BENGHAZI'S ARRESTED DEVELOPMENT

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000573 SIPDIS E.O. 12958: DECL: 10/3/2016 TAGS: ECON ETRD EIND LY SUBJECT: BENGHAZI'S ARRESTED DEVELOPMENT CLASSIFIED BY: Elizabeth Fritschle, Pol/Econ Chief, United States Embassy, DOS. REASON: 1.4 (b),(d) ¶1. (U) Six months after a deadly riot at the Italian consulate that left more than a dozen killed, Econoff made a quick swing through Libya's downtrodden second city on September 13-14, accompanying a two-person team from the Commerce Department's Bureau of Industry and Security (BIS). ¶2. (C) Upon arrival from Tripoli, one is immediately struck by Benghazi's slower pace. Benghazi doesn't appear to have the constant crush of cars common to Tripoli's streets, lending a relative quiet to the city. The disparity of wealth compared with Tripoli is obvious, and most clearly marked by the cars on the road. New black and white cabs are nearly impossible to find, and other vehicles are severely dilapidated and sand-blasted. State-funded infrastructure appears on a par with the Tripoli, and the streets are not as choked with rubbish. On the other hand, signs of new housing construction are deceiving. Contacts reported that work on several large apartment block developments has been on hiatus for many months; their cinderblock and rebar husks loom forlorn and half-finished. A major bridge connecting the city has been closed for years, with rumors of imminent repairs stretching to fill the time. ¶3. (C) A quick inspection of the Italian consulate, epicenter of the mid-February riots, made plain that it would not be opening for business anytime soon. Anti-Italian and anti-Danish graffiti remain on the walls, which are smoke-blackened and pock-marked. Most of the structure's windows remain broken, and the interior of the building is charred and filled with debris. The streets in the immediate vicinity of the consulate appear unblemished, with no signs of damage. The ravaged building was guarded by three uniformed military police officers (the only uniformed security presence visible on the streets during the two-day stay). ¶4. (U) Visits to both high-end (Dubai Street) and working-class (Eshreen Street) shopping districts highlighted the penchant for business commonly ascribed to the port city. Unlike Tripoli, billboard ads are plentiful, and smaller postings dot every major street. Many of the Dubai Street shops could be transplanted into Western European commercial districts and fit right in. Foot traffic on Eshreen Street was heavy, and the shops appeared well-stocked and orderly. A favorite of Econoff's, among the myriad clothiers featuring bridal gowns, was a second-floor shop's display window, in which the half-dozen lace-wrapped mannequins had their backs turned to the street for modesty. ¶5. (U) Econoff paid a visit to the "Small and Medium Projects Fair" being held in a small industrial park close to the city center. The exhibition was in its final day, but the full selection of eighty-odd vendors was still up and running. Intended to highlight Libyan private companies, the fair showcased about sixty Libyan private and public entities, with Egyptian companies making up the bulk of the remainder. Most booths hawked construction services and materials, oil industry support services and agricultural products. Agents for a handful of large foreign companies (Sanyo, LC, Bobcat) had displays, but the most eye-catching displays belonged to several Libyan manufacturers of Technicolor living room furniture molded out of open-cell foam. ¶6. (U) Exhibition organizers "International Jerma Expo for Exhibitions and Conferences" arranged for display booths in a long run of air conditioned storage containers, spruced up with carpeting, ceiling adornments and additional lighting. The event was well-organized, but sparsely attended - there were easily more booth attendants than visitors. Jerma Expo is also the organizer for a number of other exhibitions to be held in Tripoli over the coming months: an Agricultural Fair (11/27-30), Water and Sewage Equipment Fair (1/29/07-2/1/07),Small and Medium Project Fair (6/1-5),and Safety and Security Fair & Electronics Technical Fair (6/11/07). ¶7. (C) Embassy Comment: Benghazi has reportedly been calm and quiet since the Danish cartoon riots and killings in February 2006. As noted by Econoff, there are not signs of a security presence in the city that would indicate any lingering tension after the unrest of last winter. Benghazi natives resident in Tripoli frequently complain that Benghazi has second class status. While the Jamahiriya government does take care to maintain an appearance of equity in the distribution of government funds and projects, the city lacks vitality or hopefulness. While the General People's Congress (GPC) recently announced plans for a major commercial development in Benghazi, three major free zones are planned for the Misrata area that could potentially overshadow any revitalization in Benghazi. And the GPC also announced the creation of a large "special zone" under the direction of the Leader's son, Saadi Qadhafi, in the area of BuKammash west of Tripoli and Zwara. This special zone is rumored to be a new major tourism project, although (in classic Libyan contradiction) there are also rumors that it will include manufacturing and some aspects of energy production since it may have its own airport, customs officials and security force. Italian Embassy Political Counselor told P/C Chief on September 28 that the Italian consulate would not be reconstructed in the near future. They are concentrating their efforts on a major reconstruction of their Tripoli Embassy building. End comment. GOLDRICH SIGNATURE