What Prospects for Libya's Private Sector?

By Padraig O'Hannelly.

Husni Bey, the chairman of HB Group -- according to some, Libya's richest man -- is not happy with Libya's lack of progress towards a free market economy.

In an interview with Voice of America, he criticised what he sees as a national mentality that wants everything from the government, and said he believes Libya’s new leaders are involved in mass institutional bribery.

Libyan's know the importance of being free to choose how society is governed, but for many people real "daily democracy" is the ability to compete in a free and open marketplace.

As a reader of Libya Business News, do you think the state sector is disproportionately large, and how do you view the prospects for the private sector? Please let us know your views in the Comments section below.

4 Responses to What Prospects for Libya's Private Sector?

  1. Katarina Vidakovic 5th March 2013 at 1:46 pm #

    Private sector in Libya needs to be networked (in clusters or the other kind of linking). In the beginning, networking should be led by an agency, established by the government, made up of Libyans and also experienced representatives of international organizations and consultants ready to provide support to help Libya to achieve faster and more efficient development.

    As individuals, private owners are left on their own, without any chance to provide serious funds and markets. The government should stimulate the private networking by easier loan approval, incentives and benefits. When they see the benefits of cooperation, private owners will be stimulated and interested in business networking. I think it is important for start up companies and also for existing entrepreneurs and private companies. It is also extremely important for companies intending to export goods to the international market.

    Traditional moral and cultural/religious values ​​can contribute in successful networking in a specific and stimulative way - beside the contracts, in Libya that could be based on the honor, given word and partnership.

    Further development on the basis and in direction mentioned above may contribute to further healthy considering and thoughts about modern regions in Libya - based on economic interests, not on political divisions.

  2. Phil Hodkinson 5th March 2013 at 1:46 pm #

    This guy is correct; Libya needs to develop a dynamic private sector to speed up the general development of the country at large.
    The new government have to be seen to be giving every assistance for this to happen.
    However they should also be careful not to put rich and powerful people in a position to be able to manipulate this newly growing sector to their own advantage.
    There is also plenty of free help and advice available from friendly organisations within UK.

  3. Zak gariani 6th March 2013 at 8:10 am #

    Private Sector Problem Issues in Libya:

    The private sector in Libya is weak, fragmented and underdeveloped.

    Libya has no effective, responsible private sector, able and combat to this.

    In 2006 around 98% of registered private businesses were formed by a very loose network of small businesses and micro-enterprises with low levels of productivity.

    The main reason for the private sector's weak performance in Libya is due to the Ghaddafi's economic policies that battled private investment and increased high levels of government bureaucracy and outright corruption.

    To date, private sector investment has been limited given the uncertainty over security and future government policy.

    But now, Libya has an opportunity to break with the past.

    The following are issues that need to be tackled:

    1. Facilitating the establishment and growth of the private sector should be at the top of the policy agenda.

    2. Such measures needed to go hand in hand with strengthening the education system and increasing human capital.

    3 The sector requires innovative mechanisms to encourage entrepreneurism to enable graduates to start their own businesses based on their creative ideas.
    4. In order to generate sustainable growth and job creation in the medium term, the Libyan government should lift all restrictions on the private sector in addition to creating a favorable environment for it to flourish.

    Banking Sector Financing Problem Issues in Libya:

    The financial market is weak and fragmented.
    Libya's banking system is dominated by four banks which are owned by the government and constitute almost 90% of Libya's banking sector assets.

    A Domestic credit markets do not exist and need to be the main driving force behind jump starting the economy.

    These banks are bureaucratic and inefficient.

    Public Sector Problems:
    1. Around 65% of the Libyan labor force depends on government or public sector positions, and the International Monetary Fund as almost 19 percent of GDP estimates the government wage bill alone.
    2. There is an urgent need for robust measures to tackle corruption and financial waste in the public sector.
    3. The size of the civil service needs to be reduced, and public- sector wages raised .

    Soulutions:

    1. Modernize the infrastructure of its economy, and create private-sector employment opportunities for its citizens.
    2. Private sector loans and funding needs to increase dramatically,of small- and medium-sized business, given first priorty, given that most employment creation happens in this sector.Enhancing access to finance for entrepreneurs by developing the nascent financial sector will go a long way to create new employment opportunities and foster the growth of the non-hydrocarbon economy.
    3. To meet the demand, it will be important to establish training programs for workers and job seekers, and to reform the education system to reflect new needs, such as language and computer skills.
    4. In order to stimulate job creation in the private sector, the new Libyan labor law must give employers control over determining wages and the ability to dismiss workers on the basis of poor performance or economic necessity.

  4. Gérard nordon 6th March 2013 at 5:48 pm #

    HusniI is absolutly right ... Montesquieu and Locke said in the book L Esprit des Lois (law spirit) to separate government from the private sector and to choose between legislatif and executive power...this has been written in the Human Right declaration..
    So Lybian government has to start like in 1789 then things will be on the good rails..
    At your disposal

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