Libya: Change is in the air but happens slowly on the ground
Libya | Change is in the air but happens slowly on the ground | Economist.com
Under its still-eccentric leader, could Libya ever loosen up?
THREE years ago, Libya stunned the world. Its famously erratic leader, Muammar Qaddafi, announced a series of dramatic policy reversals. Bullied and beguiled by the British and American intelligence services, he gave up research into chemical and nuclear weapons, paid generous compensation to the relatives of passengers in an American airliner blown up over Lockerbie in 1988, and championed economic reform. Liberalisation was the key to prosperity, he declared in one speech, and stable institutions were vital for Libya's credibility in the world.
Mr Qaddafi has delivered on many of these scores. Not only did he scrap an extensive and secret nuclear-weapons programme, he squealed on its shady suppliers. His intelligence services, long better-known for skulduggery, became useful allies in the global campaign against radical Islamist groups. They lightened their hand at home a little, too, most recently by freeing some 130 of the country's 500 or so political prisoners, most of them Islamists. From 2003 until his removal this week, a respected American-trained economist, Shukri Ghanem strove, as prime minister, to shift policy towards free trade, privatisation and greater openness.
As a result of all this, shoppers in Tripoli, the capital, no longer queue for rations in state-owned stores, but choose what they like from well-stocked private markets. Since the end of UN sanctions, imposed in 1992 over the Lockerbie affair, they can fly abroad on holiday. They can even visit the United States, now that diplomatic ties have been partially restored after a 23-year break.
Americans are swarming the other way. Along with a clutch of congressmen, oilmen have been sniffing around a country whose huge energy resources remain largely unexploited. President Bush has boosted trade prospects by unblocking export credits. The Libyan police have bought Ford cars. European businessmen are coming in too. Italians are selling helicopters. France was poised this week to sign a deal to co-operate over nuclear power for civil purposes.
Yet despite having accumulated a foreign-exchange hoard worth $45 billion on annual oil sales now running at $20 billion, Libya has much the same drab, shambolic air as when diplomatic isolation, trade sanctions and centrally planned socialism prevailed. With 5.7m people, it has just one world-class hotel and only 20 cashpoint machines. No road signs, even in Arabic, show the way to Leptis Magna, a ruined Roman seaport that is but one of many ancient sites whose scale and magnificence point to a past more glorious than the present. “I met a guy who spent 15 years abroad, and he said he recognised the same potholes as when he left,” chuckles a Tripoli taxi driver, snarled in one of the rubbish-strewn capital's daily jams.
Money in, muddle out
State wages, the main income for two-thirds of the workforce, have been frozen since 1981. They average $3,000 a year, in a country with a purported GDP per head (at purchasing-power parity) of $12,000. Subsidies make up part of the shortfall: water is sold for 5% of what it costs to pipe it, petrol at 11 cents a litre, and 40% of Libyans don't bother to pay for their state-supplied electricity at all. But the meagre wages crimp disposable incomes and kill incentives to work harder. “My father never got a raise in 30 years,” claims a café waiter. “Now he's retired, he gets the same pension as his former salary.”
Huddles of Egyptian and black African labourers lurk at roadsides, hoping for clients who pay $10 a day. Yet while some 2m foreigners toil here, a fifth of the native workforce is jobless. Underemployment is an even bigger problem. A top official has reckoned that the state would function better if it shed two-thirds of its payroll.
This lack of activity hampers even the crucial energy sector. Oil production is now 1.7m barrels a day, little more than half the peak reached a year after Mr Qaddafi seized power, in 1969. The plan is to crank this up to 3m within ten years. Perfectly possible, say oil experts, except that not enough is being invested to maintain old fields, and decisions on the new ones are being taken too slowly.
Recent bidding rounds have attracted lucrative offers from scores of foreign firms, not surprising since Libyan oil tends to be high-grade and cheap to produce, and only a quarter of the country has been explored. But some firms are still haggling over details of contracts signed five years ago. In spite of huge gas reserves, Libya's power plants mostly run on diesel fuel.
In fact, it is hard to identify any institution that works well, aside from the ubiquitous security services, which have handily blocked at least a dozen coup attempts. The peculiar structure of the state lends itself to bumbling. Officials declare that their form of government is unique, reflecting the theory of direct but non-representative democracy expressed in Mr Qaddafi's 120-page “Green Book”. Every citizen is expected to join in taking decisions via “popular committees” at local, regional and national level, with powers over such things as business and building permits. But these compete with a raft of other bodies, such as “revolutionary committees” and multiple shadowy security agencies.
An annual general congress of people's committees is meant to exercise oversight. Among other things, it hires and fires both the prime minister and his cabinet, as Mr Ghanem has just found to his cost. But this proto-parliament meets for only a week a year, issuing abrupt decrees that reflect its underlying role as a sort of trade union representing entrenched bureaucratic interests. Favouritism towards Mr Qaddafi's own family, clan and tribe also complicates things. Given that laws and policies must negotiate this thicket, it is no surprise that so few get made, let alone carried out.
There are darker stories, too, of rampant corruption and other abuses. A well-known case is that of five Bulgarian nurses and a Palestinian doctor sentenced to death on the monstrous charge of deliberately injecting hundreds of children with the HIV virus. They have now been reprieved, and appear likely to be freed under a complicated face-saving deal. Hundreds of Libyan dissidents have got less foreign attention, and remain in prison or exile. Last month, police in Benghazi killed a dozen protesters whose march against cartoons mocking the Prophet (an issue deliberately stoked by inflammatory coverage in the state press) turned into a riot targeting government property. Draconian laws still bar Libyans from speaking openly with foreigners, criticising the leader or setting up political parties. All foreign publications are effectively banned. But the isolation that lasted for two decades has begun to crack. Satellite dishes and the internet open windows on the world. Mr Qaddafi's second-eldest son, Seif-ul-Islam, provides a further impetus for change. Among other liberalising moves, he has hired a team of international consultants, led by Michael Porter, an economist from America's Harvard University, to detect symptoms and suggest cures. The group's hard-hitting preliminary report, out last month, got an encouragingly warm welcome.
Yet reform remains an uphill battle. It struck a new obstacle this week, when the just-concluded people's congress not only replaced Mr Ghanem with his more timid deputy but also elevated a team of grey apparatchiks to other ministries. Mr Ghanem may be happier, however, in his new post as energy boss. Even Mr Qaddafi, with all his dangerous capriciousness, must know it is only because of oil that Libya has been able to afford decades of damaging social experimentation.
Under its still-eccentric leader, could Libya ever loosen up?
THREE years ago, Libya stunned the world. Its famously erratic leader, Muammar Qaddafi, announced a series of dramatic policy reversals. Bullied and beguiled by the British and American intelligence services, he gave up research into chemical and nuclear weapons, paid generous compensation to the relatives of passengers in an American airliner blown up over Lockerbie in 1988, and championed economic reform. Liberalisation was the key to prosperity, he declared in one speech, and stable institutions were vital for Libya's credibility in the world.
Mr Qaddafi has delivered on many of these scores. Not only did he scrap an extensive and secret nuclear-weapons programme, he squealed on its shady suppliers. His intelligence services, long better-known for skulduggery, became useful allies in the global campaign against radical Islamist groups. They lightened their hand at home a little, too, most recently by freeing some 130 of the country's 500 or so political prisoners, most of them Islamists. From 2003 until his removal this week, a respected American-trained economist, Shukri Ghanem strove, as prime minister, to shift policy towards free trade, privatisation and greater openness.
As a result of all this, shoppers in Tripoli, the capital, no longer queue for rations in state-owned stores, but choose what they like from well-stocked private markets. Since the end of UN sanctions, imposed in 1992 over the Lockerbie affair, they can fly abroad on holiday. They can even visit the United States, now that diplomatic ties have been partially restored after a 23-year break.
Americans are swarming the other way. Along with a clutch of congressmen, oilmen have been sniffing around a country whose huge energy resources remain largely unexploited. President Bush has boosted trade prospects by unblocking export credits. The Libyan police have bought Ford cars. European businessmen are coming in too. Italians are selling helicopters. France was poised this week to sign a deal to co-operate over nuclear power for civil purposes.
Yet despite having accumulated a foreign-exchange hoard worth $45 billion on annual oil sales now running at $20 billion, Libya has much the same drab, shambolic air as when diplomatic isolation, trade sanctions and centrally planned socialism prevailed. With 5.7m people, it has just one world-class hotel and only 20 cashpoint machines. No road signs, even in Arabic, show the way to Leptis Magna, a ruined Roman seaport that is but one of many ancient sites whose scale and magnificence point to a past more glorious than the present. “I met a guy who spent 15 years abroad, and he said he recognised the same potholes as when he left,” chuckles a Tripoli taxi driver, snarled in one of the rubbish-strewn capital's daily jams.
Money in, muddle out
State wages, the main income for two-thirds of the workforce, have been frozen since 1981. They average $3,000 a year, in a country with a purported GDP per head (at purchasing-power parity) of $12,000. Subsidies make up part of the shortfall: water is sold for 5% of what it costs to pipe it, petrol at 11 cents a litre, and 40% of Libyans don't bother to pay for their state-supplied electricity at all. But the meagre wages crimp disposable incomes and kill incentives to work harder. “My father never got a raise in 30 years,” claims a café waiter. “Now he's retired, he gets the same pension as his former salary.”
Huddles of Egyptian and black African labourers lurk at roadsides, hoping for clients who pay $10 a day. Yet while some 2m foreigners toil here, a fifth of the native workforce is jobless. Underemployment is an even bigger problem. A top official has reckoned that the state would function better if it shed two-thirds of its payroll.
This lack of activity hampers even the crucial energy sector. Oil production is now 1.7m barrels a day, little more than half the peak reached a year after Mr Qaddafi seized power, in 1969. The plan is to crank this up to 3m within ten years. Perfectly possible, say oil experts, except that not enough is being invested to maintain old fields, and decisions on the new ones are being taken too slowly.
Recent bidding rounds have attracted lucrative offers from scores of foreign firms, not surprising since Libyan oil tends to be high-grade and cheap to produce, and only a quarter of the country has been explored. But some firms are still haggling over details of contracts signed five years ago. In spite of huge gas reserves, Libya's power plants mostly run on diesel fuel.
In fact, it is hard to identify any institution that works well, aside from the ubiquitous security services, which have handily blocked at least a dozen coup attempts. The peculiar structure of the state lends itself to bumbling. Officials declare that their form of government is unique, reflecting the theory of direct but non-representative democracy expressed in Mr Qaddafi's 120-page “Green Book”. Every citizen is expected to join in taking decisions via “popular committees” at local, regional and national level, with powers over such things as business and building permits. But these compete with a raft of other bodies, such as “revolutionary committees” and multiple shadowy security agencies.
An annual general congress of people's committees is meant to exercise oversight. Among other things, it hires and fires both the prime minister and his cabinet, as Mr Ghanem has just found to his cost. But this proto-parliament meets for only a week a year, issuing abrupt decrees that reflect its underlying role as a sort of trade union representing entrenched bureaucratic interests. Favouritism towards Mr Qaddafi's own family, clan and tribe also complicates things. Given that laws and policies must negotiate this thicket, it is no surprise that so few get made, let alone carried out.
There are darker stories, too, of rampant corruption and other abuses. A well-known case is that of five Bulgarian nurses and a Palestinian doctor sentenced to death on the monstrous charge of deliberately injecting hundreds of children with the HIV virus. They have now been reprieved, and appear likely to be freed under a complicated face-saving deal. Hundreds of Libyan dissidents have got less foreign attention, and remain in prison or exile. Last month, police in Benghazi killed a dozen protesters whose march against cartoons mocking the Prophet (an issue deliberately stoked by inflammatory coverage in the state press) turned into a riot targeting government property. Draconian laws still bar Libyans from speaking openly with foreigners, criticising the leader or setting up political parties. All foreign publications are effectively banned. But the isolation that lasted for two decades has begun to crack. Satellite dishes and the internet open windows on the world. Mr Qaddafi's second-eldest son, Seif-ul-Islam, provides a further impetus for change. Among other liberalising moves, he has hired a team of international consultants, led by Michael Porter, an economist from America's Harvard University, to detect symptoms and suggest cures. The group's hard-hitting preliminary report, out last month, got an encouragingly warm welcome.
Yet reform remains an uphill battle. It struck a new obstacle this week, when the just-concluded people's congress not only replaced Mr Ghanem with his more timid deputy but also elevated a team of grey apparatchiks to other ministries. Mr Ghanem may be happier, however, in his new post as energy boss. Even Mr Qaddafi, with all his dangerous capriciousness, must know it is only because of oil that Libya has been able to afford decades of damaging social experimentation.
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