Oil Report

Libya's Gaddafi tells govt to hand out oil money

TRIPOLI, May 8 (Reuters) - Libyan leader Muammar Gaddafi accused a “corrupt” government of failing to manage the country’s oil wealth and ordered it to hand out oil money directly to the country’s 5 million people.

Western diplomats said the call, late on Wednesday, appeared aimed at putting pressure on the government to speed up reforms to improve the living standard of the population at a time of soaring oil revenues.

In March, Gaddafi urged a sweeping reform of the government bureaucracy, saying most of the cabinet system should be dismantled to free Libyans from red tape and protect the state’s budget from corruption. The government has yet to implement the changes.

“This may come as a shock for people to accept but such a surgical operation is what is needed to reach a healthy situation,” Gaddafi told a gathering of government officials and teachers. The text of his speech was carried by the official news agency Jana.

Tripoli’s government wants to raise oil output to three million barrels per day by about 2012 from 1.6 million now.

Many Libyans say they have yet to benefit from rising oil revenues and foreign investment after Libya in 2003 abandoned its prohibited weapons programmes and ended its international isolation.

Gaddafi gave the examples of the education and healthcare systems to underline what he called pervading government corruption, nepotism and mismanagement of the state budget.

“Libya is a small country with a population of five million, of which one million are government employees paid from the oil money. There is widespread cheating to take money from the oil wealth, perhaps three-quarters of the oil money is illegally diverted,” Gaddafi said.

“It is not acceptable to leave the sole and very important wealth of the people in the hands of the government administration. The administration has to hand over the oil money directly to the people. This is their right and there is no debate about such an issue,” Gaddafi said.

Gaddafi said Libyans should decide for themselves how to spend the money, citing better education for their children, healthcare and the freer import of goods to counter monopolies and fight price increases.

Education Minister Abdelkader al-Baghdadi told Gaddafi the government would start implementing his proposals as soon as September.

Gaddafi seized power in a coup in 1969. In 1977 he proclaimed Jamahiriyah popular rule to try to create the perfect society in line with the teachings of his Green Book, which combines aspects of socialism, Islam and populism.

Admirers of the system say it gives people a say in how they are ruled. Critics say it is a fig leaf for authoritarian rule. (Writing by Lamine Ghanmi; Editing by Janet Lawrence)