Econostrum | Economic News in the Mediterranean
en.econostrum


   
en.econostrum



           

Libya's economic outlook: A huge cake to share

Special series "Towards a new Libya?" Part 4 of 6


The tempo is accelerating for many countries eager to participate in the ongoing economic battle over reconstruction and oil. The diplomatic ballet continues to grow in Tripoli. But the dancers are not all on the same footing.



A country to rebuild (photo: OCHA/Giles Clarke)
A country to rebuild (photo: OCHA/Giles Clarke)
LIBYA. "The real issues are money, money, money and oil (...) Libya is a gigantic cake that [foreign] countries want to share," so spoke Saif Al-Islam Gaddafi in July 2011 during the civil war that would take his father's life. A decade later, this statement is still relevant. And even more so in this devastated country. "Libya is one of the three Mediterranean countries that need to be rebuilt from top to bottom, along with Lebanon and Syria," says Bernard Valéro, honorary plenipotentiary minister and former ambassador of France. Just retired from his position as director general of Avitem (Agency for Sustainable Mediterranean Cities and Territories), he is pleased that "Libya may now have the opportunity to make a reset after ten wasted years.
 
If the bride is beautiful, and the suitors numerous, the real question remains to know if the counters will indeed be reset to zero in the future Libya? In any case, the tempo is accelerating for the dancers of the most popular diplomatic ballet in the region. The next war will be an economic battle.

The international orchestra is playing louder and louder in this multi-beat waltz. It is necessary, from now on and more than ever, to occupy the field. The race for this manna involves nations as different as France, Turkey, Russia, Tunisia, and of course the former colonizer Italy. All these states are currently trying to get on the ballot of the new governance and to be in the best possible position.
 
But the powers that be are not all on the same page when it comes to the promising new Libya and its beautiful dowry acquired through hydrocarbon revenues.

Italy, first to reopen its embassy

Béatrice le Fraper du Helen, Ambassador of France to Libya was able to return to her embassy in Tripoli (photo: Embassy of France in Libya)
Béatrice le Fraper du Helen, Ambassador of France to Libya was able to return to her embassy in Tripoli (photo: Embassy of France in Libya)
After seven years of closure, France has just, Monday, March 29, 2021, reopened its embassy in Tripoli. Appointed on September 10, 2018 ambassador extraordinary and plenipotentiary to the State of Libya, the Nice-based Béatrice Le Fraper du Hellen was finally able to settle in the Libyan capital. "An important signal of Paris' desire to play an active role in the new chapter that seems to be opening in Libya," Bernard Valéro emphasizes. In July 2014, the security situation in the Libyan capital had led Paris to relocate its diplomats to Tunis. If the gesture was appreciated by the new local authorities, no one in the country has forgotten that Italy had made this return in 2017. For more than three years, it has been the only European diplomatic representation in this country. No one forgets either the essential role assumed by Paris and which led to the current situation.
 
"Certainly France, very active during the intervention of 2011, is largely responsible for the Libyan drama. Moreover, its policy after this intervention has not always been very clear even if it denies having supported Haftar militarily. However, it seems to have tried to play the role of referee, going so far as to receive, for example in July 2017 and May 2018, Haftar and Sarraj to adopt a roadmap focused in particular on the organization of future elections, while displaying its support for UN mediation in Libya," says Jean-François Coustillière. Member of the JFC analysis group on international relations in the Mediterranean, he notes, however, that this roadmap has remained a dead letter. This explains "that after 2019, and specifically the attempted conquest of Tripoli in April 2019 by Haftar, France has taken more distance with him. It is certain that French policy is undergoing a strong reorientation aimed at restoring peaceful relations by taking advantage of the emergence of new leaders appeared with the Libyan Political Dialogue Forum," says Jean-François Coustillière.
 
"In theory, France should be disqualified because of its inconsistent sculling policy in Libya, but in international relations this kind of inconsistency does not carry much weight: people's memories are very short, and only the weight of weapons or aid counts," said Henry Marty-Gauquié, Honorary Director of the European Investment Bank (EIB). "If France wants to find its place, it will have to give all the more pledges as its image is clearly tarnished. Nothing is ever impossible in international relations, but at what price?" continued Jean-François Coustillière.
 
Henry Marty-Gauquié does not imagine that Paris would be fully involved in this matter. "It would raise too many difficulties and uncover too many contradictions at the European level. His agenda is also too busy: becoming its intervention in the Sahel, exit from the Covid crisis, resumption of reforms engaged and stopped in 2019, the need to put back in place real public policies on topics such as youth, yellow vests and territories, energy, financing of old age dependence, etc...", he analyzes.
 
Bernard Valéro sees differently and believes in "an important role for France thanks to its initial involvement, which does not disqualify it, its status as a permanent member of the Security Council, its role within the EU, subject to close coordination with Italy."
 

Greece pleads for Turkey's ouster

Mario Draghi reserved his first official trip as Italian Prime Minister for Libya, where he met with the new Prime Minister Abdel Hamid Dbeibah (photo: Italian Council Presidency)
Mario Draghi reserved his first official trip as Italian Prime Minister for Libya, where he met with the new Prime Minister Abdel Hamid Dbeibah (photo: Italian Council Presidency)
Italy has the consensus of experts interviewed by econostrum.info. "Only Italy seems to want a lasting stabilization and unity in Libya, both for intellectual reasons, colonial consciousness and the lure of oil. But it has only diplomatic means. Its naval forces remain entirely mobilized by European migration policy," says Henry Marty-Gauquié. A former French intelligence officer (1972 to 2007 at the DGSE, where he was head of the security intelligence service), Alain Chouet puts "the Italians in pole position, even if they don't make much noise. But also, surprisingly, the Spaniards "for their agricultural expertise on dry land and their Arab policy. 94% of the country's land is desert," he recalls.
 
After the President of the European Council Charles Michel, the Maltese Prime Minister Robert Abela (who will reopen his embassy in Tripoli), the heads of French, German and Italian diplomacy, on Tuesday, April 6, 2021, the Italian and Greek prime ministers were in the Libyan capital. Mario Draghi - his first visit abroad just appointed and while no Italian president of the Council had set foot there since January 2012 - and Kyriakos Mitsotakis met with the new authorities. "Developments during the last decade have limited our economic relations but the presence of Greek entrepreneurs in Libya has never been interrupted. Now that the situation has stabilized, the interest has been revived", underlined the head of the Greek government, without ambiguity on the meaning of his visit. He also pleaded for the eviction in this race of the Turkish competitor. "This new stage in our relations will allow us to correct and erase the mistakes made during the previous phase," said Kyriakos Mitsotakis. A clear reference to the agreements between Fayez al-Sarraj and the GNA with Ankara. This message is less well received. For, if Abdel Hamid Dbeibah said he was "ready to form joint committees with Greece to resume discussions on maritime borders, and define the exclusive economic zone for each country between Crete and Libya," the Libyan Prime Minister specified beforehand "the importance of any agreement that could provide adequate solutions while preserving the rights of Libya, Greece and Turkey."
 

Ankara and its contracts signed with Gaddafi

Libya's economic outlook: A huge cake to share
Turkey has ratified with the former government of Fayez Al-Sarraj a controversial delimitation of maritime borders between the two countries that ignores the existence of several Greek islands including Crete. It was denounced by several countries. Recep Tayyip Erdogan has also given strong pledges that could serve as levers, provided that the wind blows in the right direction. His military support has prevented Tripoli from falling into the hands of eastern strongman Khalifa Haftar. By getting involved in the conflict, despite the warnings of Western powers, the Turkish president has bet on the rich Tripoli region, and in particular Misrata, at the crossroads of trans-Saharan and maritime trade routes. The Turkish president hopes to recoup the dividends of his military investment. Especially since the new power is concentrated in the hands of Abdel Hamid Dbeibah, the new interim Prime Minister and a native of Misrata. The businessman, who became a politician in 2011 after the fall of Muammar Gaddafi, of whom he was a close friend, owns several companies in this port city, whose branches extend as far as Turkey.
 
Not to mention that Ankara had already concluded contracts with Muammar Gaddafi, many of which have not been implemented or remain unpaid. The new Libyan government should go to Turkey to reactivate some and cancel others. And it is not the only one concerned. At the end of June 2014, in an internal report, a World Bank team based on a mission by its experts in April 2012, estimated the value of contracts launched before February 15, 2011 (the start of the first civil war) at around $100 billion (€83 billion). Three hundred of these accounted for three-quarters of the total value.
"International contracts," numbering 1,379, accounted for 8.6% of the number of contracts, but 73% of the total value. The average value of international contracts (80 million LYD) was 27 times higher than the average value of local contracts (2.9 million LYD)," the World Bank said. 45% had been awarded on the basis of a single source, preventing the cross-checking of information.
 
In its recommendations delivered in December 2013, this study, conducted at the request of the Libyan government, concluded: "the legacy projects were designed and launched under completely different economic and political circumstances. Furthermore, the original cost estimates have been greatly exceeded by events, and it is likely that the works and assets have deteriorated. The presumption should therefore be that these projects should be abandoned unless there is specific evidence to the contrary." 16,000 contracts remained open at the end of 2013.

The Tunisian neighbor remains on the lookout

"Turkey is the favorite, because of its networks and its ability to redirect the course of things," says Barah Mikaïl. But the director of Stractégia, associate professor of international security at the University Saint-Louis Campus of Madrid, also bets on Italy. "It is also in a good position because of its role and its support for Libyan infrastructure (oil, but also hospitals), not to mention its participation in the training and education of the military." Barah Mikaïl adds "the United States, which could have opportunities if they wanted", Qatar, China, Germany, Egypt. He is less enthusiastic about France, Russia and the United Arab Emirates. "It's hard to say at this stage, it will depend on what they negotiate. But, while things will probably be more difficult for them, these countries will not be excluded from the game for all that."
 
Above all, we must not forget the Tunisian neighbor, coveted in other times by Muammar Gaddafi. In 1974, the Guide came close to achieving a union between the two countries, which would have been called the Arab Islamic Republic, with the approval of Habib Bourguiba, the Tunisian president.
Today, cross-border trade is more about smuggling, but the Libyan revival could benefit Tunisia's neighbors tomorrow. Tunisia could take a nice revenge, after its vexing non-convocation to the International Peace Conference on Libya in January 2020.

In early March 2021, the chambers of commerce of Sfax and Tripoli signed a memorandum of understanding, the first step before reactivating the trade agreements between the two countries. In the same approach, a Tunisian-Libyan economic forum was held in Sfax in February 2021 with 200 Tunisian and 100 Libyan bosses. Its slogan is a strong message: "The forum of hope and challenge to build an integrated economy. Some even talk about the establishment of a free trade area between Libya and Tunisia.

"Libya has a potential not only for the country and the people, but for the whole region ... There is so much money on the table that with the delay in investment, there will be for everyone, "said an expert on site requesting anonymity. Two million Egyptians were working in Libya, mainly in construction. And if Alain Chouet indicates that this country of 6.77 million inhabitants asleep by the oil rent will have "to put its population back to work and not entrust it to foreigners", our previous interlocutor estimates that "three million immigrants will be necessary" to make the new Libya work. "Libya will again become a country of destination for foreigners and more of passage to leave the African continent," he adds.

 

The international powers no longer want to provide after-sales service

"The current instability allows the various Libyan actors to pay themselves on all sorts of trafficking, corruption or embezzlement," describes Henry Marty-Gauquié. "The military and social chaos allows external powers to play their game to satisfy their regional political ambitions. This is particularly true of Turkey and Russia, but also of Egypt and the Gulf states. However, none of these players are willing to get involved to the point of wanting to impose a unitary solution." Why? "None of these parties want to take charge of the post-crisis management. Just as Sarkozy and Cameron hurried home once Gaddafi was deposed and assassinated," adds the EIB's honorary director.
Alain Chouet also blames the foreign powers: "they behaved like colonialists by sending the gunboat, and now they don't want to provide the after-sales service.
 
For Bernard Valéro, "the challenge of the current period is to know if the Libyans will be able to seize the historic opportunity offered to them to emerge from ten years of conflict, instability and regression. For the international community, it is a question of deciding, and giving itself the means, to stop the "somalization" of a Mediterranean country that had become a "black hole" in the heart of the Mediterranean area.
 
Regional organizations will also have their role to play. "The Arab League and the African Union will have to play their parts, whereas these two organizations have seriously failed for ten years on this issue," Bernard Valéro points out. The honorary plenipotentiary minister recommends "a conference of donors, which the United Nations could initiate, and in which the Europeans would undoubtedly be called upon to take the lead alongside the major international financial institutions.


Frédéric Dubessy


Thursday, April 15th 2021



Article read 142 times


Articles which should interest to you
< >