TRIPOLI - Members of the Economic Track met for five days between 8 to 12 February in their second formal in-person session. Their discussions focused on Libya’s subsidy system, economic restructuring, private sector stimulation and diversification as well as how to balance development state-building and ensure economic justice.
Members explored ways to rationalize Libya’s subsidy system to better serve citizens, and improve economic sustainability and long-term stability. Participants examined the current impacts of subsidies and considered pathways toward a more targeted, efficient, and fiscally sustainable support framework. The exchange underscored the importance of a gradual and carefully sequenced approach, anchored in strong governance, effective social protection, and measures to reduce smuggling, corruption and misuse. Participants highlighted that subsidy reform should aim to protect vulnerable groups, preserve social stability, and ensure that public resources are used more transparently and equitably for the benefit of all Libyans.
Special Representative of the Secretary General for Libya, Hanna Tetteh, attended part of the discussion. She listened to participants expressing alarm that Libya is approaching a critical tipping point. They highlighted serious risks of social instability if decisive corrective measures are further delayed.
“Economic reform is crucial to moving Libya forward,” said SRSG Tetteh. “Each day people are struggling with the cost of living, with the devaluation of the currency and lack of employment opportunities. They want an economy which allows them to prosper, where development and opportunities are equal. We are at a turning point in the Libya economy, and I hope that through the SD members’ recommendations we will be able to highlight how crucial and urgent the corrective economic measures and reforms are.”
Members also reviewed Libya’s economic opportunities and conditions required to unlock its full potential. The discussions also included ways to advance a more diversified and resilient Libyan economy, with a stronger role for the private sector in driving growth and employment. Participants highlighted the importance of predictable regulations, improved access to finance, effective institutions, and rehabilitated infrastructure to support small and medium-sized enterprises, local value chains, and emerging sectors such as renewable energy, manufacturing and tourism.
Participants further discussed demographic trends in Libya and noted rising poverty, growing strain on the middle class, and the need to strengthen education, service delivery, and job creation to support social cohesion and resilience. They presented compelling evidence demonstrating a strong correlation between poverty, corruption, and systemic economic distortions.
On the final day of the week-long meeting, members of the Economy Track, alongside the SRSG, DSRSG RC Ulrika Richardson and DSRSG-P Stephanie Koury, met with Ambassadors and representatives of the Economic Working Group of the Berlin Process. Economy Track members conveyed their strong alarm at the rapidly deteriorating economic situation and underscored the urgency of supporting immediate corrective measures to avert further social and economic decline. The track members also pointed to the interlinkages between the economic track with those of security and governance.
Several ambassadors took note of the gravity of the economic situation, and expressed support for the Economic Track of the Structured Dialogue. The diplomats also encouraged continued progress, noting that they look forward to practical and actionable recommendations to help alleviate current challenges, including in the current political context. They also called on greater Libyan leadership in driving reform towards stability.
The Economy Track’s work aligns with UNSMIL’s mandate to use its good offices to facilitate an inclusive, Libyan-owned and Libyan-led political process, without determining outcomes, and to advance consensus on governance arrangements toward elections and long-term stability. The group will begin drafting the outcome document through thematic teams during Ramadan based on the discussions so far and will reconvene in early April.
The Structured Dialogue is not a decision-making body for the selection of a government but rather explores concrete recommendations to create a conducive environment for elections and address more immediate governance, economic, security and national reconciliation and human rights challenges to strengthen state institutions and needed reforms. By examining and developing policy and legislative proposals to address long-term conflict drivers, the work of the Structured Dialogue aims to build consensus on a national vision that will shape the path to peace and stability.
