Is the U.S. Next? Libya To Give Oil Proceeds Directly To the Population

As early as May, 2008, Libyan leader Colonel Muammar Ghaddafi suggested that his country planned to dismantle his nation’s political bureaucracy and would “hand out oil money directly to the country’s five million people.” ( Nearly three-fourths of Libya’s petroleum revenue is suspected of being illegally diverted.

In September of last year, the Arab Times reported that “Libyan leader Muammar Al-Ghaddafi has announced he will distribute all oil revenues directly to his people and will purge most state departments except the Defence, Interior, Foreign Affairs and Justice,” columnist Saleh Al-Ghannam wrote for Arrouiah daily. Ghaddafi attributes this decision to corruption in government departments which put the burden on the budget to the tune of $27 billion each year.” (

London’s Financial Times reported November 14, 2008 on an appearance by Ghaddafi on Libyan television. Among those discussing the issue were Farhat Omar Bin Guidara, central bank governor, and Al-Baghdadi Ali al-Mahmoudi, prime minister of Libya.

Arguments by leading members of the government against Ghaddafi’s revolutionary and unorthodox plan included anticipated major inflation and foreign currency problem in the country. Another suggested distributing shares in Libya’s manufacturing and telecommunications industries. Ghaddafi failed to be persuaded. According to The Financial Times, he charged officials with “clinging to the status quo to protect their privileges…so you can keep your positions.“ (

The story was hardly reported in major American news media at the time. It was not until February 14, 2009 that the New York Times and first reported the story from a Reuters dispatch.

The Socialist Islamic republic, which derives roughly a quarter of its annual GNP from the OPEC member’s petroleum revenues, was unlikely to be seen one of the first nations to try to adopt a direct libertarian political posture.

In his forty years since his successful and bloodless coup in 1969, Ghaddafi has at various times been both hailed and denounced as a visionary and a revolutionary.

In a 1986 raid on Tripoli by U.S. warplanes, he lost his infant daughter.

Proof of his complicity in the 1988 Pan Am flight bombing over Lockerby, Scotland was never legally established, although Ghaddafi and the Libyan nation accepted full responsibility and made financial restitution in 2006.

Previous U.N. sanctions, imposed in 1992, were lifted in 2003 and 2006.

Today, the Sunni Moslem country is a one-year member of the U.N. Security Council

It is estimated that there are roughly five million people in Libya. The nation produced a GDP of $57 billion. Some $32 billion annually would be distributed to the population.

Ghadaffi’s remarks should be favorably received by those advocating similar utopian ideals in the United States.

Libya is essentially a centrally ruled socialist autocracy with popularly elected local leaders. In 1977 Ghaddafi proclaimed Jamahiriyah (people’s republic). The unique governmental form combines religious aspects of Islam, economic mixture of socialism and capitalism, and populism.

While Ghadaffi holds ultimate power over major macro-economic decisions, he suggested that “You would fail to stop corruption as long as the state owns the oil wealth, makes contracts with companies to carry out projects, manages health care, education and other services and economic projects”

Particularly unusual for an autocratic ruler, Ghaddafi emphasized that “We are not afraid that people enjoy freedom on every street and every place, to appoint the officials of their liking, create associations, set up business and companies as they like. … This is their right and there is no debate about such an issue.”

Roughly twenty percent of Libyan’s are government employees.

Awaiting the outcome of the social experiment, American analysts ranging from the intelligence community to armchair pundits ascribe various motives to the sixty-seven year old leader. Ghaddafi is one of the longest-serving heads of state in the world, ruling since 1969. The king of Thailand, Bhumibol Aduljadej (1945), Sheik Saqr of Ras al-Khaima (1949), Queen Elizabeth II (1952) and Gabon’s Omar Bongo (1967) are the other leaders currently serving.

The convergence between capitalism and socialism and populism with strong central leadership should be closely monitored, whether in Libya or the United States.

2 comments to Is the U.S. Next? Libya To Give Oil Proceeds Directly To the Population

  • If Qadafi really wants to fight corrupton, what he needs to do is privatize the oil industry. Having the government collect the proceeds and then distribute them will lead only to different forms of corruption as politicians divert the proceeds in different directions than they are being diverted now.

    That is the problem with state owned enterprises wherever they arise. It is the nature of hte beast. The fact is that someone will have to decide who gets how much. When you are talking about many billions of dollars, that is a lot of power to be abused.

  • Privatizing the oil industry is what Ghaddafi ostensibly wishes to do by giving its ownership directly to his population. Unfortunately, he is faced with two dilemmas:

    1) Except for a small, experienced elite, his own population does not have the skills nor education to run an industry as complex as the oil industry effectively, and

    2) if he does indeed privatize and opens the industry up to all free market “comers,” foreign interests are the most likely to snap up this lucrative and key resource.

    These options are clearly not in Libya’s best interests.

    Ghaddafi’s deciion to distribute the wealth to his own people seems clearly most consistent with his “Green Book” and Islamic philosophy.

    It is well overdue that the U.S. stopped judging every other society’s decisions solely by its own standards of maximzing profits.

    It might be more to the point to understand and accept other, more applicable standards relevant to the country under consideration.

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