Libya, located in the northern part of Africa, is the largest producer of black gold in its continent. It is the fifth largest producer of the same product in the entire world. Despite its unfavorable geographic location, it is one of the countries with flourishing economies. It is located in the Sahara desert with no major river in the enormous country. That simply means that, unlike the majority of African countries, it is not capable of naturally supporting any serious agricultural activity. Surprisingly, Libya has one of the few enviable economic statuses that many other agriculturally-rich nations cannot attain. The major boost to its appreciable stable economic status on the global arena can be attributed immensely to this valuable commodity.
Energy is the key driver of almost all important processes in the world. Industries rely heavily on oil to drive their prodigious power consuming operations. People need various oil products for essential living. In the rural areas, people require kerosene to light their homes. Members who own motor vehicles rely solely on petroleum products to fuel their motor vehicles. In the market, one cannot fail to spot a number of essential products made from oil, ranging from cosmetics to the ordinary petroleum jelly. This makes it a truly valuable mineral. Because of this, Libya seems to have a blessing in the form of gas and oil deposits (US Energy Administration, 2007).
The significant riches from oil production and marketing have helped Libya to have a name in the list of developed nations. This status is not only respectable in the continent of Africa, but also in the entire world. Indeed, the oil wealth has supported quite decent living in the Libyan community. The country ranks favorably many other players in the oil industry on the global scene per capita.
In many countries, oil wealth is a prominent player in the creation of opportunities for the well-being of citizens. There are many jobs that the oil sector creates. This is one of the aspects that anchors decent living among the Libyan nationals. Levels of unemployment are very low, thanks to the mammoth oil and gas reserves in the country. Young people find jobs directly from oil mining activities. Others get employment in the oil refining industry. Many others get the paid working positions in oil related industries.
As a nation, Libya needs the sufficient revenue to support its serious economic agendas and sustain government projects. Besides government tax, fees and rates, Libya relies on its exports for acquisition of foreign currency, which are vital for international trade. Oil exports contribute the largest amount of revenue to the government. It is a prominent pillar of all government grand plans in the country.
In order to ensure maximum benefits from this highly-priced resource, the Libyan government has always been on the forefront. Together with parliament, the country’s executive makes policies and regulations serve to help utilize the resource economically and beneficially. Until the fall of Muamar Gaddaffi, the first and the longest serving President on African continent, there were particularly trivial cases of civil strives. Unlike other countries, where that commodity leads to emerging terror gangs, massive corruption scandals and political disintegration among members of a country, Libya managed to survive with little of such troubles for a very long time. That seems to have been another reason for the fruitful exploitation of the resource (Waddams & Frank, 1980).
In spite of the decent benefits that oil and gas bring, there are many other unpleasant deawbacks connected with these high-value minerals. Authorities have the problem of ensuring that sound policies and regulations are in place. There is also another issue of fluctuations in the prices for oil and gas and their products. Sometimes, many countries cannot handle the oil wealth quite effectively. This is usually because most nations are ill-equipped to tackle the problems that arise from oil production. In case of Libya, oil and gas infrastructure building can play crucial role in enhancing the social and economic proliferation of the nation and the people (Economides & Oligney, 2000).
Libya seemed to have avoided the resource curse that is usually a norm in other places. In most countries, diamonds, oil and gas are believed to bring civil wars. In Nigeria, warlords have taken serious positions with clear intentions of destabilizing the entire nation. The unending war between Sudan and Africa’s newest nation, South Sudan, is directly linked to the exploitation of oil. Many oil producing countries in the Middle East have turned into terrorist territories. These are some of the misfortunes that could have befallen Libya. However, this has not been so apparent in the country for the time since the independence to the time of the country’s first father fell out the nation’s and the international community’s favor. Politically, the country must have set up reliable policies and regulations on the use of the commodity, without fueling civil animosity among different communities.
Oil revenues have been put into productive and diversified economic use. This must be the major cause for the country’s deviation from the usual course of undesirable outcomes associated with the resource. The impact of oil was particularly remarkable where oil revenue was the exclusive local government revenue for growth and development, and state-building. The government took full the responsibility in managing the entire resource. The role of private players remained remarkably limited for the most part. Government made sure that rogue business could not infiltrate into the market with the unorthodox means of generating abnormal profits from the oil wealth (Vandewalle, 1998).
Libya has always enforced sound fiscal policies. For instance, the government initiates many giant projects during the times of oil booms. These projects go on until the time of declining oil prices locally and on the international market. During such bad moments, the government cuts down its expenditure on such undertakings appropriately to ensure it does not strain its oil revenues and government reserves. Since the state is the major player in the oil sector, it holds the full control over the generated revenues and utilizes in the best interest of the entire nation. With little interference from the private sector, the government regulates its highest income source for maximum benefits. Under this, the government managed to nationalize major oil corporations and, therefore, the state can regulate all operations as it may deem fit. In fact, there are very few foreign investors in Libya, despite the huge oil reserves in the country.
Policymakers in Libya provided ample time and environment for authorities to assess all conditions and choose the right course for the nation’s development. They embraced the concept of economic diversification by using the oil revenues to initiate other economic development projects. Agriculturally, Libya is significantly viable, in spite of being situated in the desert with little or no rain during most times of the season. Such major undertakings seem to be precautionary measures for anticipation of the unpredictable future in the oil sector. Fluctuations in oil prices, new entrants and fear of depleting the resource are appreciable concerns for the stakeholders in the sector (Monitory Fund, 2005).
In summary, Libya has had challenges in managing its valuable resource, just like other countries around the globe. Regulation, management and marketing are notable tasks that concerned parties ought to accord sufficient attention. This appears to have been a success to the people and government of Libya. For the most part of oil exploitation ventures, the country has enjoyed the remarkable peace. The government takes a credit for the commendable it has done for many years. A lot more may be required to sustain the great works that the former leader set up. The new regime should borrow heavily from its predecessors and make very minimal alterations to the existing regulations of the industry for a sustainable growth.