Newly liberated Libya opens up for business

After the bloody struggle for freedom that caused so much destruction in Libya, it was a question of time before the newly liberated country drew a line beneath the last few tragic months to start a new page in its history. The North African country now needs to be rebuilt practically from scratch to provide its people with a decent quality of life.

The recent visit to Libya by Finance Minister Tonio Fenech and the Minister for Small Business, Jason Azzopardi, followed by a long-awaited trade mission organised by Malta Enterprise, should help to restore the “business as usual” feeling that entrepreneurs wanting to do business in Libya have been yearning for in the past several months.

Doing business in Libya was never easy. Previous regulators demanded that foreign companies had to hire large proportions of Libyan workers and managers even if they were unqualified. Foreigners could not own land and even majority ownership by foreign shareholders of Libyan businesses did not automatically mean control over strategic decisions.

Even so, various business delegations from countries like China, Italy, France, the UK and Canada have been visiting Libya to explore how the new government is shaping up in its attitude to foreign investment.

Many businessmen remain frightened by the instability that still persists in some parts of Libya and the political uncertainty that prevails in the months ahead of the first free elections that are scheduled to be held in June.

So, apart from some significant moves in the oil business, few other foreign businesses that traded in Libya before the uprising have in fact seen any significant upsurge in their activities.

An official of a western security and risk assessment company in Tripoli quoted by the Financial Times noted that it is going to be very hard to get any of the reforms people are expecting to see in terms of laws governing investment and registration of companies. Companies, he added, wanted to know whether they should be doing it under the old or new rules.

This should hardly be surprising. Libya is now a country that needs to build not only its physical infrastructure but also the institutional one. It is a country that requires a solid legal infrastructure that, among other things, guarantees a fair judicial system in trade and business deals. More than anything else, the new Libyan leaders need to build a social infrastructure on which the prosperity and success of every nation depends.

For too long, Libya was a dysfunctional state where its people were not allowed to achieve their aspirations through study, meaningful work and enterprise. Their schools and hospitals failed to provide the people with the quality of education and health services that a rich modern country should be able to provide.

This now needs to change through meaningful cooperation between the Libyan people and the international community that has to respect the aspirations of this freed nation.

The Malta Enterprise business mission focused on the maritime sector services including ship repair, marine engineering and construction, port services and other activities. According to the Libya Herald, Mr Fenech discussed “Malta’s hopes of obtaining assured supplies of Libyan oil and gas products on favourable terms”. This, of course, is all good news.

However, Maltese business can no longer expect any preferential treatment when trying to strike deals in Libya. They have to succeed on their own merits. Companies like the Corinthia Group have shown that this can be done.