ECONOMIC DEVELOPMENT IN LIBYA

Construction industry to Economic Development in Libya



Construction industry to Economic Development in Libya

Introduction

Globally, construction and engineering services industry is regarded as one of the largest fragmented industry accounting for 10-12% of GDP in many countries. Benefiting from both public and private investments, the construction industry is a prime source of employment generation offering job opportunities to millions of unskilled, semi-skilled and skilled work force. The total world spending on construction amounted to US$3.2 trillion in 1998. (Porter.,1985,354)

Construction and engineering services industry has played a key role in the economic uplift of the developed world. The remarkable infrastructure facilities on which the economic edifice of the developed countries stands, owes largely to the construction industry. The rapidly developing economies like Korea, Turkey, Malaysia and Indonesia realized the importance of this industry early in their economic development and they promoted construction industry in their countries. Through effective policy support and extension of credit lines to construction firms, these countries have been able to penetrate the growing construction markets of Central Asia, Middle East and Russia.(Arditi,1991,27)

Today the growing and lucrative construction markets of Central Asian States and Middle East are being dominated by the Turkish, Malaysian and Korean construction firms. The present share of the Turkish construction sector in the international market is about 10% and is active in more than 25 countries with contracts worth $15 billion in hand.(Bairoch,1996,28) The major advantage enjoyed by the Turkish construction firms is that they cater to the needs of the countries in which they are operating with whole package offers and extension of credit with active support from their government.

Construction covers designing and development of large and high-rise structures for institutional, commercial, social, governmental and recreational purposes, housing, dums, roads, bridges, etc. etc. The housing and construction sector has played a major role in the economic revival of countries like the United States, UK, Japan, Malaysia and China. This sector holds tremendous potential to reinvigorate sick industries of Pakistan and can give kick start to the ailing economy by reviving 40 allied industries engaged in the production of construction materials and other manufactured goods used in construction of housing and buildings. Table-III depicts these industries.(Bon,,2000,12)

The important role of this sector as a stimulator for domestic economic activity and national development can be judged from the following facts: Housing and building construction is labour intensive, it brings down unemployment rate; it stimulates the production of local construction materials; it acts as an incentive to mobilize household savings by offering an attractive investment opportunity and if effects in the economy are prompt.

The construction industry, despite having the potential, has not been able to export its services due to host of reasons already outlined in the impediments. One of the major problems is the limited financial capacity of local firms to compete for large projects abroad. (Arditi,1991,27) To enable the industry to export its services, the following steps need to be take by the government and the industry together:

* The industry should develop models for ...