A world in economic crisis

Libya – the impact of a Socialist state.

Posted in Libya by Aussie on May 28, 2011

Few people realize that Libya was made a socialist state by Daffy Duck. When Daffy came to power he changed the flag until it became that green thing. He also introduced his green book – shades of Mao Tse Tung. On top of that he changed the name of Libya so that it became known as the Socialist State of Libya – very similar to the old Soviet Union. This is because Gadhafi decided to use the socialist set up in order to shore up his own power.

When the protesters in Benghazi were successful in overthrowing the military in the town, they turned to the old flag as the symbol of what they wanted for their own country – no socialism. They want a Western friendly democratic country – or at least that is the aim of the people in Benghazi.

As a socialist state, Libyan people are paid a stipend by the Libyan government. They are given enough to be able to purchase the basic necessities. Businesses for cars, mobile phones etc. thrived in Libya. The main export for Libya has been oil, which is sent elsewhere for refining, and then re-imported as the finished product. As is the case with these oil rich nations, Gadhafi had not been spending the money on the people but he had been secreting the earnings from the oil elsewhere, spending lavishly on his own family, sponsoring terrorist activity and purchasing military equipment and weapons.

All of that has changed since February 2011, when the first protest and the crackdown began, and then get out of control. As a result of Gadhafi’s determination to crack down on those who dissent from his leadership there has been a civil war, and the imposition of a UN sanctioned no-fly zone.

Civil wars have economic consequences and this includes the impact upon a local city economy, such as that of Benghazi. The people no longer have the money to purchase clothing, even when prices are reduced by 40%. However, what is really telling is the attitude of the people: they think it is worth it if it means getting rid of Gadhafi. What is also coming out is that Gadhafi has removed the money from the bank so that the people of the east cannot get access to necessary finance.

There are some countries, such as Qatar who have been willing to lend a helping hand. The problem that must be faced is how will the loans be repaid? The National Transitional Council is ready to form a legitimate government in Benghazi. They have support from Qatar and some Western powers. Will it be enough to keep them afloat? Time will tell as to the real consequences regarding the “civil war” in Libya. Can the NTC in Benghazi hang on and keep going?