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LIBYA

 
  
   

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 34,137    34,136 57
  n/a     n/a
GNI per capita
 US $
Ranking is given out of 208 nations - (data from the World Bank)

Books on Libya

REPUBLICAN REFERENCE

Area (sq.km)
1,759,540

Population
5,499,074

Capital
Tripoli

Currency
Libyan dinar 

Leader 
Col Mu'amar al-Qadhafi

 

Update No: 010 - (01/09/04)

Increasing the Flow of Oil, Stopping the Flow of People
The process of rehabilitating the Libyan Jamahiriya with the West has been largely driven by the need to exploit new sources of oil that are both geologically and geo-politically advantageous. 
Nevertheless, European governments, which share the Mediterranean Sea with Libya, have also sought to increase ties with Libya in order to cooperate on the sensitive issue of illegal immigration. 
Many illegal immigrants board makeshift craft in North African ports hoping to reach the shores of Italy, as their first port of entry to Europe. 
The European Union has often complained that some governments, such as that of Italy, have not done enough to control the flow of illegal migrants. 
The new Italian EU Commissioner, a veteran ex Christian Democrat and member of the Forza Italia ruling coalition, Rocco Buttiglione therefore suggested that Libya must be readmitted as full partner in system of international Mediterranean cooperation in order to guarantee a frequent and regular contact over issues of mutual concern. 
The incoming Buttiglione will responsible for emigration as part of his duties as EU commissioner for justice, freedom and security. 
He has advocated that all remaining obstacles to full cooperation between the EU and Libya be removed - even the issue of compensation for German victims of terrorism has been resolved now. 
Buttiglione's comments came just as Italy's Prime Minister Berlusconi was meeting Col. Qadhafi, for the second time since the Libyan 'Glasnost' began to discuss ways to reduce the flow of illegal migrants departing from Libyan shores. 
For its part, Libya claims it is helpless in the face of overland immigration from the Sahel and the Horn of Africa, and that sanctions have deprived it of acquiring the basic means of patrolling its long shoreline and vast and difficult to patrol borders across the Sahara. 

Accordingly, Buttiglione and Berlusconi would like to secure stronger ties in order to help Libya stop the migrants from ever reaching the shores of the Mediterranean in the first place. 
By removing all remaining sanctions, Italy hopes Libya will be included in, and bound by, a system of Mediterranean accords, which will facilitate the coordination of immigration controls between Libya and the EU. 
Similar agreements have been reached with Tunisia; however, the strategy there has focused on developing commerce and industry - especially textile- through European direct investment in a policy designed to create jobs in the very sources of migration.
While Libya's economy remains overwhelmingly dominated and built around the oil sector, such initiatives are not yet possible even while Qadhafi's current vision includes the desire to diversify investment and sources of revenue. Berlusconi met Col. Qadhafi in Sirte, Qadhafi's official capital built out of an Oasis in the mid-90's, and discussed the matter over the course of a meeting lasting five hours. 
The two leaders, one more flamboyant than the other, said that they had reached an understanding over the problem of illegal immigration and that it is a problem, which is as much European as it is African. 
Libya has served as base from which to reach Europe while the current Italian conservative coalition has been very harsh toward illegal migrants. 
A key ally of Berlusconi, is the separatist party of the Lega Lombarda. One of its members has very recently suggested that the Italian coast guard shoot migrants if they do not turn back. 
Libya is the only country in North Africa not to have yet signed an agreement over the issue of immigration. 
The problem is, as Qadhafi has hinted a much larger one. Africans fleeing starvation in their own countries pour practically unchecked across Libya's long desert border with Chad, hoping to cross the Mediterranean to Europe. 
Berlusconi wants Libya to set up reception centers in Libya where immigrants can be processed and - say critics of the scheme - held indefinitely, instead of going to Italy. 
Berlusconi's visit was also motivated in no small part by a desire to maintain the special relationship that Libya has long had with Italy, which was its former colonial power. 
As Libya's markets and energy resources have been made available to the whole world since the end of sanctions, Berlusconi wanted to secure Italy's privileged economic relationship as Libya's main trading partner. 
Libya recently signed a $5.6 billion deal with the Italian energy company ENI to supply natural gas through a 370-mile pipeline under the sea to southeastern Sicily. 
Unlike in previous decades since the Qadhafi revolution of 1969, Libya has attracted other powerful suitors such as the United States, whose oil companies are looking for outlets from the instability of Iraq. 

For his part, Col. Qadhafi wants the Europe to supply him with night vision equipment and bulletproof vehicles to be able to patrol the border more effectively, and surveillance planes and boats to stop the huge traffic of boat people in the Mediterranean. 
Illegal immigration is a problem, for Libya as well said Qadhafi. Tripoli is full of African migrants seeking refugee status. 
The UNHCR in downtown Tripoli located in the former Italian colonial villa that has housed the UNDP office since 1948 always has a long line up of hopeful migrants from Sub-Saharan African countries ranging from Sudan to Sierra Leone hoping to receive official refugee status. 
In the alleys and slums bordering on Tripoli's fashionable Girgaresh Street, many of these migrants live in bad conditions and become involved in alcohol and drug racketeering rivalling local Libyan gangs. 
In 2000, this volatile mix produced violent clashes between Africans and Libyans vying for control of the territory leaving many dead. The police staff handling migration problems is unprepared and untrained. 

Thousands of prisoners wait to be expelled at the infamous Janzour jail, just five minutes outside Tripoli. 
It was interesting that just as Berlusconi urged Qadhafi to monitor migrants, while Qadhafi explained how difficult a problem this was for Libya, Four Eritreans, among a group expelled from Libya, have given themselves up after hijacking a plane flying them home and forcing it to land in Khartoum. 
The four surrendered after the flight landed in the Sudanese capital. Libya admitted to having expelled 229 illegal immigrants of various nationalities. 
The decision to deport the foreigners was due to its "willingness to fight against the growing influx of illegal immigrants entering Libya and who are harming our relations with Europe." 
The expulsions and the consequent hijacking occurred two days after Italian Prime Minister Silvio Berlusconi visited Tripoli for talks with Qadhafi on the problem of immigrants heading for Italian shores from Libya. 
As for Sudan and the ongoing crisis in the Darfour area, President Omar Hassan El Beshir of Sudan asked Col. Qadhafi to intervene in finding a solution for the crisis.
President Beshir agrees with Colonel Qadhafi in opposing foreign intervention in Darfur hoping that the crisis might be solved through the repatriation of refugees. 
A week prior to the official request delivered in talks with the Sudanese Foreign Minister Libya hosted informal talks in Sirte between representatives of the Khartoum government and the two Darfur rebel movements as well as representatives of the African Union and neighboring Chad, which hosts the lion's share of Darfur refugees. 

Libya's progress toward better relations with Europe and the West was also noticeable in the unexpected reception of Amnesty International's report on human rights violations in Libya first presented to Libya in April 2004. 
The report entitled "Libya: Time to make human rights a reality," was published following a two-week visit to Libya last February by an AI delegation. 
The delegation met with Qadhafi and held talks with Libyan ministers, prisoners, lawyers and magistrates. 
Amnesty International officials have noted that they were optimistic about the evolution of the dialogue with Libyan authorities and their availability to discuss human rights issues. 
For its part the Libyan government has presented a human rights bill to be examined by the People's General Congress (what most people around the world call a parliament) in order to develop a legal framework for human rights issues. 

Oil & Energy
In late August, Libya has invited international energy firms to bid for exploration in a 78,000-square mile area in the north and West of the country. 
The state-owned Libyan National Oil Co. said the bids would be for exploration and production rights in the area. 
They would be divided into 15 blocks at cost of $130,000 per submission. The process will take place in London and Tripoli. British, Chinese, French, Russian and US companies were expected to bid for the project. 
Meanwhile, Libyan Oil output is rising: energy minister Fathi Ben Shatwan on 13th July that output had risen to 1.65 mm bpd since the beginning of 2004. 
Output was expected to rise to the OPEC approved maximum level of 1.7 mm bpd. Libya plans to eventually raise production capacity to 3 million bpd, a process experts have suggested might take up to seven years. 
The minister believes the production rise will be made possible by relying exclusively by enhancing existing fields. 

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FOREIGN ECONOMIC COOPERATION

Turkey-Libya JEC meeting progresses well

The 19th meeting of Turkey-Libya Joint Economic Commission (JEC) started in Ankara on August 5th. Turkish State Minister, Kursad Tuzmen, and Labour and Infrastructure Minister, Muhammad Matuk Muhammad, of Libya presided over the delegations of their respective countries, Anadolu News Agency reported. 
Recalling that the trade volume between Turkey and Libya reached US$1.3bn last year, Tuzmen said that exports from Turkey to Libya increased by 12% in the first half of 2004. "We target to increase our trade with Libya to a volume up to US$3bn by the end of the year," he said. "In order to reach this target, we should sign a series of agreements to prevent double taxation, to encourage and protect investments mutually and to cooperate in customs and in agriculture. Also, the most important project is the formation of a free trade zone."

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FOREIGN INVESTMENT

Libya and Iraq closer to opening oil industry

Libya and Iraq, two of the world's largest holders of oil, have taken significant steps towards opening their industry to international investors, the financial Times reported on August 17th.
Libya launched its first bidding round to allow international companies to explore for oil and natural gas since the US removed its sanctions from the country.
Also Iraq attracted several big oil companies - including Royal/Dutch Shell and Bp - to bid on the right to advise Baghdad on how best to develop Kirkuk and Rumail, two of its biggest oil fields. 
Energy companies are struggling to find new reserves of oil and are counting on investment opportunities to open up in countries such as Iraq, Libya and Russia.
Although Iraq's tender is a preliminary step, it is an important chance for companies to establish a relationship with the world's second largest holder of oil reserves, company executives said.
Meanwhile, Libya's tender will allow US companies to return to the country where their European counterparts - such as Eni of Italy, Total of France, Spain's Repsol and OMV of Austria - have already begun to invest while US sanctions were in place. However, analysts said that Libya was less desperate to attract investors this time around, and so the terms were likely to be tougher.
"The tax terms are biddable, that will get people in bidding. The Libyans can always say no," said Caroline Cook, analyst at Duetsche Bank. "Anything that is in the south-west of the country near the Algerian border is interesting, as are the more mature fields in east. The Gulf is more frontier stuff and offshore there is real potential for gas."
Tripoli's two main concerns in deciding the winner of the rounds are said to be the size of the signing bonus offered by the bidding oil company and the percentage of share the Libyan side is able to retain.
The country is expected to embark on road-shows in London and Houston to outline the 15 lots for which bids are due on January 10th.
"This is good news," said John McInespie, lawyer at Butera & Andrews, a Washington DC law firm involved in brokering deals in Libya. "The Libyans have done this in their own time and will not put their eggs in one basket so we think that there will be plenty of room for the smaller players."
Shell, which has already signed a memorandum of understanding for a natural gas deal in Libya, expects to finalise the agreement "in the coming months," according to a company spokesman.
Libya's national oil company needed the expertise of foreign companies to meet its production target of 2m barrels a day by 2007, analysts said.

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