Libya’s political and economic landscape has changed slowly but surely in recent years. A halting five-year rapprochement began in 2003 when the United Nations ended its embargo and Libya’s leader Muammar Gaddafi renounced terrorism and weapons of mass destruction. This was followed by the restoration of US-Libyan diplomatic relations in 2009 for the first time in about 30 years. Signs of political and economic opening became more noticeable in areas concerning human capital and legal rights and implementing big projects of economic development.
In 2009, Libyan authorities gave Human Rights Watch permission for the first time to draft a report on Libya’s rights record from inside Libya. Also in 2009, Libyan authorities gave Amnesty International permission to send a fact-finding mission to the country, the first they had allowed since 2004. In addition, the Gaddafi International Charity and Development Foundation which is presided over by Gaddafi’s son, Saif al Islam, has been praised locally and internationally for its efforts to push for political and social reform in areas of human and civil rights, accountability among government officials and a more egalitarian distribution of resources.
Libya’s political opening has also been followed by a push to open up and expand the country’s economy through developing industry and attracting investment beyond the oil and gas sector. In 2003, Gaddafi called for the first time for the privatization of the oil industry and other sectors, marking another sign of openness to the outside world, including international companies. Since then, privatization has progressed slowly and the Libyan government has continued to promote entrepreneurship, make credit loans from local banks more widely available and encourage foreign companies to provide capital, know-how, and training to local enterprises.
In the last two years, the General People’s Congress has passed several pieces of legislation to help stimulate the economy and boost the private sector, including removing currency controls and improving taxation laws. Moreover, a new economic reform plan called the Libyan Economic Development Board was also launched in 2007 to lead initiatives that address Libya’s critical economic priorities, such as promoting small and medium-sized enterprises, improving the country’s competitive position, developing human capacity and promoting public-private dialogue and partnerships.
These promising initiatives, coupled with the change in rhetoric among the ruling elite in recent years, make Libya a potential candidate for liberalization through economic reform which can pave the way for political reform in the long-term. To ensure that recent political and economic openings are not dialed back, civil society groups in Libya — including business associations and economic think tanks — will need to play an active role in engaging the new generation of Libyan political and economic leaders in advocating for more change, building political dialogue and demanding that democratic norms and reforms be introduced and respected. These types of civil society organizations are uniquely positioned to mobilize the business community around a set of common issues, advocate for change, develop solutions, and monitor implementation.
Libya is an interesting case because despite its long isolation from the international stage and the closed nature of its regime, it has been able to maneuver itself away from political breakdown and relatively maintain its political stability in a volatile region. While change is still happening at Libya’s pace, Libya’s liberalization has not been frozen and has been moved by both internal and external factors. There is some hope that Libya will set up a good example for democracy promotion in countries where political and economic liberalization has not kicked in yet. Promoting democracy in Libya through economic means could be an instrumental policy towards integrating the Libyan regime and economy into the world stage.