If Libya can successfully form a stable government it could become an important destination for foreign investment over the next five years, says Middle East Association (MEA) chief executive Peter Meyer.
The MEA has been working alongside the Libyan Investment Authority over the past few years to create an environment that makes Libya an attractive foreign investment location. Measures include improving education, healthcare, security and the reopening of one of Libya’s international airports.
“The interest that we’ve got from members is very high so we think Libya could be a bright spot in the next five years,” says Mr Meyer. “There are no sanctions involved as there are with other emerging markets and they’ve got very good quality oil.”
The biggest obstacles, unsurprisingly, remains security and stability. Libya’s UN-backed government, the Government of National Accord, and prime minister Fayez Seraj have still not successfully formed a nationally-backed government or specified who has control over the military and police force. They will also still need to deal with the issue of how much government power militia factions will be given.
Despite the threat from ISIL in the region, alongside militia factions, Mr Meyer believes the biggest security threat is criminality. “The major problem they have faced is the fact that the criminals were released from prison at the time the regime was brought down. The police have never been given sufficiently strong powers to round them up,” he says. “I think [the threat from ISIL] can’t be compared with Fallujah [in Iraq]. It’s a mini problem, and they’ve got no real grassroots support in Libya.”
However, he does acknowledge the importance of forming a government of a unified Libya, one that is not susceptible to the various regional rivalries in the country. Most security and economic analysts agree that Libya is a very long way from being in the position to realise its FDI potential.
Were the political situation in Libya to become stabilised, as Mr Meyer expects it to, he believes the industries that will see the most investment are the oil, hydrocarbon and natural gas sectors. Much of this investment will come from the UK, in particular from the north-east of England and Aberdeen, from the EU and from Gulf countries such as the United Arab Emirates, Qatar and Saudi Arabia.