The annual conference of the Faculty of Economics at Al-Margeb University was held yesterday at the headquarters of the National Council for Economic and Social Development under the title: From Rents to Economic Diversification: Reality – Challenges – and Transformation Policies.
The conference was opened by Mahmoud Ahmed Al-Futaisi, Director General of the National Council for Economic and Social Development Board (NESDB), where he indicated the importance of the conference’s activities. The conference also witnessed the presence of several experts, specialists, national stakeholders and decision-makers, and among the guests of the conference were the Head of the Executive Team of the Prime Minister’s Projects, the Undersecretary of the Ministry of Economy for Free Zones Affairs, the Chairman of the Advisory Team at the Ministry of Higher Education, the Undersecretary of the Ministry of Transportation for Land Transport Affairs, the Dean of the Faculty of Economics, Al-Margeb University, and the Assistant Director General of the NESDB.
During the conference, four scientific sessions were held in which more than fifteen reviewed scientific papers were presented in which Libyan and Arab universities participated, and the main themes of the conference dealt with the axes:
- The economic axis
- The financing axis
- The accounting axis
- The political and legislative axis
- The technical axis
The papers focused on the necessity and importance of transitioning to a “diversified economy” through gradual and deliberate policies, away from shocks that may affect stability.
Mohamed Abusneina, former Central Bank of Libya Board Member and a leading economist and academic, contributed with an intervention in the first Dialogue Session, which dealt with the definition of the rentier economy and the rentier state.
Abusneina said there is a need to develop and adopt a vision for the Libyan economy that includes a clear strategy and objectives to diversify the economy and a clear identity for the Libyan economy.
He said there is no choice but to move towards this goal, to avoid the collapse of the service system and increase poverty rates, in light of the challenges facing the financial sustainability of the state, the risks faced by the oil market in favour of alternative energy sources, and the benefits of the Fourth Industrial Revolution and its developments, and expectations of low oil prices and the decline in its revenues.
It was also noted at the conference that the vertical diversification of the economy is adopted, as opposed to horizontal diversification, by moving towards investment in non-traditional areas such as transit trade by taking advantage of the geographical location and considering it as an economic resource. Also, investment in free zones, tourism, export industries whose materials are available and have a comparative advantage, exploitation of seashores for tourism purposes, and the economics of marine resources, which are areas in which the national private sector and foreign investment can play a large role. This can be through public-private partnerships, by providing financing outside the general budget of the state and generating alternative income to finance the public budget from various sources.
The importance of overcoming obstacles and addressing the distortions that hinder the diversification of the economy and transforming it into a productive economy was also noted. This, through the review of legislation regulating investment, the development of banking services, improving the business environment, stabilizing the exchange rate of the Libyan dinar, initiating structural reforms for various service sectors, economic reforms, and restructuring the Libyan economy to increase the contribution of non-oil sectors to the GDP and enhance the role of the private sector in economic activity.
At the end of the conference’s activities, the conference made its recommendations, the most important of which were:
· Restructuring the Libyan economy to be a productive economy beyond the stage of unilateral dependence on oil.
· Giving utmost importance to small and medium-sized enterprises and developing their financing mechanisms.
