Libya moves to abolish state subsidies

TRIPOLI – Libya intends to abolish some five billion dollars (N$30,5 billion) worth of subsidies on electricity, fuel and basic food items in a major move to liberalise its economy, Prime Minister Shukri Ghanem said on Monday.

The move, which Ghanem said would come “soon,” is part of an effort to get the north African state back on its feet following more than two decades of isolation and international sanctions, imposed because its leader Muammar Gaddafi was accused of sponsoring terrorism. In an interview with AFP, Ghanem said the measures – which in addition to electricity and fuel would include food items such as cooking oil, flour, rice, sugar and tea – were necessary to “strengthen and liberalise the economy.”In order to prevent ordinary Libyans from suffering too much, the government plans to double the national minimum wage from 150 dinars (US$116) a month to 300 dinars, as well as lower taxes and abolish interest rates.Ghanem said the sharply higher wages would also apply to foreign companies operating in Libya.After “a revaluation of salaries, which will allow Libyan citizens to earn as much as citizens of other oil-producing countries,” the state was to lift two billion dollars of subsidies on petrol, he said.A litre of petrol currently costs 0,11 dinars.Last year, Gaddafi charged Ghanem with opening up the country to outside investors to bring in badly needed foreign currency, which had all but dried up because of United Nations and US sanctions.Last December, Libya abandoned its plans to develop weapons of mass destruction following intensive negotiations with the United States and Britain.It has also agreed to pay out billions of dollars of compensation to the members of families whose relatives died in passenger jet bombings over Scotland in 1988 and in the Sahara desert in 1989.-Nampa-AFPIn an interview with AFP, Ghanem said the measures – which in addition to electricity and fuel would include food items such as cooking oil, flour, rice, sugar and tea – were necessary to “strengthen and liberalise the economy.”In order to prevent ordinary Libyans from suffering too much, the government plans to double the national minimum wage from 150 dinars (US$116) a month to 300 dinars, as well as lower taxes and abolish interest rates.Ghanem said the sharply higher wages would also apply to foreign companies operating in Libya.After “a revaluation of salaries, which will allow Libyan citizens to earn as much as citizens of other oil-producing countries,” the state was to lift two billion dollars of subsidies on petrol, he said.A litre of petrol currently costs 0,11 dinars.Last year, Gaddafi charged Ghanem with opening up the country to outside investors to bring in badly needed foreign currency, which had all but dried up because of United Nations and US sanctions.Last December, Libya abandoned its plans to develop weapons of mass destruction following intensive negotiations with the United States and Britain.It has also agreed to pay out billions of dollars of compensation to the members of families whose relatives died in passenger jet bombings over Scotland in 1988 and in the Sahara desert in 1989.-Nampa-AFP