workers to their home countries and reduced incomes of Libyan citizens. Foreign trade has been disrupted by a significant reduction of exports in some key products such as oil. However, the impact has been much higher on imports, mainly due to a contraction in the construction and building sectors.

The report further  highlights some major factors that have exacerbated economic losses, such as the destruction of capital assets in the oil, construction, agriculture and manufacturing sectors; the decline in oil prices on global financial markets; and the diversion of resources from health care, education and infrastructure to military spending.

The report also notes that the repercussions of the conflict in Libya have spilled over to the economy of neighbouring countries such as Algeria, Tunisia, Egypt and the Sudan, with which Libya has important ties in trade, investment and employment.

Peace in Libya requires a plan for reconstruction and recovery based on effective and transparent economic governance and rehabilitation of sectors affected by the conflict,” said Tarik Alami from ESCWA. He also called for advancing growth and investment through emergency short-term reconstruction programmes and longer-term institutional reform.

The report also warns that the cost of the conflict is set to rise sharply in the absence of a peace agreement in the coming years. According to ESCWA, if the conflict continues until 2025, it may add $462 billion to the total cost estimated today, which would amount to 80% of losses incurred over the past ten years.

The report is the output of the first phase of an ESCWA project on the effects of peace and reconstruction in Libya on neighbouring countries and regional cooperation, which feeds into the ESCWA Libya Socioeconomic Dialogue launched to debate alternative socioeconomic frameworks for sustainable development in Libya. The project comprises two phases: the first measures the direct repercussions of the war economy on Libya, and the second delves into the opportunities that could arise from peace and reconstruction in the country for neighbouring ones and for regional cooperation.

ESCWA- One of five United Nations regional commissions that supports inclusive and sustainable economic and social development in Arab States, and works on enhancing regional integration.




Related Articles