Libya has a vast territory and a population of approximately six million, one-third of which are under 15 years old.
In 2006, it ranked 64th out of 177 countries on the annual Human Development Index, mainly due to its high per capita income and an average literacy rate of 82.6%. Libya is also endowed with large oil reserves, and its
dominant hydrocarbons sector represents 95% of export earnings and contributes to 60% of all public sector wages. Recent oil discoveries promise rapid foreign and domestic investment and an expansion of the hydrocarbons sector.
Since the normalisation of external relations, marked by the 2003
and 2004 lifting of UN and US economic sanctions, the government has
embarked on a clear path of economic reform. It is committed to
opening up the state-dominated economy by expanding the private
sector and encouraging foreign direct investment. Libya has
taken initial steps to move from a socialist-oriented to a
market-based economy. It has applied for WTO membership, reduced
some domestic subsidies and announced plans for privatisation
(the government still employs some 70% of all national employees).
Economic reforms, though, have been sporadic and subject to periodic
A broad cabinet reshuffle in 2007 established the Economic Development Board
(EDB), which immediately announced a number of reforms, such as an
across-the-board increase in public sector salaries, an increase in
housing/social welfare allowances, the creation of a personal savings and
retirement scheme and a new law to encourage local entrepreneurs by
providing loans for small enterprises. Also in 2007, an initiative to
streamline the public sector was launched to encourage the development of
the private sector and cut down the government’s massive wage bill by
releasing 400,000 employees (one-third of the workforce). As
compensation, released employees will be offered retraining and provided
loans to set-up their own business.
Expatriate workers from other Arab countries and Sub-Saharan Africa
are thought to number more than one million, some illegal. New
regulations to limit illegal workers in Libya were introduced in
2007, mainly requiring all immigrants to apply for work visas and
pay increased charges on foreign workers. A deadline was fixed for
all illegal workers to leave, resulting in some 35,000 Egyptian
workers returning to Egypt in early 2007.
The economy displays the classical features of an oil-rich economy:
lack of economic diversification and significant reliance on
These two features must be effectively addressed before Libya
tackles its serious structural unemployment problem. The
unemployment rate is as high as 30% and predominately affects
youth and women.
Libya faces important challenges that have a bearing on employment
prospects, such as human resource development, capacity-building,
economic diversification, entrepreneurship promotion and a
- Supporting the development of a national vocational training
- Promoting entrepreneurship culture, through training
trainers specialized in entrepreneurship and management
training, using ILO training tools for micro - and small
- Capacity building of ILO constituents in accessing
Occupational Safety and Health (OSH) information worldwide
- Facilitating networking with European OSH institutions