NEW YORK, NY – Secretary of State Hillary Clinton has expressed support for lessening regulations on small business because “too many people still can’t find jobs”. American small business owners might take heart at this recognition except the businesses she is concerned about are in Egypt, Libya and Tunisia. And, her support was directed at ministers from Arab nations meeting at the Waldorf Astoria Hotel in New York.
Ironically, the economic picture seems much rosier in Libya than in the Secretary’s own country. The Organization for Economic Co-Operation and Development (OECD) projects the Gross Domestic Product of the Arab nation to grow at a rate of 20.1% this year. That is 15 times the 1.3% GDP growth rate in the United States during the second quarter of this year. The OECD also estimates that Libya’s real GDP will grow by an additional 9.5% next year.
Libya will have a budget surplus equal to 13.6% of GDP this year compared to a U.S debt that will increase more than $1.2 trillion in the same time period.
“In Tunisia, Egypt, and Libya, people rose up against their dictators because they were fed up with governments that served the interests of a few at the expense of everyone else,” said Clinton. “But economic and social challenges did not disappear with the dictators. Too many people still can’t find jobs, and young and growing populations crave a sense of opportunity and self-determination.
“On the economic front, we are zeroing in on small and medium-sized enterprises because they are the growth engines in any economy,” Clinton said. “They create the bulk of new jobs and they spread wealth more broadly through more communities. And when people have the opportunity to unleash their talents and create something of their own, they are more invested in their communities, their countries, and their new democracies”.
“So the OECD is helping emerging democracies find ways they can loosen regulations and make it easier to start or expand a small business,” she said. “Several partners are setting up funds to help small businesses gain access to loans and financing. People of the region need to see that their governments can be fair and just. So we are stepping up our efforts to return billions of dollars that were stolen or siphoned away over decades of cronyism and corruption.”
As a result of its civil war, Libya went through a dramatic economic contraction in 2011. But, according to the OECD, it is bouncing back from that.
“Libya’s civil war hugely disrupted the economy by cutting oil output, the primary source of revenue, to virtually zero,” said an OECD analysis of Libya’s economy published in May. “As a result, the economy contracted 41.8 percent in 2011 but as oil production recovers, it should expand 20.1 percent in 2012 as reconstruction takes hold, followed by a gain of 9.5 percent in 2013.”
According to the OECD report, Libya had a 17.1 percent budget deficit in 2011, while going through its civil war. However, according to the report, Libya ran budget surpluses in each of the six years before that and is expected to run a 13.6 percent surplus in 2012 and a 12.2 percent surplus in 2013.