Having been cut-off from the West for nearly 15 years, Libya has recently begun laying the groundwork for rapprochement. In addition to distancing itself from state-sponsored terrorism, Libya has recently sought to embark on a more liberal economic path, paving the way for increased investment flows.
In a major economic policy change earlier this year, the Central Bank of Libya (CBL) devalued the official exchange rate of the Libyan Dinar by 51 percent, sending out a clear signal that reform is on the agenda.
Later this year, Libya’s National Oil Company (NOC) Chairman Abdul Hafid Zlitni was quoted in Al-Bayan as saying that the state-owned firm expects to sign one billion dollars’ worth of exploration contracts by year’s-end, plus five billion dollar investment deals in the petrochemical industry.
Libya’s economic plans were further outlined by Sayef Al-Islam, Muammar Kadhafi’s eldest son, in his recent visit to France. “Libya wants to introduce market economy, abandon the controlled economy, fight corruption and bribery and adopt a transparency in economy and politics,” he told Al-Zaman.
Such statements are catching the attention of an increasing number of European and Asian companies interested in exploring this uncharted market, mainly its oil sector. With proven oil reserves of 29.5 billion barrels, which are forecasted to increase by 40 percent by decade’s end, even lingering contract negotiations and continued US sanctions cannot rob Libya of its standing as the world's most attractive oil exploration province, as surveyed by Robertson Research.
These developments have become possible only after last year’s extradition of two Libyan suspects in the 1988 Lockerbie bombing. In light of Libya’s move, the UN Security Council dropped its sanctions against the North African country. However, Libya is still required to admit responsibility for the Pan Am jet bombing, renounce terrorism, disclose all information it may hold about the case and pay some four billion dollars in reparations to the families of the 270 victims.
A key fence-mending measure took place earlier this week when British Foreign Office Minister Mike O'Brien arrived in Tripoli—the first ministerial visit to Libya in nearly two decades. He met with Libyan leader Kadhafi and later conveyed to the BBC his impression that unlike Saddam Hussein in Iraq, "Kadhafi has recognized that international law must be now complied with…”
Following the high-profile visit, an official Libyan statement announced that the country was "in principle" willing to pay compensations for the airliner bombing and address demands to accept responsibility for the attack, reported.
While Libya’s diplomatic relations with Britain were resumed back in 1999, right after the Libyans agreed to hand over the Lockerbie suspects and accept responsibility for the death of a British police officer in 1984, the US has so far refused to reconcile and drop its sanctions.
Nonetheless, signs of a softer American approach toward Libya may yet be found in Bush’s neglect to include the country in his original "axis of evil" speech. Anticipating the emergence of a more liberal business environment, it will be even tougher for US oil giants to stand by much longer while their competition seizes the lucrative opportunities opening up in Libya. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
