RABAT (Reuters) - A post-Gaddafi Libya would likely seek to diversify its economy and encourage the private sector, the World Bank’s regional director said on Wednesday.
“I would have thought going forward, depending on what the authorities would be looking at, is to build up a modern, private-sector friendly environment that allows it to diversify from its petrol-rich dependency to something that’s more sustainable,” Simon Gray, who oversees the Maghreb region, told Reuters when asked how he thought Libya’s economy might change in the event Muammar Gaddafi left power.
The West has launched an air war on Gaddafi’s forces to support rebels who now control part of Libya. Western leaders say they want Gaddafi to leave office.
Under his 42-year rule, Gaddafi has sought to embrace Islamic socialist values spelled out in his multi-volume Green Book. The national oil industry has proved the Libyan economy’s main engine. The country accounted for more than two percent of world production before the war started.
The International Monetary Fund has estimated that in 2009 and 2010 oil and gas revenues funded 80 percent of the government budget.
Gray said future economic change in Libya could include “trying to diversify in the petrol chemical industries themselves,” he said. “There’s some things that we’ve been looking at: tourism, cultural tourism; there was some talk about some agriculture, food diversification.”
A wider economic base would also lessen the impact of swings in the price of oil in Libya, whose reserves are estimated to be the world’s ninth largest.
Libya “was a rich country that was not a borrower,” Gray said about its relationship with the World Bank. “At the moment we are looking at some grant financing.”
Elsewhere in the region, the World Bank is working on a package of support in Tunisia, where a popular uprising overthrew the government earlier this year. It is also hoping to encourage greater economic cooperation across North Africa.
“We are looking to, in general, much more accent on voice, on governance, on inclusion in the whole growth paradigm, on more transparency of information,” Gray said in an interview.
“All of those things across the Maghreb region will be important and we are looking at the authorities to increase those areas, which I think are integral aspects to the whole growth agenda.”
Earlier on Wednesday, Morocco’s economic affairs minister, Nizar Baraka, said his country’s GDP could grow two percentage points more than at present with greater economic cooperation in North Africa and more trade with neighboring Algeria.
“We have been constantly saying don’t just look at integrating in Europe, don’t just look at integrating with Africa, which Morocco has been doing a lot of, but try to see what can be done on the integration side within the Maghreb,” said Gray, the World Bank’s former Serbia country manager.
“The more you can come together in those sorts of markets, as we have seen in the Balkans, the better you are at placing yourself.”