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LIBYA

 
  
  

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 19,131     71
     
GNI per capita
 US $ n/a n/a
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: 030 - (02/05/06)

Transitions are Difficult
As stated on various occasions, Libya's reforms while apparently well intentioned are weakened, despite their best efforts, by the unclear constitutional situation and the divergence of opinion between the revolutionary elite and the reformers themselves. In March, there was an important cabinet shuffle that replaced Prime Minister Shukry Ghanem with al-Baghdadi al-Mahmoudi, who was Ghanem's deputy. Mahmoudi is a technocrat with extensive experience in the Libyan bureaucracy, while Ghanem had more experience in international settings as he spent much of his career at OPEC and in academia. Some say Mahmoudi is better suited, or at least better connected, to reformists as well as conservatives (in the case of Libya, these are those holding on to the country's revolutionary past), which suggests he will be better able to lead the country through the delicate changes that will inevitably erode the influence of some powerful societal elements. Shukry Ghanem was pushing for a rapid transformation of Libya's particular brand of socialist economy promoting free market mechanisms; however, he was alienating colleagues, which ultimately made the proposed reforms ineffective. 
Therefore, some diplomats have been suggesting that with Ghanem moved to lead the National Oil Company (NOC), the reforms might have a better chance under Mahmoudi, who is more familiar with the 'system'. That the cabinet shuffle in mid-March came shortly after deadly riots in Benghazi (attributed to protests over the display of the Danish Muhammad caricatures on an Italian minister's t-shirt), suggested that Ghanem was alienating large parts of the population with the free market approach, considering that Libya's young population has known little else but the generous subsidies and employment of the state. Ghanem's package of reforms envisaged in his 'National Economic Strategy' is not likely to be adopted by Mahmoudi. However, the new prime minister has stated that free market reforms, including private banking, would continue. There would also be a renewed focus on low-income citizens; state investment in infrastructure - which apart from the Great Man Made River finished in 1997 - is urgently needed in order to help the population at large, which suggests that fighting the 13% unemployment rate will remain a priority. Al-Mahmoudi also said his government would help streamline the bureaucracy simplifying taxes and financial regulations. On the surface, the Mahmoudi program is not very different from the Ghanem one. The differences are expected to be in the approach and dealings with 'stakeholders' (i.e. the old guard), which in Mahmoudi's case are perceived to have more widespread appeal. 

A Family Feud
A more pernicious problem for reform is the role of the 'leader', particularly, as there is no succession mechanism envisaged in the Jamahiriya (and the Green Book - the de-facto constitution of the country) for Col. Mu'ammar al-Qadhafi. Qadhafi is in his mid-sixties and probably has many more years of rule left in him; however, as reform, or talk of reform, advances the question of succession is inevitable. The prominent role of Qadhafi's son Saif-ul-Islam in the reform process, his pronouncements on foreign affairs and the widely held view that it was he who persuaded his father to renounce "weapons of mass destruction" to improve relations with the United States would indicate that Saif-ul Islam is indeed the designated successor. Nevertheless, in Libya, not everything is, as it seems, especially with regard to the leadership, which has never been an official role. Qadhafi's title is Leader of the revolution, not president. Saif ul-Islam is also the current head of the Kaddafi Foundation and is apparently the favourite. However, Saif's brother Saadi also appeared to be slated for the role of 'successor', even if Saadi has been involved in several controversial situations, which usually had something to do with football. In fact, the July 1996 riots outside Tripoli stadium that left an estimated 80 people dead, started after a match played and won controversially by Saadi's own team (against the team of his half brother Muhammad, who enjoys better regard from the people). Nevertheless, Saif and Saadi have been vying for a leading role in Libyan politics. Saif is far more public relations savvy and has a good relationship with the press.
Saif has also said things that appear to diverge from the official position (such as the ineffectiveness of reforms in Libya and pronouncements on the failure of the Libyan medical system vis--vis the Bulgarian nurses trial), which could also be construed as being those of his father. Saif is also liked by the West, which considers him the face of the "New Libya." Saif stated recently "Libya must become open and democratic; otherwise it risks turning to dictatorship and fascism." Saif is fluent in English and German, with some knowledge of French, Saif has been a key factor in bringing Libya back into the international community. He has been able to almost single-handedly change Libya's image abroad - no small feat considering that until 2003, Libya was still widely perceived as a terrorism-sponsoring nation and a rogue state. Saif is also believed to have challenged his own father by suggesting, "All US oil companies are returning to Libya, the revolution is over and done with." Saif's foundation took on some of the more 'significant' foreign policy events in Libya's recent history such as helping to free hostages in the Philippines held by the Islamic Abu-Sayyaf movement to freeing western hostages in southern Algeria. 
If Saif-ul-Islam enjoys the support of the West to succeed his father (as well as many Libyans), Saadi has not given up the challenge. While, Saadi appears to support the old guard (the Revolutionary Committee types), his soccer connections - Libya is a soccer mad country - have not been kind. Saadi's many attempts at playing professional soccer abroad (famously with the Italian Serie-A team Perugia) and his failure to deliver prestigious results have earned him some scorn among the very ranks he was trying to impress. Saadi was recently appointed to lead the national football league, but the failure of the Libyan national team to advance in the elimination round in the recent 2006 Africa Cup, which was won by Egypt, further alienated his 'natural' support base. Internationally, Saadi does not enjoy his brother's reputation. He has had numerous spats with the police in Italy for raucous and violent behavior in popular night clubs in the Italian island of Sardinia, where he was once asked to leave a club owned by the famous Renault formula-one boss Flavio Briatore. Nevertheless, while logic suggests that if the choice for successor would likely fall on Saif-ul-Islam, Saadi could still garner sufficient support by conservatives to obstruct his brother. The choice ultimately rests on the success and popular acceptance of the reforms. Should these fail to deliver their promises, Saadi could after all emerge as the ultimate victor.

Re-Trial of Bulgarian Nurses 
Meanwhile, the re-trial of five Bulgarian nurses accused of infecting children with HIV in Libya has been scheduled for 11 May. The first session of the trial will serve to present the case to the new judges. While, it is doubtful that the nurses will once again face the death sentence, the nurses' Libyan lawyer Osman Bizanti said he would seek the testimony of HIV experts Italian Professor Vittorio Colizzi and his French colleague Luc Montagnier. They had written a report identifying the cause of the HIV outbreak in the infant wing of a Beghazi hospital that infected some 400 children to poor hygiene. Nevertheless, the trial will be held in Tripoli rather than Benghazi, which is doubtless a point in favour of the nurses (given the tense situation in Benghazi as suggested by the riots of last February and the need to identify a culprit for the families). 

US maintains status-quo
Finally, in April the US State Department confirmed that Libya would not be removed from its list of state sponsors of terrorism. The United States praised Libya for the progress made so far and their growing cooperation, but stopped short of offering an explanation as to why Libya has not been 'promoted'. Cuba, Iran, North Korea, Sudan and Syria are on the current list. Libya was not pleased with the move, which was widely perceived as the decision almost coincided with the 20th anniversary of the US bombing of Tripoli and Benghazi on April 15, 1986. Libya complained that the United States has not yet apologized for that action, hindering trust between the two countries. While unstated, the retention of Libya in the state sponsors of terror list is likely due to the pressure of the families of survivors of the December 1988 bombing of Pan Am 103 over Lockerbie, Scotland - even as Libya has been paying compensation to those families. 

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ENERGY

Greece to further invest in Libya's oil industry


Visiting President of the Hellenic Republic, Karolos Papoulias, expressed Greece's desire to further invest in Libya's oil industry during his meeting with Libyan Prime Minister, Baghdadi Mahmudi, in Tripoli recently.
"A new chapter regarding Greek-Libyan relations has begun with a new momentum that is based on mutual political volition to promote relations for the benefit of both peoples," Papoulias said during the signing of two bilateral agreements in the tourism and cultural exchanges sectors. "Greece and Libya can also cooperate in the Balkan and Black Sea regions," ANA quoted Papoulias as saying.
Mahmudi, who signed the agreements with Greek Culture Minister, George Voulgarakis, and Deputy Foreign Minister, Evripidis Stylianidis, said he was pleased with Papoulias' visit, who he called "a beloved friend of the leader of the revolution."
Mahmudi also referred to a new period of economic cooperation between the two countries and called on the Greek business community to invest in Libya.
Later, Papoulias met with Libyan leader, Muammar al-Qaddafi, in a cordial atmosphere. The Libyan leader received the Greek President and his entourage in the known Tent where he hosts foreign senior officials who visit Libya.
Papoulias and Qaddafi talked for about an hour, both at the meeting that took place in the presence of Boulgarakis, Stylianidis and Deputy Foreign Minister, Yannis Balynakis and Deputy National Economy and Finance Minister, Petros Doukas, as well as at the dinner which Qaddafi hosted in honour of the Greek delegation. The two leaders did not make any statements.
Athens, however, expressed concern after Libya's state oil company published plans to issue permits for exploration and drilling in areas south of the Greek Mediterranean islands of Crete and Gavdos.
The issue gained attention after Libya's state oil company reportedly published an energy map on its website showing territory and waters in Libya and beyond where the company could consider issuing permits for exploration and drilling.
"The extent of the area pictured on the map in question is such that it creates ambiguities as to the potential for conveying rights for economic exploitation in areas south of Crete, as well as the island of Gavdos," Greek foreign Minister spokesman, George Koumoutsakos, said in a statement.
"The ambiguities of this particular map rendered necessary its clarification through actions undertaken by the foreign ministry on an official and political level."
According to international law, any county has the right to explore underwater natural reserves u to 200 nautical miles from its coast. Qaddafi has recently sparked interest in investing in Libya by pursuing economic reforms in an effort to encourage foreign oil companies to return.  

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