Wednesday, 12 January 2011
Libyan government is taking steps to enhance employment
The Libyan government is taking steps to enhance its employment factor to obviate the root causes of dissent which affect other North African regimes. Prime Minister Mahmoud al-Baghdadi has made specific proposals for the banks to deploy their capital in small businesses. It is argued that the talents of senior staff would be better rewarded in this activity rather than remaining in government employment. This and other would-be innovative policies will have no short-term effect but would place the Libyan economy in the right direction for the longer term.
The measures of economic improvement, especially in living standards, have been reinforced by the high level of government spending. In the 2008-12 period, allocations for development total around US$117 billion. So far, US$113 billion has reportedly been spent, of which US$59,700 million has apparently gone to fund housing developments. These accumulated additions to economic growth will play a major role in dampening any dissent which could arise from dissatisfaction over pay rates which have tended to stagnate.
The government has taken some time to develop its appreciation of the dangers of consumer price inflation, caused by the mis-match of supply and demand in a distorted market. Its preferred solution appears to be a moderate attempt to contain demand while also still providing expensive subsidies on staple goods and foodstuffs. So far, the change of policies has been comparatively successful.
The economic news appear to indicate that some real gains are being made in the living standards of a substantial number of Libyans, and especially those in Tripoli or other areas benefiting from large-scale government investment. The government obviously has in mind a bimodal growth strategy, with the larger industries operating as efficiently as possible within the global context while smaller industries, with protected industry status, provide both an appreciable area of job creation opportunities as well as being a useful input of added value.
For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.
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