Libya to open banking sector to Arab investors

Dec 14, 2004 01:00 AM

Libya is seeking to liberalise its banking industry by first opening up the sector to Arab investors and privatising two major government banks, it was revealed by Dr Shukri Ghanem, Libyan Prime Minister, on the second day of the on-going Arab Strategy Forum. At a session devoted to Libya titled "Libya: The Vision for the Future", Dr Ghanem said that the Libyan market is now in a position to take-on competition from international banking companies.
"We will first start with Arab banks while at the same time privatise two major banks," he told the audience.

On the telecommunications sector, Dr Ghanem said Libya is currently focused on restructuring its monopoly telecom service provider.
"We will initially give a chance to local and public investors and later consider opening the market to international companies." However, he said, this will not happen in the short term.

Dr Ghanem also talked about the need for the Libyan economy to reduce the dependence on oil revenues.
"Oil revenues should be used to provide a reserve for the economy. Government must find ways to stop depending on oil as the main source of income and look for alternative sources."
"We believe that oil revenue should not support the whole economy, he said. "Oil should be used as an engine for growth," he added. "Libya, realizing that oil won't last forever, is now seeking to find alternative sources and develop new industries as well as utilize oil resources in the most profitable way," he said.

Dr Ghanem said Libya is looking at creating funds with oil revenue that could be used to generate more economic activity and growth as well as build new infrastructure. This fund, he said, could also support the development of ideas into business projects and thereby become an engine of growth. He talked about how oil revenues have been managed poorly by many countries.
"Some of the poorest areas of the world quickly acquired oil wealth. Though it solved many problems, the resource itself became a problem because the management of revenues was not good."

On the question of oil prices, he said that oil prices should be de-linked from any conflict. Libya, he said, has its own reading of oil prices.
"We have to protect prices and have to set a minimum price." He dismissed the impact of the search for alternative sources of energy on oil process.
"Some alternatives have emerged but they are not likely to lead to an immediate reduction in the role for oil," he said.

Source: Emirates News Agency
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