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Books on Libya

Update No: 077 - (30/04/10)

The Libyan Definition of ‘Chutzpah’
Much of the world, and the United States in particular (perhaps in light of its distance from the country) would appear to interpret the Libyan leader’s ‘musings’ and inexplicable behavior as clownish, almost humorous: ‘The Libyan leader may have been a threat in the 1970’s and 80’s but now he is an amusement’. In fact, the Libyan leader remains a threat; he is a threat to his own people and to the future of Libya, and while foreign investors remain interested, driven by the potential profits to be made in banking and infrastructure developments, as well as oil, the government is really doing very little to develop the Libyan people. In fact, the Libyan leadership continues to be concerned with elusive ambitions and the avoidance of working on an actual political project that might ensure a more complete development of Libya and Libyans. An example of this neglect is the tourism sector. When Libya and the West thawed relations in the latter half of the past decade, tourism was seen as one of the tools through which to start developing a freer economy and generate employment opportunities. After investing billions in building new hotels, the much hyped tourism industry has failed to take off; and this is not because Libya has little to offer. On the contrary, there are some fantastic destinations for travelers, from entire Roman cities on the coast to desert scenarios and prehistoric cave paintings. Despite the abundance of places to see, only a handful of tourists have been visiting Libya in 2010, fewer than in the same period in 2009, the early spring period, which in Libya is the high season. Airlines and travel agencies as well as international tourism investors cannot work with unpredictability, and do not need to, given the competitiveness of even neighboring destinations, like Morocco and Tunisia.

Seeing as the majority of the travelers are coming from Europe, and Libya has not hidden the fact that it has targeted the western tourism market, Qadhafi’s call for a jihad against Switzerland has, predictably, left many would-be travelers to stay away. The call for jihad and the entire Libyan-Swiss mess, resulting from the Geneva hotel ‘beating episode’ involved Hannibal Qadhafi in 2008; The charges were dropped, but the feud has continued and highlight the Libyan leadership’s main feature, which is its unpredictability. The wider world also has not forgotten the absurdity of the ‘Bulgarian nurses’ scandal which took so many years to resolve.

Libya, which on paper has the potential of being North Africa’s answer to Dubai, has tried hard to attract foreign investors and promote tourism to diversify its almost entirely oil-driven economy, but the recalcitrant attitude of a mind-boggling bureaucracy, which begins with the difficulty in obtaining a visa, has stifled the best intentions. One unfortunate Swiss man remains in jail, Max Goldi, in the ‘Hannibal’ hotel room incident aftermath, while Qadhafi personally ordered the exclusion of citizens from 20 European countries from being granted visas. In March, Qadhafi called for a jihad against Switzerland, and regardless of how we interpret ‘jihad’, it does not take away from its inappropriateness. Of course, those who pay the price for Qadhafi’s eccentricities are ordinary Libyans. Travel agents have lost as much as 60% of their regular business.

Libya's allegedly desired transition toward a less interventionist economy has also stumbled on its own inconsistencies and lack of institutional development. The sale of the Canadian Verenex oil company was exemplary for the resumption of an intransigent and nationalist approach to business. The Libyan government prevented China National Oil Company from buying Verenex at market price, forcing the sale to itself for a much lower amount than its large oil find would warrant. The modern and reforming face of Libya has been represented by Qadhafi’s son Saif ul-Islam, who conceded then that the tribes and the security apparatus are preventing reforms from being actuated.

It is no surprise, then, that the only investments that have attracted foreign businesses continue to focus overwhelmingly on oil. The business and political environment in Libya remain frustrating. "There's a lot of reluctance on the investment side. The situation is not stable. There have been problems. They've seen issues with different companies," said Gene A. Cretz, the U.S. ambassador in Tripoli. Moreover, as the US improves relations with former foes in the Middle East, such as Syria, the Libyan leader, Muammar al-Qadhafi, is increasing resuming his role as ‘madman’ (or ‘mad dog’ as president Reagan called him) of the Middle East. More than any other notable, he represents the more unpleasant side of Arab regimes, as unpredictable and fickle as ever. So it should not be surprising that after calling for a jihad on Switzerland, the Libyan leader had the audacity to formally complain that he was not asked to visit Washington to take part in president Obama’s ‘Nuclear Security Summit’. The Libyan leader is still citing the decision to forego its weapons-of-mass-destruction program and still waiting for a reward. “I would really like to express my strong regret for Libya not having been invited to that conference," he said, speaking via video link from Tripoli to a meeting of the World Affairs Council in Washington on Monday.

Libya was not invited, as weren’t Iran and North Korea – not the kind of ‘partners’ that help boost reputations. Meanwhile, the Swiss citizen, who was arrested in the wake of the Hannibal Qadhafi incident, Max Goldi has been serving a jail sentence in Libya since last February 22. The situation has not changed and the confusing attempts to resolve the dispute between Switzerland, the European Union and Libya have fizzled. There are no signs that Goldi will be released soon and the EU’s mediation has not produced any results either. Goldi has appealed by letter sent to the reasonable face of the regime, who has no official role however, (the Libyan leader’s son Seif al-Islam), asking for his help in the matter. It is worth noting that prior to the “Hannibal’ incident in July 2008, Libya represented Switzerland’s main trading partner in Africa; now, Swiss exports to Libya have dropped by 70%. Yet, the international community had remained essentially inert before this.

At the Arab League summit in Tripoli held at the end of March, Spain’s minister of foreign affairs, Miguel Angel Moratinos, described the EU’s black list against 188 Libyan authorities as inadmissible, perhaps forgetting that a Swiss citizen was in jail, over a very flimsy excuse. The United States actually apologized to Libya for comments made by the State Department spokesman, P.J. Crowley, who merely highlighted the nonsense that continues to pass for leadership in Tripoli. Interestingly, Libya's Central Bank has still been able to attract European banks (and three Arab banks from the Gulf region) to make offers for a joint-venture bank in Tripoli. So far, Unicredito, and HSBC will be competing to hold a maximum 49% of the shares of a joint private banking institution.

The Central Bank now allows foreign banks to establish joint-venture banks with Libyans. The government hopes to reform the highly regulated banking system, which many observers see as a major obstacle to economic growth, to be capable of drawing more private investment, apart from the energy sector. The international banks are hoping to use the government’s offer to enter Libya even if the economy has not changed very much at all. The Swiss ‘jihad’ situation is already starting to bear its bitter fruit. Transocean Ltd, a Russian company, fears that Libya's embargo against Swiss companies will prevent it from deploying a Transocean rig to drill in Libyan waters. Transocean is now officially registered in Switzerland, having moved there from the Cayman Islands for tax reasons 2008. In Libya, business circumstances now are beyond anyone’s control.

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