A seminar on Libya held in Malta last week degenerated into a heated exchange on the way forward, with Libyans in the panel and the audience clashing over the ability to make cross-border payments, salaries paid by the public sector, and restrictions on foreign investment.
But the managing director of the Libya Africa Investment Portfolio, Ahmed Kashadah, raised most eyebrows when he gave a frank opinion of the solution if the country is to find prosperity again: “The problem is that we Libyans keep asking for help but it will not come if we just sit here and wait. We need to stand up against this mess,” he said, acknowledging that those who did stand up were paying the price for it.
“It is tough, dangerous work but the movement is gaining strength.”
Speaking later to The Business Observer, Mr Kashadah was, if anything, even more honest, saying that since Libya became independent in 1951, it was poor and struggling, “possibly in a worse position than it is now”.
“History has shown us that the need to move on was what drove the tribes and cities to unite. There will be no country unless we sit and talk. There is no future for anyone unless we try to solve this problem. This is the main motivator for all the parties to get together…” he said.
The seminar was the second in a series put into motion by the Libyan-Maltese Chamber of Commerce, which is seeking to leverage Malta’s unique position as a go-between for international companies seeking opportunities in Libya. It first brought down the Libyan-German Business Council a few weeks ago, and subsequently the Libyan-British Business Council (LBBC), headed by the former British High Commissioner to Malta Vincent Fean, who subsequently served in Libya as ambassador for four years. The LAIP, one of the organisers of the conference, was established in 2006 and is owned by the Libyan Investment Authority.
The LBBC has 70 members, 26 of whom came to Malta for the networking forum – companies which appreciate the fluidity of the situation but also realise that with high risk comes high returns. Sir Vincent said with the fluency of an experienced diplomat: “Libya needs what we can deliver. We stand by our friends when they need us.”
The private sector has so far been doing an amazing job in such difficult times, ensuring that the rate of unemployment is driven down
However, the rewards are bilateral. Libyan journalist-in-exile Sami Zaptia noted that only three of the 18 hospitals in Tripoli are functioning. And a conference in London next month is expected to highlight the billions that need to be spent to rebuild the country’s infrastructure, ravaged by years of fighting.
Panel member Ehabi Bukhdair, the managing director of a leading group of companies in North Africa, was optimistic, admitting that there was a shortage of foreign currency which made it hard to buy foreign goods, but that “Libya is open and there are many business opportunities”.
“Many operators pulled out but that created space for newcomers who want to penetrate the market,” he said.
As Mr Kashadah said, there are security risks but companies would be able to “hit the ground running”.
“What you do not want is to come into a market where everyone else is. Everyone has their hearts and minds in the right place and they are here to identify the right partners, the right sectors, the right approach. This is when you have to start the work: when you can afford to do a proper analysis. Usually, we don’t have enough time to make the right decisions.”
There was considerable debate on the role of the private sector, particularly since public sector salaries increased dramatically after 2011, luring thousands away from the private sector. Unfortunately, these jobs were quickly seen as a generous ‘trough’, and Mr Kashadah said that action had to be taken, with an 82 per cent reduction in costs after a campaign started just over a year ago to ensure people put in their hours – a campaign which generated a violent backlash of threats and strikes.
“Public entities are struggling because of the political instability. Many entities within the public sector cannot pay salaries because they were not planned well, and cannot make any money. The State is not helping these companies any more.
“The private sector has so far been doing an amazing job in such difficult times, ensuring that the rate of unemployment is driven down. It is also making sure that Libyans can find products and services.”
The aim of the seminar was to highlight Malta’s role through its long-established ties with Libya which would benefit foreign investors. Mr Kashadah added that many Libyan companies found Malta to be an effective base for operations in Libya, “just an hour from Tripoli – even closer than Tunis”.
But in spite of all the speeches about collaboration and future investment, there are still major headaches. Pierre Mifsud, of local law firm EMD, said one of these was cross-border financial transactions.
“We need a financial institution in Malta – not necessarily a bank – operating under the EU regime which would basically have people knowledgeable on the way business is done, to bridge the gap between practices in Europe and those in North Africa. An institution like that would bring businessmen in both regions closer together, he told The Business Observer.
“This would not necessarily be Islamic finance – although that could be part of it. At this stage, I would limit it to an institution which seeks to facilitate business transactions, which knows the parties and can carry out due diligence on them, having the trust of both sides of transactions. That is the missing link at present. It is very easy to get lost in translation.
“Banks nowadays are very restricted so possibly another type of financial institution would be more amendable to the needs of the business partners. I think it has to be a joint effort: the policies have to be set and the regulator has to tweak legislation where necessary. It needs to be an initiative by public institutions but incorporating the private sector,” he said.