Libya – Academic and economic expert Mohamed Dermish said the lack of a proper environment for investment, finance, and business is having a wide-ranging impact on the national economy. He warned this absence is increasing unemployment and poverty, widening the circle of crime and ignorance, and fueling monopolies and corruption. He added that it is also causing overcrowding in the public sector workforce, inflating the wage bill, and limiting opportunities for growth and diversification of income sources.
Dermish, in remarks to Sputnik, explained that the banking sector acts as the backbone of the economy by driving financing and investment. He stressed that any shortcoming in the performance of banks reflects negatively on the national economy and undermines efforts to diversify income.
He said that developing the banking sector is a core responsibility of the Central Bank of Libya, which oversees banks’ work. Dermish emphasized updating the banking system to keep up with global developments and enhance efficiency. He also advocated for allowing reputable foreign banks to operate in Libya, saying this would bring expertise, promote competition, and improve the quality of financial services.
Dermish declared that regaining citizens’ trust in the banking sector requires a package of measures. First, banks must develop their services so they can play their true role in funding and investment. He also called for a review of the exchange rate policy to better align with citizens’ incomes and the country’s resources.
He proposed raising annual foreign currency allowances for individuals to $15,000, and increasing allowances for medical treatment and education abroad to $20,000 per year. He called for organizing letters of credit in coordination with the Ministry of Economy and Trade, as well as simplifying procedures and making these services available to citizens year-round.
On cybersecurity, Dermish stressed the need for cooperation with global institutions specializing in information security and electronic systems. He said this is crucial to protect the digital infrastructure of banks from breaches and cyberattacks.
He underlined the importance of continuous coordination between the Central Bank, the Ministry of Economy, and the Ministry of Finance. According to Dermish, these entities are the main arms of economic policy and should develop a comprehensive strategy to track developments and respond quickly to crises.
Dermish warned against unilateral and random decisions, saying they could further complicate the economic situation and weaken institutions’ ability to manage crises effectively.