The head of the Libyan Business Council (LBC), Rashid Swani, told Al Jazeera Channel that while Libya possesses wealth, it lacks a genuine economic base.
Swani was speaking on the sidelines of the third edition of the Libya Travel and Tourism Fair, held at the Great Hall of Tripoli Sports City (1 to 3 November).
Swani said having wealth is not the same as having an economy. The Central Bank of Libya (CBL) has about LD 80 billion in its accounts, but neighbouring countries probably don’t have two billion in their Central Banks. But they have an economy (an economic system). They have products and productivity, he added.
Wealth is not a solution. It is a means. Libya suffers from a lack of an economy. When Libyans say my salary is weak or there is a liquidity crisis, this is not the problem, it is a symptom, he explained.
He added that the size of deposits or reserves alone does not build a strong economy, and that a large Central Bank balance does not necessarily indicate economic strength. What truly matters, he said, is productivity, diversification of sectors, and the state’s ability to sustainably produce goods and services.
The economy is goods and services. These need to be supported. We need to enshrine the culture of productivity not printing money or issuing bonds. There needs to be industry, productivity and services, he said in a not-so-veiled criticism of the CBL Governor and has planned policy.
Ninety per cent of our economy is a consumer economy. This creates inflation. The CBL has no control over this or the Foreign Exchange rate as we have imported inflation. We are a rentier state. The price of the barrel of oil is what determines the foreign exchange rate of the dollar in Libya, Swani added.
If you want to withdraw the cash (hidden in houses and outside the banking system), there needs to be the creation of industry so the economic wheel turns.
