You are reportedly a big supporter of economic privatisation in Libya and you would privatize everything if you were a decision maker. Would that not deprive Libyans of their rights to get free education, healthcare and other services?
You are reportedly a big supporter of economic privatisation in Libya and you would privatize everything if you were a decision maker. Would that not deprive Libyans of their rights to get free education, healthcare and other services?
I have never asked the state to abandon basic duties like education, which is a state obligation toward citizens. However, I would allow the private sector to establish education institutions to compete with the free and semi-free state education. There should be competition between the two sectors and citizens choose. This should at least be applied to secondary and tertiary education. The state should not monopolize the sector.
As for health, the state has to provide free care in certain specializations such as accident & emergency care, preventive medicine and chronic diseases but the private sector can compete with the public sector to enable citizens to choose the best quality services.
The private sector is not after the state’s possessions. It should only be allowed to compete with the public sector in terms of cost, production and manufacturing. The competition should be fair. In other words, sums of money should not be paid to public companies from the state budget when their managements or staff fail to make profits. There is a difference between ownership and management which directly impacts production. Therefore, I am against all forms of monopoly whether by the state or the private sector.
Do you think the private sector is able to work in the current security and political situation, especially given the major setbacks of SME owners in Tripoli after the ‘Airport War’ in 2014?
First of all, the private sector does not need guides, supporters or consultants. It always finds a way to grow under all circumstances. Although there are security issues which undermine opportunities and competition, the economy needs security and the private interests make people seek stability and build it.
The private sector can grow under all circumstances and challenges. However, the monetary authorities need to take the right decisions to achieve equilibrium.
Your group has the exclusive rights to distribute most of the products available in the Libyan market. Do you have any plans to establish agricultural or industrial projects to further stimulate the economy?
We do not merely have commercial franchises; we have shares in the licensing companies. In fact, we fully own some of these companies and have shares in others.
We have industrial projects in Libya but they are established illegally as the state has not planned the urban areas in a way that enables investors to work properly.
Even our stores in Tripoli are illegal as the city’s master plan has not been modified since 1978 and it does not have specific commercial, service or industrial zones. All factories in Libya are outside the industrial zones which are only designated to public factories.
Under Gaddafi, the state expropriated the people’s lands to use them for public purposes but in reality these zones were commercial and the public interest law could not be applied to them. Thus the majority of people protested and have been compensated.
We own three factories built on agricultural lands and every now and then someone claims ownership of these lands. Anyone can accuse us of breaching the law and we cannot deny it. What I want to say is that the state should perform its duties to facilitate economic growth. We hope that one day we will be able to invest in private lands. The state role is to plan and not to own or buy lands and to buy services rather than invest in them.
Our shops and factories are constantly threatened with closure by the municipal guards. Therefore, I repeat here, that the state should develop plans for private sector growth. Without such plans, there will be no fair growth for the sector. I am taking risks in continuing to work in Libya. Not everybody is prepared to do the same.
Under the Corporate Social Responsibility (CSR) principle, every successful project should be committed to community development. What have you done in this regard?
Let me speak about development through job creation and labour force development. I believe we have done enough in this regard. Our companies created 2,500 jobs. Our group has training facilities of its own and we hire specialized trainers.
Given our volume in the Libyan economy, this figure means we have done a very good job. Our companies are committed to training our employees but not the public. I see a contradiction here too: you first refused privatizing education and now you are asking the private sector to train everybody and contribute to development.
Your companies are allegedly importing through letters of credit i.e. you import at the official price of the dollar and sell goods at high prices as the dollar price is high in the parallel market. Is that right?
It is totally untrue. We do not import at the official exchange rates. No one in the market imports at the official rates. We import some goods which the Ministry of Economy prohibit us to cover at the official rate. For a whole year now, we are not using the official rates even with allowed imports including baby milk.
For a whole 18 months, we used the Central Bank of Libya rates to import: baby milk (for only 60 days), tomato paste (for only 10 days), milk, tuna and cheese (for only 10 days). Credits in the whole country were only covered for 6-7 months a year.
It is worth mentioning that our companies are the leaders in supplying the Libyan banks with cash on a daily basis. We are fully transparent.
As one of Libya’s richest people, have you not thought, under the current difficult circumstances, about launching an initiative to lower prices, especially of your imported items?
No one can lower prices. The market is ruled by the law of supply and demand. I challenge any individual, institution or sector to control the prices on their own. For example, gas cylinder imports are monopolized by one government company and four companies distribute them. The unit price is LYD 5 (3.5USD) but the four distributors sell it to the consumer at LYD 40 (14.2 USD). This is the case of one government importer and four distributors; what if we have private companies competing among each other.
Most traders in western Libya refuse to deal with the currency printed by the Central Bank in Al-Bayda, which complicates the crisis even further. Do you trade with it?
We accept all exchangeable currencies unless prohibited by the Central Bank (CB). The CB silence means that they do not mind. In general, printing more currency will only lead to more inflation whether printed in Al-Bayda, Tripoli or elsewhere.
How do you explain the continual depreciation of the Libyan dinar against other currencies and the high prices in the country despite open credits and subsidies of basic goods?
All currencies are merchandise like any other services or goods. Thus, their value depends on supply and demand which explains what I said about printing bank notes. Printing more Libyan dinars provides more supply and thus the value falls, leading prices to rise.
Of the foreign currencies, 97 percent come from the oil sector and go exclusively to the Central Bank. Since oil exports are disrupted, the Central Bank will provide no foreign currencies. This lowers the FX supply and increases their prices. Therefore, the price of the Libyan dinar against the US dollar is related to supply and demand and traders have nothing to do with this issue.
What is the solution?
The only solution is to ensure balance between the printed currencies and the balance of trade, restore the previous level of oil exports to enable such balance and allow the private sector to support the public sector.
Do you expect that Libya will borrow from the World Bank to address its budget deficit?
Personally, I do not fear the intervention of the World Bank or the International Monetary Fund; such intervention is useful. I do not fear borrowing though we do not need it as we have all the resources needed to solve the crisis and make our own decisions. If borrowing is absolutely necessary, it should be internal through treasury bonds or finance instruments.
It is not fair that the state should borrow to pay the salaries of employees who are not going to work or subsidize fuel which is smuggled to all neighboring countries. The only beneficiary of these loans is the smugglers.
Are you seeking a political position in the future? What is the secret behind your current involvement in politics?
I have no political aspirations and I do not wish to be a civil servant. However, I am ready to provide any support or consultations to whoever believes my expertise is useful to the economy.