News / Middle East

    Olive Oil - Libya’s Other Oil Economy

    Olive press in the Nafusa Mountains, Libya, April 09, 2012. (Stephanie Figgins)
    Olive press in the Nafusa Mountains, Libya, April 09, 2012. (Stephanie Figgins)
    Stephanie Figgins
    As Khaled looked out over the now quiet, olive-tree covered hills of Zintan, he recalled the fighting and destruction that rocked this area just a few short months ago. Zintan is a town of 40,000 people tucked into the Nafusa Mountains of northwest Libya. Six thousand Zintanis joined the armed opposition to oust dictator Moammar Gadhafi, forming one of the country’s most formidable militias.

    During the eight-month conflict, Zintan’s able-bodied boys and men joined the fighting, its businesses shut down, and electricity and water stopped flowing. Like in the rest of Libya, the economy came to a standstill. In less than one year, the country’s Gross Domestic Product (GDP) contracted by a staggering 60 percent.

    For Khaled, who runs the local media center, nursing the economy of his town and his country back to health is among the most critical challenges facing the country’s transitional government.

    The focus thus far has been on restoring oil production to pre-war levels. Libya’s oil minister said the country is now producing 1.6 million barrels per day (b/d) of crude oil, just short of the 1.77 million b/d the country was producing before the revolution.

    Getting the oil sector up and running should indeed be a primary focus, as hydrocarbons have long dominated the Libyan economy; before the war, oil accounted for over 70 percent of GDP, 95 percent of exports, and nearly 90 percent of government revenue, as estimated by the International Monetary Fund.
    The new Eni (The Italian oil and gas company) gas compression plant in Mellitah, Libya. (file photo)The new Eni (The Italian oil and gas company) gas compression plant in Mellitah, Libya. (file photo)
    x
    The new Eni (The Italian oil and gas company) gas compression plant in Mellitah, Libya. (file photo)
    The new Eni (The Italian oil and gas company) gas compression plant in Mellitah, Libya. (file photo)

    Moreover, Libya supplies two percent of global output. That its particular brand of “sweet” crude, exported mainly to Europe but also to Asia and the United States, cannot be easily replaced makes it some of the most sought-after oil on international markets.

    But some argue Libya’s economic recovery must go beyond restoring the pre-war status quo.

    As Michael L. Ross, Professor of Political Science at UCLA, argues in his book The Oil Curse, countries “blessed” with abundant natural resources - particularly oil - also carry a heavy burden. He notes that an over-dependence on the oil sector correlates with a decline in the competitiveness of non-oil sectors, makes the economy vulnerable to swings in international commodity prices, and fosters nondemocratic governments. Indisputably, seemingly endless oil revenues helped keep Gadhafi in power for 42 years.

    Moreover, little oil wealth trickled down to ordinary Libyans.

    “One of the largest oil pipelines in Libya passed through here,” said Khaled, pointing to two long, white streaks running down the mountainside near his hometown, signaling the pipelines buried below. “But we didn’t benefit at all.”

    The pipeline carries oil from the Awbari oilfield in the south to the al-Zawiya refinery in the north, near Tripoli. Opposition fighters shut it down in June 2011 in order to deprive Gadhafi of resources, a move that rebels say was critical to their victory. For Khaled, it was also an important symbolic act, in which regular people reclaimed a pipeline that quite literally bypassed them, funneling Libya’s most precious natural resource north for the benefit of the ruling elite.

    Less hydrocarbons, more olives

    Consequently, Libya’s post-conflict growth strategy must include a more equitable distribution of oil wealth, but as the IMF argues, it must also involve a reorientation of the economy away from dependence on hydrocarbons.
    An olive tree in Zintan, Libya, April 9, 2012. (Stephanie Figgins)An olive tree in Zintan, Libya, April 9, 2012. (Stephanie Figgins)
    x
    An olive tree in Zintan, Libya, April 9, 2012. (Stephanie Figgins)
    An olive tree in Zintan, Libya, April 9, 2012. (Stephanie Figgins)

    Olives have been an important facet of the economy in the Nafusa Mountain area for thousands of years. The Romans, whose ruins dot the landscape of Zintan, produced olive oil here and exported it to Rome. Olives are also a source of pride for Khaled, who showed me ancient olive presses and explained how to determine the age of an olive tree by counting the number of rings in its trunk. “Land isn’t just for making a living off of,” he said. “The land is our past, present, and future. Our grandfathers liberated the land, protected it.”

    However, olives were among the agricultural commodities whose production declined with the 1958 discovery of oil, explains a 2006 report by the MEDFROL project, which analyzes the agricultural sectors of Mediterranean countries. Before 1958, agriculture was the country’s main source of revenue, making up about 30 percent of GDP. With the increase of oil production and exports in the 1960s, the size of the agriculture sector declined rapidly, comprising less than 5 percent of total GDP by 2005.

    Now, local business owners and farmers are calling for reforms that would re-focus attention on the agricultural sector.
    Outside of Said's olive press in the Nafusa Mountains, Libya, April 9, 2012. (Stephanie Figgins)Outside of Said's olive press in the Nafusa Mountains, Libya, April 9, 2012. (Stephanie Figgins)
    x
    Outside of Said's olive press in the Nafusa Mountains, Libya, April 9, 2012. (Stephanie Figgins)
    Outside of Said's olive press in the Nafusa Mountains, Libya, April 9, 2012. (Stephanie Figgins)

    Said, 46, owns an olive press a few minutes from Zintan. He recently returned to work, having shut down his factory during the uprising to join the fight against Gadhafi. Now, he wants to get the modern machinery inaccessible before. Under Gadhafi, Said and other farmers in the region were forced to pick their crop by hand, a difficult and time-consuming process that, Said explains, was part of the regime’s strategy to keep its people economically suppressed. With new machines, he hopes he will be able to produce more olive oil and expand his business.
    Mohamed talks about farming under the Gadhafi regime, April 9, 2012. (Stephanie Figgins)Mohamed talks about farming under the Gadhafi regime, April 9, 2012. (Stephanie Figgins)
    x
    Mohamed talks about farming under the Gadhafi regime, April 9, 2012. (Stephanie Figgins)
    Mohamed talks about farming under the Gadhafi regime, April 9, 2012. (Stephanie Figgins)

    Mohamed, 78, inherited his olive farm from his great-grandfather. After finishing secondary school, a distinction only few achieved in the days of his youth, he joined Libya’s bloated civil service. After three decades, Mohamed grew tired of the rampant corruption in his office, so he went to work on his family’s olive farm. But no industry was spared from the corrupt arm of Gadhafi’s government, he said. Most of the oil produced from Mohamed’s olives was sold to the government at reduced prices, and little was made available to regular Libyans.

    With the ouster of the regime, he is optimistic that corruption will give way to transparency. And if he could set up irrigation systems and import sophisticated machinery, he would be relieved of trucking in water and harvesting the olives manually.

    Getting former fighters back to work

    An over-dependence on oil has also contributed to the problem of structural unemployment, a critical factor leading to the uprising against Gadhafi’s oppressive regime. As a capital-intensive industry, the oil sector provides limited jobs. And because oil revenues sustained the government, Gadhafi dedicated few resources to developing human capital.

    “Gadhafi wanted us to be so preoccupied with looking for food, a house, a car, that we could not think about other things like higher education,” said Khaled. Before the revolution, he made just 175 Libyan dinar a month, around 140 USD. “A suit costs 120 dinar,” he said. “So the first month of work, you buy a suit. The second month, shoes. After 20 years, you can buy a car.”

    Libya’s unemployment problem persists. “Libya has a young population - close to 50 percent are below 25 years of age - with a large influx of entrants to the labor market expected in the next decade,” notes the IMF.  Diversification of the economy can serve as a means to create employment opportunities for the country’s youth.

    Although many Zintanis have laid down their weapons, the boys and men who fought are now looking to re-integrate into normal life, and they need jobs. But first, Libyan youth will have to be trained in new skill sets to meet the demand of companies that will begin to invest in the economy. “To meet the demand, it will be important to establish training programs for workers and job seekers, and to reform the education system to reflect new needs, such as language and computer skills,” urged the IMF’s August 2012 report Libya Beyond the Revolution: Challenges and Opportunities

    Possibilities ahead
    Overlooking a valley in the Nafusa Mountain area, Libya, April 9, 2012. At the far left, white streaks running down the mountain signal oil pipelines buried below. (Stephanie Figgins)Overlooking a valley in the Nafusa Mountain area, Libya, April 9, 2012. At the far left, white streaks running down the mountain signal oil pipelines buried below. (Stephanie Figgins)
    x
    Overlooking a valley in the Nafusa Mountain area, Libya, April 9, 2012. At the far left, white streaks running down the mountain signal oil pipelines buried below. (Stephanie Figgins)
    Overlooking a valley in the Nafusa Mountain area, Libya, April 9, 2012. At the far left, white streaks running down the mountain signal oil pipelines buried below. (Stephanie Figgins)

    Re-focusing the Libyan economy on non-hydrocarbon sectors is not just about making the economy more stable or equitable. As Khaled indicates, it is also about reawakening the imagination of many Libyans who had been oppressed for decades under Gadhafi.

    Zintan’s olive oil industry represents just one facet of the unprecedented economic opportunities available in the post-Gadhafi era. Khaled is floating many other ideas to build up the local tourism and trade industries, both of which, says the IMF, hold many opportunities because of the country’s  “rich archeological sites, Mediterranean climate, and proximity to major European markets.”

    Khaled imagines building a hotel and a restaurant to cater to tourists that would come to see the Nafusa Mountain’s historical treasures, including its Roman ruins.

    The economic challenge ahead is great, and is complicated by the fact that Libya does not yet have a permanent government to carry out long-term policies. In June, the country will elect members to a national assembly tasked with drafting the constitution. Once the constitution passes a referendum, parliamentary and presidential elections will follow - a process likely to take around two years. All of this, amid persistent fears over basic security in a country saturated with weapons.

    Regardless of what business ventures Khaled undertakes, for him the economic changes ahead are about achieving something more basic, something that was not possible under the Gadhafi regime: “We want jobs, salaries, to get married, to have babies. We want a normal life. A human life."

    You May Like

    Hope Remains for Rio Olympic Games, Despite Woes

    Facing a host of problems, Rio prepares for holding the games but experts say some risks, like Zika, may not be as grave as initially thought

    IS Use of Social Media to Recruit, Radicalize Still a Top Threat to US

    Despite military gains against IS in Iraq and Syria, their internet propaganda still commands an audience; US officials see 'the most complex challenge that the federal government and industry face'

    ‘Time Is Now’ to Save Africa’s Animals From Poachers, Activist Says

    During Zimbabwe visit, African Wildlife Foundation President Kaddu Sebunya says poaching hurts Africa as slave trade once did

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: cerrinoart from: Libya
    June 01, 2012 3:25 AM
    Compliments to Stephanie, a type of article that we should read more of – Hope, dreams and aspirations. The olive branches of Libya, long a symbol of peace, should regain their heritage as a significant contributor to the wealth of the people and their country. Khalid may well wish to consider as an initial step, semi-automatic small scale cold presses which are reasonably priced and produce a higher quality tastier oil, popular with small to medium scale farmers in Italy. As an extra source of income the residue pulp can be dried and sold to fuel pellet manufacturers, pellet fired boilers are becoming an increasingly viable and eco friendly alternative to gas, wood and oil fired boilers in Europe. Empires have come and gone through this African doorstep to Europe but the serene olive trees remain quietly growing and bearing fruit, rooted to the land of their birth. I wish Khalid a bright and productive future.

    by: Optimist from: Everywhere
    May 29, 2012 11:48 AM
    Truly an informative article. VOA needs to bring these kinds of articles to inform the public. The reporter identifies the problems and opens up the real issue for the average person (a Non-Libyan) to see.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Ivorian Chocolate Makers Promote Locally-made Chocolatei
    X
    July 29, 2016 4:02 PM
    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Ivorian Chocolate Makers Promote Locally-made Chocolate

    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Tesla Opens Battery-Producing Gigafactory

    Two years after starting to produce electric cars, U.S. car maker Tesla Motors has opened the first part of its huge battery manufacturing plant, which will eventually cover more than a square kilometer. Situated close to Reno, Nevada, the so-called Gigafactory will eventually produce more lithium-ion batteries than were made worldwide in 2013. VOA's George Putic reports.
    Video

    Video Polio-affected Afghan Student Fulfilling Her Dreams in America

    Afghanistan is one of only two countries in the world where children still get infected by polio. The other is Pakistan. Mahbooba Akhtarzada who is from Afghanistan, was disabled by polio, but has managed to overcome the obstacles caused by this crippling disease. VOA's Zheela Nasari caught up with Akhtarzada and brings us this report narrated by Bronwyn Benito.
    Video

    Video Hillary Clinton Promises to Build a 'Better Tomorrow'

    Democratic presidential candidate Hillary Clinton urged voters Thursday not to give in to the politics of fear. She vowed to unite the country and move it forward if elected in November. Clinton formally accepted the Democratic Party's nomination at its national convention in Philadelphia. VOA national correspondent Jim Malone has more.
    Video

    Video Trump Tones Down Praise for Russia

    Republican presidential candidate Donald Trump is toning down his compliments for Russia and Vladimir Putin as such rhetoric got him in trouble recently. After calling on Russia to find 30.000 missing emails from rival Hillary Clinton, Trump told reporters he doesn't know Putin and never called him a great leader, just one who's better than President Barack Obama. Putin has welcomed Trump's overtures, but, as Zlatica Hoke reports, ordinary Russians say they are not putting much faith in Trump.
    Video

    Video Uganda Unveils its First Solar-powered Bus

    A solar-powered bus described by its Ugandan makers as the first in Africa has made its public debut. Kiira Motors' electric bus, Kayoola, displayed recently at a stadium in Uganda's capital. From Kampala, Maurice Magorane filed this report narrated by Salem Solomon.
    Video

    Video Silicon Valley: More Than A Place, It's a Culture

    Silicon Valley is a technology powerhouse and a place that companies such as Google, Facebook and Apple call home. It is a region in northern California that stretches from San Francisco to San Jose. But, more than that, it's known for its startup culture. VOA's Elizabeth Lee went inside one company to find out what it's like to work in a startup.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.

    Special Report

    Adrift The Invisible African Diaspora