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WEEKLY NEWSLETTER
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Libya
Index
By the mid-1980s, the government conducted virtually all
foreign trade either directly or through public corporations.
Import licenses were no longer issued to the private sector. The
foreign exchange needed to purchase imports has been allocated by
the commodity budget since its inception in 1982. Exports consisted
almost entirely of hydrocarbons. Between 1978 and 1985, crude oil
exports accounted for between 85 to 99 percent of total annual
exports. Exports of other hydrocarbons, mainly methanol and
liquefied natural gas, were irregular and depended on bilateral
supply agreements of limited duration.
The balance of trade has consistently been in Libya's favor
since 1963, when oil exports first reached significant levels.
Whereas during the 1970s exports kept ahead of imports by a wide
margin, since 1981 this has not been true. For example, during 1982
Libya's trade balance showed a surplus of only LD2 billion, the
smallest surplus since the mid-1960s. Only a drastic cut in imports
kept the trade balance as a surplus after 1981. In 1985 exports
stood at LD 3.2 billion, while imports totaled LD 1.4 billion.
The decline in Libya's trade position after 1981 was largely
the result of falling oil prices and decreasing volumes of oil
exports. The oil price decline resulted from factors beyond Libya's
control, but much of the decline in export volume resulted from
Libya's decision to stay generally within its OPEC production
quotas. These quotas were reduced in the early and mid-1980s as
OPEC tried to use its market power to reverse the falling price
trend.
The composition of imports was more varied than that of
exports. Figures for 1981 indicated that the largest percentage of
imports, by value, was the category of machinery and transport
equipment. Manufactured goods, principally metal manufactures and
iron and steel, came second, followed by foodstuffs. The percentage
of foodstuffs in the import bill has been rising steadily since
disposable incomes began rising. The direction of trade has
undergone a significant change since the mid-1970s (see
table 9,
Appendix). Whereas during much of the mid- to late-1970s the United
States was Libya's leading export market, American trade
restrictions had reduced Libya's trade with the United States to
zero by 1983. Italy remained Libya's most important trading partner
in the mid-1980s, followed by the Federal Republic of Germany (West
Germany). These two countries together supplied about 30 percent of
Libya's imports and bought slightly under 50 percent of its exports
in 1984.
Data as of 1987
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