Libya's economy has long been characterized by its heavy reliance on oil and a dominant public sector. This dependency poses significant challenges to fiscal sustainability and underscores the critical need for economic diversification driven by a robust private sector. Despite numerous efforts over the years, the indicators of non-oil GDP, particularly in the private sector, have yet to show significant improvement. This reality calls for well-coordinated counter-cyclical economic policies to enhance productive efficiency in the short to medium term and comprehensive structural reforms to boost the overall productive capacity in the long term.

In this context, UNDP, leveraging over 50 years of on-the-ground experience in Libya, is dedicated to supporting the country's journey towards sustainable development and economic diversification. In line with the UNSDCF 2023-2025 and following the visit of the UNDP Regional Director in November 2023, we have embarked on a strategic initiative to formulate a suite of programmes aimed at fostering sustainable development and economic diversification.

Last month, a mission comprising senior economists from the UNDP Regional Bureau for Arab States and the UNDP Amman Regional Hub met with several Libyan ministries, and national institutions to explore opportunities for future engagement and programming. The discussions focused on ongoing efforts and strategies to support Libya in developing national planning and budgeting, sustaining and increasing the role of the private sector, and ultimately driving and leading to economic growth and diversification.

Private Sector Development

UNDP's strategy emphasizes enhancing access to finance by reviewing the legal and regulatory frameworks, building capacity, and digitalizing services and infrastructure. Key initiatives include reactivating the credit information bureau, cadastre in major urban areas, and movable assets registry, supporting credit guarantee schemes, lease financing, public-private partnerships, and developing policies for MSME and private sector development with a special focus on women's participation.

To bolster entrepreneurship, we are scaling up support for business incubators and cooperatives, focusing on digital, youth, and women-led start-ups. By strengthening business associations, particularly those led by women, we aim to enhance their roles as mediators and service providers, fostering a more inclusive business environment.

Human Development

Technical assistance and capacity building are cornerstones of our approach to human development. We are supporting technical and vocational education institutes in developing qualification standards and certification mechanisms. Reviewing active labor market policies and job matching services, particularly for women and youth, is vital in addressing unemployment and ensuring a skilled labor force that meets market demands.

Support to Fiscal Policy and Local Economic Development

UNDP provides evidence-based policy advice for key fiscal reforms, including revenue-sharing and subsidy reforms, addressing inequalities between women and men, and between different geographical regions. Supporting local development and municipal planning frameworks ensures effective revenue management and service delivery. Our efforts will also include strengthening networks for community and women's economic empowerment and fostering inclusion, trust-building, and peacebuilding through local dialogues and perception surveys.

National Vision and Economic Planning

Our support extends to national vision consolidation and strategic planning for economic recovery, sustainability, and effective policy design for economic diversification, energy transition, and climate change. Facilitating participatory workshops and dialogues helps redefine the social contract, essential for a cohesive national strategy.

Data Analytics and Research

Finally, enhancing the capacity of national statistical offices in producing socioeconomic data and providing training in economic modeling and simulations will help ensure that Libya's policies are informed by robust evidence. This approach will help in crafting effective strategies for subsidies, budget prioritization, industrial policies, and social protection, ultimately supporting Libya's reconstruction and sustainable development.