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Millett warns Libya of bankruptcy

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British ambassador to Libya Peter Millett said, in an article distributed by the British Embassy in Libya and posted on Facebook and Twitter, entitled: Who cares about the economy?

Millett said that despite Libya used to earn more than it spent, enjoying the second largest fiscal surplus in the Middle East. Now the situation is reversed: the government is spending a lot more than it earns and is running a fiscal deficit of over 40%, the largest in the world.

He also warned that Libya is facing bankruptcy, and there is another scenario looming around the corner, in which the Libyan state wont be able to buy all it’s needed goods from food and fuel.

Millett, who is working now from Tunisia after the closure of British Embassy in Tripoli, pointed that the World’s Bank expects the current account deficit to increase up to 70% of GDP in 2015.

Millett declared that Libya started to use its cash reserves, which was 121 billion dollars last year. World’s Bank estimates that cash reserves won’t exceed 55 billion dollar with the end of this year.

He considered that all problems Libya face stem from decisions Taken inside Libya:  the reduction in production because of the lack of security for oil installations; the huge increase in government expenditure funding salaries in the public sector; and the lack of investment because of the continuing lack of stability in most parts of the country.

He added “ if that turmoil continues, economic situation will get worse, but if the political  dialogue succeeded, there is a chance that it will improve, but this improvement won’t happen over night it will take time”.

The British ambassador stressed that Libya is in desperate need for government of national accord in Tripoli, to begin the task of mending Libya’s injured economy.  He called all Libyans to get behind and support the political dialogue as they were behind removing Qadhaffi.