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C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000136

SIPDIS

STATE FOR NEA/MAG, ISN, OES (ROBERT SENSENEY AND WILLIAM LAWRENCE), H AND MEPI, COMMERCE FOR NATE MASON AND COMMERCIAL LAW DEVELOPMENT PROGRAM

E.O. 12958: DECL: 2/16/2020 TAGS: PREL PGOV ECON PINR LY EINV ENRG

SUBJECT: NEW HEAD OF LIBYAN PRIVATIZATION BOARD WELCOMES U.S. FIRMS REF: A) 09 TRIPOLI 925; B) 09 TRIPOLI 198; C) 09 TRIPOLI 437 TRIPOLI 00000136 001.2 OF 002 CLASSIFIED BY: Gene A. Cretz, Ambassador, U.S. Embassy Tripoli, Department of State. REASON: 1.4 (b), (d)

¶1. (C) Summary: On February 10, the Ambassador briefed Jamal al-Lamushie, Secretary of the Privatization and Investment Board (PIB), on the upcoming U.S. Trade Mission and discussed the status of Libya's privatization efforts thus far. Al-Lamushie and his staff reiterated an interest in technical assistance and training in best practices for privatization. Such a program would further economic ties between the U.S. and Libya, and would provide a view into what is an otherwise opaque and unpredictable process. Al-Lamushie, who also serves as Director of the General Board of Fairs, made a pitch for U.S. participation at the annual Tripoli International Fair. End summary.

¶2. (SBU) The new head of the Libyan Privatization and Investment Board, Jamal al-Lamushie, told the Ambassador (accompanied by econoff) during a February 10 meeting that U.S. companies are welcome in Libya, and to that end, pledged to help arrange meetings for the upcoming U.S. Trade Mission. In al-Lamushie's view, most Libyans are pro-U.S., but, he believes some Americans have negative views of Libya due to the media. He said "we consider you as a friend, and we are all part of one team, to make the trade mission a success." Al-Lamushie, who replaced Mahamud al-Ftise as head of Privatization on December 28, explained that he will also retain his other role, as General Secretary of the General Board of Fairs. (Note: Dr. al-Ftise's new role, if any, is still unclear. According to the Tripoli rumor mill, he is now in charge of the government-owned Steel Factory in Misurata.) Al-Lamushie was accompanied by a new member of his staff, Dr. Abdelkarim Mgeg.

PRIVATIZATION AND INVESTMENT BOARD WELCOMES U.S. COMPANIES

¶3. (C) Al-Lamushie noted that Libya was "speeding up" the process of privatization, in which nearly 20 state-owned enterprises will be either liquidated, sold to employees, or sold to investors. He said foreign investors are now able to partner with Libyan companies, either from the private or public sectors, in joint ventures at up to 60 percent ownership. He thought the remaining larger projects could be of interest to foreign investors, such as the petrochemical plant in Abe Kamash near Qe Tunisian border, the truck factory in Tajura, the Steel Factory in Misurata, and several oil services companies. He noted that 110 companies had been privatized (as reported in ref A) and that almost all were doing well, but admitted that 10-15 were "not doing soQell" and would probably not be of interest to investors.

SAADI AL-QADHAFI'S PET PROJECT: ZWARA ECONOMIC CITY

¶4. (SBU) Addressing recent reports of a new law enacted by the General People's Congress establishing a free-trade zone in Zwara (west of Tripoli), al-Lamushie said further details on the "Economic City" would be announced in two weeks. (One of Muammar al-Qadhafi's sons, Saadi, is in charge of the project to transform the western side of Libya's coastal area into an economic zone, ref B). He clarified the project would not be a "free trade zone" but rather, an "economic city" with a special status. In order to roll out the project, "special seminars" will be held for foreign companies in Libya and overseas. He said such seminars could even take place in the U.S., if there was interest.

FOCUS ON ALTERNATIVE ENERGY: NUCLEAR, SOLAR, WIND

¶5. (SBU) Beyond its role in privatization, al-Lamushie said the PIB was also charged with attracting companies with expertise in new, alternative forms of energy, such as nuclear, solar, and wind power sources. He said that Dr. Abdelkarim Mgeg, a former nuclear scientist, was responsible for reaching out to companies working in alternative energy sources. Mgeg noted that Libya's goal was to diversify its energy mix. (Note: Mgeg is a familiar face to the Embassy, having worked with U.S. scientists when he was the Director of Tajura Nuclear Research Center, and he has stayed in touch with us since leaving that position in late 2008. He had been planning to travel to the U.S. in January to meet with Solar Energy companies and to attend a conference on this topic, but his trip was postponed for work-related reasons; he hopes to reschedule. End note).

POSSIBLE GREEN ENERGY BRIEFING FOR CODEL GRAYSON

¶6. (SBU) The Ambassador noted that Congressman Alan Grayson would be transiting Tripoli on February 17 for a few hours, and TRIPOLI 00000136 002.2 OF 002 due to his interest in green technologies, would be interested to receive a briefing on Libya's efforts in this area. Al-Lamushie said that Dr. Mgeg could meet with the Congressman, provided the meeting was approved by the MFA. Post will follow-up.

RENEWED INTEREST IN TECHNICAL ASSISTANCE FROM THE U.S.

¶7. (C) PIB staff voiced renewed interest in cooperating with Post on the development of Libya's private sector, via activities such as training and technical assistance for the PIB staff in best practices concerning privatization, as well as training for managers and boards of directors of newly-privatized companies. (Comment: Under al-Ftise's leadership, no one from PIB followed up with the Embassy on this proposed cooperation, but the new leadership may give a new push to bilateral cooperation. End comment).

AND A PLUG FOR THE TRIPOLI INTERNATIONAL FAIR

¶8. (C) Putting on his other hat (as head of the General Board of Fairs), al-Lamushie pointed out that there has been no U.S. booth at the past two Tripoli International Fairs. He encouraged the Ambassador to organize a U.S. booth at the 39th Tripoli International Fair, to be held April 2-12. (Note: Interest in this event has waned on the part of companies after the lifting of sanctions, as there are now many tradeshows that are more useful to companies. The Tripoli International Fair tends to attract Libyan consumers looking for unusual and inexpensive imported goods.)

COMMENT

¶9. (C) Based on his comments and plans, it appears that al-Lamushie may have been brought in to ramp up the pace of revitalizing Libya's commercial sector. Al-Lamushie's warm welcome to U.S. firms and interest in technical assistance and training in best practices for privatization are a welcome change from his predecessor's attitude toward bilateral cooperation. Post recommends following-up on this request as it would further economic ties between the U.S. and Libya, and also would provide a view into what is otherwise an opaque and unpredictable process. CRETZ