Poverty persists in Libya despite oil riches

Libya has largest oil reserves in Africa and ninth largest in world, but 40 per cent of its 6.4 million people live below poverty line, with most of the oil wealth channelled to the Qaddafi family and their supporters

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BENGHAZI and TOBRUK, LIBYA // Mustafa Khamis, 23, and his four brothers live with their mother in a small house in Al Jabila, an area of the eastern Libyan town of Tobruk.

"This is a rich country, but we have not seen any of the money," Mr Khamis said. "I am angry."

Behind the smart facades of many buildings in Tobruk and Benghazi lie unpaved areas of basic housing.

Cassandra Nelson, a member of a Mercy Corps team that completed a two-week assessment in Libya in March, said: "We were extremely surprised to find the living standards of so many people was incredibly low. A large part of the population is living without clean running water, working sewage systems and is struggling to meet basic daily needs."

According to the United Nations, 40 per cent of Libya's population of 6.4 million live below the poverty line, with no benefit from Libya's oil reserves, which are the largest in Africa and the ninth largest in the world.

Nouran Alarapi, 16, who has been delivering food parcels to Benghazi's poor, said Libyans had not realised the extent of the poverty. "We found people who don't eat for two days. We never knew such extreme poverty existed because people did not talk to each other as much," she said.

Since the UN and US lifted sanctions in 2003 and 2004, foreign investment has helped the economy. Last year, the gross domestic product improved by 10.6 per cent, according to the International Monetary Fund. Annual gross domestic product per capita has reached US$13,800 (Dh50,868) per year. Even so, much of Libya's population scrape by.

Many people told Mercy Corps that they survived on state welfare handouts of 200 Libyan dinar (Dh619) a month and subsidised food.

There are varied reasons for Libyans' poverty. The non-governmental organisation said much of that was due to a "lack of economic opportunities and the failure of the government to provide basic services to many neighbourhoods".

Much of Libya's economy is centrally planned, allowing little room for private entrepreneurship. The economy is heavily dependent on oil reserves, which account for more than 50 per cent of gross domestic product and 95 per cent of exports, according to the World Bank. As a country that has been kept closed to the outside world, Libya has been denied access to revenue from tourism and international exchange. This has led to limited job opportunities.

Mr Khamis has been unemployed since graduating from a nursing institute. Getting a job in the public sector was mired by bureaucacy and bribes, he said, and the private hospitals wanted people with higher qualifications. Now, Mr Khamis makes money from odd jobs and selling household goods at roadside kiosks.

Even for the employed life is a struggle. In Benghazi, teachers and doctors complain their salaries of 300 to 400 dinars a month barely stretch out for a week. Most live with their families, take second jobs and rely on loans to survive.

Rising poverty is not just due to the economy and unemployment. Libya is run as a fiefdom under Colonel Muammar Qaddafi, and most of the oil wealth has been channelled to the Qaddafi family and their supporters, critics said. That included payments offered to loyalists and mercenaries willing to fight for the regime, they said.

Tobruk's port workers said imports from Egypt of anything but Egyptian goods was banned in a bid to channel goods through the port - controlled by Col Qaddafi's son Hannibal.

Locals said the east of the country had been particularly neglected. Far from the hub and Col Qaddafi strongholds of Tripoli and Sirt, where shiny new developments were popping up along the seafront until the uprising, little attention had been paid to the region.

This was one of the reasons Libyans in the eastern stronghold cite when asked why Benghazi was the first place to rise up. "When you earn 300 dinars a month as a taxi driver, it is hard not to feel resentful," said a woman whose husband was fighting and who asked not to be named as Col Qaddafi's forces approached the rebel stronghold.

A month since the uprising began, many in the east said the situation was worsening. In Tobruk, further from the unrest, residents have kept many shops and businesses open. Many of Benghazi's outlets have been closed for weeks. Government handouts have ceased.

"People we spoke to said they had not received welfare payments since the uprising," Ms Nelson said. "Handymen and taxi drivers said they had been unable to find any work. Families said they were using meagre savings to survive but their money is starting to run out and they have no idea how they will manage if fighting continues."

Many in the east hoped a new, free Libya would bring not just political freedoms but economic ones too. "We want freedom of speech, but we also want the wealth to be shared and we want prosperity," said Mr Khamis.