The Private Sector amid Conflict : The Case of Libya

Libya’s economic stability should be a priority for the international community. Although the private sector is an integral part of the Libyan economy, limited systematic information is available on how the prolonged conflict in Libya affected the private sector and the implications for a postconflict recovery. Using original survey data, The Private Sector amid Conflict aims to fill this gap by analyzing how the private sector has coped with the conflict and examining resilience and postconflict optimism. The conflict has profoundly affected the Libyan private sector. The conflict-induced macroeconomic crisis has generated a liquidity crisis, weakening the banking sector. Firms’ revenues, jobs, and production have been reduced and value chains have been disrupted. The conflict has distorted the business environment, undermining the rule of law, reducing accountability, and affecting service delivery. Not all firms have been negatively affected, however. The conflict-induced changes to competition, access to inputs and markets, innovations, and informal activities tend to affect different types of firms differently. Overall, the private sector shows signs of resilience and optimism for a postconflict recovery. The analysis in the book draws on novel data and other conflict experiences. The results presented offer suggestions for policy actions to address private sector constraints amid conflict and in the postconflict era.