2021 Index of Economic Freedom

Libya

OVERALL SCOREN/A
WORLD RANK
Rule of Law

Property Rights16.5

Judicial Effectiveness19.7

Government Integrity21.0

Government Size

Tax BurdenN/A

Government Spending0.0

Fiscal Health19.9

Regulatory Efficiency

Business Freedom38.4

Labor Freedom55.3

Monetary Freedom69.7

Open Markets

Trade FreedomN/A

Investment Freedom5.0

Financial FreedomN/A

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See how Libya compares to another country using any of the measures in the Index.

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Quick Facts
  • Population:
    • 6.8 million
  • GDP (PPP):
    • $83.5 billion
    • 9.9% growth
    • 14.3% 5-year compound annual growth
    • $15,803 per capita
  • Unemployment:
  • Inflation (CPI):
    • 4.6%
  • FDI Inflow:

Libya is not ranked in the 2021 Index of Economic Freedom because of the lack of reliable data. Official government reporting of economic data is insufficient, and data reported by many of the international organizations on which Index grading depends are incomplete.

Libya’s two major political factions appear to be headed toward a cease-fire and elections in 2021 despite ongoing political instability, security threats and military conflict, capital flight, oil production problems, and low global oil prices. These problems present extreme challenges to any government seeking to implement a coherent policy to enforce the rule of law and reform the state-dominated economy.

IMPACT OF COVID-19: As of December 1, 2020, 1,196 deaths had been attributed to the pandemic in Libya, and the economy was forecast to contract by 66.7 percent for the year.

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Background

Muammar Qadhafi seized power in 1969 and ruled as a dictator until he was overthrown and executed in 2011. Since then, bitter factional infighting has polarized Libyans along political, ethnic, tribal, and regional lines. In 2016, the U.N. brokered the establishment of a national unity government to replace two rival administrations, but unification of the country has not progressed since then to any significant degree. During 2019 and 2020, foreign intervention and the rebel campaign of military commander Khalifa Haftar have deepened the crisis. Oil and natural gas dominate the economy and provide almost all export revenues. Various militias, including the Islamic State in 2018, have attacked oil fields and seized oil infrastructure, threatening government control of oil and gas revenues.

Rule of LawView Methodology

Property Rights 16.5 Create a Graph using this measurement

Judicial Effectiveness 19.7 Create a Graph using this measurement

Government Integrity 21.0 Create a Graph using this measurement

Although Libyans may legally own property and start businesses, property rights are not protected, and contracts are not enforced. The government’s elimination of property rights in 1978 has greatly complicated recent efforts to prove clear title to property throughout the country. Without a permanent constitution, the role of the judiciary remains unclear. Corruption is pervasive, and a general lack of security hinders reforms.

Government SizeView Methodology

The top individual income tax rate is 10 percent, and the top corporate tax rate is 20 percent. In practice, however, the effective enforcement of taxation has been impeded by political and economic instability in recent years. Government spending has amounted to 94.5 percent of total output (GDP) over the past three years, and budget deficits have averaged 11.6 percent of GDP. Public debt is equivalent to 5.6 percent of GDP.

Regulatory EfficiencyView Methodology

The entry costs of starting a business and the cost of obtaining electricity have increased. The government does not enforce laws against forced labor effectively. Only 4 percent of the labor force works in the private sector. According to the African Development Bank, government subsidies for food, health, energy, and education accounted for 18.2 percent of the budget in calendar year 2019.

Open MarketsView Methodology

The combined value of exports and imports is equal to about 110 percent of Libya’s GDP. Political instability, exacerbated by lingering security threats, is a serious impediment to foreign trade and investment. The financial infrastructure has been significantly degraded by unstable political and economic conditions. Limited access to financing severely impedes any meaningful private business development.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1United Arab Emirates76.90.7
2Israel73.8-0.2
3Qatar72-0.3
4Bahrain69.93.6
5Saudi Arabia663.6
6Jordan64.6-1.4
7Oman64.61.0
8Kuwait64.10.9
9Morocco63.30.0
10Tunisia56.60.8
11Egypt55.71.7
12Lebanon51.4-0.3
13Algeria49.72.8
14Iran47.2-2.0


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