Fifty-five members of the House of Representatives (HoR) issued a statement last Tuesday (8 April) on the devaluation of the dinar, stressing that the solution to the economic crisis is not through the reduction of the dinar or raising the price of the dollar, but through a package of economic reforms.
No comprehensive vision or radical solution to Libya’s economic crisis
The 55 members considered the Central Bank of Libya’s announcement to devalue the Libyan dinar against foreign currencies to be yet another in a series of monetary decisions taken without a comprehensive vision or a radical solution to the country’s worsening economic and financial crises.
The statement emphasised that such measures, which directly impact citizens’ livelihoods and purchasing power, should not be taken in isolation from comprehensive economic reforms. It emphasized that these measures should not be presented as the sole solution in light of the ongoing deficit and political division, in addition to the expansion of government spending outside the approved budget.
Abolition of the exemptions granted from exchange control
The HoR members announced that the solution to Libya’s economic crisis does not lie solely in devaluing the dinar or raising the exchange rate of the dollar, but rather requires the adoption of a package of serious and comprehensive reforms, most notably the abolition of the exemptions granted from exchange control, which have contributed to opening the door to excessive spending and burdening foreign reserves.
Reducing foreign spending
They also called for reducing foreign spending by reviewing the number of Libyan embassies abroad and their staff, reducing them by at least 80% to ease the burden on the general budget.
Proposed reforms
The proposed reforms include halting political competition in reconstruction projects between East and West, limiting spending to essentials only, taking into account national priorities and the needs of cities and villages, and transitioning to a productive economy by launching a five-year plan to transform from a rentier economy to one based on diversified sources of national income and strengthening the role of the private sector.
Enhanced public sector transparency, oversight and accountability
The HoR members see the proposals as enhancing transparency in public finances by activating oversight of government expenditures, controlling subsidies and salaries to achieve justice and efficiency, activating the role of the House of Representatives in overseeing monetary policy, and ensuring that the Central Bank of Libya is accountable to the legislative authority.
The statement added that halting all spending under Chapter 1 of the state budget, with the exception of salaries, ensuring that each employee receives only one income, reviewing appointments and secondments to ensure fairness, and disbursing only necessary funds to security and police agencies, regardless of their affiliation, while prioritizing funds based on the needs of national security and stability, are among these reforms.
The HoR members considered accepting requests for appropriations for essential goods only, implementing the House of Representatives’ decision to halt oil swaps, and ending the political divide and unifying state institutions by forming a unified government that works to implement reforms and end the division within sovereign institutions to be among the most important proposals.
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