Libya aims to privatise half of economy in decade

Wed Mar 31, 2010 11:16am GMT
 

By Lamine Ghanmi

TRIPOLI (Reuters) - Half of Libya's economy will shift into private hands within 10 years, a privatisation official said, creating opportunities for foreign investors to snap up assets in the oil-exporting country.

After decades of Socialist-style economic policy and international isolation, Libyan leader Muammar Gaddafi has begun tentative liberalisation of some parts of the economy and foreign investors are beginning to return.

The business environment remains unpredictable and decision making can be painfully slow but Libyan officials say that in the past 10 years they have privatised 110 state-owned companies -- a third of the total -- and they want to go further.

"We prefer that the state withdraw from all economic activities and focus on making laws and regulations," Abdelkarim Mgeg, head of the strategic projects department at the government's Privatisation and Investment Board, told Reuters in an interview.

"I expect that more than 50 percent of the economy will be in the hands of the private sector within the next 10 years," he said on the sidelines of the Libya Business and Investment Summit.

"We want to put 100 percent of the economy under the control of private investors but we are still far from that goal. The speed and time to get there depend on the appetite, capability and successes of the private sector."

Libya's privatisation policy is not driven by a need for capital -- it sits on a vast mountain of oil money. Instead, officials have said they want to attract private sector expertise to create jobs and reduce the country's dependence on oil and gas.

It remains a challenging place for investors, especially because government rules can change without warning. For several weeks, Tripoli stopped issuing visas to most European citizens over a dispute with Switzerland.   Continued...

<p>Libya's leader Muammar Gaddafi attends the Food and Agriculture Organisation (FAO) Food Security Summit in Rome, November 16, 2009. REUTERS/Filippo Monteforte/Pool</p>
 
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