Arab Spring may turn page in Egypt-Libya economic relations

Can revolutions succeed where decades-old dictatorial systems failed, and usher in stable, mutually beneficial economic relations between Egypt and Libya? The coming months may bring the answer. 

Last month's visit to Cairo by the chairman of Libya's National Transitional Council, Mustafa Abdul Jalil, came just days after he declared his country liberated, and opened what could be a fresh page in the two countries' oft-stormy relationship.

Economics and investment issues were said to have topped the agenda during Abdul Jalil's short meeting with Egypt's de facto ruler Field Marshal Tantawi and interim Prime Minister Essam Sharaf. 

One of the most pressing issues involves the estimated one million Egyptians who lived and worked in Libya before the country's uprising. Many are still in Libya, while others are considering a return, especially given Egypt's dire economic straits and squeezed job market.

The problem, however, is ensuring an improvement in working conditions and contracts for those employed in Libya -- long a bone of contention for migrant workers. 

Egypt's current leaders stressed their interest in full participation in the Libya's regeneration, but wishes alone may not be enough when facing fierce competition from companies from other foreign countries eager for a share of the pie.

A matter of days before Colonel Gaddafi's ignominius death in his hometown of Sirte, a delegation representing 80 French companies visited Libya with a view to new infrastructure projects -- sentiments echoed by their British and US counterparts. All three nations played major roles in the NATO no-fly zone that guaranteed victory for Libya's rebels.

Some French, US and UK companies already operated in Libya before the revolution, but they were greatly outnumbered by those from Turkey, China and Libya's old colonial overseer Italy.

Before the Arab Spring hit both countries, the total volume of Egyptian investments in Libya before was valued at US$3 billion, according to 2010 data from Egypt's investment authority. Most investment was in the energy, electricity and construction sectors.

Egyptian investors faced major obstacles in Libya during Gaddafi's rule, with all ventures requiring a local Libyan partner to hold a 51 per cent stake, and transferring funds being a complex process. On the other side, an estimated 236 Libyan companies were reported to operate in Egypt.

The Egyptian Businessmen's Association signed a protocol with the Libyan Businessmen's Association, agreeing to the founding of a joint business council to encourage investment and trade. 

Now, with the upheavals of the so-called Arab Spring, the two neighbors are primed for a new partnership. But they will have to struggle to capitalise on it before the opportunities are seized by others.

(Source: Ahram Online)

No comments yet.

Leave a Reply