Libya: Peanuts to Prosperity

Two sleek, twin-stacked Yugoslav cruise ships floated at anchor in Tripoli harbor last week, set up as dockside hotels for all comers. Tripoli’s landlocked hotels are booked solid for the next three months, and taxicab drivers are taking advantage of the crush of visitors to charge exorbitant sums for short hops around town. On the edge of town, workmen are hammering the last exhibits together for the 30 countries that will be represented at the annual Tripoli International Fair, which opens next week and will attract a record influx of visitors.

Just a few years ago, the idea of selling much to the desert kingdom would have been laughable. Libya’s export-heavy economy was literally peanuts—and peanuts could not pay for much. Now businessmen from abroad are falling over one another to peddle their goods to Libya. Suddenly Libya has more money than it knows what to do with. Since 1961, when U.S. and other foreign firms began pumping oil from beneath its sands, it has leaped into eighth place among the world’s oil producers, is now turning out 1,200,000 barrels a day. Oil royalties have poured into the treasury, and the country’s per capita income has spurted from $35 to $450 annually.

Encroaching Desert. Smart shops in Tripoli and Benghazi—the twin capitals—display Dior dresses, footwear from Italy and tape recorders from Japan. Auto agencies do a brisk business, and visitors are warned to watch both ways for “first-generation drivers” —registrations have risen from 12,000 to 55,000 in five years—as well as for gaping chuckholes in the streets, beneath which Tripoli is installing its first modern sewer system. New hotels and apartment houses are sprouting like desert flowers; three new hotels worth $10 million will soon be started in Tripoli alone. A small upper-middle class has grown enormously wealthy, built hundreds of lavish villas in the fashion able Tripoli suburb of Georgimpopoli.

Libya’s new wealth has brought new problems. With a population optimistically estimated at 1,600,000 in a land 21 times the size of Texas, the country has too few people to put its money to work efficiently. Libya has not enough skilled labor to meet the demands of oil companies and the booming construction industry, not enough competent administrators to channel oil revenues into properly planned projects, not enough trained government officials willing to make decisions. Rents and prices have more than doubled in five years. On the outskirts of Tripoli, Benghazi and Tobruk have grown up squalid Bidonvilles where thousands of Bedouins, attracted from the desert by the lure of the city, live in houses made of shipping crates and lift vans, vainly waiting for wealth to come to them. Meanwhile, the desert is slowly but inexorably encroaching on agricultural land abandoned in the rush to the cities, and Libya’s precious agricultural production has dropped a staggering 75% .

Retiring to Palaces. Despite such problems, Libyans recognize good times when they see them; U.S. Ambassador David Newsom calls Libya “the most stable country in the Arab world today.” Reform-minded King Idris, 76, has built more than 100 new schools outside Tripoli, has pledged 70% of the government’s $200 million-a-year budget for more housing, hospitals, roads and other welfare and public works projects. To keep Libya steady as well as rich, he has built a well-trained, 7,000-man army, and has quietly warned Egypt’s Nasser that in case of aggression he would not hesitate to call for help from the U.S.’s Wheelus Air Force Base near Tripoli and Britain’s R.A.F. staging base at El Adem outside Tobruk.

To prepare the way for an orderly transition after his death, Idris has been grooming his nephew, Crown Prince Hassan Rida, and at the same time altering and liberalizing the character of Libya’s kingship. He is retiring more and more to his half a dozen domed and crenelated palaces scattered around the country, leaving day-to-day government to his able and popular Prime Minister, Hussein Mazik, and encouraging talk of a constitutional monarchy and even a republic after he is gone. Whatever Libya becomes, the chances are that its wealth will continue to grow: it has hardly begun to tap the oil riches with which nature, forgetting almost everything else, has endowed it.