The UK is committed to helping the Transitional Government, and any future government, to rebuild Libya. This conference has been designed to look at the practical ways in which UK businesses can use their expertise to make this happen.
And I welcome the interest of every one of you who has made the time to be here today. I know that the majority of you represent small or medium-sized firms, and I’m aware that your time is very valuable.
Less than 3 months ago, I visited Tripoli as the first foreign trade minister to go to Libya since the revolution.
I was following in the footsteps of Prime Minister David Cameron and Foreign Secretary William Hague, who had visited earlier in September. And I was accompanied by UK Trade & Investment’s Edward Oakden and a small business delegation.
We were met at the almost deserted airport by Libyan officials, with the words “Welcome to Free Libya”.
As we drove half an hour into Tripoli, I was surprised to see how normal everything looked. There were some evident signs of destruction, you saw check points and some AK47s, but there was a large amount of traffic, and some brilliantly colourful and well-executed graffiti.
But over the next few hours, as we met ministers and officials, the scale of the challenge facing Libya became apparent.
There was a need to restore fuel supplies, get medicine into hospitals, and completely rebuild infrastructure that had been destroyed or degraded - not just in the conflict but in the preceding years as well. Some parts of the country, such as Benghazi, had suffered from underfunding for decades.
We were welcomed very warmly, and I was struck by how keen the Libyan authorities were to work with the British. It was clear that UK companies, with their expertise, innovation and ethical approach to business, can provide real help to the Libyan people as they rebuild their country.
Libya’s liberation was finally declared on 23 October and, a few days later, the National Transitional Council appointed Abdul Rahim Al Kib as Prime Minister.
In forming his interim cabinet, the new Prime Minister has had to achieve a balance in the distribution of power to ensure that the new Transitional Government is fully inclusive.
There has been a complete change of key personnel and the new cabinet members are largely technocratic and secular. But it is a government that is facing considerable challenges.
The immediate focus is on pulling together next year’s budget. With oil production at a third of pre-war levels, Prime Minister Al Kib has called on the international community to unfreeze Libyan assets to allow the Government to plug the financial gap. Enough assets have been unfrozen to cover immediate needs and liquidity has now largely been restored. But there is still more to do.
At the political level, the UK is doing all it can to help. We fully understand that the immediate priority for the Libyan authorities is in restoring security and meeting humanitarian needs. But we also know that getting the Libyan economy up and running is essential for its long-term political stability, and that getting assets unfrozen is a priority.
The UK is engaging with the Transitional Government and international partners as a matter of urgency to ensure funds are accessible while the requirements for transparency and accountability are met.
With the Treasury and DFID, we are urging the International Monetary Fund to provide support for reforms to the Libyan Public Financial Management system, and are looking to provide UK technical experts to work with Libyan institutions.
This high level political activity is essential and ongoing, but you may well wonder why it matters for your firms. Well, our advice, when it comes to doing business with Libya, can be summed up in the words: “strategic patience and persistence”.
What do we mean by this?
Shortly after my return from Libya, UKTI held a conference attended by 150 businesses. Some of the speakers from the floor were concerned about delayed payments on contracts and property damage caused during the conflict. They wanted to be paid, and they wanted to paid now.
These are very reasonable concerns, and I should say here that the Libyan authorities have repeatedly pledged to honour all existing contracts that were legally won. We’ve not seen any reason to doubt them on this promise, and it is one that the UK government will continue to remind them of.
Other speakers at the conference looked at the situation from a different point of view. These were businesses that had been operating in Libya for up to 40 years. They had enjoyed decades of stable growth in this market followed by a comparatively short period of disruption. Their message to fellow conference delegates was that, despite the current challenges, Libya was worth the persistence and worth the strategic patience.
I am convinced that it’s in the UK’s interests to build a long-term relationship with Libya. It is home to about 6 million people – a little more than Scotland. Its economy is expected to rebound strongly from the conflict, with the UN forecasting growth rates of 4.2% - well above the international average. It is a beautiful country with a proud history and great potential for tourism.
Libya has 5 UNESCO World Heritage sites, including the remarkable city of Leptis Magna, founded by the Phoenicians in the 10th century BC, and some of the best beaches in the Mediterranean.
We have strong personal links. There are more Libyans living in the UK than anywhere else outside of Libya. If you were passing by the Edgware Road a few weeks ago, you would have been caught up in the large crowds celebrating liberation.
But it also a country where the post-conflict reconstruction programme is going to require spending of $200 billion over a ten-year period.
The Transitional Government is not expected to sign any large long-term contracts before the elections planned in eight months’ time, with the exception of those projects required to meet the most urgent needs.
Our approach is to work with the Libyan authorities now to identify the sectors where they say they need help. That’s why when UKTI sent a healthcare mission to Libya this week, we asked the Libyans in advance what they wanted. Their specific request was for strategic advice on how to set up a healthcare system. Their priority was rehabilitation for people hurt in the conflict and trauma care.
So UKTI put together a mission of firms and experts who held meetings at the highest levels – in the Ministry of Health and with the Head of the Ambulance Service, for example - to understand the challenges and to scope out requirements. It is paving the way for a larger mission that will go to Libya, led by British Business Ambassador Lord Darzi, one of the world’s leading surgeons.
It’s this approach, rather than rushing in with hastily assembled, and not always welcome. trade missions, that will help the UK to win business in the long-term.
Healthcare is just one of the sectors identified by UKTI where our firms can make a difference. I understand that you will be joining workshops after lunch to look at these specific areas in more detail: airports and ports, education, infrastructure, oil and gas, health and civil security.
To help realise this business, UKTI is back on the ground in greater numbers than before. We have sent over 3 extra members of staff from the UK and are recruiting more local employees. Operating out of a hotel room, they have been working hard: building relationships with the Transitional Government; scoping opportunities; representing the interests of existing business investors.
They have also agreed a limited system of visa waivers for trade missions and VIP visitors, and will have greater capacity once the Embassy moves this month into more permanent offices.
UKTI has already engaged with over 500 businesses interested in working in Libya and we have an ambitious programme of trade missions planned. I hope you will be signing up for these.
It is also setting up a UK-Libyan CEO Taskforce, so that senior business leaders on both sides can help drive business alliances that extend beyond specific deals into enduring partnerships.
And my Foreign Office colleague Alistair Burt has just been in Libya where he has relaunched the British Council’s operation. Education is one of the areas where we can really make an impact in Libya.
Clearly, achieving stability will take time. However, I believe that we should plan for the future, ensuring that UK business gets its due diligence done now.
It is, of course, essential that companies return to Libya once the situation on the ground allows, not only to pursue new business but also to recover assets and to collect payment on existing contracts.
Due to the magnitude of the reconstruction work required, companies will need to think imaginatively about working with other British, Libyan and international partners, such as the Emiratis or Turkish firms, in triangular partnerships on larger projects.
I would urge you to look carefully at the new products offered by UK Export Finance, the former ECGD.
Now available to companies of all sizes, UK Export Finance can offer insurance against non-payment on overseas contracts, and can help small and medium-sized firms to obtain the working capital that will enable them to fulfil large orders.
Like any type of insurance, this cover needs to be taken out in advance. However, the risk capacity for Libya has been increased to £375 million which clearly demonstrates that there is a sizeable chunk of cover available.
My thanks today go to the Libyan British Business Council, British Expertise and the Middle East Association for supporting this event. It is by working in partnership that we can succeed in helping business. A great deal remains to be done by the Libyans to translate the success of the revolution into stable, long-term governance and economic development.
I would like to take this opportunity to reaffirm the commitment of the British Government to help the Libyan authorities at every stage of this journey. There will, of course, be bumps in the road, but I am confident that the Libyan people will enjoy the prosperous and stable future that they richly deserve.
We have a great interest in investing in the partnership between Britain and Libya. It is a partnership for the long term, and it is a partnership from which I hope you will all benefit.