Libya’s Parliament passed a $41-billion budget for 2008 aimed at giving Libyans a direct share in oil wealth after leader Moammar Gadaffi said economic development was too slow, state media reported on Tuesday.
Many Libyans say they are still waiting to benefit from soaring oil revenues and rising foreign investment following Tripoli’s 2003 abandonment of prohibited weapons programmes and subsequent return to the mainstream of international politics.
Gadaffi told the Parliament, also known as the General People’s Congress (GPC), on Sunday that the estimated six million population should receive oil wealth directly because the government had failed to develop the economy quickly enough.
”The GPC issued a resolution … regarding the general budget for this year for 49,47-billion dinars ($40,8-billion) during the financial year 2008 to spend this amount on the programme of distributing wealth and the objectives of the general budget,” a parliamentary statement carried by state TV and radio said.
The statement said a committee composed of representatives of several institutions would be established to examine ways of giving Libyan families a share in state revenue.
The 2008 budget appeared to be a big increase on 2007.
The assembly, meeting in Gadaffi’s home town of Sirte on Monday evening, did not give a figure for the 2007 budget but state media a year ago said the government of the North African country planned spending of 31-billion dinars in 2007.
Despite ownership of Africa’s largest oil reserves, the state-dominated economy has long been enfeebled by international sanctions, old-fashioned centralised management, a primitive banking sector, corruption and red tape.
But hopes of change have risen with the revival of ties with Washington. In May 2006, the Bush administration said it would restore formal ties with Tripoli as a reward for Libya’s scrapping a programme of mass destruction weapons.
The government said in November 2007 it planned to spend 150-billion dinars on public works including building schools and renewing water and sanitation systems over the next five years.
The International Monetary Fund (IMF) staff said in November 2007 that the economic outlook for Libya was bright but cautioned the government to contain government spending, especially when it came to public-sector wage hikes.
It said a large increase in spending had pushed inflation sharply higher from lows in the first half of 2007 to about 11% in the third quarter of that year.
It said it expected Libya’s economy to expand 8,8% in 2008 after expected growth of 6,8% in 2007, buoyed by growth in both oil and non-oil sectors.
To try to ease budget pressures and stimulate the private sector, the government in January 2007 announced plans to lay off 400 000 people, or more than a third of its workforce. – Reuters