Libya - fulfilling potential at home and abroad

The country setting of Wiston House, in Steyning, West Sussex, might have sounded a strange venue where to discuss and analyse Libya's potential both at home and abroad but it could not have been more appropriate for a Wilton Park conference, which was attended not only by Libyan officials and diplomats but also by oil company business development managers, Associate Fellows of political, defence and security-related think-tanks, politicians, Oriental and African studies specialists, investment bankers, and migration institute officials, among others.

What was intriguing about the conference was that even in this case Wilton Park rules prevailed, in the sense that the conference which was intended to be interactive, encouraged those attending to participate in their own personal capacity.

Under this rule, participants are free to use the information and views discussed in the conference, but no individual speaker or participant should or can be quoted (nor their identity or affiliation revealed) without their express permission. This rule applies to all discussion outside the conference room as well as to points made in the conference sessions.

This obviously does not apply to those who chose to circulate their contribution.

It was a pleasure to meet, after many years, Mohammed Siala, Libyan Minister for International Co-operation, or to be more precise, Secretary for Co-operation in the General People's Committee for Foreign Liaison and International Co-operation. His understanding of the dynamics of Maltese politics is still as fresh as ever and, although he now ranks as one of the most senior in age in the Gaddafi administration, his economic background and openness to new ideas continue to make of him one of the most level-headed, insightful and pragmatic members of the Libyan government.

There was none of the "I know better" approach that one might have expected from the Libyans present. On the contrary, they were among the first to admit their shortcomings as well as to take on board practical suggestions intended to render their economy more vibrant and their transformation process more rapid and lasting.

As part of a MENA-OECD programme, an OECD official presented a draft national investment reform agenda for Libya based on his various meetings with high ranking Libyan officials, since Libya is understandably not a member of the OECD.

Spurred on by the fact that Libya aspires to join the WTO in the near future, the following recommendations were made :

¤ Reform of foreign investment legislation and other elements of the regulatory environment;

¤ Strengthening of the Libyan Investment Board to enhance investment promotion and communication tools;

¤ Enhancement of the Libyan tax system by way of designing corporate taxation and reviewing current tax incentives for investment

¤ Reforming the financial sector through the development of a capital market and the organisation and functioning of the stock market.

Although Libya has allocated a substantial amount of its oil revenue to state-owned financial institutions that have the task of supporting agriculture, rural development and SMEs, there is not yet a systematic policy to support enterprise creation, through finance, land development and training for entrepreneurship.

There was also a call for a review of Libya's privatisation strategy in the sense that although it has embarked on an ambitious process of privatisation it would benefit from a more coherent overall strategy for both transfer of ownership and management of remaining state-owned enterprises as well as through greater transparency and functioning of a capital market.

Relations with the United States are definitely on the mend; so much so that it is likely that a US embassy will be opened in Tripoli before summer.

British co-operation in the security sector is also strong as may be confirmed by the fact that Tony Blair has even appointed a PM Defence Co-ordinator to Libya.

Libya's role in the war on terror, particularly against fundamentalist extremist groups, is highly commendable.

On the economic front one of the challenges Libya still faces is a certain reluctance to invest in the non-oil sector.

On the other hand through its outreach and contacts in the African continent it is proving to be a spearhead of investment projects by third countries in a number of African states - an area which falls directly under Minister Siala's responsibility.

The illegal immigration issue was described as "a consequence of the sanctions" issue in the sense that the sanctions left Libya ill equipped and isolated in confronting a phenomenon that had already started rearing its head.

What I found intriguing was how Libya plans to develop particular niches for its tourism sector rather than relying on the mass tourism that has characterised Morocco and Tunisia.

To enhance heritage protection it is likely that responsibility for Libya's archaeological gems will be shifted from the Ministry of Tourism to the Ministry of Culture.

What struck me most about the Libyans is that, in spite of certain elements - not those present at the conference - who might resist change, overall there is a strong political will to change for the better and reform the economy to help facilitate the country's integration in the international community.

While certain areas might still lack a certain degree of professionalism, primarily banking, one cannot say the same for their oil sector, which is professionally run as confirmed by various publications that specialise in analysis of the oil, gas, and power sectors.

While admitting certain previous reform failures, Libya gives evidence through its actions of its increasing acknowledgement of its need of reform.

If Libya wants to counter the spread of Wahhabism it must address unemployment, which is also affecting the graduate sector.

Many delegates appreciated the humanitarian aid Libya is providing to such areas as Darfur in Sudan, by often making recourse to difficult and untested routes.

The brief of the conference was to address the following questions:

What are the current aims of Libya's foreign, economic and security policies? What are the benefits of full engagement with the international community and how to achieve this? How to press ahead with administrative and economic reform? How to encourage growth of the private sector and foreign investment? What prospects for the energy and tourism sectors? What is Libya's role in the war against terrorism?

In all honesty, I feel that I flew back home with more than satisfactory answers to all of these questions.

leo.brincat@gov.mt

Leo Brincat, who is Shadow Minister of Foreign Affairs and IT, was invited, in his personal capacity, to be a keynote speaker of the Wilton Park Libya conference.