Education is only useful up to a point. A PHD in Aerospace Engineering sounds great, but even in the US there is little demand for such people so they often waste most of that education. The worse the economy / infrastructure / social infrastructure the lower the benefit from high levels of education.

PS: It's been suggested that a balance of subsidizing government services and giving everyone an equal rebate like Alaska may be the best overall approach. However, doing so in a corrupt society often simply breeds government waste so a pure refund is probably the best long term option.

Well, that is true if you are talking about higher education, but people still need to learn some basic skills (writing, reading, counting, etc.). Learning English is often useful as well (note that before replying to your comment, I expected Libya to have a low rate of alphabetization, but it turns out their alphabetization rate is rather high (source: http://en.wikipedia.org/wiki/Libya#Education)).

On top of that, they probably need some skills in the fields of medicine, or petrol engineering.

They have the trade off between paying for that with oil money directly now, or being able to continue to pay for less of it, but being able to continue "forever" by investing the oil money, while the principal grows rapidly as long as their oil revenue keeps coming.

It's the age-old tradeoff between saving vs. immediate gratification.