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French Version

Libya to reform economy but political structure stays intact

Gadhafi has no plans to step down

Libya, opening up to the world after decades of isolation, is aiming to dismantle the controlled economy with its waste and corruption but leave untouched the political bodies dominated by Moammar Gadhafi.

In a country noted for the difficulty of divining its intentions, the dual-track was signaled in two major events this month.

The first confounded forecasters of political change, the second put in place a more transparent streamlined approach to the mainstay of the north African country's economy - oil.

As Libya celebrated the 35th anniversary of the Sept. 1, 1969 coup led by Gadhafi that toppled King Idriss, many expected the announcement of unprecedented political reforms.

But in a commemorative speech in his hometown of Syrte before hundreds of members of the country's "People's Committees," Gadhafi neither touched on a possible nomination of a state president who would supervise the government's work nor hinted at anyone who might succeed him. Gadhafi is not officially the head of state, seeing himself as Libya's "guide." His 31-year-old son, Saif al-Islam (Sword of Islam) who persistent rumors - regularly denied - see as Gadhafi's heir, also showed himself to be especially discreet during the Sept. 1 celebrations. He did not even appear three days afterwards for a ceremony putting a definitive end to the saga of the 1986 bombing of a Berlin nightclub even though Saif's charitable foundation, the body involved in compensating the victims of the bombing, signed the accord.

But the path for economic reform has already been clearly signposted.

Tripoli has set out the terms for foreign companies to obtain oil exploration rights for 15 blocs in the country and offshore, using a transparent bidding process aimed at wooing foreign investment for its sanctions-ravaged industry.

Some 20 international oil majors attended. A further presentation is to be held in London on Sept. 15 after which companies not already operating in Libya will be required to make a formal expression of interest by Sept. 28.

The process aims to draw a line under an arcane and much criticized system of direct talks with individual oil companies that previously governed the upstream sector in Libya.

But investors flying in to the vast country will be left in no doubt about Gadhafi's domination of the life of the nation.

His portrait hangs everywhere at the international airport, on public buildings, at the entrances of hotels. "You are the expression of loyalty, we can only be loyal to you" read streamers slung over the main arteries of the capital.

In June 2003, Gadhafi carried out an almost public sacking of his prime minister Mbarek Echamekh, accusing him of having slowed up privatization. Gadhafi then appointed Shukri Ghanem, a US-trained economist and oil specialist, and gave him a free hand to carry out deep-seated reforms in the economy and prepare it for the free-market era.

"The authorities cannot carry out economic and political reforms at the same time, without risking a loss of momentum. They have given priority to the economy," said one Western diplomat.

An Arab diplomat commented: "In Libya, the prime minister and ministers are the lightning rods who have to submit to criticism without protest and accept failures in silence, while those who are responsible for them are other people. The source of power is higher up."

For Gadhafi, the "People's Committee" state is above power struggles but not immune to battles for influence, being a source of waste and corruption in the distribution of public wealth - failings he has often denounced. In his Sept. 1 speech, Gadhafi reiterated his faith in the "state for and of the masses," prophesying the "end of capitalism, imperialism, representative democracy, exploitation and repression" and their "replacement by people's socialist Jamahiriya."

He urged the United States to change, returning power to the people through congress and people's committees, so that a powerful America would have something to offer to the world.

Beirut,09 13 2004
The Daily Star
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