Written by: Economic Expert Ayoub Mohamed Al-Farsi<\/p>\n\n\n\n
Firstly: How the Crisis Is Managed in Libya \u2013 Between Reality and What Should Be:<\/strong> But the Economics of Crisis Says:<\/strong> To achieve the most effective solution for the economy, one must avoid idealism and focus, in my opinion, on three pillars. Neglecting them would exacerbate the problem:<\/p>\n\n\n\n 1. Prioritizing Expenditures:<\/strong> 2. Managing Collective Behavior During Economic Crises:<\/strong> 3. Strong State Intervention (Most Important):<\/strong> The mistake in Libya is insisting on market mechanisms while letting corrupt actors set prices, distorting the principle of competition, which is largely absent. Most goods are monopolized, and market mechanisms are paralyzed, even if they were functional before the crisis.<\/p>\n\n\n\n State Intervention Options in Economic Crises Include:<\/strong><\/p>\n\n\n\n A crisis economy cannot be solved using normal economic assumptions; solutions must consider the specific conditions of the crisis. For example, the approach in 2015 with a money supply of about 79 billion dinars differs vastly from 2025 with 220 billion dinars.<\/p>\n\n\n\n It is illogical for solutions to ignore corruption in credit provisioning, fuel smuggling, rising poverty, or fluctuations in foreign currency and money supply, while expecting market mechanisms alone to restore stability.<\/p>\n\n\n\n Conclusion:<\/strong> As a legal maxim states: \u201cThe private restricts the public\u201d<\/em> \u2014 I say: \u201cEconomic crises restrict economic mechanisms.\u201d<\/em><\/p>\n\n\n\n The Problem Lies In:<\/strong><\/p>\n\n\n\n Written by: Economic Expert Ayoub Mohamed Al-Farsi Firstly: How the Crisis Is Managed in Libya \u2013 Between Reality and What Should Be:What is happening in Libya now is an attempt to maintain the status quo, relying on market mechanisms and continuing policies, while some experts recommend working as if the crisis does not exist\u2014assuming that […]<\/p>\n","protected":false},"author":13,"featured_media":256101,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[683],"tags":[720,613],"class_list":["post-256100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-articles","tag-crisis","tag-libya"],"acf":[],"_links":{"self":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts\/256100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/comments?post=256100"}],"version-history":[{"count":1,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts\/256100\/revisions"}],"predecessor-version":[{"id":256102,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts\/256100\/revisions\/256102"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/media\/256101"}],"wp:attachment":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/media?parent=256100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/categories?post=256100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/tags?post=256100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
What is happening in Libya now is an attempt to maintain the status quo, relying on market mechanisms and continuing policies, while some experts recommend working as if the crisis does not exist\u2014assuming that economic mechanisms alone will correct the situation without direct state intervention.<\/p>\n\n\n\n
\u201cCrisis Economics\u201d is not just a financial downturn; it is a state in which the behavior of individuals, companies, and governments must shift from \u201cgrowth and prosperity\u201d to \u201csurvival and hedging.\u201d In these circumstances, traditional market laws fail to operate efficiently, and the state must intervene directly to manage limited and wasted resources, especially if the crisis is accompanied by corruption, as in Libya.<\/p>\n\n\n\n
Spending should shift from luxury and leisure goods to a \u201cnecessity economy\u201d (food, medicine, energy, and security). Companies that do not provide these services face immediate bankruptcy if the crisis is managed wisely. In Libya, the opposite is happening: luxury sectors are expanding, and their suppliers are becoming wealthy amid the crisis.<\/p>\n\n\n\n
Fear drives individuals to seek \u201csafe havens,\u201d such as gold or foreign currency, creating a liquidity crisis. Restoring confidence in the banking sector is essential, with pillar one as the foundation.<\/p>\n\n\n\n
In crises, the \u201cinvisible hand\u201d of the market diminishes, and the \u201cgrip of the state\u201d becomes necessary. Governments must inject massive liquidity (stimulus packages) or impose price controls to prevent social unrest.<\/p>\n\n\n\n\n
Policies and solutions must be based on the reality of the economy, not ideal conditions. Crises require diagnosing how the economy functions under stress, not applying general economic rules.<\/p>\n\n\n\n\n