2014 Index of Economic Freedom

Libya

overall scoreN/A
world rank
Rule of Law

Property Rights10.0

Freedom From Corruption18.3

Limited Government

Government Spending0.0

Fiscal Freedom95.0

Regulatory Efficiency

Business Freedom50.1

Labor Freedom77.9

Monetary Freedom66.9

Open Markets

Trade FreedomN/A

Investment Freedom5.0

Financial Freedom20.0

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Quick Facts
  • Population:
    • 6.4 million
  • GDP (PPP):
    • $77.4 billion
    • 104.5% growth
    • -3.7% 5-year compound annual growth
    • $12,066 per capita
  • Unemployment:
    • 30.0%
  • Inflation (CPI):
    • 6.1%
  • FDI Inflow:
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Background

After the 2011 overthrow of dictator Muammar Qadhafi by rebels backed by the U.N. Security Council and a NATO bombing campaign, elections were held in July 2012. The new government led by President Mohammed Magarief and Prime Minister Ali Zeidan has struggled to rein in fiercely independent militias fighting for control of territory and resources. Oil and natural gas provide about 80 percent of GDP, 95 percent of export revenues, and 99 percent of government revenues. Economic recovery, which began in 2012, has been driven by the energy sector, which is producing at pre-war levels. The government faces major challenges in disarming and demobilizing militias, imposing the rule of law, and reforming the state-dominated socialist economy.

Rule of LawView Methodology

Property Rights 10.0 Create a Graph using this measurement

Freedom From Corruption 18.3 Create a Graph using this measurement

Corruption has long been pervasive in the private sector and in government. The fall of the Qadhafi regime raised some hopes that the level of graft would decline, but oil interests, foreign governments, smuggling groups, and armed militias often still wield undue influence, especially in the South, and opportunities for corruption abound in the absence of effective fiscal, judicial, and commercial institutions.

Limited GovernmentView Methodology

The top individual income tax rate has fallen to 10 percent, and the top corporate tax rate remains 20 percent. A 4 percent surcharge for the “Jihad” fund is applied to corporations. Oil revenues have helped to bolster public finances even though taxation has been enforced only erratically since the beginning of 2011. The overall tax burden is about 1 percent of GDP. Public expenditures are around 67 percent of GDP. Libya has no public debt.

Regulatory EfficiencyView Methodology

Regulatory efficiency is very poor, and only limited private entrepreneurial activity has been successful. Application of regulations is inconsistent and non-transparent. The labor market remains destabilized, and the informal sector is large. Increased spending on public-sector wages adds to inflationary pressure, which the government attempts to mitigate through extensive (and price-distorting) food, fuel, and electricity subsidies.

Open MarketsView Methodology

Libya has a 0 percent average tariff rate, but civil unrest is a significant deterrent to international trade and investment. The financial system continues to function relatively normally, but limited access to financing has severely impeded any meaningful private business development. Commercial banking has been dominated by four main banks.

Country's Score Over Time

Bar Graph of Libya Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Libya to other economic country groups

Regional Ranking

rank country overall change
1Bahrain75.1-0.4
2United Arab Emirates71.40.3
3Qatar71.2-0.1
4Jordan69.2-1.2
5Israel68.41.5
6Oman67.4-0.7
7Kuwait62.3-0.8
8Saudi Arabia62.21.6
9Lebanon59.4-0.1
10Morocco58.3-1.3
11Tunisia57.30.3
12Yemen55.5-0.4
13Egypt52.9-1.9
14Algeria50.81.2
15Iran40.3-2.9


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