世界银行-《利比亚经济监测》2023年秋季（英）

AuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorized

PublicDisclosureAuthorizedPublicDisclosure

MiddleEastandNorthAfricaRegion

LIBYA

ECONOMICMONITOR

Fall2023

Libya

EconomicMonitor

Fall2023

LIBYAECONOMICMONITORIFall2023

CONTENTS

BOXES3

ACRONYMS4

EXECUTIVESUMMARY5

RECENTECONOMICDEVELOPMENTS8

Conflict,FragilityandGovernance8

Growth16

ExternalSector20

PublicFinances21

RECENTSOCIALDEVELOPMENTS25

PovertyandVulnerability25

HealthServices27

Education28

WaterandSanitation28

AccesstoElectricity29

OUTLOOK30

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LIBYAECONOMICMONITORIFall2023

BOXES

Box1:TheDernaTragedyandWaterSectorGovernanceinLibya10

Box2:RecentProgressTowardtheReunificationoftheCentralBankofLibya13

Box3:TheeconomicImpactsofthestormDaniel:TheRDNAassessment17

Box4:TheimportanceofplanningpublicinvestmentFigures23

Figure1:FinancialCostsoftheConflictontheWaterSector(2012-2019)10

Figure2:GeneralCompanyforWaterandWastewaterBudget,2018(US$million)11

Figure3:Libya:ViolenceHassharplyAbatedsince201111

Figure4:Violentincidentswereregisteredalloverthecountrybuthighlyconcentratedinoil-richareas12

Figure5:Libya:MostVolatileGrowthPerformanceWorldwide14

Figure6:Since2011,OilProductionremainedlargelydependentonPoliticalandSecurityconditions15

Figure7:DiversificationinLibya:StagnatingoverDecades15

Figure8:SpatialDisparitiesAmongDistrictsasourceofpoliticaltension15

Figure9:InequalRepartitionofGDPPerCapitaAmongDistrictsin202315

Figure10:Oilsector:Asignificantincreaseinproductionbutoilpricedeclineshrankexportsrevenue16

Figure11:OilandGasFieldGeographicPositionsarefarfromthefloodedareas16

Figure12:sectoraldistributionofthedamagesandloss17

Figure13:regionaldistributionofthedamagesandloss17

Figure14:LimitedGDPimpactin2023thatcouldincreasein2024and202518

Figure15:Thefloodingaffectsalleconomicsectorexceptforoilandminingsectors18

Table1:GDPlossbydistrictrelativevariationvis-à-vistothebusiness-as-usualscenario)18

Figure16:Inflationhaseasedgraduallyin202319

Figure17:Theeaseofinflationhasbeenperceivedinallregionsin202319

Figure18:MoneySupplyandCurrencyOutsidetheBankingSystemhasgrownin202320

Figure19:CurrentAccountBalanceandNetOfficialReservessignificantlyincreasedin202221

Figure20:Loweroilpricesandreducedtradebalancesurplusduringthefirstsevenmonthsof202321

Figure21:Duringthefirstninemonthsof2023GNUachievedafiscalsurplus23

Figure22:CapitalExpenditureissignificantbutlargepartofdirectedtowardtheNationalOilCorporation24

Figure23:DiverseImpacts:HowSector-SpecificInvestmentsShapeGDPOutcomes24

Figure24:PovertyremainschallengemainlyintheEastandSouthofLibya25

Figure25:AlargeProportionofHouseholdsareusingCopingStrategytocovertheiressentialneeds26

Figure26:Libyansaregettingindebtedtomeettheirbasicneedsmainlyfromfriends27

Figure27:QualityofEducationSysteminLibyaoneofthelowestworldwide28

Table2:MacroPovertyOutlookIndicators(annualpercentchange,unlessotherwiseindicated)31

Note:Theboundaries,colors,denominations,andotherinformationshownonanymapinthisworkdonotimplyanyjudgmentonthepartoftheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries.

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LIBYAECONOMICMONITORIFall2023

ACRONYMS

ACLED

ArmedConflictLocation&EventData

CBL

CentralBankofLibya

CGE

ComputableGeneralEquilibrium

CPI

ConsumerPriceIndex

EU

EuropeanUnion

FAO

FoodandAgricultureOrganization

FDI

ForeignDirectInvestment

GAWR

GeneralAuthorityforWaterResources

GCD

GeneralCompanyforDesalination

GCWW

GeneralCompanyforWaterandWastewater

GDP

GrossDomesticProduct

GECOL

GeneralElectricityCompanyofLibya

GNS

GovernmentofNationalStability

GNU

GovernmentofNationalUnity

HoR

HouseofRepresentatives

IMF

InternationalMonetaryFund

JENA

JointEducationNeedsAssessment

LNA

LibyaNationalArmy

LYD

LibyanDinar

MEB

MinimumExpenditureBasket

MMRP

Man-MadeRiverProject

MSNA

Multi-SectorNeedsAssessment

NOC

NationalOilCompany

OCHA

OfficefortheCoordinationofHumanitarianAffairs

OPEC

OrganizationofthePetroleumExportingCountries

PHC

PrimaryHealthcare

RTGS

Real-timeGrossSettlement

RDNA

RapidDamageNeedsAssessment

UN

UnitedNations

UNICEF

UnitedNationsChildren’sFund

UNITAR

UnitedNationsInstituteforTrainingandResearch

WHO

WorldHealthOrganization

WLGP

WesternLibyanGasProject

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LIBYAECONOMICMONITORIFall2023

SUMMARY

EXECUTIVE

I

nSeptember2023,LibyawasstruckbystormDaniel,resultinginthebreachoftwodams,significant

flooding,lossoflifeandphysicaldamagesinDernaandsurroundings.

RecentdatafromUnitedNations(UN)agenciesrevealsnearly4,000fatalities,9,000missingindividuals,and40,000displacedresidents.Satellite-derivedbuildingdamageanalysisidentifiesatotalof30,975buildings/structureswithvisibledamageswithintheDerna,AlJabalAlAkhdar,AlmarjandBenghaziGovernorates.Inaddition,346Kilometers(km)ofroadshavebeendamagedorarepotentiallydamaged.

Intheaftermathofthedisaster,Libyaexperiencedararemomentofunityandsolidarity.Civilsocietyactivelyprovidedinitialsupporttodevastatedareas.TheUnitedNations’OfficeofCoordinationofHumanitarianAssistance(OCHA)assessedthehumanitarianneedsatUS$71.4million.TheGovernmentofNationalUnity(GNU)allocatedUS$412million(2LYDbillion)fortheBenghaziandDerna

ReconstructionFund.Atthesametime,theHouseofRepresentatives(HoR)approvedUS$2.1billion(10LYBbillion)forregionalrecovery,albeitwithnoclearfundingmechanism.TheGNUallocatedanadditionalmonthofsalarytocivilservantsintheaffectedareas.

Thebreachingofthetwodamshighlightsthedeficienciesinpublicinvestmentandmaintenanceplanningandspending.Publicinvestmentspendinghashistoricallyservedasanadjusteroftheoilrevenuefluctuations,resultinginvolatileand

unpredictablespendingallocations.Maintenanceoperationsarepartsofchapter2buttheallocationislimited.

In2022morethan70percentofChapter2wereallocatedtosovereignministryandtosecurityexpenditure.Moreover,whenofficialinvestmentspendingisrelativelyhigh(15.3percentofGrossDomesticProduction(GDP)in2022),asignificantportionoffundsisoftendirectedtowardstheNationalOilCompany(NOC)and

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LIBYAECONOMICMONITORIFall2023

security-relatedexpenses,whereasonlyasmallfractionisearmarkedforinfrastructureprojects.|Thesedecisionsappeartobemadeonanadhocbasis,lackingacohesiveeconomicvisionandaconsiderationofthemediumtolong-termdevelopmentneedsandimpacts.Lastly,fiscalspaceforinvestmentspendingisrelativelynarrow:publicspendingonsalaries,subsidiesandtransfersaccountsfor70percentoftotalspendingornearly33percentofGDP.

PovertyandspatialdisparitiesaccentuatevulnerabilitytofloodinganddisastersandarekeydriversofLibya’sfragility.Tripoli’sGDPpercapitais35percenthigherthanthatofDernaandAlButnan,themostdisadvantageddistricts,accordingtobigdataanalysis.Between84and97percentofhouseholdsintheeasternandsoutherndistrictsreportsignificantbarrierstoaccesshealthcare,comparedto40percentofthewesterndistricts(OCHA).Meanwhile,educationqualityislowanddeclining.TheLibyaneducationsystemwasconsideredtobetheworstsystemamong144countriescoveredbythelastWorldCompetitivenessreportcoveringLibya(2015).

ThefloodingscausedlimiteddisruptionstotheoilsectorandnationaleconomyandtheLibyaneconomyisexpectedtoreboundin2023-2024.Oilproductionwasnot

affectedbythestormandfloodinginDerna.Oilexportterminalswereonlyclosedforafewdaysforprecautionaryreasons.Dernacontributesamodest

1.75percenttoLibya’sGDPandtheagriculturalsector,themostaffectedsectorbytheflooding,contributeslessthan2percentofGDP.Asaresult,theeconomyisprojectedtogrowby14.1percentin2023,reboundingfroma-1.2percentcontractionin2022,andby4.7percentin2024.Thisisassumingthatoilproductionisnotaffectedbypotentialsecurityandsocialdisruptions.

Uncertaintiesanddownsideriskspersist.Keyamongthesearerisksrelatedtoconflict,toglobaleconomicdevelopments,especiallyfromtheChineseeconomy’sdecelerationasthiscouldnegativelyaffectoildemandandprices.TheimpactoftheconflictintheMiddleEastcouldleadtoanupwardpressureonenergypriceswhichwouldbetoLibya’sexportrevenueadvantage.However,heightenedgeopoliticaltensionscouldalsounderminethecountry’ssecurityandstability.

Libya’smedium-termgrowthanddevelopmentchallengesaremajorandpressing.Keyamongtheseistoaccelerateandstabilizegrowth:GDPpercapitashrankby54percentbetween2010and2022.Furthermore,Libya’seconomywasamongthemostvolatileduringthepastdecadeduetotheconflict,instability,

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LIBYAECONOMICMONITORIFall2023

fragmentation,oilexportblockades,andweakeconomicpolicies.Anotherchallengeistodiversifytheeconomytomakegrowthmorejob-rich,moreinclusivetowomenandyouthand

lessintensiveincarbon.Thiscouldbeachievedbystrengtheninghumancapitalandrebuildinginfrastructure.Buildingawide,transparent,andeffectivecashtransfersystemcouldbeatransformationalapproachtoreformpublicfinancesandthepublicsectorandrebuildtrustbetweencitizensandthestate.Partlylinkedtotheaboveisthechallengetoaddressthetransparencyandequitablesharing

ofoilresources,includingtoaddressregionaldisparitiestoreducerisksofconflictandfragilityintheinterestofbuildingalastingpeace.Lastly,the

overallinstitutionalandeconomicpolicyframeworkandcapacityneedtobestrengthenedtoundertakesuchmajortransformation.

ButagreementsconcerningamoreunifiedandcohesiveresponsecouldopenthedoortoabroaderreconciliationandreconstructionprocessinLibya.Thiscouldbeacriticalmomenttorespondtothedemandforamoreunified,effective,andaccountableState,aswellastotransformLibya’ssignificantresourcesintogreaterwealthandprosperityforallcitizens.

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LIBYAECONOMICMONITORIFall2023

RECENTECONOMIC

DEVELOPMENTS

Conflict,FragilityandGovernance

andsuppliesfromvariouscitieswereconveyedtoDerna,andcoordinationamongarmedgroupsfacilitatedthe

initialaiddelivery.TheGovernmentofNationalUnity(GNU)announcedtheallocationofLYD2billion(US$412million),anemergencycashtransferprogramforaffectedhouseholds(whosetermsaretobedefined),LYD92million(US$19million)forthereconstructionofdamagedschoolsandthepaymentofone-monthextrasalarytocivilservantsintheaffectedregions.TheGNUhasimportedafirstbatchofmobilehomestoprovidetemporaryshelterforLibyanswhosehomeshavebeendestroyedbythefloods.TheHouseofRepresentatives(HoR)approvedUS$2billionforregionalrecovery,butthesourceoffundingremainsunclear.

Over24countriesandinternationalorganizationsarecoordinatingtheirresponsetoassistLibyan

OnSeptember10,2023,stormDaniel

devastatedLibya’seasterncoastal

region.Twodamsburstduetothe

strongrainfallclosetothecoastaltown

ofDerna,oneofthepoorestregionsin

Libya,andlargepartsofthecityandits

surroundingareaswereflooded.Nearly

4,000peoplehavedied,9,000people

arestillmissing,and40,000people

remaindisplaced1.Satellite-derived

buildingdamageanalysisidentifies

atotalof30,975buildings/structures

withvisibledamagesandconstraints

withintheDerna,AlJabalAlAkhdar,

AlmarjandBenghaziGovernorates,

andupto346kilometers(km)ofroad

aredamagedorpotentiallydamaged

(UnitedNationsInstituteforTraining

andResearch—UNITAR).

Thecatastropheinitiallyledtoa

momentofnationalsolidarityand

unity.Civilsociety,theinternational

communityandauthoritiesrushedto

helptheaffectedareas.Aidworkers

1Source:

/report/libya/iom-flash-appeal-libyastorm-daniel-september-2023-june-2024

and

/report/libya/libya-floods-fact-sheet-2-fiscal-year-fy-2023

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LIBYAECONOMICMONITORIFall2023

authoritiesinaddressingthecrisis.

TheWorldFoodProgram(WFP)hastripleditsaid,supporting16,000individualsin13cities,yetWFPwouldneedanadditionalUS$6.5millionfor100,000affectedpeople(WFP,SituationReport,September22,2023).TheUnitedNations’OfficefortheCoordinationofHumanitarianAffairs(OCHA)hasappealedforUS$71.4millioninhumanitarianaid.However,theabsenceofaunifiedcrisismanagementsysteminLibyahashinderedinternationaleffortstorespondtotheflooddisaster.2

Theeffectivenessoftheresponsehasquicklyrunintopoliticaldivisions.TwodistinctDernareconstructionfunds,theBenghazi-DernaReconstructionFundandonereconstructionfundwhichisyettobeestablishedandannouncedbytheHoR,havebeenannouncedandinternationalreconstructionconferenceswereplannedbythetwoparallelgovernments.TheoneorganizedbytheGNStookplaceinearlyNovemberwhereasthesecondhasnotbeenheldtodate.Withtheslowanddisorderlyresponse,angerinDernaledtoprotestsonSeptember18,2023.

Theinternationalcommunity,throughtheSpecialRepresentativeoftheSecretary-General(SRSG)oftheUnitedNationsSupportMissioninLibya(UNSMIL),hascalledforaunifiedresponse.

Reconstructionofflood-affectedareasshouldproceedspeedily,basedonacredible,independent,andobjectiveassessmentofthedamageandneeds,professionallydeterminedcostestimates,andtransparentcontractingandprocurementprocesses.

Thedisasterillustratedsomeofthe

country’seconomicgovernancechallenges.Yearsofconflictsanddivisionshaveledtoinadequatepublicinvestmentandmaintenanceofinfrastructure,includinginthewatersector(Box1).

ThecatastrophealsohighlightedtheneedtodevelopaspecificclimatechangeadaptationstrategyforfragilecountrieslikeLibya.Climate-vulnerablepopulationsinacontextofpoliticalinstabilityneedssupportforadaptivemeasuresandinvestments,particularlyincludingearlywarningsystems,disasterpreparednessinvestments,andresilientbuildingconstruction.

2AspointedoutbytheLibya’sPresidentialCouncilonSeptember24

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LIBYAECONOMICMONITORIFall2023

Box1:TheDernaTragedyandWaterSectorGovernanceinLibya

Libyaisamongtheworld’smostwater-scarcecountries,withanaveragerenewablewaterendowmentofabout100cubicmetersperpersonperyear,representingone-tenthoftheinternationallyadoptedscarcitythreshold.Thecountryhasnorunningrivers,lakes,oranyotherrenewablesourceoffreshwaterwithsufficientquantitiestoestablishsettledagriculture.Thecountryhasinvestedmassively—anestimatedUS$41billion—inbuildingwaterinfrastructure.Mostoftheseinvestmentsoccurredbetween1983and2010andincludedundergroundinfrastructureforfossilwatersourceutilization.Groundwateristhemainsourceofwater.Itcoversabout83percentofthewatersupply.Bycontrast,surfacewater(includingdams)coversabout5percent.

TheMinistryofWaterResourcesandtheGeneralAuthorityforWaterResources(GAWR)areinchargeofoverallwaterresourcemanagement,strategicplanning,andpolicymaking.Responsibilityforexecutingstrategies,plans,andprojectshasbeensharedmainlybythreestate-ownednationalmonopolies:theGeneralCompanyforWaterandWastewater(GCWW),theauthorityfortheMan-MadeRiverProject(MMRP),andtheGeneralCompanyforDesalination(GCD).Eachmonopolyalsohasregionalsubsidiariesandoperatingunits.

Thewatersectorsufferedsignificantdamagesduetothearmedconflictwhichhasimpaireditsproductivecapacityandraiseditsoperatingcosts,thustranslatingintoasignificanteconomiclossforthecountryandthepopulation.Waterinfrastructureisvulnerabletotargetedattacksthatcouldeasilydisableitsproductionanddeliverycapacity,asshownrepeatedlybyshutdownscausedbymilitiagroups.Inaddition,amajoreffectofthearmedconflicthasbeentheunpredictabilityoffiscalexpendituresbecauseofdisruptedhydrocarbonsectorrevenues,whichhastranslatedintocutsoncapitalexpenditures(Figures1and2).TheunitcostspercubicmeteratmarketpricesoftheMMRProsefromUS$0.21in2011toUS$0.26in2020,anincreaseofabout25percent.TheincreasemainlyreflectstheMMRP’slossofeconomiesofscalebyoperatingat50percentcapacityutilization.Asaresult,thefinancialcostsoftheconflictontheLibyanwatersectorwereestimatedatUS$2.2billionin20193,withtheurbanpopulationpayingthehighestpriceofthewaterscarcityduetotheconflict,particularlyaswatershortageshavebecomefrequentandregularinthecities.

Beyonditsexceptionalaspectandunprecedentedlevelofprecipitation,theDernatragedyalsoreflectsthestateoftheLibyanpublicsector,withcumulateddegradationofpublicinfrastructureandgovernanceoverthedecades,worsenedbytheconflict.

Newinvestment(andpropermaintenance)andbettergovernanceisacutelyneededtoensurethesafetyandmeetthebasicdemandsofthepopulation.

3WorldBank,“TheLongRoadtoInclusiveInstitutionsinLibya,”(Washington,DC:WorldBank,2023).

11

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Althoughtheoverallsecuritysituationhasimproved,tensionsremainsubstantial,oftenoverthedistributionofoilrevenues.

Thesecurityandpoliticalsituationhasimprovedoverthecourseofthisyear,asevidencedbythelessthan200violentincidentsin2023(Figure3).However,thisprogressistenuous,markedbysporadicandsometimesintenseclashesinvariousregions,includinginTripoliinAugust2023.

LIBYAECONOMICMONITORIFall2023

ThecollapseddamsresponsiblefortheDernatragedywerebuiltfrom1973to1977tocontrolfloodings,irrigateagriculturallandsandprovidewatertonearbycommunities.Dernahashistoricallybeenknowntobepronetoflooding,havingexperiencedfourmajorfloodsbetween1942and1986.Indeed,thiswasthereasonwhythetwodamswereconstructed.Cracksinthedamshadbeenreported,includingwarningsoffloodingriskonDernaasearlyasin1998,andasrecentlyasin20224.

Figure1:FinancialCostsoftheConflictontheWaterSector

(2012-2019)

US$,million

ApprovedAuthorized

Arrearsfrom

previousyears

US$349million

15%

US$1316million

59%

Source:WorldBank.

Note:MMRP=Man-MadeRiverProject.

Figure2:GeneralCompanyforWaterandWastewaterBudget,2018(US$million)

MMRPfinancialloss

US$581million26%

Source:GeneralCompanyforWaterandWastewater.

Irrigation

farmers

financialloss

Urbanpopulation

financialloss

Other

operationsand

maintenance

expenses

Salariesand

administrative

expenses

Watersupply

andenergy

expenditures

Capital

expenditures

250

200

150

100

50

0

Figure3:Libya:ViolenceHassharplyAbatedsince2011.

Numberof

events

1800

1600

1400

1200

1000

800

600

400

200

0

Source:ArmedConflictLocation&EventDataProject(ACLED).

4NYTimes(16/09/2023),revealedthata1998studycommissionedbytheLibyangovernmentexposedstructuralissuesindams.Despitea10-yeardelay,aTurkishcompanywaseventuallyhiredin2008.Paymentdelaysbythegovernmentledtotheproject’scommencementin2010.

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LIBYAECONOMICMONITORIFall2023

Politicaltensionsofteninvolvethreatsofblockadingoilproductionorexportfacilities(Figure4).5

Figure4:Violentincidentswereregisteredalloverthecountrybuthighlyconcentratedinoil-richareas.

ThosewouldmateriallyaffectLibya’seconomy.The2013-2016blockadeofLibya’soilexports,forexample,isestimatedtohavecostthecountryUS$100billion(173percentofGDP)(Ghaddar,George,andLewis,2016).In2020,theoilblockadewasvaluedatmorethanUS$12billionlost(26percentofGDP),withspillovereffectstotheentireeconomy,includingleadingtolowerpublicinvestment.

Althoughsomeprogresshasbeenmade,thereisnoconsensusregardingtheelectoralprocesstodate.InOctober2023,theHoRapprovedthedraftelectorallawsandcalledforthecreationofanewinterim,unifiedgovernmenttooverseetheelectoralprocess.However,theHighCouncilofStaterejectedtheamendmentsandtheGNU’sPrimeMinisterrefusedtostepdownbeforethepresidentialandlegislativeelections.

TheCentralBankofLibya’s(CBL)reunificationprocess,ifeffectivelyimplemented,willbeakeysteptowardbettertransparencyandmanagementovertheeconomy.TheCBListhecentralactorofthecountry’soverallresourcemanagement(Box2)andreunificationoftheCBLwiththeeasterCentralBankbranchwasannouncedonAugust31,2023.TheCBLsymbolizesthestatusofLibyaninstitutions,anditsreunificationwillhelpimprovethecountry’soverallgovernance.Itwillalsobeafirststepconsistentmacroeconomic,fiscalandmonetarypoliciesforthecountry.

5Forexample,inlateJune2023,theGovernmentofNationalStability(GNS)threatenedtoblockadeoilandgasexportsfromterritoryunderitscontrol,claimingtheTripoliadministrationwaswastingenergyrevenues.Atthesametime,theLibyaNationalArmy(LNA)hasthreatenedmilitaryactionunlessoilrevenuesaredividedfairly.

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LIBYAECONOMICMONITORIFall2023

Box2:RecentProgressTowardtheReunificationoftheCentralBank

Givenitscentralmacroeconomicpolicyandassetmanagementfunctions,theCBL’sreunificationiskeyforLibya’sfuture.The2015SkhiratAgreementreferstotheCBLasa“sovereigninstitution”(inmanyothercountries,centralbankshaveinstitutionalautonomy,buttheyarenotsovereign).TheCBListhemainshareholderofthefivestate-ownedbanksthatholdover90percentoftheassetsofthebankingsystem(therestisheldby19commercialbanks),whilealsoservingastheregulatoryagencyoftheb