NEW POSSIBILITIES IN LIBYA

by Arab - British Trade, the official bi monthly publication of the African British Chamber of Commerce

With some of the world’s richest oil reserves, and economic reform becoming apparent, Libya is currently becoming a more attractive site for foreign investment.

Libya has, to all intents and purposes, been closed to non-business visitors from outside the Arab world until recently. Britain has not had diplomatic relations with Libya since 1984, and has maintained only an Interests Section in Tripoli

Politics

Libya has a unique form of government. In May 1973, Colonel Mu'ammar Qadhafi published his 'Third Universal Theory' which ultimately led, in March 1977, to the foundation of a Jamahiriya or 'state of the masses'. This individual theory, expounded in Col. Qadhafi's Green Book, based Libyan politics on the 'people's authority' - a purist democracy. This new thinking led to the creation in November 1976 of the Basic People's Congresses (BPCS) and the General People's Congress (GPC). All Libyans were members of BPCs (which numbered some 2,150 in 1984) and from these groups Chairmen, Secretaries and Assistant Secretaries became delegates to the GPC. The BPCs were ultimately controlled by a General People's Committee (a cabinet equivalent) which was elected by the GPC and answerable to the Secretariat of the GPC.

1992 saw the creation of 1500 mahallat, or communes, spread throughout the country, which have control over their own budgets, legislative and executive powers - all of which were formerly vested in the Basic People's Congresses. Revolutionary Committees oversee the mahallat and both Congresses.

Finance and the Economy

Largely as a result of UN trade sanctions (see below), Libya remains a mystery to many British businessmen, some of whom would be surprised to learn of the extent of Libya's economic and financial scope. Britain does not figure highly in Libyan investments or, indeed, vice- versa, but some of its European partners do.
Italy, which has strong historical ties with the Arab state, has seen Libya take an 8.5 per cent stake in Banco di Roma, the second largest Italian bank.