Libya Business Weekly - Issue 1 - 18.01.2013

18th January 2013 . issue 01

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From Potential to Progress: Can Libya harness the potential of its young population to bring its fragile revolution full circle? Ibrahim A. El Mayet – Tripoli – 16.01.2013

Amongst Libya’s youthful population over 70% of which is under 30, youth unemployment, one of the underlying causes of the Libyan uprising remains rife. In November 2012 official statistics released by Ministry of Labour stated current unemployed in Libya to be 15%. More recently Libya’s Economy Minister estimated the figure to be around 20%. Other sources estimate the unemployment rate to be closer to 30% with a further 20% underemployed in Libya’s oversized public sector.

Libya’s legacy of youth unemployment andunderemployment, and lack of support for private sector development arekey concerns in resolving Libya’s current security issues. It is essentialto provide viable alternatives for tens of thousands of young Libyan’s whohave opted for employment in militias [both illegal and state-sponsored]which continue to destabilise the country and undermine progress.

With a legacy of state corruption, misappropriation of public funds, whimsical

education policy influenced directly by Gaddafi including a ban on the teaching of foreign languages, and a prohibitive legal framework which has restricted development of small-to-medium size enterprises (SME’s), Prime Minister Zidan’s fledgling government face unenviable challenges.

Speaking at a press conference last week Economy Minister Mustafa Abufunas talked of the need for economic reform promising a review of current laws and legislation outlining a number of measures to diversify the economy, create jobs for the youth and stimulate the private sector saying: “We plan to initiate programmes to provide jobs and especially for the small and medium enterprise [SME] sector. We plan to create a new funding body for SMEs. We also plan to help increase exports and we are looking at dates, fish, and olive oil. These steps will also create new jobs”.

The Warriors Affairs Commission (WAC) is positioned to be a central part of Libya’s ambitious reintegration programme. Established soon after the liberation [October

ContentsP1 Note from Editor: From Potential to Progress

P2 International Perspective

P3 Regional Focus

P4 Progress ..continued

P5 Government acts to prevent disruption in Oil Industry

P6 Security

P7-8 Business in brief

P9 Feature

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International Perspective

clinton to Testify on Libya

Assault – Before leaving office Secretary of State Hillary Rodham Clinton is due to testify before the Senate and House foreign affairs panels on the deadly September 11 assault in Libya’s second city Benghazi which resulted in the death of Ambassador Chris Stevens on Jan. 22. Obama has nominated Senator John Kerry to replace her.

new US chargé d’ Affaires to Libya

William roebuck arrives in Tripoli

- 08.01.2013 -

Mr. Roebuck has been in the US Foreign Service since 1992 with a number of foreign postings in the Middle East including Political Officer in the US Consulate in Jerusalem (1995-1997), Political Officer in the US Embassy in Tel Aviv (2000-2003), Political Counsellor and acting Deputy Chief of Mission at the US Embassy in Damascus (2004-2007). In a statement Mr. Roebuck who speaks Arabic said he is looking forward to working with the Libyan government and the Libyan people as the US continues to build the relationship between the two countries.

Turkey to strengthen energy ties

with Libya - 09.01.13 - The Turkish Minister for Energy, Taner Yildiz, whilst on a tour of Algeria, Libya and Qatar, met with the Libyan Oil Minister whilst in Tripoli and stated that Turkey is pursuing a stronger energy relationship with Libya. Yildiz said that although some Turkish companies are working in Libya there are not enough, stating that “We have demanded new fields”. Libyan officials feel confident that oil production should surpass that of pre-revolution levels.

India confirms commitment to

assisting Libya rebuild and develop

through investment - 09.01.13 - The Indian Ambassador to Libya, Anil Trigunayat, says that India has supported Libya throughout the revolution with Indian companies offering their camps to the revolutionaries and despite huge losses to their equipment, Indian companies have paid all their dues and continued to employ their Libyan staff. As well as major Indian construction and infrastructure companies being actively engaged in Libya, the Indian Ambassador has identified the monumental task of dealing with security issues, believing that for the initiatives currently in place to succeed, Libya will need to rely on significant foreign investment and technology transfers. India also have aspirations to be a major partner in the Education sector.

president of Gnc leads major

government delegation to Italy -

09.01.13 - The President of Libya’s General National Congress (GNC), Mohamed Magarief, believes that the relationship between Libya and Italy is strategic due to it being based on common interests. Italy’s Foreign Minister, Giulio Terzi, opened the Italy-Libya economic forum by saying that Libya has reached a crucial stage. Magarief arrived in Rome with five members of Congress and a selection of high ranking Officials and Ministers representing the Libyan Oil, Economy, Planning and Industry ministries as well as being accompanied by Libya’s Deputy Prime Minister, Awad Al-Barasi. Magarief will meet with Italian President, Giorgio Napolitano, as well as the President of the Italian Chamber of Deputies, Giafranco Fini. The Libyan Ministers on the delegation will meet with their Italian counterparts separately.

prime Ali Zidan holds talks

with Qatari’s premier in doha –

16.01.2013 -

In his talks with Qatari premier, Sheikh Hamad bin Jassim bin Jaber Al-Thani, and Foreign Minister, Sheikh Mohammed bin Nasser bin Jassim Al-Thani. Libya’s Prime Minister Ali Zidan was accompanied by Interior Minister Ashour Shuwail, Minister of Foreign Affairs and International Cooperation Mohamed Abdulaziz, Chief of Staff General Yousef Mangoush and intelligence Chief General Salim Hassi looked at ways of furthering the close relationship between the two countries which has deepened following the Qatar’s support for the Libyan revolution. The possibility of Qatar establishing Centres to help train young Libyans was raised by the Libya premier.

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Regional Focus

Libyan, Algerian & Tunisian pM’s agree

to enhance security along their common

borders - 12.01.13 The Prime Ministers of three North African countries, including Libya, met in the Ghadames on Saturday agreeing to improve security measures on their common borders in order to tackle the rising problem of arms, drugs and organised crime which is entering these countries due to the regions political instability. Last month, Libya’s GNC closed the borders with Chad, Niger, Sudan and Algeria whilst seven southern regions of Libya have been declared as restricted military areas. The unrest in North Mali has also been identified as a major concern. Libya’s PM considers the summit to be a success having agreed and taken decisions confronting the threats faced by Libya, Algeria and Tunisia.

Sudan’s foreign Minister in

discussions with Libya on bilateral

cooperation as well as other African

related concerns - 15.01.2013

Ali Karti, Sudan’s foreign minister, visited Tripoli this week to update the Libyan government on the relationship between the North & South and the security issues in the region. Meeting with the Head of Congress, Mohamed Magarief the two also discussed the state of Sudan, bilateral cooperation and other African issues.

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From Potential to Progress: Can Libya harness the potential of its young population to bring its fragile revolution full circle?

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2011] the WAC, which is part of the Prime Minister’s office, is responsible for providing duty of care and opportunities to veterans of the Libyan Uprising. The WAC have compiled a database of approximately 220,000 registered revolutionaries (made up of both combatants and those who were actively involved in other revolutionary activities who joined the cause before 20 October 2011) of which 143,500 have so far been accepted and will be enrolled in various WAC programmes which include domestic training programmes, sponsorship for vocational training and degree courses at International

institutions and its landmark LYD 500 million small-to-medium size enterprise (SME) programme “Project Ambition” which will assist 5,000 former fighters to establish their own businesses.

Successful candidates will be eligible for a maximum of LYD 100,000 provided in the form of project assistance (rather than cash) working with the WAC to develop a business plan and establish required facilities such as factories, shops, warehousing etc. 57,000 have submitted their names for consideration by Project Ambition. As well as the viability of candidates proposals priority will be given to those who spent longer on the front lines or who sustained injuries in the selection criteria.

An innovative aspect of the project is that it will also draw on the experience of the revolutionaries themselves with a group of 300 to be selected and trained as business consultants to provide assistance with projects operating from a nationwide network of dedicated business centres.

WAC have taken a number of steps to avoid fraudulent claims and misappropriation of funds which plagued initiatives launched by the NTC including the scandalous misuse of funds allocated for foreign medical treatment for revolutionaries and the wide spread abuse of grants offered to revolutionaries. Measures include the development a detailed database of revolutionaries whose eligibility has been assessed through a multi-stage process of interviews, psychological assessments and background checks. Project implementation will be closely scrutinized by the WAC team including appointed consultants and observers, and funds will be allocated directly to projects rather than being given to veterans in the form of cash grants.

The Ministries of Defence and Interior are also expected to absorb tens of thousands of revolutionaries into the official state security forces as well as providing additional training for existing staff. Interior Ministry spokesperson, Majdi Alarafi told LANA new

agency that they had increased capacity for police training due the growing number of Supreme Security Council SSC members looking to join the police.

While the Ministry of Higher Education wait’s for newly

nominated Minister Ali Muftah Obaid to take office pending Congressional approval after former nominee Abdulasalm Bashir Duabi was disbarred by the GNC’s Transparency and Integrity commission in November; plans are being drafted for a major overhaul of Libya’s Higher Education system and institutions. Libya currently has approximately 530,000 students serviced by 12 Universities and network of Technical Training Colleges. Priorities include increasing capacity for teaching of foreign languages including English, French, Italian and German, introducing new vocational qualifications as a viable alternative to degree courses, and upgrading and equipping facilities to modern specifications.

While the task of improving the business environment and reforming Libya’s education system is a massive challenge for Libya’s first elected (albeit interim) government it is clear that engaging disenfranchised elements of Libya’s youth is crucial for the country to progress from its current state.


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Government threatens crack-down on illegal demonstrations as protestors experimenting with new freedoms continue to cause serious disruption to Libya’s recovering Oil & Gas Industry – 15.01.2013 Responding to a recent spate of protests which have caused a complete shutdown of operations at Zeuitina Oil terminal since December as protestors blocked access to oil installations causing losses of $1m per day; Prime Minister Ali Zidan pledged to impose order using all necessary force. In a statement on Wednesday 9th January Zidan said ‘We [Libya] cannot be patient when violence results in the disruption of oil supplies and the loss of life.”

Thoughout 2012 oil installations increasingly became a focal point of protests as a number decisive issues came into play including benefits for injured revolutionaries, geo-political tensions centring on calls for greater autonomy for Eastern Libya and the relocation of the National Oil Company (NOC) to Benghazi and calls for fair pay, improved working conditions in the industry and fair distribution of resource wealth.

Speaking to Reuters on Wednesday 9th January Oil Minister Abdulbari Al Arusi confirmed that an agreement has been reached with the defence minister, chief of staff and interior

minister to secure the oil ports and that the army had mobilised a force to protect Zueitina terminal.

No oil has been shipped out of Zueitina which is some 800km East of the Libyan Capital Tripoli, exporting around 60,000 - 70,000 barrels per day, since the start of January as a result of the local protests that began in December. In addition to lost export revenues, such a shut-down also causes serious maintenance issues due to damage to pipes. Local officials and industry executives had been working for days to achieve a resolution to the issue. The chairman of Zueitina Oil Company, said that protestors were persuaded to leave by local officials and it is expected that the terminal will reopen in the coming days after the oil ministry gave the go-ahead for activities to resume. Under the current economic and political climate it is possible that Libya will face further disruption to its Oil Industry which accounts for the majority of its revenues.

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TRIPOLIBENGHAZI

Zeuitina Oil Terminal

El-Sharara

El-Hamra SIRTEBASIN

GHADAMESBASIN

PELAGIANBASIN

MURZUKBASIN


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Security

Italy closes Benghazi Consulate following attack – 16.01.2013

Italy temporarily closed its consulate in Benghazi on Tuesday and pulled its staff out of the country following a failed gun attack on Consul Guido De Sanctis’s bullet-proof car on Saturday. The consul escaped unharmed. Foreign Minister Giulio Terzi on Sunday condemned the attack as an act of terrorism and “an attempt to destabilise the institutions of the new Libya.” This is the latest in a series of attacks on foreign missions in Benghazi as authorities struggle to control security in Libya’s second city.

Libya to establish diplomatic protection force in the wakeof recent attacks on foreign missions – 13.01.2013

The Libyan Government has announced that it plans to create a new special force initially to protect diplomats but could extend to protecting foreign workers employed by international companies working in the country. It has been said that this force will be a combination of police and army, although it is considered probable that it will come under the authority of the Ministry of Interior. It is likely that members of the force will receive training abroad but exact numbers are still unsure.

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Business in Brief

Libya’s Deputy PM calls for investment in Renewable Energy

- 10.01.13

Deputy Prime Minister, Awad Al-Barasi, has asked Italian companies to invest in renewable energy projects with particular emphasis on the creation of a trans-Mediterranean electricity cable running from Libya to Italy. Al-Barasi stated in the opening session of the Italy-Libya Economy Forum that Libya has development projects worth $100 billion and has advised Italian companies to be involved.

Turkey plan to increase oil imports from Libya due to problems with Iran - 05.01.13

U.S. sanctions on Iran has resulted in Turkey needing to look elsewhere for its oil imports. Turkish Energy Minister, Taner Yildiz, has said that Turkey could potentially increase its crude oil imports from Libya to over 1 million tons a year. Turkey plans to hold talks with Qatar in regards to building a third terminal for liquefied natural gas with a capacity of 5-6 billion cubic meters to meet the needs of Turkey and the region.

Libya’s Central Bank discusses the idea of Credit Unions in Libya with World Council - 03.01.13

Libya is in need of reconstruction and the economy is earmarked to grow rapidly. With most small and family run businesses being self-financed, and the concept of consumer finance being widely unknown, it is important that Libya can offer financial assistance potentially offering bank guarantees and financing for business. The world council’s President & CEO, Brian Branch, said “financial cooperation is still not well understood, but many are looking for an Islamic finance model. The credit union model fits.”

President of the Union of Italian fishermen met with Libyan Officials to cooperation - 16.01.2013

During a meeting with Libyan Deputy Prime Minister for Technical Affairs Abdulsalam ElGadi, on Tuesday to discuss cooperation between Libya and Italy and the potential for establishing a partnership in the field of fisheries between the two countries particularly in providing access to the EU market for Libyan fishery production. Libyan waters are rich in many varieties of fish including tuna, especially in the Gulf of Sirte. Rehabilitation of Libyan fishery’s and training for local fishermen to optimise efficiency was also discussed.

Alstom SA to supply 11 gas turbines to Libya’s GECOL - 14.01.2013

Alstom SA, a French power equipment manufacturer, has stated that it has signed a contract with the General Electricity Company of Libya (GECOL). The 11 turbines will be provided across five power plants in Libya with inspections being planned for 2013 (6 turbines) and 2014 (remaining 5 turbines). GECOL aims to have its gas power plants operational and connected to electric grid in time for summer 2013.

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Business in Brief ...continued

Good Riddance to Bad Rubbish

Libya’s pM, Ali Zidan, has said that they may need to look

abroad for a solution to the growing garbage problem in

Libya. – 10.01.2013

With streets lined with garbage, rubbish bins over flowing and roads being used as garbage tips local contractors are unable to deal with the rapidly escalating problem, prompting a suggestion that tenders could be issued for international companies to bid for waste management and processing contracts in Libya.

Oil Minister Abdulbari Alarusi calls for a fresh approach to managing Libyan resources at a meeting at National Oil Corporation (NOC) Headquarters – 16.01.2013

While reviewing previous projects and proposed plans during the meeting held at the NOC offices in Tripoli this week, the minister called on the NOC to “avoid the complexities of the former regime in dealing with national companies” proposing the formation of a new committee to review and follow up on legacy issues within existing contracts, stressing that the industry should be run for the benefit of Libya and the Libyan people.

Praising the efforts of Libya’s technicians in restoring oil output, the Minister also called on Libyan oil & gas experts working internationally to return to Libya. He highlighted that increasing production to meet the budgetary demands of country during this challenging transitional period is the primary focus for the Industry. Water

Minister of Water resources, Elhadi Hinsheer to discuss

measures to avert a potential water supply crisis following

Industrial Action by factory workers in Brega – 16.01.2013 Following protests by striking workers from a pipe factory in the Eastern town of Brega, which supplies pipes to the Great Man-Made River (the principle source of water for most Libyans) the Chairman of the Great Man-Made River (GMMR) Nasser Bubteina told the Minister at the newly created Ministry of Water Resources, Elhadi Hinsheer that the demands for improved pay and conditions from the employees at the factory must be addressed to avoid further industrial action and potential loss of water supply. The Minister agreed to meet with representatives of the Great Man-Made River Authority to discuss the underlying issues.

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Look back at the Libyan revolution as we approach the second anniversary of Benghazi’s uprising on 17 February 2011, and it’s worth reflecting how much of it came down to communications – both good and bad.

When people first took to the streets in Benghazi, they were telling the Gaddafi regime that they had been suppressed long enough. When the thuwar revolutionaries appropriated the defiant slogan of Omar al Mukhtar, leader of the Sanusi uprising against the Italians in the 1920s – “We will never surrender. Victory or death” – and daubed it on walls up and down the country, they were proclaiming, loud and clear, that they were no longer afraid of the regime and would not stop resisting it until it fell. It was a powerful message and it spread like wildfire.

By contrast, Gaddafi’s communications – threatening to purge rebels street by street – or zanga zanga, as the infamous speech was quickly satirised – were a complete disaster. They precipitated the NATO intervention by uniting the UN Security Council against a potential genocide in Benghazi. When Libyans later looked to Saif al Islam to suggest an alternative route out of the crisis, instead he promised nothing but more bloodshed.

Today, good communications are essential to the lasting success of the Libyan revolution.

It is said that you campaign in poetry and govern in prose, and it has been difficult for Libyans to adjust from the euphoria of toppling the hated Gaddafi regime to grappling with the challenges of good government after more than forty years of dictatorship.

The Libyan government now faces a public hungry for the benefits of freedom and democracy. Libyans want jobs and security.

They want the standard of living that they believe a country with a small population and vast energy resources can afford. They would like to see the government acting decisively to control armed elements that remain independent of the security forces. They want their elected politicians to make serious progress with drafting a new constitution.Yet, as the researcher Rhiannon Smith wrote in a recent article for Open Democracy, there is “a growing gap between the expectations of the public and the capacity of the current authorities to deliver”. Disappointment is inevitable and, in some quarters, it is growing.

It is therefore vitally important that Libya’s leaders, in every sphere of life, manage the public’s expectations.

One way to manage these expectations and disappointment is to communicate fully and openly. Just doing that sends a compelling message that the new Libya does things differently; that, after decades of being ignored and treated with contempt, Libyan voices are now listened to and respected.

The Libyan public wants to be reassured that politicians in the government and in the General National Congress are acting in the national interest. Former fighters, many of them seriously wounded, want to see the Warriors Affairs Commission dealing with their cases fairly and transparently. Libyans want to know that their country’s money is being spent wisely, that those Libyan institutions that survived the revolution have left behind their discredited past and are embracing a new era of responsibility and good governance. Communicating these challenges, and the work being done to meet them, is vitally important if these institutions, as well as the new ones, are to continue to receive public and international support.

Communicating Comprehensively in the New LibyaBy Justin Marozzi

Feature

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Around the world good communications are considered a vital part of any organisation’s armoury these days, whether you’re a company or a government, a peacekeeping mission or a politician. As one Libyan official told me during a recent visit to Tripoli, “It’s uncomfortable to say this, but the one Libyan who really understood the power of communications and completely misused them - from bringing Libya in from the cold in the late 1990s, to rebranding Saif al Islam as a reformer - was Gaddafi”.

Nobody expected the euphoria of 2011 to last forever, but the challenge for Libya today is to keep alive the hopes kindled during the revolution. Compared with the other challenges that await, communicating more effectively than a despised dictator should not be too difficult. But it requires those to

whom the public looks for information and assurances to give communications the energy, skill and resources that are needed to do the job properly and well.

Justin Marozzi has been travelling to Libya for more than 20 years and is a Senior Adviser with Albany Associates, which provided pro bono communications assistance during the Libyan revolution. Albany led a successful campaign on behalf of the Ministry of Oil and Finance to encourage the British government to release almost 2bn Libyan dinars impounded in the UK. To discuss how Albany, which has partnered in Libya with IE, could help your organisation contact [email protected]; www.albanyassociates.com

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Communicating Comprehensively in the New Libya

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IE consultancy plus (IE) is a young, dynamic business development agency, supplying market research, representation, advisory and support services to international clients looking to establish or extend their commercial presence in the emerging markets of the new Libya. With offices in Tripoli and London and supported by associates based throughout Libya’s key commercial locations, IE boasts a unique profile founded on the experience and vision of its management team and developed on the collective expertise of its extended network of consultants. For more information on how we can help you to do business in Libya contact us now in either London or Tripoli

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Libya Business Weekly - Issue 1 - 18.01.2013

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Transcript of Libya Business Weekly - Issue 1 - 18.01.2013