MOHAMED ALI EL HUWEJ Secretary for Finance

United World: Could you please give us a general overview of the current state of the financial sector in Libya.?

Mr. Huwej: We all like to protect our national interests; we did so during the sanctions period and continue to do so today. We feel the need to reform our economy, our financial sector, our banking systems and even the business culture that currently exists. There are changes that are needed in terms of ownership rights, and current government subsidies that exist. The sanctions era was a different one and a more difficult one of course, where our economic development was put on hold. Things have changed now. We believe in transparency and investor confidence. We have some objectives here in order to achieve this: firstly, we have to unify the state budget and squeeze expenditures. We need to maximize efficiency and increase our earnings from all sectors. This means that we need to reform our customs duty taxes, social security, and banking system and of course we need to clear up our balance sheet. We need radical decisions in order to move forward. We have so far implemented a fixed maximum rate of income tax at 35%. We have also implemented a tax-break for foreign investors in the first five years of their projects. We have already signed a double-taxation agreement with France and discussions are underway in that regard with Germany. We cancelled all customs duty taxes but we of course still have a list of banned imported goods, which may include things like alcohol, pork meat and agricultural products that we produce locally and want to protect. We also have a list of about 71 goods with a 25% tax fee on them that exist only to protect or maintain a balance with local production. However, this list is reviewed each month. We are trying to increase the interest rate in banks; however, this is something we cannot directly interfere in because it falls under the responsibility of the Central Bank of Libya. We recently agreed to move towards creating a stock exchange because legally we cannot move forward with privatization without one.

United World: What are your motivations behind the creation of a stock market?

Mr. Huwej: The market is there and it's small but a lot of work needs to be done. We don't have private Libyan companies or industries; it's all state-owned. We need to create a private sector environment; this is why the stock exchange is important.

United World: What can foreign investors do to boost Libya's financial sector?

Mr. Huwej: We have to be realistic. Most investors lack confidence in Libya because of the recent past situation we were in. However, I believe Libya will not go back on its economic reform process; we are even aiming to join the WTO in the future. At this point, we don't have a lot to offer besides oil and gas but we want to develop our other sectors in order to be eligible to join that organization. We have a strategic geographical location. We have better ingredients than most of the Gulf countries to develop our economy and country, but of course this requires rules and regulations and incentives for foreign investors; this is what we are working on.

United World: You mentioned investor confidence earlier, what do you feel is the most obvious sign of confidence for investors in Libya today?

Mr. Huwej: When people like you visit us. The media has transformed the Arab world into something horrible. The problem in the US is that they believe everything that is said to them. Nowadays they associate Arabs with nothing more than terrorism and religious fanaticism. I was in the United Stated for several years; I got my masters from a management Institute there in Boston. There is a huge problem with misconceptions; some people I talked to would assume I lived in a hut in Libya. This is a serious situation that should be addressed. We are trying to leave our past behind us and improve our integration with the rest of the world. We are the gateway to Europe and Africa from opposite sides of the continent.

United World: What are you looking to achieve during your time as the minister of finance?

Mr. Huwej: our main objective is to increase the Libyan people's income. Also our aim to diversify the economy more, rather than have a concentration of investment on the oil and gas sectors. This can be done more efficiently with the simplification of procedures for everything with regards to our economy; we need to get rid of red-tape or bureaucracy. Red-tape breeds' corruption and this is why we are trying to implement transparency on a wider-scale. Last but not least, job-creation in proper, productive positions.

United World: Let's talk about the banking sector, which is a key area for foreign investors. Tell us a little bit about how it's changing.

Mr. Huwej: In principle and reality, we have no say in this sector; it's controlled by the governor of the Central Bank of Libya. What needs to be done primarily is the privatization of some of our banks, like Sahara and UMMA. There has been a reduction in interest rates, which needs to change. In the future we are looking to bring in international investment banks. This will take place in the next two years we hope, because we need time to rehabilitate our local banks; we are still too weak to compete in this sector with foreign banks.

United World: You are a well-known financial figure around the world and you are the former chairman of the Libyan Arab Foreign Investment Company. How does it feel to change from investing Libyan money abroad, to bringing in foreign investment into the country?

Mr. Huwej: I have become more aware of what the business community needs in my position here. Both jobs have been complimentary for the most part however.

United World: Do you think that Libya is a suitable environment for American investors?

Mr. Huwej: Libya is suitable for any investor. I know Americans to have good management, which is something we need to improve on here a lot. They are also very experienced in the oil and gas sector, which is our most lucrative sector here. The only existing obstacle lies with the American administration; they need to take us off the list of terrorist-sponsor states. There are a lot of regulations on American businesspeople that want to invest in Libya because of our placement in that list. People don't like complications; they just won't do business here so long as we are on that list. We hope that your readers realize that there is no reason for us to be on that list.

United World: Thank you very much for your comments.

Mr. Huwej: Thank you.