Foreign and Commonwealth Office, 24 May 2004
Foreign Office Minister for trade Mike O'Brien addressed the Denton Wilde Sapte Seminar on Doing Business in Libya at the Offices of Denton Wilde Sapte, London
Thank you for inviting me to address this seminar and thank you to Denton Wilde Sapte for organizing the event.
I am glad to see so many here today. Your presence is testament to the many new business opportunities which are emerging in Libya. Last month I accompanied a group of leading British businessmen to Libya. I hoped to build on the positive developments in our bilateral relationship by strengthening our trade and investment links. The companies who traveled out to Libya with me had all been pursuing serious business opportunities there. They hope that the visit will help speed up their negotiations.
I met the Libyan Energy, Finance and Trade Ministers as well as the Foreign Minister and Deputy prime Minister. I was encouraged by their enthusiastic welcome and their readiness to discuss issues important to us such as economic reform. Libya's re-engagement with the West.
Libya has come a long way. My first visit there, in August 2002, was the first by a British Government Minister for 19 years. It took five years of patient dialogue and quiet diplomacy to help Libya rebuild its relationship with the West, culminating in the decision, last December, to give up its missile and weapons program.
Libya has begun intensive co-operation with the International Atomic Energy Agency. It has provided unrestricted access to facilities and has agreed to intensive and, indeed, intrusive inspections. The Prime Minister's visit in March confirmed Libya's commitment to dismantling its weapons program and re-engaging with the West.
Colonel Gaddafi made it clear to the Prime Minister that he recognized Libya's future lay in a new relationship with the rest of the world. That terrorism and extremism of any kind threatened the security, not just of the West but also the Arab world.
Libya needed to restore trading links and political relations with its international partners if it was to prosper in today's global world. It has taken considerable courage for Libya to change direction. So it is vitally important that we work with Libya to help it restore partnerships with the international community.
UK-Libya
The UK has been a key partner in this process. And we intend to remain so. Following the Prime Minister's visit we have started a new dialogue with Libya on regional and security issues. We are also extending our education and trade ties with Libya. The British Council has opened an office in Tripoli to promote English language studies. In March Shell signed a Heads of Agreement for gas exploration in Libya.
Trade in both directions is on the rise. In 2003 UK trade with Libya in visible goods was up 12 per cent to £241 million, while Libya's exports to the UK were up 21 per cent.
Economic reform
There are encouraging signs too that Libya is moving away from a state-controlled economy towards a free market. Libya's agreement to the publication of last year's IMF Article 4 report and its desire to seek WTO membership are further positive signs of a move towards an open economy. But Libya will need to take tough political decisions to realize its full economic potential.
Relinquishing state control will not be easy. Opening up markets to competition can mean painful job losses. We have all had to face that. But competition leads to new enterprise and that means more jobs and more growth. As both the Prime Minister and I said to Libyan ministers during our recent visits, the UK stands ready and willing to offer support.
Earlier this year, a Roundtable was held in Tripoli bringing together Libyan policy-makers and a panel of experts from the UK and the UN Development Program. This two-day program saw the first cautious steps in an open discussion on public sector reform and development.
The UK is firmly committed to sustaining and broadening this open dialogue. Indeed we have pledged long-term financial support to help make this happen. And we are urging the Libyans to maintain a dialogue with international economic and development experts on long-term, sustainable growth.
Expanding trade and investment
Libya has much to offer overseas business partners and inward investors. Abundant oil and gas reserves are already attracting considerable business and investment interest from around the world. But Libya's potential wealth runs much deeper. Its heritage, its talented and skilled people and its Mediterranean climate offer huge potential for the development of tourism.
My colleagues in UK Trade & Investment have developed a program to highlight business opportunities in education & training, transport, airports, tourism and healthcare.
But I am as aware as you are that, if new business is to flourish, Libya needs to offer an open and reliable business environment. Businesses need assurance that:
. tendering processes are transparent;
. that signatures on contracts and agreements will be respected;
. that commercial law will be fully enforced and
. that companies can be certain of being paid and able to repatriate profits.
We have made it clear to the Libyans that having reliable systems in place will go a long way to increasing business confidence with relatively little need for radical reform. We have also made it clear that legislation will need to be matched by effective and reliable implementation.
During my visit I urged Libyan ministers to work with British and other international businesses to hear what they had to say about doing business in Libya and to try to understand their needs. I pointed out that, by investing their own time, money and effort into Libya, businesses would become committed stakeholders in Libya's future growth and prosperity.
Libya's growth is their growth. That means passing on much-needed skills, technology and know-how to their Libyan trading partners. Because without that their own business will not prosper. And, by becoming an integral part of the local community, businesses are more likely to increase productivity and, thus, help ensure long term growth.
Libya has already taken positive steps towards improving the business environment. The tone of the Foreign Investment Law is encouraging. So is Libya's willingness to negotiate further Investment Protection and Double Taxation Agreements with new partners. And Libya is making a concerted effort to clear outstanding sovereign debt issues.
In January of this year we announced the reintroduction of Export Credit Guarantees from the UK for Libyan projects. So we are making progress. We will continue to encourage and support Libya's re-engagement with the international economic system and offer help and advice on domestic reform.
Conclusion
The more we can help Libya's reintegration into the international community, the better the chances for long-term stability and prosperity in the region. And that will be of lasting benefit to us all. Trade and investment development are a key part of that process.
I have no doubt that today's seminar will be highly stimulating. My colleagues in UKTI and in our Embassy in Tripoli are ready to offer advice and help identify local contacts and potential business partners.
Libya has real potential. We will do what we can to help Libya realize that potential. And we will work with you to help ensure that your business in Libya is successful too.
