SME'S IN LIBYA

Small and Medium Enterprises in Libya

Small and Medium Enterprises in Libya

Introduction

The popular revolution of 2011 in Libya has reduced the chances of diverse and potential growth in the country. Since then, the country faced a complex situation of rebuilding the entire economy and its infrastructure followed by the institutions and increasing demands of population, especially for improving the standard of governance. The conflicts affected the revolution and had a severe impact on Libya's economy. The country's wealth opened the door of choices for Libya to work on its future. The country could have fallen into the trap of several countries which have immense resources and become overly reliant on revenues which they generate from natural resources Ayyagari et al, 2007, pp. 421).

The importance of small and medium enterprises in production is accepted by all the developing and developed countries of the world. All countries accept the fact and appreciate the presence and operations of small and medium enterprises as the sector contributes heavily to the economy of the country. Apart from contributing in the production sector, the SMEs also contribute towards minimizing the unemployment rate in the country. Small and medium enterprises are also contributes heavily in fulfilling the needs and demands of the economy of any country. These small and medium enterprises constitutes about 90% of the majority number of companies in the world economies and at the same time, these small and medium enterprises also contribute about 46% in domestic and international productions. The SME's sector also provides 40% to 80% of job opportunities to the people of the country. In gulf countries, small and medium enterprises play a vital and prominent role in the economic development of country.

The NTC-National Transitional Council has worked on promoting political transition peacefully in order to settle the economic situation and to set out a reform agenda on a national level. The authorities worked on restoring the security issue, enabling the production of hydrocarbon and maintaining the economic stability. At the same time, Libya also faced serious challenges to respond to the causes of revolution and re-building a democratic regime. Therefore, efforts were focused on infrastructure, capacity building, and job creation, improving education system, development of private-sector and ensuring social safety at the same time. International financial institutions become involved in technical assistance and policy consultations at the request of Libyan authorities. The goal was to maintain economic stability and developing infrastructure for institutes in order to promote employment growth and economic diversification (Dalbir & Ibrahim, 2011, pp.323).

Discussion

Small and Medium Enterprises in Libya

There is no proper definition of small and medium enterprises. Their definition varies from country to country and even from one organization to the other in the same country. SMEs can be defined on many criteria's like sales volume, number of employees, invested capital etc. The GPC (General People's Committee) in Libya has put forward a definition for small enterprises in 2006. According to GPC, small enterprises are the ones whose capital is less than LD 2500,000 and their ...