Libya is classified as an upper middle income country heavily dependent on hydrocarbon with limited private sector initiative.
After the 2011 overthrow Muammar Qadhafi, elections were held in July 2012. The newly elected government faces major challenges in disarming and demobilizing militias, imposing the rule of law, and reforming the state-dominated socialist economy.
Libya's economy is structured primarily around the nation's energy sector, which generates about 95% of export earnings, 80% of GDP, and 99% of government income. Meanwhile, the non- hydrocarbon sectors of the economy remain mostly underdeveloped and state controlled.
The first biggest non-oil export groups of Libya are iron and steel. The second biggest are pearls, metals and precious stones. There is a clear need to diversity the Libyan economy particularly through attracting foreign investment, strengthening the private sector, and expand the export base.
In 2003, with the lifting of the sanctions, Libya opened its economy to foreign investment and has also made a bid to be part of the World Trade Organization (WTO). As part of its WTO accession bid, Libya has implemented numerous trade liberalization reforms, such as reducing the number of state importing monopolies, limiting the number of import bans, abolishing licenses for most goods, and reducing subsidies.
Libya is a signatory of the Greater Arab Free Trade Area (GAFTA) and the Arab Maghreb Union (AMU), with ties to the Community of Sahel–Saharan States (CEN‐SAD) and the Common Market for Eastern and Southern Africa (COMESA). It has bilateral trade agreements with Morocco and Jordan. Libya is the only Mediterranean country - with the exception of Syria – that has not yet concluded a Free Trade Agreement with the EU.
Notes: Top 20 products listed in decreasing order of their export potential to the world. Development indicators are relative to the country’s current situation, green indicating performance above its trade-weighted median and red otherwise. A blank cell indicates that data are not available. A blank cell in export potential means that the product was not consistently demanded over five years by any country in the respective region. Exports (US$ thousand) correspond to average exports to the world over the period 2009-2013.