Libya Economic Monitor, Spring 2023 : Towards a Sustainable Social Contract in Libya

While armed clashed have declined, Libya continues to face fragmentation and fragility. The country's fragility is having far-reaching economic and social impact. Social conditions and public service delivery have been affected. Similar to numerous conflict-affected countries, the World Bank refrains from providing quantitative growth and macroeconomic forecasts. Despite the numerous challenges facing the country, the Libyan economy cab ne reconstructed and diversified by leveraging its substantial financial resources building on four critical pillars. The first is reaching a sustainable political agreement on the future of Libya. The second is the preparation of a shared vision on economic and social development that is based on accurate assessments of needs and aspirations. The third is the development of a modern and decentralized public financial management system that ensures adequate sharing of oil wealth and inter-governmental fiscal transfers as well as effective and transparent budget planning, execution, and reporting policies. The fourth is the establishment of a modern and comprehensive social policy that enables the reform of public administration and creates a clear distinction between social transfers and public wages