Al-Farisi: From a Fixed Salary to Business Ownership — A Bold Start with a Safety Net for Returning to Public Employment

Dr. Ayoub Al-Farisi, a member of the Central Bank of Libya’s Monetary Policy Committee, wrote an article in which he stated:

Amid the debate over the unified salary scale, and in the absence of reforms to the mechanisms for managing national wealth, which have exacerbated crises across all sectors, the solution is not new and has been implemented in some countries. However, it requires political will above all else. Without it, the current employment model will do little more than keep public-sector employees in poverty while wasting the country’s resources.

The Libyan state faces a complex structural crisis, characterized by the enormous expansion of its administrative apparatus and the concentration of workers in the public sector. This has imposed a massive financial burden on the state budget through its substantial salary bill. A genuine solution lies not in temporary measures, but in developing a comprehensive economic and development policy that encourages individual initiative, activates the role of the banking sector, restructures public-sector employment according to efficiency standards, and aligns educational outcomes with the actual needs of the labour market.

First: A Programme to Transition into Entrepreneurship and Self-Employment

This pillar focuses on encouraging employees who wish to pursue entrepreneurship by providing incentives and guarantees that ensure job and financial security during the business start-up phase, through the following measures:

• Granting employees who wish to make the transition a full year of leave from their jobs while continuing to receive their basic salaries.
• Providing interest-free loans to help employees establish their own businesses and become employers.
• Guaranteeing the right to return to government employment if a business fails during the leave period, with repayment of the interest-free loan beginning through manageable instalments deducted from the employee’s basic salary upon returning to work.

Second: Activating the Role of National Banks in Economic Development

Transforming banks from mere channels for distributing cash and salaries into drivers of economic development through:

• Requiring banks to finance and support innovative small and medium-sized enterprises established by employees transitioning to the private sector.
• Providing financial advisory services, guidance, and business support to help ensure the continuity of these enterprises and reduce failure rates.

Third: Restructuring Public-Sector Employment and Evaluating Performance

This pillar aims to reduce excess staffing within government institutions and improve service quality through the following measures:

• Establishing an optimal staffing limit for each government institution based on needs assessments and operational requirements.
• Raising salaries for employees who remain in the public sector to levels that ensure a decent standard of living and enable them to compete with the private sector.
• Implementing a rigorous productivity assessment system based on monthly and annual performance scores, with bonuses and promotions clearly linked to these evaluations.

Fourth: Establishing a Fund to Manage and Protect Surplus Labour

The fund would serve as a social and economic safety net to address employment insecurity by:

• Providing a minimum income guarantee for jobseekers and employees of struggling companies and institutions.
• Managing retraining and rehabilitation programmes for surplus workers in preparation for their transition into the private sector and to meet its workforce needs.

Fifth: Aligning Educational Outcomes with Labour Market Needs

Addressing the crisis at its roots by reforming university admission policies through:

• Coordinating directly with universities and educational institutions to suspend admissions to fields of study where the public sector has already reached saturation.
• Requiring students who wish to enrol in these oversubscribed fields to sign a formal declaration acknowledging that they cannot demand automatic placement or appointment by the state, except where a genuine staffing need exists and has been officially announced through a competitive process.

Conclusion

Implementing this proposal comprehensively and in phases would help transform the salary bill from a consumption burden that strains the state budget into an investment-driving force that stimulates the domestic market, creates genuine development and employment opportunities, and supports the national economy.

As previously noted, without political will, strong and unified institutions, and a comprehensive and forward-looking economic vision, no reform will be achieved.