EconSource: Libya’s General National Congress Approves Subsidies Reforms

Libya’s General National Congress (GNC) has approved a potentially controversial decision to replace state subsidies for basic goods with direct cash payments, which it said would reduce smuggling. The Tripoli-based parliament announced that in place of subsidies on staple foods and fuel, each Libyan citizen will receive LD50 ($40) per month. The GNC added that payments of the new direct benefit will start before any subsidies are lifted. The move is intended to cut the huge payments made by the state to maintain artificially low prices on staples such as food, utilities, and fuel. It is not clear whether the restructuring will affect the entire country or only the areas controlled by the Tripoli-based authorities. [Libya Monitor (subscription), 5/21/2015]

Syria hopes for new $1 billion credit line from Iran  
Syria hopes to receive a new credit line from Iran worth around $1 billion which it will use to buy basic goods, an assistant to Syria’s Minister of Economy and Foreign Trade Hayan Salman said. The comments come a day after Ali Akbar Velayati, a senior adviser to Iranian Supreme Leader Ayatollah Ali Khamenei, met Syrian President Bashar al-Assad in Damascus. Syrian state media said Velayati’s visit yielded agreements on oil, electricity, industry and investment, without giving details. Salman added that a previous $3.6 billion credit line from Iran is close to being used up. [Reuters, 5/20/2015]

Egypt permits private sector to import natural gas
Egypt has given the private sector a green light to import natural gas or liquefied natural gas (LNG), a step that could encourage private investment in the energy sector while easing energy shortages. Egypt has tried to address energy shortages by signing LNG import deals this year, but allowing the private sector to import gas could further boost supplies of gas used to power most Egyptian homes and factories. The chairman of state gas board Egyptian Natural Gas Holding Company (EGAS) said officials had decided to allow private companies to import gas through state infrastructure. In exchange, the state will get a tariff for transferring the gas through its infrastructure. [Reuters, 5/21/2015]

With oil cheap, public pressure grows on Gulf sovereign funds
Running sovereign wealth funds in the Gulf has become an awkward business in the era of cheap oil, as managers face growing pressure from politicians and the public to prove they are investing national reserves wisely. When oil prices were high, the Gulf funds came under little public scrutiny. But with Brent crude now at little more than half last June’s level, Gulf countries may be entering their toughest fiscal times since the 1990s. With most of the funds publicly disclosing little information about their accounts, lawmakers in some states are looking out for poor performance. It is not clear whether investigations will unearth any serious wrongdoings, but they could encourage funds around the Gulf to operate more cautiously and conservatively. [Reuters, 5/20/2015]

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