Libya: Tripoli urged to free economy - Financial Times, September 2
By Mark Huband in Tripoli
Libya's growing need for foreign investment is expected to
intensify pressure for further economic liberalisation despite the
government's determination to retain control over the economy.
Government strategy and the demands of foreign
companies intent on exploiting an estimated $9bn
worth of investment opportunities in Libya following
the suspension of United Nations sanctions earlier
this year will be discussed today at the first of a series
of investor conferences in Tripoli to be organised by
the government.
The conference will be a big test of the government's
readiness to cede greater control of the economy to the
foreign and domestic private sectors, which are also
expected to use it to demand greater transparency.
Libya is also under pressure to improve its image abroad
radically in order to encourage tourism. Central to the
tourist development strategy is the potential for beach
holidays as well as cultural tourism centring on extensive
ancient ruins, in particular, the Roman ruins of Leptis
Magna.
Sanctions imposed in 1992 were suspended in April
when Libya handed over for trial two men accused of
masterminding the bombing of a US airliner over
Scotland in 1988.
The government estimates Libya lost $20bn as a result
of sanctions, which included the freezing of assets
abroad, a ban on imports of equipment for the oil sector,
and an air and arms embargo. Foreign reserves now
stand at $4bn, largely due to the low level of imports
under sanctions.
Officials are sensitive to the possibility that economic
liberalisation may lead to pressure for a loosening of
political control by the regime of Col Muammer Gadaffi,
who celebrated 30 years in power yesterday.
"Encouraging foreign investment is very important to us.
But it's also very sensitive," said Bashir Ali Zenbil,
organiser of today's conference and director of the Libyan
Foreign Investment Board (LFIB) formed in 1997 as part
of the moves towards a degree of economic reform.
Conditions are expected to be imposed on foreign
investors in areas which are domestically the most
politically sensitive. In particular, repatriation of earnings
by foreign workers will be limited if foreign companies do
not also employ local labour. The measure is intended to
prepare the economy for the arrival in the jobs market of
the 50 per cent of the population under 15 years old.
The government's hopes are pinned on tourism,
infrastructure, agriculture and manufacturing industry, as
well as in the oil and gas sectors, which account for 50
per cent of government revenue and 95 per cent of export
earnings. It also aims to resuscitate Libya's trading role,
using the recently established Tripoli freeport as the
nucleus for trade between Africa and Europe.
"If we don't control investment it could be very
dangerous. ..So, it will be guided. We are not going to
open the country to foreign investors without any
restrictions or limitations," Mr Zenbil said. |
