Economy
When it gained independence in 1951, Libya was one of the poorest countries in the world, with an economy based largely on subsistence farming and nomadic herding. It had few prospects for development and depended heavily on foreign aid for survival. The discovery of oil in the late 1950's, however, changed the economy dramatically. Today, Libya ranks among the world's leading producers and exporters of petroleum and has one of the highest per capita incomes in Africa. Vast oil revenues have enabled the government to initiate much-needed development programs in agriculture, transportation, housing, education, and industry.
The rapid utilization of Libya's large petroleum reserves has resulted partly from the nation's location near European markets. Most of the oil comes from rich fields in north-central Libya. Oil is also produced offshore. About 80 per cent of the oil is produced by state-owned enterprises, the remainder by European firms. Pipelines carry crude oil to ports along the northeastern coast. Much of the exported oil is unrefined. Other minerals produced include iron ore, gypsum, and natural gas.
Many Libyans still depend on a primitive kind of farming or nomadic herding for a living, but their number has been declining since the oil boom began. Tillable land, which amounts to less than 2 per cent of the total area, is concentrated in relatively well-watered areas near the coast and at oases. Principal crops include barley, wheat, peanuts, olives, vegetables, dates, grapes, and citrus fruits. Government programs to develop water resources and introduce modern farming methods are resulting in an increase in cultivated land and productivity. Production, however, continues to fall far short of domestic requirements, and much food must be imported. Livestock herding is widespread but is most important in marginal areas that are too dry for farming. Sheep, goats, camels, and cattle are raised, mainly by nomads and seminomads.
Manufacturing industries have developed slowly in Libya, largely because of a lack of raw materials and skilled labor. Food processing and the making of beverages, tobacco products, textiles, and simple metal goods account for much of the production. The fastest growing industries are oil refining and the making of chemicals and fertilizers, all based on Libya's abundant oil. Most of the large-scale manufacturing enterprises are state-owned. The making of handicraft items, such as rugs, metalware, and leather goods, is still done in homes and small shops as it has been for centuries.
Libya's transportation system consists chiefly of a paved cross-country highway that follows the coast, and some secondary roads extending into the desert. The nation has no railways. Tripoli and Benghazi are the main transportation centers. Their ports handle virtually all the nation's foreign trade, except for petroleum, and both cities have international airports. Libyan Arab Airlines, the national carrier, provides domestic service and some international flights, mainly to cities in North Africa and the Middle East.
