LIBYAN PRIVATE SECTOR LOOKS TO SAIF AL-ISLAM FOR STABILITY

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 001035

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E.O. 12958: DECL: 12/23/2019
TAGS: PGOV ECON LY EFIN EPET EINV
SUBJECT: LIBYAN PRIVATE SECTOR LOOKS TO SAIF AL-ISLAM FOR STABILITY

TRIPOLI 00001035 001.2 OF 002


CLASSIFIED BY: Gene Cretz, Ambassador, U.S. Embassy Tripoli,
U.S. Department of State.
REASON: 1.4 (b),(d)

1. (C) Summary: Several leading Libyan businessmen view Saif
al-Islam al-Qadhafi's new role as "General Coordinator" of Libya
as a positive development. They believe his appointment will
ensure stability and continuity, ending the infighting of recent
years. They believe Saif al-Islam is a logical choice to lead
Libya due to his western education and pro-reform agenda, and
note that Saif has been groomed for this position for several
years. He reportedly has a system in place to receive daily
report on his siblings. Well-connected contacts believe Saif's
new position will be formalized in mid-January. They are
hopeful that, once formalized, his new role will end the recent
chaos in Tripoli's commercial scene, which one regime insider
attributed to the political uncertainty following Saif''s
nomination as General Coordinator in early October. If Saif
does try to implement reform, he is likely to face resistance
from Libya's entrenched elite who have benefited from a business
environment based on tribal ties and proximity to the regime.
End summary.

LIBYAN BUSINESSMEN THINK SAIF IS A GOOD CHOICE~


2. (C) Several prominent Libyan businessmen positively view
Saif al-Islam's new position as they believe it will promote
stability and ensure continuity after Muammar Qadhafi is no
longer on the scene. In a recent meeting between emboff and
members of a leading Benghazi-based family with significant
business interests throughout Libya, the family said the formal
naming of Saif as a "General Coordinator" of Social Committees
could create stability after the past few years of uncertainty
and infighting amongst the Leader's children. According to the
family's patriarch, the actual title of "Coordinator" is
"meaningless." He said one could see a genesis for the position
as far back as the late 1990's when the regime was faced with
many anti-Qadhafi plots emanating from various tribes in Libya.
In response, the Leader created "Peoples Social Committees" to
deal with the "trouble-makers" within the tribal structure.
This family believes Saif's appointment to this new position
will help the Libyan Government prevent the rise of some sort of
Muslim Brotherhood extremist group, or tribal infighting in
support of different other al-Qadhafi siblings.


3. (C) Another prominent Libyan businessman said that Muammar
al-Qadhafi had appointed Saif al-Islam to this new position in
order to ensure continuity for when he is gone from the scene.
Saif was "the logical choice" because he is well-educated,
well-respected, and is reform-minded. In his view, Saif is
"good for the future of Libya" since he is interested in
attracting foreign investment to Libya and creating a modern
Libya inspired by Dubai's model.

~AND BETTER THAN THE ALTERNATIVES


4. (C) Of the Leader's seven sons and one daughter, Libyan
businessmen prefer Saif al-Islam as he is more of a known
quantity. One businessman commented `the devil you know is
better than the one you don't know.' According to one
businessman, Saif is better-prepared to replace his father as he
has positioned himself for such a leadership role for several
years and reportedly gets daily reports on the activities of all
of his siblings. As for al-Qadhafi's other son and National
Security Advisor, Muatassim, he characterized him as
"blood-thirsty" and violent. The rest of Muammar al-Qadhafi's
children are simply "incompetent" and only interested in lavish
life-styles.


5. (C) Members of the Benghazi-based family believe Saif is
well-known to the average Libyan due to his visibility in the
media and his speeches to Libyans, especially youth. They echo
the comments of a Tripoli businessman (cited above) that the
elder Qadhafi had long been preparing Saif al-Islam for his new
role as "General Coordinator," by sending him to the West for
his studies. Other Qadhafi sons have not lived or studied in
the West. The head of the business family believes Saif should
now "get rid of his immature friends," who continue to exert a
bad influence on him. A relative of his commented that many
Libyans perceive the U.S. to favor al-Qadhafi's other son,
Muatassim, citing his recent trips to the U.S. He noted Libyans
did not really know Muatassim, i.e. what his personality is, or
even what he looked like, perhaps because as a "security
person," Muatassim was rarely seen by the Libyan public.

WILL SAIF TAKE THE JOB?


6. (C) Although Saif has not officially "accepted" his new
position as "General Coordinator," this head of the prominent
Benghazi family believes Saif has given his tacit acceptance.

TRIPOLI 00001035 002.2 OF 002


He noted that in the past, Saif has always publicly stated his
views on issues, such as when he said he would step down from
public life in August 2008. This time, however, he has not said
anything about the new position, which our contacts interpret to
mean Saif has agreed to the new role.


7. (C) Contacts in Tripoli, including the well-connected son of
one of the Free Officers, those officers who have been with
Qadhafi from the beginning, have told us that Saif is expected
to formally accept his new position around the middle of
January. The Free Officer's son told us that Saif al-Islam has
spent the last two months consolidating "his team," identifying
key advisors who will be able to promote his agenda. This
contact believes that Saif's vision for Libya is strongly
pro-reform and pro-Western.

HOPE THAT SAIF CAN CREATE ORDER OUT OF A CHAOTIC URBAN
DEVELOPMENT SCENE


8. (C) Libya's small private sector is hopeful that Saif will
be able to impose some order to the chaos and uncertainty that
has wracked Tripoli's business environment in recent months. As
a result of construction projects and arbitrary closings of
businesses, one major department store was recently closed for
several weeks, along with 31 other shops along the popular
shopping street of Gagaresh. The owner of the store estimated
this affected 2,000 employees of these shops, along with their
families due to lost wages. He said the ostensible reason the
Tripoli municipality gave was that the entire area was not a
"commercial zone" and so no shops were permitted outside of a
small section of downtown Tripoli according to a rule enacted in

1978. He noted that the 1978 law is totally out-of-date and
many shops have sprung up in response to the growth of Tripoli
suburbs. These shops have permits to operate and their owners
pay taxes so it does not make sense that they would be shut
down.


9. (C) Another businessman noted that several shopping malls
are being built by Libyan government joint ventures but that no
malls are yet finished. He wondered why there was a rush, then,
to reduce competition from shops outside the malls? He pointed
out that shops in another area of Tripoli, Souk Talat, had also
suddenly been torn down but that there had been no thought to
relocating these businesses. As a result, many small business
owners, primarily in the car parts and hardware businesses, have
seen their livelihoods disappear. Lastly, a lack of
coordination among the various commercial development projects
means that the developers for one shopping mall were unaware
that another mall was being built only one kilometer away from
their property. The son of one the Free Officers, himself a
business owner, attributed the recent commercial turmoil and the
apparent wanton destruction gripping Tripoli to the overall
state of political uncertainty following Saif al-Islam's
appointment as General Coordinator in October. He believes the
situation will improve once Saif's position is formalized.


10. (C) Comment: While the majority of the prominent
businessmen we surveyed were hopeful about Saif al-Islam's
prospects to effect real change, others are less sanguine.
Although he is western-educated and has a history of advocating
for reform, Saif al-Islam also is a product of a highly corrupt
system that has been in place for 40 years. If/when he does try
to implement political and economic reforms, he undoubtedly will
face significant challenges from entrenched elites who have
benefited from a business environment based on tribal ties and
proximity to the regime. It may be that his visible appearance
at the planeside scene where convicted Lockerbie bomber Abdel
Megrahi was welcomed home reflects Saif's (and perhaps his
father's) realization that these interests need to be taken care
of, even at the cost of sometimes alienating Libya's Western
interests. End comment.
CRETZ