Analysis of the economic policies of foreign direct investment (FDI): A case study of Libya

This research looks at the controversial issue of foreign direct investment (FDI) in Libya. Global FDI usually flows from capital surplus countries towards capital deficit countries. However, Libya is a capital surplus country, yet is still requires foreign investments. Therefore, an empirical question arises: why does Libya, as a capital surplus country, have to allow FDI? This research examines this question, as well as the distribution of FDI in Libya. It considers why most FDI in Libya is concentrated on the petroleum sector, while other sectors such as education, health, transport, manufacturing, technology and trade are ignored. The complex empirical field for this study requires close examination of the economic policies of FDI that are issued by the Libyan government. This study also examines the pattern and distribution of FDI in Libya during the international economic sanctions and following the recent removal of these sanctions, from 1992 to 2010.