Memo From Tripoli - Unknotting Father’s Reins in Hope of ‘Reinventing’ Libya

By LANDON THOMAS Jr.

TRIPOLI, Libya — Prying open a closed economy is no easy job, especially if the country in question is Libya — a nation that has spent more than two decades with its back turned to the world. It becomes all the more challenging when doing so means taking on the legacy of your father and fighting an entrenched bureaucracy with little interest in serious change.

Yet that is the goal of Seif al-Islam el-Qaddafi, the son and possible successor to Libya’s leader, Col. Muammar el-Qaddafi, as he sets out to dismantle a legacy of Socialism and authoritarianism introduced by his father 40 years ago.

“It is hard work reinventing a country,” he said in an interview last month, as he slouched on a sofa in his villa in the hills above Tripoli, picking at a tray of fruit including fresh dates brought to him by a black-suited waiter. “But that is what we are doing. We will have a new constitution, new laws, a commercial and business code and now a flat tax of 15 percent.”

In the last few years, Mr. Qaddafi, 37, who has a doctorate from the London School of Economics, flawless English and a bold independent streak, has emerged as the Western-friendly face of Libya and symbol of its hopes for reform and openness. When he was nominated last year to lead a powerful government body overseeing tribal leaders, analysts saw it as a sign of his father’s endorsement.

But in Libya’s opaque politics, little is seldom as it appears. And it is far from clear to what extent the younger Mr. Qaddafi’s vision is official policy or wishful dreaming.

Despite his broad international appeal and evidence of popular support at home, analysts say that resistance to his pell-mell approach to modernization appears to be building.

Recently the government curtailed the operations of two crusading newspapers he backed. His entreaties for Western investment were undercut last month when the government imposed a visa ban on more than 20 European countries hoping to do business here. And the old, bellicose Libya seemed to hold sway last week when Colonel Qaddafi escalated a running feud with Switzerland by declaring a “jihad” against it.

The developments have bolstered the view that the hard-line faction championed by Seif Qaddafi’s equally ambitious older brother, Mutassim, the country’s national security adviser, was gaining ground.

“A lot of people have jumped on Seif’s bandwagon as if he were the future of Libya,” said Dana Moss, a Libya expert and the author of a forthcoming monograph on United States-Libya relations. “But that is not clear yet. In a future Libyan system both Seif and Mutassim will have a say, but the question is who will have more of a say.”

Since Libya agreed to renounce its nuclear weapons, an initiative led by Seif Qaddafi, and began to mend ties with the West in the last decade, experts predicted that the opening of the economy would soon follow, spurred by privatization and an influx of foreign investment beyond the presence of international oil companies.

Those expectations were buoyed last October when Seif Qaddafi was proposed to lead the umbrella grouping of local leaders, a position that would give him, like his brother, a voice in the government and an official platform to further his reform agenda.

But months later, he has yet to accept the job. In his first public comments on the subject in London in January, Seif Qaddafi said that until Libya adopted democratic institutions he would stay on the political sideline.

“I will not accept any position unless there is a new constitution, new laws and transparent elections,” he said. “Everyone should have access to public office. We should not have a monopoly on power.”

Instead, he has continued his high-wire act, using his status to occasionally challenge his father’s ways — pushing for openness, opposing the ubiquitous revolutionary committees, allowing human rights critics into the country — while trying to retain his viability as his father’s successor.

Some analysts see his reluctance to enter government as a calculated strategy to retain the aura of an outsider, to rise above the political infighting just as his father did in 1972 when he removed himself from government and adopted the title Brotherly Leader and Guide of the Revolution.

Free of bureaucratic restraints, Seif Qaddafi has been able to propose far-reaching ideas: tax-free investment zones, a tax haven for foreigners, the abolition of visa requirements and the development of luxury hotels.

“We can be the Dubai of North Africa,” he said, citing Libya’s proximity to Europe (the flight from London to Tripoli is under three hours), its abundant energy reserves and 1,200 miles of mostly unspoiled Mediterranean coastline. In the den of his villa, where a stuffed white tiger lay in watchful repose, a fountain gurgled peaceably nearby and the air was thick with incense, the idea seemed plausible. Libya is wealthier than debt-ridden, oil-poor Dubai. Its $15,000 gross domestic product per person ranks it above Poland, Mexico and Chile, according to the World Bank. The government’s sovereign fund, a reserve of oil revenues, boasts $65 billion. And the government has announced plans to invest $130 billion over the next three years to improve infrastructure.

But a descent into the center of Tripoli offers a bracing dose of reality. The streets are strewn with garbage, there are gaping holes in the sidewalks, tourist-friendly hotels and restaurants are few and far between. And while a number of seaside hotels are being built, the city largely ignores its most spectacular asset, the Mediterranean.

Unemployment is estimated as high as 30 percent and much of the potential work force is insufficiently trained.

“The whole country looks like a construction site,” said Mustafa Fetouri, a political analyst based in Tripoli. “But it is developing and growing Libya’s people, that is the real problem. We are not Dubai.”

Libya’s market economy remains more aspirational than real. On a recent weekday morning at the nascent Tripoli stock exchange, 10 or so brokers sat looking blankly at their screens while a handful of customers waited languorously nearby. Ten companies trade on the exchange, which says it does $400,000 worth of business on an average day.

“The cost of running the stock market is more than the daily trading volume,” said Shokri M. Ghanem, the chairman of the National Oil Corporation, the state oil company.

That scene is unlikely to change until the government releases its tight grip on the economy. But Mr. Ghanem, a former prime minister who supports efforts to open the economy, said the political resistance was formidable and has been bolstered by the world financial crisis. The same oil wealth that would finance Seif Qaddafi’s vision has propped up an entrenched elite vigorously opposed to reform.

“There are certain people high up in the government that are against privatization, even though a majority of Libyans wish to go for a market economy,” Mr. Ghanem said.

That majority includes people like Muhammad Younes, 35, a mechanical engineer in Tripoli who has not had a steady job for years. Libya may be wealthy, but he has nothing to show for it, despite his fluent English and a university education.

“No work, no chances, no job,” he said with a fatalistic shrug. “Yet we have so much money. Something must be wrong.”