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Libya
FOREIGN TRADE
By the mid-1980s, the government conducted virtually all foreign
trade either directly or through public corporations. Import licenses
were no longer issued to the private sector. The foreign exchange
needed to purchase imports has been allocated by the commodity
budget since its inception in 1982. Exports consisted almost entirely
of hydrocarbons. Between 1978 and 1985, crude oil exports accounted
for between 85 to 99 percent of total annual exports. Exports
of other hydrocarbons, mainly methanol and liquefied natural gas,
were irregular and depended on bilateral supply agreements of
limited duration.
The balance of trade has consistently been in Libya's favor since
1963, when oil exports first reached significant levels. Whereas
during the 1970s exports kept ahead of imports by a wide margin,
since 1981 this has not been true. For example, during 1982 Libya's
trade balance showed a surplus of only LD2 billion, the smallest
surplus since the mid-1960s. Only a drastic cut in imports kept
the trade balance as a surplus after 1981. In 1985 exports stood
at LD 3.2 billion, while imports totaled LD 1.4 billion.
The decline in Libya's trade position after 1981 was largely
the result of falling oil prices and decreasing volumes of oil
exports. The oil price decline resulted from factors beyond Libya's
control, but much of the decline in export volume resulted from
Libya's decision to stay generally within its OPEC production
quotas. These quotas were reduced in the early and mid-1980s as
OPEC tried to use its market power to reverse the falling price
trend.
The composition of imports was more varied than that of exports.
Figures for 1981 indicated that the largest percentage of imports,
by value, was the category of machinery and transport equipment.
Manufactured goods, principally metal manufactures and iron and
steel, came second, followed by foodstuffs. The percentage of
foodstuffs in the import bill has been rising steadily since disposable
incomes began rising. The direction of trade has undergone a significant
change since the mid-1970s (see table 9, Appendix). Whereas during
much of the mid- to late-1970s the United States was Libya's leading
export market, American trade restrictions had reduced Libya's
trade with the United States to zero by 1983. Italy remained Libya's
most important trading partner in the mid-1980s, followed by the
Federal Republic of Germany (West Germany). These two countries
together supplied about 30 percent of Libya's imports and bought
slightly under 50 percent of its exports in 1984.
Data as of 1987
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