Assessing The Current Economic Scenario And Future Prospects Of Foreign Investment In Libya

The Importance of Foreign Direct Investment in Economic Growth

Discuss About The Political Instability Greenfield Foreign.

In recent times, most of the countries strive to magnetize foreign direct investment (FDI), due to its immense acknowledged benefit that act as a tool of economic growth and development in the home nation. Import of products and services from foreign nations improve the productivity and effectiveness of domestic organizations resulting to economic development (Bandyopadhyay,  Sandler and Younas 2013). The growing rate of productivity not only occurs in the host nations through international trades but also further motivates its economic development. The essay will intend to focus on the current economic scenario of Libya by shedding light on its current situational context related to investment and venture. In addition to this, the paper will evaluate the ways in which Libya has transformed into a promising and potential region for foreign investment as well as offering fundamental enhanced developments.

The Libyan economic development began to progress and measured by GDP with the rapid development in bank loans related to the property sector. During the 1990’s certain indications of surplus resource within the property marked was witnessed (Blanchard 2016). The banking sector with extensive high price rates in the stocks as well as property markets had become vulnerable to the risk of sudden decline in market prices. However, in 2010, Libya managed to acquire one of the significant positions to enhance the expertise level and growth of national constituent (Fairbairn 2013). It further increases its competence, productivity, knowledge transfer as well as resettlement in the domestic economy. The current scenario of Libyan investment primarily involves certain advancements in laws and policies governing aid in the country (Salacuse 2013). This has been resulted in order to reach the interests of public along with the areas that purposes to endorse capital as well as foreign investment assignments within the context of precise and states of shares in the country (Burger, Ianchovichina and Rijkers 2013). These economic investments have developed with the rising economic signs in comparison to the earlier times, particularly with a contrivance to apply the essential aid and further prioritise the investors by developing a focused and specialized centre in order to establish future investment deals in all the regions of the country.

Libya’s economic growth has traditionally depended on a range of positive aspects namely the excess of oil and gas supply, along with strategic and planned geographical location between regions of Europe, Africa and the Gulf region (Wood et al. 2014). It must be noted that the Libyan government has been struggling to transform the country in a full market economy. The industrial sector relies majorly on oil refining, petrochemical along with iron and steel. However, the current economic scenario of Libya is yet to be wholly pleasant and must not result in several upcoming inflows of foreign trade and investment (Ali and Harvie 2013). The primary concern for the country’s economic associates has been remaining on the situations under which infrastructure ventures and projects along with recent developmental projects as well as inducements for lubricant explorations reliant on a weak political stability will restart (Colgan 2014).  Several reports of economic as well as investment enterprises revealed that Libya has gradually transformed into a region possessing the best suitable climatic conditions along with promising regions catering in the Middle East (Hehir 2013). These have further led to the whole legal, economic as well as social conditions that enhances the course of ventures and investments that have revealed that Libya has immense economic competence not only related to the benefactions of resources and materials but further perform on its progress, development and exploitation.

Libyan Economic Development and Current Scenario

With the contribution of these riches, the country has developed in an attraction pole, Libya, has embarked on various measures. The recent economic policies and legislations in order to welcome the flow of foreign investment and further by promoting active association with both the public and private sectors (Joffe 2014). As a result, this has led to an increase in size of such ventures over the last few years that has reached an approximate rate of five billion as well as over 600 million Libyan dinars, which equals to almost 55 billion dollars since Libya has encouraged foreign investment ventures (Bindra et al. 2014). Certain reports reveal that the country’s investment power acknowledges stockholders to establish tourism ventures especially on the Libyan coast and other projects that would facilitate the Libyans by over 70% of employment (Bandyopadhyay, Sandler and Younas 2013).  Other reports disclose that increased contractual volume in the rate of tourism ventures run  by local and foreign wealth and resources in Libya have played a significant role in valuing over 50 international and national firms to tour for investment locations in order to utilize varied projects related to the tourism industry (Fairbairn 2013). However, it must be noted that the aspects such as the strategic location along with skilled and expertise employment base and competitiveness along with accessibility of reasonable power resources, excess raw materials have acknowledged the country’s administrative and economic situation.

The current transportation investment has been regarded as the formation and management of airports, controlling services, catering and other services at airports have facilitated in creating highways. It further comprises of the development of subway and railroad pathway, development and establishing alliance with Socialist Ports Corporation (Wood et al. 2014). Libya has further contributed to the domains of education, agriculture, fishery and other fields of tourism and industrial sectors with the aid of foreign stakeholders. Regardless to the progression of the country on varied domains, Libya has been facing major hindrances in the flow of investments and commercial ventures (Colgan 2014). One of the major obstacle faced by the country is the ambiguity and political instability, excessive administrative and economic exploitation that have been occurring within the country. The administrative and rigid map of the country revealed two divergent aspects, one being the official part namely the General Peoples Committee along with the  parliament known as the General People’s Congress (Fairbairn 2013). The other strong aspect of the country is related to the leadership of Gaddafi, whereby, several situations related to conflict of interests and disagreements amongst the two aspects have been noted as a serious concern (Bindra et al. 2014). However, it must be taken into consideration that few foreign nations such as USA, Turkey, Canada, South Korea have intended to contribute to this situation with the cooperation of the then leader Gaddafi. His contemporary opinions in order to involve foreign assistance, cooperation, and further encouraging Western countries assisted to invest and start their ventures in Libya (Burger, Ianchovichina and Rijkers 2013). The country in the upcoming years will effectively combat the governmental and administrative exploitation and by the means of several approaches and restrictive consequences for delinquents because of excessive high costs on the domestic economy as a whole (Ali and Harvie 2013). The Department by curbing serous reforms and progress of human resources, techniques and tools in particular to those dealing with third parties will be able to be liberated from unstable management as a form of difficulties and duration of procedures within the compliance of the world trade organization (Joffe 2014). The public authoritative bodies will be adhering to the constructive guidelines and economic institutions. These provide their services at the level that can be compared to the comprehensively approved investment methods and further removing restrictions on the liberty of movement of aid and investments to and from the Libyan financial institutions in the forthcoming years (Hehir 2013). 

Therefore, from the above discussion it can be concluded that Libya has been successfully adhering to administrative laws and compliance and further endorsing promotional efforts to encourage foreign stakeholders to invest in this country. The essay has focused on the current economic situation of the country by shedding light on the varied sectors it caters. Furthermore, the paper also evaluated on the future prospects scenarios Libya will have to deal with by analysing some of its current activities.

References

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Bandyopadhyay, S., Sandler, T. and Younas, J., 2013. Foreign direct investment, aid, and terrorism. Oxford Economic Papers, 66(1), pp.25-50.

Bindra, S.P., Hamid, A., Salem, H., Hamuda, K. and Abulifa, S., 2014. Sustainable integrated water resources management for energy production and food security in Libya. Procedia Technology, 12, pp.747-752.

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Salacuse, J.W., 2013. The three laws of international investment: national, contractual, and international frameworks for foreign capital. Oxford University Press.

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