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Libya's economic outlook: Too many clouds block the horizon of a diversification

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


Libya must recover from ten years of internal conflict and tackle not only its reconstruction, but also the diversification of its economy. However, a prerequisite for this is the establishment of a proper state and administration.



The Roman ruins of Sabratha are among the main tourist attractions in Libya (photo: Lybian Tourism)
The Roman ruins of Sabratha are among the main tourist attractions in Libya (photo: Lybian Tourism)
LIBYA. Oil has dominated its economy for the past seventy years and is Libya's tool of resilience. When exports of this black gold go, everything goes. Or almost. However, the new governance underway must move away from this mono-industry. "Oil will certainly remain a central element of the Libyan economy, but it will have to be diversified thanks to better regional economic integration. Libya is the Maghreb-Mashrek hinge," comments Bernard Valéro, honorary plenipotentiary minister and former French ambassador.
 
Diversification must therefore remain a point of horizon for the new governance, and especially for that which will emerge from the future national elections. Whether they take place on 24 December 2021 or later. However, no change of direction will be made without a perennial government representative of the entire population, underline all the experts interviewed by econostrum.info. For Henry Marty-Gauquié, it is therefore too early to consider it. "At this stage, the question does not arise. Once the country has stabilised and a consensus has been reached on a common future, the team in place will be able to reflect on a strategy of economic and social modernisation including major structural policies (women, family, unemployment, migration, territorial balance), political policies, economic policies (attractiveness to foreign investment, tourism, R&D/innovation, reform of the banking system, development of the national civil service or territorial civil services, recourse to delegated management or not....)," says the Honorary Director of the European Investment Bank (EIB). According to him, "Arab models exist, whether in the Gulf States or in Morocco. But without a political basis, we will build on sand and nothing lasting will be done.
 
Barah Mikaïl, founder-director of Stractegia and director of the political science and international relations programme at the Université Saint-Louis - Campus de Madrid, is of the same opinion: "Undoubtedly, diversification remains desirable. But everything remains to be done, especially on the industrial level. And for that to happen, we need to train the population beforehand, so that they are really up to speed.  Bernard Valéro agrees and raises the need for an "effort in favour of youth and training" to get out of the oil business.
 
"The diversification of the economy is indeed an essential but particularly delicate issue. However, Libya has a specific geographical position which has always dictated its activity. Because of its latitude, it is much closer to internal Africa than Algiers and Tunis, and even Morocco and Egypt, both of which are on the periphery of the continent," observes Jean-François Coustillière. "Thanks to this landlocked position, we can see a natural vocation for links with the Saharan and Sudanese countries. In fact, two essential caravan routes traditionally intersected at Tripoli, one going to Mecca and the Levant, and the other directed towards the 'Sudan'. For the JFC analysis group member, "it is conceivable that these factors of strength could be exploited to make Libya a major centre of trade and exchange by land between Europe and Central Africa, but also between the West Mediterranean and the Middle East."
 

The strong potential of tourism

The Great Sand Sea Lodge developed by two Frenchmen (photo: Eugène Antoniotti)
The Great Sand Sea Lodge developed by two Frenchmen (photo: Eugène Antoniotti)
Diversification yes! But in what sectors? "Tourism, renewable energies...", says Bernard Valéro. Alain Chouet praises "the length of the coastline (editor's note: 1770 km), the beaches, the tourist sites." In November 2013 in London, the World Tourism Organisation (UNWTO) and the Libyan Ministry of Tourism signed a cooperation agreement for the development and progressive implementation of a strategy and action plan. UNWTO Secretary General Taleb Rifai stressed that "tourism will improve the global image of the country and contribute to its economic growth and sustainable development.
 
The strong potential of Libya - which has five UNESCO World Heritage sites - remains undeniable. Even if it has never really been exploited over the last thirty years. According to the UNWTO, Libya attracted 1.83 million international tourists in 1995. This figure declined very quickly to 760,000 in 2008, the latest data retained by the institution. The sector then represented 0.11% ($99m - €84m) of Libyan GDP. At its peak, it only reached 0.99% ($202m - €169m) in 2002.
 
Eugène Antoniotti confirms it, "before the war, Libya only received a handful of beach tourists, whereas neighbouring Tunisia welcomed ten million. There is still a lot to be done in this area. This Corsican of origin, established in Marseille, also mentions "the numerous Greco-Roman ruins and the rock engravings. In times of peace, connoisseur tourists would only come to admire them during the winter season."
 
Together with his cousin Michel Vinciguerra, Eugene Antoniotti worked for the development of tourism, "clearly encouraged by Saif Al-Islam, Gaddafi's son. He even came to visit us at the site of our lodge. At first, his project was to set up tourist tours in the "Great Sand Sea", with the creation of a ten-room lodge near the oasis of Al Jagbub, on the Egyptian border. "We then bought and renovated a 400 m² 'kasar' 100 metres from the entrance to the Greco-Roman ruins of Cyrene (editor's note: which gave its name to the Province of Cyrenaica)," he explains. Eugene Antoniotti continued his adventure there, supplying alcohol-free wine to the French managers of the five largest hotels in the capital. "Then, given the ease of setting up a business, we bought a restaurant in Tripoli, the 'Old City'. The war then put an end to the Libyan dreams of the two cousins.

 

An ancient cultural heritage in absolute danger

Libyan soils are 90% arid, hence the importance of good irrigation (photo: FAO)
Libyan soils are 90% arid, hence the importance of good irrigation (photo: FAO)
Libya's archaeological wealth, however, bears the scars of two successive civil wars. As revealed in the conclusions of a workshop organised in early April 2021 in Bani Walid (near Misrata in the north-west of the country) by five Libyan specialists from the Department of Archaeology and the National Institute of Archives and Historical Studies in Tripoli, "the treasures and cultural heritage of ancient and Islamic Libya are in absolute danger and have been subject to looting, vandalism, sabotage and demolition purely and simply for religious, cultural and criminal reasons. And sometimes through ignorance and negligence.

Mohamed Fakhri Elkrekshi, who reports these findings to econostrum.info, adds that "the museums of Nalout, Bani Walid and Cyrene have suffered the same damage." According to this former director of the Department of Multilateral Economic Cooperation at the Libyan Ministry of Foreign Affairs (2000-2007) and member of the Libyan mission to the UN (2007-2012), "the most heinous crime was the spraying of paint on the rock art at the Akakus site in the Sahara Desert by the driver of an Italian tourist agency seeking revenge for his dismissal. He was sentenced to only six months in prison, as such crimes are not considered by the law as serious and criminal. This is currently a subject of debate within the archaeological community.

He is therefore not very confident that tourism will return soon. "This sector is disorganised, with no reception or transport infrastructure. The situation has worsened since 2011 with insecurity: looting in centres of cultural interest, areas of criminal activity such as open-pit gold mining on the southern borders with Chad and Niger, not to mention smugglers of illegal immigrants. Personally, I do not believe in a short-term resumption of tourism given the vulnerability of the Libyan state, the general deterioration of the road infrastructure, reception and accommodation facilities as well as the extent of the looting of treasures with the complicity of certain foreign countries and governments.
For the former Libyan diplomat, "the restoration of state authority, an urgent return of security and actions to limit the vulnerability of part of the population in areas deprived of basic public services, with the assistance of countries directly involved in the Libyan crisis, remain prerequisites for any resumption of tourism."

Tunisia to support the development of health tourism in Libya

At the beginning of April 2021, during a conference in Djerba devoted to the subject, Tunisia and Libya signed several partnership agreements in the field of health tourism, particularly in the maritime areas. A prerequisite for the launch of a series of bilateral cooperation initiatives to "take advantage of the great potential available in the two brotherly countries", indicated Lotfi Al-Khoulaifi, executive director of this event.

Already in 2017, a study published on the HAL-SHS platform (Open Archives in Human and Social Sciences) underlined that "health tourism could contribute to the economic development of the country and fully participate in a sustainable development perspective, as it has fewer negative effects on the environment and the population". Its author, Khaled Abdalla, saw this activity as "one of the most important alternatives that would make it possible to diversify financial resources in the short and medium term, gradually enriching the country's economy in the long term".

 

Agri-food to fuel diversification

Alain Chouet also cites "the development of agri-food" as one of the avenues for diversification. According to the CIA World Factbook, agriculture accounted for only 1.3% of Libya's GDP in 2017. It was nevertheless the second most important sector of this economy, after oil.
 
The Great Man-Made River, a project desired by Muammar Gaddafi, whose various phases were inaugurated from September 1989 to September 2007, now allows water to supply the whole of Libya. Ironically, the aquifers were discovered under the Libyan desert, in the Nubian Basin, during oil explorations. Back to the sender, this water, drawn by solar pumps, could accompany tomorrow's diversification by irrigating agricultural land, without using precious oil.
It was thanks to this huge project that Libya "began to develop agricultural production that could lead to self-sufficiency (wheat, fruit, vegetables)," recalls Christian Graeff, former French ambassador to Tripoli from 1982 to 1985.
 
Potatoes, watermelons, tomatoes, onions, olives, cereals, citrus fruits... were scattered over the 3% of the country's surface occupied by cultivable land before the conflict. Fertile land is mainly found in the north and on the Mediterranean coast. But Libya still imported most of its food, with domestic production providing only 25% of the necessary demand. To encourage vocations, the Guide offered free support in the form of machinery and seeds, as well as advice on how to cultivate the land, to any Libyan who owned land and wished to make it productive.
 
Once the scars of war have been repaired, the Great Man-Made River will once again be able to irrigate as much land as possible (94% of the country's soil is arid), and new technologies will find a good place to expand. For example, hydroponic agriculture (cultivation on a neutral substrate such as sand and irrigated by a solution providing mineral salts and nutrients) has recently been tested in al-Qouwea, on the outskirts of Tripoli.

 


Frédéric Dubessy


Tuesday, April 20th 2021



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