External Economic Exposure: An Analytical Study of its Concept, Indicators and Applications to the Libyan

Abstract

By applying indicators of external economic exposure to the Libyan economy and using Libyan foreign trade statistics, it has become clear that the Libyan economy has suffered from severe external exposure throughout the study period. This is reflected in the dominance of crude oil exports in the GDP and the complete reliance on export revenues to cover the import bill. Imports also play a crucial role in meeting individuals’ needs and supporting economic development.Libyan exports are characterized by a high degree of concentration in favor of oil exports, while imports show significant diversity. This is accompanied by a clear geographic concentration in Libya’s foreign trade markets—both in exports and imports—limited to a very small number of trading partners. Therefore, the study has attempted to propose a set of economic and trade measures and policies in the form of recommendations that may help alleviate the intensity of Libya’s external economic exposure and reduce its negative effects on the main macroeconomic variables that determine the effectiveness of economic activity in Libya