News24

Libyans expect post-war boom

2011-09-14 11:07

Tripoli - Airlines are readying their return to Libya, ports largely shuttered during the fighting are receiving cargos and foreign oil companies that had fled the country's civil war are making tentative steps back.

And waiting eagerly on the doorstep are businessmen looking to get in on what they believe could be a bonanza for investment - an oil-rich nation with large tourism and construction potential that went largely untapped under an eccentric and often closed 42-year-long regime.

Slowly, Libya is reopening its doors after seven months of fighting, even as former rebels still hunt for ousted dictator Muammar Gaddafi.

"Definitely, Libya is an El Dorado," said Husni Bey, one of Libya's biggest entrepreneurs. "It has great resources that really allow it to turn around in no time."

The optimism is tempered by the challenges the country faces in overcoming decades of underdevelopment and corruption that helped fuel the uprising against Gaddafi.

In the immediate term, the nascent government has to jump-start the economy even as it tries to establish its authority in a country that remains unstable.

Libya's economy largely ground to a halt when the brutal regime crackdown on a popular uprising was met by international sanctions and opened up a civil war. An embargo by air, land and sea - exempting humanitarian supplies and food - froze most trade. Inventories ran low. Hundreds of thousands of foreign workers fled, abandoning construction sites, bakeries and oil fields.

Pre-war levels

For the Libyan public, improvement is coming gradually. Food and fuel prices are dropping nearer to pre-war levels and waits at gas stations now last hours instead of days.

Links to the outside world are re-opening, though Nato is still only granting case-by-case exceptions to its air embargo.

Royal Jordanian resumes daily flights to Benghazi on Thursday, with an aim for flights to the capital Tripoli later this month. Turkish Airlines plans to start before the end of the month. Already, Libya's national carrier offers three daily flights between Tripoli and Benghazi, the country's second largest city.

Hadi Elayeb, whose Horizons Travel Agency made bookings for 17 airlines before the war, said most intend to come back, including Air Malta, which contacted him and said they hope to resume flights soon. He hasn't booked a flight since March 1, but hopes to be back in business by October.

Beyond that, Elayeb - like many - dreams of a boom.

"It's going to be fantastic," he said. "Libya, in good hands, will be even better than Hong Kong."

Easy place to work

The reasons many see a gold mine are clear. With a small population of only six million, Libya raked in $40bn last year from oil and gas exports. Long-term possibilities are many, including tourism in a country that boasts pristine Roman ruins and hundreds of miles of undeveloped beaches just across the Mediterranean from Europe.

Gaddafi opened up the country somewhat in the 2000s, but the arcane political system, unpredictable business and visa rules and other restrictions kept much business away.

"Now Libya is a very easy place to work. There's lots of money and it has huge investment needs," said Ahmed Maiteeg, who owns three hotels and was involved in a major construction project.

He said he's already been contacted by about a dozen European companies about partnerships.

Local business leaders are making plans. Bey wants to build a 36 000 square meter mall, and Maiteeg envisages a $49m, 50-bed, heart hospital employing Libyan doctors currently working in the US.

That earlier Gaddafi opening, however, provides a lesson in investment gone wrong.

Foreign firms - particularly international oil majors - streamed into Libya after decade-old sanctions against Gaddafi were lifted in 2003.

Problems

Luxury hotels arose, shopping malls and hypermarkets opened. New German and Japanese cars sped along paved highways and trendy coffee shops brewed espressos and blended coffee drinks. Oil exports filled coffers, with Libya's foreign reserves climbing past $100 billion and the country enjoying no real foreign debt.

But the prosperity was a veneer enjoyed by those closest to Gaddafi. Private sector growth was stunted and industry remained firmly in the hands of Gaddafi, his immediate family and his supporters.

The wider population saw little benefit, facing shortages of affordable housing, substandard education and little opportunity in the private sector - all problems that still exist.

With Gaddafi gone, oil companies are putting tentative feet forward. Foreign firms were the backbone of Libya's pre-war production of about 1.6 million barrels a day. Experts say it could take about a year or more to get back to that level.

Output has begun at one of the eastern fields, the acting prime minister said this week.

At the offices of Mellitah Oil & Gas, a partnership between state-run National Oil Corp. and Italy's Eni North Africa, human resources manager Ramadan Gushti is contacting more than 240 foreign employees to return. Many of its 4 000 Libyan workers are already back on the job, and Gushti expects production to resume in a month.

International contracts

The company produced more than a third of Libya's oil output and delivered natural gas directly to Italy via pipeline.

Traffic is resuming at Tripoli's port, where under the wartime embargo only shipments of food, medicine and humanitarian supplies were allowed. The Overseas Shipping Co. said it expects two container ships from Malta this week, carrying spare parts for cars, furniture and personal effects.

To lure back investors, the National Transitional Council - Libya's new, Western-backed government - promised to honour international contracts.

But it is leaving the drafting of a new economic policy largely to the next, elected government, said Wafik al-Shater, an economic adviser to the NTC.

For now, "it's a priority for the government to kick-start the economy as soon as possible so people can get back to work," he said.

Shopping in the open-air market next to Tripoli's central square, history teacher Zahrah Dabbah said she's now paying 3.5 dinars for a kilogramme of chicken — about $1.13 a pound — half the wartime price.

Nepotism is over

A few of the gold traders in Tripoli's historic market have opened their shop doors. But they are keeping their wares locked up and the display cases empty, leery of weapons that flooded the streets since the uprising began.

With expectations that Gaddafi-era nepotism is over, some Libyan business leaders are calling for review of contracts signed under the old regime.

But that could backfire, warned Said Hirsh, the London-based Mideast economist with Capital Economics.

"Whatever happened during Gaddafi’s time, corruption and bribery, the foreign investors should not be penalised," he said. "Otherwise, that will probably send the wrong signal."

Comments
  • Illuminated - 2011-09-14 12:51

    yea sure, there will be chaos there for many years to come and the media will cover it up like they always do.

      Anton - 2011-09-14 13:01

      Illuminated, Let's face it, you lost, Big time !!!! And I know it is hard, to see your hero driving the one week, triumphantly in his "golf cart" around Tripoli, and than a few weeks later, he is hiding in a "hole" But, now be gracious, and wish the winners, all the best !!

      Illuminated - 2011-09-14 14:30

      Anton you really are a mindless ignorant fool arent you.. you think this is a game? lost? i didnt realize we were playing. you and your kind keep puting words in my mouth that i have never said. i never liked Gadaffi, i never said he was amazing and never fully agreed with everything he did.. BUT.. there should never be a justification for invading a country illegaly because of greed and power.. but honestly you will never understand what is really going on. War, famine, fighting, desease, poor, rich all arent natural and should never have existed... but we accept it. we should and can live happily together but that would mean less money and power for the ones who already have it... Gadaffi was never perfect but i promise you they were looked after and will now only be worse off.. you dont understand that governments dont run countries anymore. its powerful rich institutions like the UN and world bank, and if you dont comply.. you are destroyed.. you think its all conspiracy talk and crazy talk but its real.. im tired fo arguing with you... i dont think you are mature enough to try debate about issues and perhaps consider that you dont know everything. lots of people have made valid points that oppose yours but you use juvenile statements to deflect from what they have said, which is a sign of weak character.. your first problem is that you think the media is free and fair but hey.. live in ignorance, they say its bliss...

      slg - 2011-09-14 17:09

      This is where you go wrong Illuminated. No-one invaded a country. Period. End of story.

      letsee - 2011-09-14 17:13

      Promises and dreams. The Libyans will have to work to recover from Gaddafi times and the war. No foreign country will give anything unless paid for.

      john - 2011-09-15 12:23

      "War, famine, fighting, desease, poor, rich all arent natural and should never have existed." Wtf? What planet are you on? These are the most natural things ever. I suppose you also think lions and antelope got on perfectly, frolicking together in the veld until the evil Westerners arrived and set the two species against each other? War is completely natural, we've been doing it since we crept out of the primordial swamp. Ditto with famine. Early civilisations didn't have well-stocked supermarkets to sustain them. If natural events (drought, pestilence, fire, etc) turned against them, they starved. Ticks, fleas, mosquitoes, lice, leeches and other nasties have been feasting on humans and spreading disease since the year dot. Not to mention disesases resulting from poor hygiene and lack of sanitation. Early Boer settlers carried metal combs to brush off the ticks that hung like bunches of grapes on them. Rich and poor are likewise totally natural. Even the Bible is littered with stories of rich and poor. There's a reason why early humans rarely lived beyond 30. And it had nothing to do with oil or being bombed by NATO. We are a natural species which has been subject to the whims of our natural environment from the get-go. Mass deaths, misery, starvation, suffering, disease, oppression, conquest, war - they all go with the territory.

      Illuminated - 2011-09-15 13:04

      slg what the F@#k do you call bombing the hell out of lybia with special forces on the ground directing rebels on how to take over the country? you are such an idiot... PERIOD, END OF STORY... and john war is natural?? huh? take your ignorant head out of your fat a$$... thats got to be the dumbest thing i have ever read... yes compare humans who can think to lions and antelope...im not even going to respond .. what a tool

      daaivark - 2011-09-15 13:11

      Come now, kiddies. Play nice. Opinions are allowed still. It is rather amusing to watch the antics of the armchair experts, though. Thanks.

      Anton - 2011-09-15 13:12

      Illimunated, The "t" for "tool" , if I may suggest, should be a "f" sorry, I am just trying to help you!! And Marco, before you post another 17000 words on this site; I agree with you !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      slg - 2011-09-16 05:49

      To invade is to: enter a country or region so as to subjugate or occupy it. The international community, acting through the United Nations, has not done this in Libya. But you know better.

      amos - 2011-09-18 20:13

      With people of SIG's type of mentality [mentally challenged]it is no wonder that the world is in such a chaos.

  • Theo - 2011-09-14 14:01

    Thanks to UN and all the members that voted in vavour resolution, thanks EU, Thanks NATO, , Now come and join the fun and rebuild Libeya all together, Where is South Africa please dont leave us out Our President Zuma really stuffed this up we goiing to miss the party

  • marco - 2011-09-14 15:16

    Libya has the largest oil reserves in the whole of Africa-larger than Nigeria,Angola and Sudan-and a substantial supply of gas even though under Gaddafi the country only produced 1.7million barrels of oil a day. Anyone ever wondered:How Gaddafi became a NATO ie Western-backed dictator? From "rogue state" to a neoliberal client- When Gaddafi's regime’s genocide against the Libyan people unfolded,it took days before the USA and other Western governments were prepared to condemn the regime for this monstrosity.Even as late as February 23,US President Barak Obama had not condemned Gaddafi by name.Why is that? You see throughout much of the 1980's and the 1990's the Gaddafi regime was attacked by the same NATO governments as a "terrorist rogue state" because of its political and material support to numerous national liberation movements around the world.The administration of US President Ronald Reagan imposed economic sanctions on Libya and carried out bombing raids to try and assassinate Gaddafi,but failed.Which meant one thing and that is:Secret negotiations for a rapprochement with the US and other Western governments.First off,UN sanctions were lifted in 1999 and by 2006 the US lifted its own sanctions and normalised relations with Gaddafi. Consequently,European leaders flocked to Libya with greedy businesspeople hanging on to their coat tails and before long several European oil companies were back in business,with banks,airlines and hotel chains all following.

  • marco - 2011-09-14 15:17

    Former British Labour PM Tony Blair and scandal-plagued,right-wing Italian President Silvio Berlusconi played leading roles in this.Saif offered NATO Nations greater access to capital,tax concessions and privatisation.According to an April 2010 report from the Libyan government,over the previous 10 years the the regime privatised 110 state-owned companies.The same report promised to privatise 100% of the Libyan economy over time.The prospect of the privatisation of the oil refineries and other downstream sectors of the oil industry promises lucrative profits to the WEST. America's interests: Worried that they were missing out to European competition,a group of powerful US companies(including BP,Chevron,ConocoPhillips,Dow Chemical, ExxonMobil,Fluor,Halliburton,Hess Corporation,Marathon Oil,Midrex Technologies,Motorola,Northrop Grumman,Occidental Petroleum,Raytheon, Shell and United Gulf Construction Company)all set up a US-Libya Business Association to catch up with Europe. Among the Gaddafi regime’s new lobbyists and "friend" in Washington was arch neocon Richard Perle,a former Reagan-era US Defense Department official and George W. Bush -era chair of the US Defense Policy Board.

  • marco - 2011-09-14 15:18

    According to US political reporter Lauren Rozen,Perle traveled to Libya as a paid adviser to the Monitor Group,a prestigious Boston-based consulting firm with close ties to leading professors at the Harvard Business School. Several major US oil companies,including ConocoPhillips,Marathon Oil and Hess Corp,now have significant stakes in Libya's oil industry,according to a fact sheet prepared by Reuters News on Feb,23 2011.However,80-85% of Libya’s oil exports go to Europe and companies such as British Petroleum,Italy’s Eni,Spain’s Repsol and Royal Dutch Shell have some of the biggest stakes. Italian interests In the February 23 issue of the British Guardian, Tom Bawden and John Hooper described the role of Berlusconi in Europe’s courting of the Gaddafi regime: Gaddafi and Berlusconi have a famously warm personal relationship. Less well-known, however, is the fact that Berlusconi is in business with one of the Libyan state’s investment vehicles.In June 2009, a Dutch-registered firm controlled by the Libyan Arab Foreign Investment Company,took a 10% stake in Quinta Communications,a Paris-based film production and distribution company.Quinta Communications was founded back in 1990 by Berlusconi in partnership with Tarak Ben Ammar, the nephew of the late Tunisian leader, Habib Bourguiba.

  • marco - 2011-09-14 15:20

    The Italian prime minister has a 22% interest in the company through a Luxembourg-registered subsidiary of Fininvest, the firm at the heart of his sprawling business empire.Last September,the Libyans put a director on the board of Quinta Communications to sit alongside Berlusconiís representatives.Libyan investors already hold significant interests in several strategic Italian enterprises.They reportedly own around one per cent of Italy’s biggest oil company,Eni;the LIA has an acknowledged 2% interest in the aerospace and defence group,Finmeccanica;Lafico is thought to retain more than 2% of Fiat and almost 15% of a quoted telecommunications company,Retelit. The Libyans also own 22% of the capital of a textile firm, Olcese. Perhaps their best-known investment is a 7.5% stake in the Serie A side Juventus. But undoubtedly the most controversial is another 7.5 per cent interest in Italyís largest bank, Unicredit. The European Union’s latest annual report on arms exports revealed Libya’s biggest military suppliers in Europe, reported Deutsche Presse-Agentur: Italy granted export licences totalling 112 million euros, with a single 108-million-euro licence for military aircraft making up most of the amount,[was the largest supplier] Malta emerged as the second-largest exporter, having authorized the sale of an 80-million-euro consignment of small arms…

  • marco - 2011-09-14 15:21

    Germany was third in the list,with 53 million euros of licences, mostly for electronic jamming equipment used to disrupt mobile phone,internet and GPS communication… France was next with 30.5 million euros, followed by Britain with 25.5 million euros, and Belgium with 22 million euros. British interests: According to the Guardian Newspaper Bawden and Hooper: About 150 British companies have established a presence in Libya since the US and Europe lifted economic sanctions in 2004,after the country renounced terrorism,ceased its nuclear weapons programme and handed over two suspects in the Lockerbie bombing case.The most high profile have been the oil companies,keen to tap Libya’s vast reserves of fossil fuels. In a deal brokered in 2007 by Tony Blair,BP signed a £560m exploration agreement allowing it to search for oil and gas,offshore and onshore,in a joint venture with the Libya Investment Corporation.Shell is also exploring for oil in Libya as western companies seek to capitalise on a country with the largest oil reserves in Africa and substantial supplies of gas. High street retailers such as Marks & Spencer,Next,Monsoon and Accessorize have also set up in the country to serve the growing middle-class population,as oil revenues have 'trickled down' into the broader Libyan population.

  • marco - 2011-09-14 15:22

    Companies such as AMEC,an engineering firm,and Biwater,a waste treatment company,have supplied services to Libya,which is using its oil revenues to reshape the country through an infrastructure spending spree that will cost about £310bn over the next decade. British exports to Libya have soared to about £930m in recent years, while the business momentum in post-sanctions Libya is so great that the economy managed to grow by about 5% last year,while much of the rest of the world struggled. Gaddafi’s son Saif,speaking in his private suite in Mayfair’s five-star Connaught Hotel,told the British Daily Mirror in June 2010: Tony Blair has an excellent relationship with my father.For us,he is a personal family friend.I first met him around four years ago at Number 10.Since then I’ve met him several times in Libya where he stays with my father.He has come to Libya many, many times. Libya considered Blair to be a trusted adviser to the Libyan Investment Authority, a role that Blair now denies.But Blair’s done his dirty job well. As a February 19, 2011 ,report in the British Independent revealed: Since the warming of relations between Libya and Britain, officers travelled frequently to Tripoli between 2008 and 2009 to train police, and Britain has authorised the export of tear gas,crowd-control ammunition, small-arms ammunition and door-breaching projectile launchers.

  • marco - 2011-09-14 15:23

    Three years ago,ministers agreed to send Libya vehicles armed with water cannons. There are also unconfirmed reports that riot vans made by British companies have been present during crackdowns in the Libyan city of Benghazi, where scores have been killed. One of the murderous special battalions headed by another Gaddafi son, Khamis, is a British-trained unit, according to a February 21 Associated Press report.The same greedy and powerful Western interests that first attacked and then propped up the Gaddafi regime are preparing for a change of tack,which included direct military intervention. As the 19th century British Prime Minister Lord Palmerston famously wrote:"We have no eternal allies,and we have no perpetual enemies.Our interests are eternal and perpetual".Hopefully the makers of the new Libyan NTC will heed the lessons of its own history.So don't be so eager to say the ANC or the AU and Gaddafi were all mates,it's the ****ing West that's been the biggest ****sucker of Gaddafi.

      slg - 2011-09-14 17:10

      Another quick poll: anyone read or want to read all this? Me, no and no.

      Anton - 2011-09-14 18:11

      Marco, What is wrong with you ???

      Illuminated - 2011-09-15 13:09

      guess that shows slg level of intelligence... sorry does reading hurt your brain..? or do you just not want to be proven wrong.. yea keep your head in the sand.. idiot i have realized no matter how much evidence is put forward, people like slg and anton will remain as dense as the day their mothers brought their worthless lives into the world... your ignorance on politics is pathetic, all you can do is spew the BS you are brainwashed with. but hey conforming is easier that thinking for yourself..

      slg - 2011-09-16 05:52

      Is there anything intelligent in this? Can't find it.

      daaivark - 2011-09-16 07:22

      Illuminated, you arrogant pratt. Marco nposts these reams and reams of dogmatic bull. It doesn't require intelligence to dismiss it as rubbish. So why should an intelligent person be dissed by another fanatic because he indicates that there is a lack of logic apparent. Your self-righteousness is sickening.

      amos - 2011-09-18 20:24

      the trouble with sig andb his cronies is that they have been sitting on their brains which appear to have receded to their lower extremities

  • letsee - 2011-09-14 17:13

    Promises and dreams. The Libyans will have to work to recover from Gaddafi times and the war. No foreign country will give anything unless paid for.

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