MAHAMUD AHMED AL-FTISE Secretary of the Board of Privatization

United World: Could you give us a brief overview of what this company is responsible for?

Dr. Mahamoud: The main task of GBOT is to help transfer a public company into private ownership. We have a five-year plan, which started in January 2004. We hope we meet our target by then but so far we have privatized sixty-five companies; they have mainly been from the agricultural and industrial sectors, both small and medium-sized companies. We have so far privatized one big company, which is the Arab Cement Company, worth an estimated $500 million. We are now in the process of privatizing a flourmill, which is worth an estimated $211 million; we are placing it under what functions like a local stock market in the country, which is under the supervision of the Ministry of Economy. The plan for GBOT on the privatization process was divided into three stages, whereby we start privatizing the small companies and move on to the medium-sized businesses and finally the large companies. The value estimates range from $50 thousand, to three billion dollars. We are trying to speed up the privatization of small state-owned companies because they are a liability for the government.
The first phase is almost finished, some small companies were transferred and others were completely dissolved because they have lost too much to survive any type of competition. So what happens to the employees of such companies? We have several committees, which are dedicated to making sure that ex-employees somehow continues working, either by finding them a new job or by helping them get loans to start-up their own businesses. This process however, has not been completely successful but it has been satisfactory.

People feel that the investment environment is improving, so they are acting accordingly with that factor. Naturally, there are some difficulties that exist, nothing is perfect. The transition from a state-owned economy to a free-market one is not an easy task. However, the will is there on all sides, despite the continued existence of bureaucracy. We are doing our best to make the process smoother, and to raise awareness amongst Libyans on privatization, and on transparency; this is mostly done through the media.

United World: What has the general feedback been from people in the business community?

Dr. Mahamoud: In the beginning, people were wary and the changes triggered panic; people started thinking, "We're not going to do this, let's keep our money in our pockets…" Attitudes gradually improved however; people started visiting us and asking questions, which helped them understand the benefits or risks etc. Things look better now.

United World: You work in collaboration with the National Investment Company (NIC) and the Foreign Investment Board, to some extent…

Dr. Mahamoud: The NIC is what one could compare to a trust fund for some one million Libyans. Over the years, 1.5% of their salaries have gone into this company. It is not really a private company as such because people are not free to buy/sell their shares whenever they please. We are trying to encourage that process to be implemented. For now, NIC is a semi-private company.
To give you a brief idea of how the collaboration works between us and the NIC, let us take the cement company for example. When we decide to privatize a big company, we make the announcement publicly that it is up for privatization; however we already know that the Libyan market cannot contribute enough to cover the cost of such a large company. The transition period for privatizing such a company is dangerous; the management is still public and it breeds corruption. This is why we prefer transferring it (during this transition phase) to the National Investment Company, which will then declare its shares to the market. This is a more successful way of doing it.

United World: What about the involvement of foreign investors?

Dr. Mahamoud: That is an interesting topic. In the past years, what I like to call foreign investment fever was prevalent in the country and abroad; numerous business and trade delegations were exchanged, conferences were held etc, all of which were certainly interesting and useful. However, over the months, we have come to realize that we are simply not ready yet. When one invites foreign investors to the country, that country needs to be prepared. There is a lack of infrastructure in Libya; at the very least, we need a national business community who can accept and work with foreign investors on the same level. We do not want to create a vacuum in the market by having all sorts of foreign companies, good and bad, waltz in and perhaps start activities like money laundering. Therefore, we need to be careful. So then we thought of inviting well-reputed companies to the country that can invest in management, which will also entail a share in profits of course.

United World: What areas would you welcome American investors to?

Dr. Mahamoud: We have the petrochemicals industry and as tradition dictate, the oil sector. However, other doors are now open in areas like education, tourism and refinery projects, which of course will be in accordance with Law no. 5, tailored especially for foreign investors.

United World: Your role is very important, because Libya's main challenge is diversifying its economy, rather than depending solely on the Oil sector as a main source of revenue.

Dr. Mahamoud: Indeed, there is a need for diversification, because, as you said, it is an oil-based economy. This process actually started in the late 1970's, where we had the birth of companies like cement, iron and steel, leather, etc. The variety is there but we are talking about management. Changing ownership of such companies is our way of increasing productivity and profits, naturally. I try to advise local entrepreneurs on looking for foreign partners after they invest, because some of the owners are employees of a small factory for example and may not have the required background to benefit from their investment. We can't force anyone though, we only advise them. Our main focus is to transfer ownership to local entrepreneurs. The rest will take its course in due time.

United World: What would you say are the specific needs of the Libyan business community from American companies?

Dr. Mahamoud: In quality, modern management and marketing. If we succeed in this, we can mover ahead much faster. We need to change the mentality of handling things by intuition and hit-an-run deals.

United World: What are your greatest achievements with regards to your position in GBOT?

Dr. Mahamoud: I would say it is that my employees now work as a team and the fact that I feel I can walk away from this institution knowing that it will continue to run as if I am there.

United World: With regards to US-Libyan relations, what are the main aspects that you feel need to be highlighted to the American business community when it comes to dealing with your country?

Dr. Mahamoud: They need to be made aware of the existing opportunities, which, as I mentioned before lie in different sectors, including oil and gas, tourism, and of course, in the friendship with the people. Libya is part of this world and it is not scary as some may think. We have a beautiful, long Mediterranean coast, we are strategically positioned geographically, sandwiched between Europe and the rest of Africa and we are open to them.

United World: Thank you for your comments.