Libyan leader pledges petrodollars to the people

Nov 24, 2008 01:00 AM

Libyan leader Moamer Kadhafi said he is determined to scrap ministries and ensure oil revenues go directly into people's pockets.
"The decision to distribute oil revenues, their sole source of wealth, directly to the people is not negotiable," Kadhafi said in a meeting with Prime Minister Baghdadi Mahmudi. "The administrative body which managed these funds for the population wants to hand this money to the people," he said, acknowledging that such a move was "sensitive, complex" and needed careful planning to be implemented.

In a speech to mark the anniversary of a 1969 coup which brought him to power, Kadhafi on September 1 promised wide political and economic reforms that he said would also see ministries dismantled. The reforms would come into effect at the beginning of 2009, the Libyan leader said at the time.
"Libyans should all be ready to receive a share of the oil revenues starting from the beginning of next year," Kadhafi told the Popular Congress, which serves as Libya's parliament.

All ministries except foreign affairs, defence, security and justice would be dismantled, he told the Popular Congress, which serves as Libya's parliament.
"You always accuse the popular committees (ministries) of corruption and poor management. These complaints will never end. So everyone should have their share (of oil revenues) in their pockets," Kadhafi said.

Libyan ministries and state institutions have since been holding a series of meetings to implement Kadhafi's "revolutionary decision," despite scepticism over its prospects. Kadhafi himself has warned of "chaos" during the initial two years of the plan until society learns to take care of its own affairs rather than rely on corrupt administrations.
In March, he condemned corruption and mismanagement in many government departments and said that failed ministries had been costing Libya a whopping $ 37 bn a year.

Thanks to high oil prices and the pledge by Kadhafi, Libyans have been embracing consumerism. Private investors have tapped into the mood of the country of nearly 6 mm inhabitants -- which imports 90 % of its consumer goods -- by launching massive retail projects.
In 2007, Libya's oil revenues climbed to almost $ 40 bn, according to its National Oil Corporation. Some 30 % of the income is allocated to state expenses and the rest to development projects.

With about 43 bn barrels of oil, Libya has the largest proven oil reserves in Africa, in addition to considerable gas resources. It is also the continent's third biggest oil producer after Angola and Nigeria, pumping almost 2 mm bpd. It has been seeking foreign investors to help it reach a target of three mm bpd by 2012.
The government has been moving to shake off Libya's staunch socialist economy and embrace reforms and globalisation since mending ties with the West by abandoning its quest for weapons of mass destruction at the end of 2003.

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