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Libya

Defense Costs

The pattern of defense spending has been difficult to appraise with any exactitude since the mid-1970s, when government restrictions on the publication of military information were imposed. Detailed budgets, once available, have not been disclosed since the mid-1970s. Total amounts allocated to defense in the national budget were available, but apportionments to individual service components or specific programs were impossible to ascertain. Moreover, the figures published for the defense budget clearly fell far short of actual expenditures. In all likelihood, many military outlays were hidden under other budget items or obscured by manipulation of prices or exchange rates. The value of imported military equipment alone has generally been far in excess of the allocations to defense as recorded in the budget. The massive purchases from the Soviet Union, estimated at over US$1 billion annually since the mid-1970s, do not appear in the budget either as payments or amortization of military credit.

Increased spending for military improvements and other defense needs was made possible by the vast revenues from petroleum-- particularly after the government nationalized the industry. Even during the monarchy, a doubling of military expenditures between 1964 and 1968 demonstrated that this new source of revenue permitted an upgrading of the military that was previously unattainable. Nonetheless, defense expenditures under the monarchy continued to be relatively modest. As one specialist wrote just before the 1969 coup, "thus far Libya has avoided succumbing to the lure of the arms race or procurement of nonessential prestige military forces."

Within a few years after the assumption of power by the Qadhafi regime, defense spending accelerated dramatically. It continued to rise nearly every year, although at a somewhat reduced rate after 1978. Arms imports ordinarily formed more than half of total defense expenditures. However, some slackening in the value of imported equipment has occurred since 1982. This is attributed in part to the saturation of the Libyan defense forces and in part to financial strains on the government arising from the sharp decline in oil prices.

The limited official data published by Libya offer a completely different picture from the estimates compiled by non-Libyan sources. In the administrative budget for 1984, the amount shown for the armed forces is LD340 million (for value of the Libyan dinar, see Glossary), which constituted 23.6 percent of the budget. This represented a substantial increase over the LD300 million shown for 1983, composing 19.7 percent of the administrative budget. Defense expenditures were omitted from the budget published for 1985, and no explanation was supplied of the component items in the ostensible disbursements for defense in 1983 or 1984.

According to estimates compiled by ACDA, Libyan military expenditures rose eightfold between 1973 and 1979, when a peak of US$3 billion annually was reached. Spending then remained fairly level until a new upswing in spending began by 1983. By 1984, annual outlays on defense were estimated at US$5.1 billion. The 1979 figure represented 12.4 percent of gross national product (GNP), whereas the 1984 figure represented 17.8 percent of GNP and an exceptionally high 40 percent of total government expenditures. On the basis of the ACDA estimate, military spending would have amounted to US$1360 per capita in 1984. This compared to a figure of US$34 per capita for Africa as a whole and was about twice the level of average per capita spending on defense of the average members of the North Atlantic Treaty Organization. Only Israel, Saudi Arabia, and several smaller states of the Arabian Peninsula had military outlays on a scale comparable to those of Libya.

Data as of 1987