Agreement on an economic reform plan for Libya reached

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An economic reform plan for Libya was agreed at the Libya Economic Dialogue meeting in Tunis yesterday.

The Libyan Presidential Council (PC) and the Central Bank of Libya (CBL) have agreed on economic reforms that would end “deformed prices of fuel” and “foreign currency rates at the market.”

The agreement came following the eighth meeting for the Libyan Economic Reform in Tunisia in the presence of the US Chargé d’affaires Stephanie Williams.

The meeting was attended by two members of the Presidency Council (PC), Ahmed Maitig and Fathi Majbri, together with Tripoli-Central Bank of Libya Governor (CBL), Saddek Elkaber. Majbri is the PC member in charge of the budget and economic affairs.

There was an agreement on four main economic measures designed to ease pressure on state spending and help alleviate the current economic burden on Libyan citizens, and especially the poorer sections of Libyan society.

These four measures are:

1) The reduction of subsidies on fuel and increasing its price from the current LD 0.15 a litre (about US$ 0.11¢ a litre at the official exchange rate).

2) The increase of the amount of the foreign currency annual allowance at the official rate of exchange, currently set at $500 per person.

3) The reactivation of the child allowance which has been frozen due to lack of state funds.

4) The devaluation of the Libyan dinar.

“Even if the reforms would bring some burdens on the citizens at first, then there will be some measures taken in line with the reforms to keep the citizens well provided for and at decent living standards.” Al-Mijibri said. He said selling dollars to the families at bank rates will be increased and the family and children’s grants (100 Libyan dinars per child) will be reactivated.

The CBL governor Al-Siddiq Al-Kabeer said there will be a package of reforms that best fit for the status quo and that he is optimistic for this new package.

US Chargé d’affaires said the international community is concerned over the Libyan economy and services provided to Libyans, saying though reforming the economy isn’t easy but placing a united budget for the country would help the government provide for all citizens.

“Libya is facing challenges and the reforms are needed in the economic sector so Libyans’ lives can become more stable and the US is in full support for the new steps.” Williams added.

Commenting on the reforms, House of Representatives’ boycotting member Fathi Bash Agha said on Twitter: “Without uniting CBL, talking about reforms in economic, fiscal and financial sectors is a means to contain people’s anger for some time. Hike in dollar exchange rates against the dinar at the black market hit 6.8 Libyan dinars at the time the meeting was on air, which is a bad indication for the reforms.”

Dispatch based on reports on The Libya Observer and The Libya Herald.

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