Turks, Europeans Lead Charge On Libyan Investment
Originally published on Wed November 9, 2011 7:53 pm
Libya may be months from a new government, but the still-infrequent international flights to Tripoli are packed with businesspeople looking to land contracts with this oil-rich North African state. The Turks and Europeans appear to be moving quickly, while the Americans seem to be several steps behind.
On one recent afternoon, the plush Rixos hotel in Tripoli hosted hastily organized meetings between Libyans and a swarm of Turks representing 150 different companies.
Turkey has never been shy about doing business in Libya, handling tens of billions of dollars in projects for the regime of former dictator Moammar Gadhafi. Some of these businessmen are in Libya to check on existing projects, while others are looking to ink fresh deals with the country's new leaders, whoever they may turn out to be.
Huge Market — And Uncertainty
Ferzat Mercan is with Dorce, an Ankara-based contractor and manufacturer of prefab buildings that has projects in Kazakhstan, Iraq and Gadhafi's Libya. Still, Mercan says he prefers a transparent, free-market oriented government, and hopes that's what's coming to the new Libya.
"Libya is a huge market. However, we have elections in the near future, so many things [may] start slowly. But it will come," Mercan says. "The new government [is] not elected yet, [but it will come from] the center of the people — so when you work with them you feel more comfortable."
As trade meetings continue, so does speculation about which countries may become Libya's favored trade partners. Some suggest that Russia and China will face a cool reception, at least at first, for their opposition to the NATO air campaign in Libya. France, Italy and Qatar, early recognizers of the Transitional National Council, are expected to be viewed with favor, and the Germans also have strong oil and gas ties in the country.
Largely absent so far is the U.S. Amid the sea of Turks at the Rixos hotel gathering was a lone Libyan-American, Omar Khattaly, with a mergers-and-acquisitions company in Atlanta.
"There's tremendous opportunities in tourism, energy sectors, agriculture, construction [and] medical; the country needs hospitals," Khattaly says. "And I think the American businessmen do need to be here. Everybody's asking."
Long-Term Opportunities Outweigh Short-Term Risks
Not everyone is in a hurry. Analysts note that only a limited number of infrastructure contracts are likely to be awarded in the short term. Meanwhile, crucial regulatory and tax structures remain up in the air.
Yusuf Yildiz, commercial counselor at the Turkish Embassy in Tripoli, says even though the Turks are showing up early, they have an eye on the longer term.
"We see Libya, besides Egypt, as a gate to the other African countries as well. So that's why industrialization and development of Libya is a very important issue," Yildiz says.
For example, Yildiz says the state-owned companies created under Gadhafi are likely to be privatized now. He anticipates that foreign investors will still need Libyan partners, but hopefully under more transparent conditions.
"My opinion is they are going to set the regulations like the Gulf countries: at least [a] 51-49 partnership. That's the system that is going to be established. But it will take years for this," he says.
For the Turks and many others, the risks are worth it to obtain or regain a foothold in a country with lucrative resources and a burning desire to spread the wealth across a population long trapped under Gadhafi's boot.
GUY RAZ, HOST:
You're listening to ALL THINGS CONSIDERED from NPR News.
In Alabama today, the Jefferson County Commission voted to declare bankruptcy. The filing is estimated to be more than $4 billion, and it would be the largest municipal bankruptcy in U.S. history.
The county has been trying for three years to negotiate a settlement with creditors. Tanya Ott of member station WBHM joins us now from Birmingham for more. And, Tanya, I know this is complicated, but how did Jefferson County get into these troubles?
TANYA OTT, BYLINE: Well, Guy, Jefferson County is home to Birmingham, and it's the state's biggest county. More than 650,000 people live here. Now, many years ago, the county's aging sewer system needed to be replaced. The county took out some risky bonds to pay for that. There were some public corruption, which landed several county officials in prison, then, of course, it's ruined the down economy, and a budget shortfall. Even the governor of the legislature tried to intervene in recent months to broker a deal with Wall Street creditors. But the sides just couldn't agree, which led to today's decision to declare bankruptcy.
RAZ: And now, I understand that there have been months of negotiations between the county and creditors. Why did those break down?
OTT: You know, what no one knows at this point, the two sides had held marathon negotiating sessions. Even in recent days, the governor and state lawmakers had issued statements seeming to indicate a deal could be reached to avert the bankruptcy.
Now, under Alabama law, the state would have to sign off on any deal, and one of the plans would have sliced a billion dollars off what Jefferson County owed to Wall Street banks. It would have done that in exchange for higher sewer rates. Those talks broke down, though, because not all the region's lawmakers could agree on what to do.
RAZ: So what does this all mean for people living in Jefferson County and the rest of the state of Alabama?
OTT: Well, that's a really good question. At this point, no one really knows. The county already faces a massive budget shortfall because the court ruled that jobs tax was unconstitutional. That forced the county to lay off hundreds of workers, close some government offices. This is another blow to the region.
Now, late today, Alabama Governor Robert Bentley issued a statement saying that he's disappointed by the county's decision to file for bankruptcy because it would negatively hurt not only the Birmingham region but the entire state.
RAZ: Mm-hmm. So this is a done deal.
OTT: It appears that it is. The county actually follows through and filed bankruptcy, that means the county loses control of its financial affairs, and it goes straight into the hands of a federal bankruptcy judge. At that point, Guy, it's really anyone's guess how long this will take, how much it'll ultimately cost residents and how other folks around the country are going to view Alabama in light of what would be the largest municipal bankruptcy in U.S. history.
RAZ: Tanya, what about people who live in Jefferson County? I mean, you presumably are citizen of the county. What do people there saying about this? Presumably, it's embarrassing. But are people worried about what might happen?
OTT: You know, it is embarrassing, obviously. And people are concerned about what other folks across Alabama will think of Jefferson County and its residents, also what folks around the country will think of us. I think there's a little bit of fatigue, though. We've been hearing about this for, you know, three and a half years. This started back in 2008. And it seems like day in and day out, we've had newspaper articles and television reports and radio reports about sewer debt, about corruption, about bankruptcy.
This isn't the first time that we've come down to the wire on making a decision. This is actually the third or fourth time that we've come down to the wire in what we've called a bankruptcy watch here in Jefferson County. So, you know, I think for certain folks, at this point, it's a done deal. We know what's happened. And we're just going to let out a big sigh and figure it out from here.
RAZ: Tanya, thanks.
OTT: Thank you.
RAZ: That's Tanya Ott of member station WBHM reporting from Birmingham on the news that Jefferson County has declared bankruptcy, making it the largest municipal bankruptcy filing in U.S. history. Transcript provided by NPR, Copyright NPR.