Intermittent warfare, disease, and poverty currently plague much of Africa. It is a paradox that the continent that provides resources for the rest of the world is the place with the poorest people in the world. Africa, far from being prosperous, is the world’s poorest continent. As the British Premier Tony Blair has recently explicitly expressed, “Half the population of sub-Saharan Africa lives in absolute poverty. And, uniquely, whereas the economy is improving in other areas of the world, Africa is getting poorer. The average income per head is lower now than it was 30 years ago. (Blair, 2005) The issue of poverty is closely linked with general underdevelopment.
Poverty remains the single greatest cause of misery; and the surest remedy for poverty is economic growth. The reasons why poor Africa is becoming even poorer can be narrowed down to the following basic ones: – Historical reasons: slavery and colonialism hampered the progress in education and development of basic infrastructure. Then, after the independence of the African states, the continent got involved into the Cold War intrigues. Most of the poor countries are far from the economic centers and coastal ports, and they don’t have an adequate infrastructure for inexpensive transport of goods.
Sachs in his article Ending Africa’s Poverty Trap explains this such that “there are several reasons why Africans tend to live away from the coast: the soils are often better and rainfall is more plentiful in the interior highland regions; the burden of malaria is intrinsically lower there; and centuries of slave trade made it dangerous for Africans to live near the coast. (2004) – Endemic diseases like malaria are constantly affecting health. Jeffrey D. Sachs claims that “Africa’s health conditions are by far the worst on the planet. The AIDS pandemic is wreaking havoc, as is the resurgence of malaria due to rising drug resistance and the lack of effective public health systems. ” (2004) – A high disposition toward natural catastrophes Jeffrey D. Sachs defines also one more reason which is a governance crisis.
He adheres to the view that if to take into account widespread war and violence in some African countries like Angola, the Democratic Republic of the Congo, Liberia, Sierra Leone, and Sudan governance crisis is understandable, however, it cannot be referred to as the sole cause of poverty. Libya’s case is a good example where the inefficient government makes the economic situation, which is due to historical, geographical and other factors difficult, even more complicated. Libya achieved independence on December 24, 1951, in the middle of the Cold War.
The long colonial experience and ensuing World War II heavily affected all forms of agricultural and industrial production in the country. Colonialism was particularly severe in the case of Libya. Italy had succeeded in isolating the indigenous Arab population, depriving it of its traditional means of existence. The colonial policy of pushing Libyans off their land threatened the livelihood of the Libyan farmers. Local nonagricultural production also suffered greatly from competition provided by government-subsidized, cheaper Italian goods.
In addition to being isolated from agricultural and industrial activities, Libyans were also kept as far as possible from government. Thus it was natural that the most serious problem facing post-independence Libya was the virtual nonexistence of an educated and trained labor force. The indigenous population had practically no access to education or public health services. All forms of middle and secondary education, as well as technical training, were prohibited to Libyans.
This inability to produce an educated, trained staff persisted in Libya up to the 1950s, even after a decade of intensive programs offering technical assistance from foreign-aid agencies. Like the preceding colonial economy, the post-independence economy had to rely on foreign subsidies to make up for its deficits. Libya’s ability to produce enough to maintain a constant standard of living became the first major goal of all foreign agencies. During the first few post-independence years, skills and capital were all foreign.
Prior to the discovery of oil, Libya had no significant industrial base. It produced only semi-industrial, agricultural-related goods such as tobacco, olive oil, and dates, and traditional textiles, such as carpets and blankets. Many of those products were exported along with tiles, brick products, limestone, and animal hides. For a number of years after independence, the major exportable item of any worth was scrap metal collected from the remains of abandoned military equipment left by the Europeans during World War II.
Agriculture contributed only thirty percent of the Gross Domestic Product (GDP), yet absorbed over seventy percent of the labor force. Trade exports and the semi-industrial sector also depended on agriculture for raw materials and thus depended on climatic conditions. (Allan, 1981) As the majority of funding for internal development came from outside Libya, by the time oil was discovered, the country was in a better position than it had been a decade earlier.
Although oil ushered in a new era by providing a crucial new resource, the country’s main resource, its people, in the words of Rawle Farley, “remained uninvolved in the development process” during this period. (Farley, 1971, 178) Upon discovering oil in abundance in 1958, “Libya was transformed overnight into a beehive,” as John K. Cooley puts it. International companies big and small “swarmed like bees to the Libyan honeycomb. ” (Cooley, 1983, 204) To the oil companies this was a country with a pro-Western government, it was also very close to European ports and contained high quantities of low-sulfur oil that needed little refining.
The influx of this tremendous wealth freed Libya for the first time in its history from dependence on foreign income. But oil is both an advantage and hindrance to a developing country. On the one hand, it provides cash for development, and on the other, it disrupts traditional social structures. Prior to the discovery of its oil fields, Libya had nothing to lose, and much to gain, from its relations with other nations. Development was slow, yet sure, and it was beginning to effect genuine change in the skill levels of many Libyans.
Within a decade of the discovery of oil, Libya had become a classic example of a dual economy: the modern petroleum sector and the traditional non-petroleum sector. Financial, technical, and managerial decisions affecting the modern sector were made outside the country and ignored the needs of the domestic non-petroleum economy. The traditional sector received a very small portion of the profits and taxes paid by petroleum companies. Libyan agriculture was left to stagnate in its low level of development and people purchased their daily food on the world market.
Since the only technological advancement was in the oil sector, little change was evident in the social structures, health protection system or standards of education and training in non-petroleum sectors. As with all economic booms in the developing world, the Libyan boom was accompanied by corruption practiced by high-ranking officials in the royal administration. Such situation changed after the Revolutionary Command Council headed by Qaddafi came to power on the first day of September 1969 and Qaddafi became prime minister.
Qaddafi inherited a country not only unable to feed itself but also devoid of an industrial sector. Upon seizing power, the RCC was going to change the way for the development in Libya. They doubled the minimum wage and lowered rents, further bringing funds into an already saturated economy and allowing uneducated people to remain so. Foremost among Libya’s problems has been the lack of water. Agriculture failed due to water shortages.
Thus the decision to build the “Great Man-made River” appeared as new policymakers hope that the “river” will give Libya a reliable supply of water for agricultural, industrial, and domestic use. However, despite their good intensions, the new government continued making old mistakes – while investing oil capital into purchasing plants and labor force they left bulk of the Libyan population illiterate and thus unqualified. Viewed superficially, the huge number of projects constructed suggests tremendous strides in development. Below the surface is cruel reality.
Countries pursuing import substitution usually attempt to make use of domestic labor and skills, and in some cases domestic entrepreneurs. Unlike those countries Libya has not built a single factory. All factories were bought abroad at enormous cost, and most were accompanied by their own foreign work force. Companies from Europe and Asia, not Libya, build roads, hospitals, hotels, other construction projects and generate capital. Thus Libyans remain impoverished. The oil industry is by no coincidence the most well-run and profitable segment of the modern sector.
Birks and Sinclair sum up Libya’s dilemma: “In the short-term, Libya can afford to pay the price for her present experiment in socialism, namely economic inefficiency, but there may also be less obvious but very costly elements, such as the atrophying of economic motivation of her indigenous work force. In many respects, Libya’s human resources are more crucial to her long-term development than a large and artificially created non-oil element in the GDP. ” (1984, 274-75) In the search for self-sufficiency, Libya’s fundamental resources such as water, soil, and oil have been abused and wasted senselessly.
Industry depends on foreign labor. The Libyan labor force has not only been ousted of the developmental process but, as a result of deliberate government policies, has also become addicted to government handouts. Situation worsened after American and UN sanctions against Libya in 1992 as Qaddafi’s regime was believed to be responsible for terrorist activities, protection and aid provided to terrorist. But in the recent time Libyan officials have made progress on economic reforms. This effort seems to have considerable effect, especially after UN sanctions were lifted in September 2003.
Furthermore Libya’s announcement made in December 2003 that it would abandon programs to build weapons of mass destruction allowed the USA to lift most sanctions too. Income from oil and drinking water and a small population give Libya one of the highest per capita GDPs in Africa. Currently Libya experiences transformation induced by international, political and economic pressure to adopt market orientated reforms and has started the process of liberalization of the socialist-oriented economy.
The overwhelming economic and environmental predicaments of the poor cannot be solved by the poor alone without substantial cooperation with the rich, and conversely, the predicament of the poor cannot be allowed to persist without bringing peril to the rich. But even if the task cannot be accomplished without technical, economic, and industrial interventions from outside, the Africans themselves have the most important role to play in the development of Africa. A mutual cooperation has to be present and Libya is the good support for such conclusion.