Tripoli, February 23: Popular uprisings across the oil-rich Middle East, with particular attention to Libya, has sent foreign oil and gas companies packing and global oil price soaring, placing further pressure on the economy still struggling with the global recession.
Media interviews Kamel Wazni, political analyst from Beirut about various aspects of the Libyan economy, its heavy reliance on oil deals and distribution.
Media: Talking about the economy – What has been the impact of the protests since they began on the Libyan economy. Some are saying that in the aftermath of the Lockerbie bombing Libya was shunned by the international community, but later on it has gone through some kind of economic rehabilitation. How is it doing now?
Wazni: Well obviously this is not only affecting the Libyan economy, this will affect the world economy because we have seen these revolutions now from Tunisia to Egypt, Yemen, Libya and it will probably go further than that. The price of oil and natural gas has been going up. As far as the Libyan economy goes, 95% total revenue comes from oil and natural gas.
There is a huge investment in this mostly from western countries – European and American companies have heavily invested in the Libyan oil sector. The economy has been in a difficult situation because the money hasn’t been distributed to the people and that’s why you see the people in Libya, when there was a call for uprising, we saw a surprisingly massive turnout.
The official figures on unemployment in Libya according to the IMF, World Bank and other sources have put the rate at 30% unemployment. Unofficial numbers suggest 50% unemployment and that’s why we have seen a change take place very swiftly. People want a new system that will empower the people and not just the family of Gaddafi that act like thugs making statements as brutal dictators trying to use all means to bring the country to total disaster.
As far as the international economy is concerned it will have a huge impact also. If we look at the price of oil heading to over 107 (US) dollars per barrel and we have to remember that we haven’t recovered from the major recession that impacted the world in 2008. European countries are still suffering economically and the US is facing huge deficits. So any rise in oil will bring back inflation and bring a halt to the recovery.
——–Agencies