Proceedings of 21st International Business Research Conference
10 - 11 June, 2013, Ryerson University, Toronto, Canada, ISBN: 978-1-922069-25-2
Developments in the Libyan Economic and Financial
System in the Past Century
Yahia M. Baej and Andrew C. Worthington1
Libya is an oil-producing country which holds around 3.5 percent of
th
the world’s crude oil reserves. Since its independence in the 24 of
December 1951, several economic development plans have been
introduced to enhance the economic growth. Nevertheless, the
country’s economy, in general, and banking system, specifically,
remained largely underdeveloped due to several internal and
external factors. The objective of this paper is to analyse the Libyan
modern economic and financial system history and factors hindering
their growth. In this sense, we identify four crucial milestones: The
first period prior to 1943, where the state economy was in huge
deficit in all of its sectors. The second period characterised by the oil
discovery. The third and longest period represents the years
between 1969 and 2011. The most distinguishing characteristics of
such period were the long-term application of socialism, the absence
of the private sector, and the implementation of UN and the U.S.A
sanctions on the country’s economy. Despite the difficulties that the
country faced during the last period, which started from 2011, the
economic and financial system is believed to be recovering. The
banking system was consequently influenced by the political
instability during the four periods.
JEL codes: F34, F35, G21
Keywords: Libya, Economic Development, Plan, Banking Activities, CBL.
1
The author and co-author are from the department of Accounting, Finance and Economics, Griffith Business
School, Griffith University, Australia. (Y.baej@griffith.edu.au , a.worthington@griffith.edu.au ).
1