Turkey & Libya: It's The Economy, Stupid!

türkçe links to original Turkish article

(Milliyet Newspaper, 19 January 2020)


                           They're closer than you think.

With the development of closer relations between Turkey and Libya
lately, the Turkish business community has become energized and
the construction sector, in particular, is following events carefully.
This is because, with the breakdown of internal law and order there,
Turkish contractors have suffered $4 billion in losses due to half-
finished projects and equipment left behind.

Turkish businesses, from foodstuffs to furniture and from textiles to
medicines, see Libya as a plump market in the event of a cease-fire.
In fact, there are some company representatives who have their
suitcases already packed, with the prospect of a settlement in Libya.
DEİK (Foreign Economic Relations Council)'s Turkey-Libya Business
Council (TLBC) is planning to send a 50-person delegation to the
country immediately after the cessation of hostilities.


                     Doesn't look good for the home team...

Murtaza Karanfil, the TLBC Chief who has worked with Libya for
32 years, explained Libya's potential as follows: "There is a population
of 6 million in Libya but they consume like there are 600 million. (!)
Qaddafi reduced the populace to beggars with government hand-outs
and imports were forbidden.  Only the state could import and then sell
to the people."

"When Qaddafi was overturned in 2011 the market was freed and
Libyans began to buy whatever they wanted.  For example, at that
time, the Turkish furniture sector exploded with sales in the country. 
But when Hafter (opposition warlord) came on the scene in 2014,
consumption fell."

With regard to Turkey's effort to secure a cease-fire, Karanfil said
that "if stability can be established there, then Turkish exports to
Libya will reach $10 billion because the country needs everything
and we can export it all there."  In fact, just last year there was a
29% increase in Turkish exports to Libya, worth $1.8 million.



                          Cockeyed optimist Karanfil. 

Karanfil commented on logistics vis-a-vis Turkish exports to central
Africa in this way: "Under current conditions, Turkish goods for
central Africa go through the Suez Canal and from the Red Sea
coast to the interior, requiring 1.5 months for transit.  This is both
long and expensive.  Whereas, it's a 3-day cruise to Libya from
Turkey.  The Libyan government gives its state airlines fuel for
a sixth of its cost, so transit fees are reduced and Turkish goods can
reach central Africa in 4-5 days."

With regard to workers, Karanfil opined that Libya will need
10 million foreign workers once stability is established and he
noted that "it's cheaper to produce goods in Libya than it is in
China.  Real estate and energy are just about free and there are
African and Chinese workers who will work for a dollar a day. (!)
Someone setting up a factory in Libya would get his money back
in two years."

As for the suffering Turkish construction companies, Karanfil
stated that "on 30 January, our Trade Ministry and the Libya
Planning Ministry will discuss an agreement which includes
solutions for refunding cash, returning machinery and other
guarantees.  I'm hopeful that we can ameliorate our contractors'
woes."


                              Ahhh, the good ol' days.