NEW LIBYAN MINISTER OF ECONOMY VOWS TO STAMP OUT CORRUPTION; WELCOMES U.S. FIRMS TO INVEST

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000258

SIPDIS

STATE PLEASE PASS USTR; STATE FOR NEA MAG; ENERGY FOR GINA
ERICKSON; MASON AND HISHAM ELKOUSTAF; CAIRO FOR TREASURY LIAISON
ALEX
SEVERENS; LONDON AND PARIS FOR NEA WATCHERS

E.O. 12958: DECL: 3/24/2019
TAGS: LY, ECON, EAGR, EPET, EFIN, PGOV, ETRD
SUBJECT: NEW LIBYAN MINISTER OF ECONOMY VOWS TO STAMP OUT CORRUPTION;
WELCOMES U.S. FIRMS TO INVEST

REF: A) TRIPOLI 157; B) TRIPOLI 198

TRIPOLI 00000258 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: On March 24, the Ambassador met with
Mohammad Ali al-Hweij, the recently-appointed Secretary of the
General People's Committee for Industry, Economy and Trade
(Economy ministry-equivalent) to discuss economic and trade
issues as well as Libya's total ban on the import of
Caterpillar's equipment. Al-Hweij said Caterpillar needed to
find new agents in Libya (as the current ones were sons of
government officials) and welcomed the visit of a Caterpillar
representative and was confident the issue could be solved. He
also said Libya wanted U.S. firms to invest in export free zones
to help Libya diversify its economy away from oil. He pledged
his ministry's help in securing Libyan visas for American
companies. End summary.

CATERPILLAR BAN: SOLUTION IS MULTIPLE AGENTS AND NO RELATIVES
OF GOVERNMENT OFFICIALS

2. (C) Responding to the Ambassador's urging that the
Caterpillar issue had to be resolved expeditiously, Al-Hweij
said he was aware of the problem (ref A),explaining that it was
not acceptable for U.S. companies to have exclusive agents;
rather, the Libyans would prefer that Caterpillar work through
more than one agent and have multiple distributors throughout
the country. They would like to see at least three agents with
one each covering Tripoli, Miserata and Benghazi. He noted the
current Caterpillar agents were the sons of government
officials, which constituted "corruption" according to the law.
Al-Hweij welcomed the upcoming visit of Caterpillar's regional
manager, inviting him to come meet with him "anytime." The
Ambassador said he appreciated this approach and hoped the issue
would be solved before the expected visit of National Security
Advisor Muatassim al-Qadhafi to the U.S. so that a Trade and
Investment Framework Agreement (TIFA) could be signed. He also
welcomed Al-Hweij's confirmation that he would act across the
board against any commercial practices that violated existing
laws against corruption.

U.S. COMPANIES ARE WELCOME TO INVEST IN FREE ZONES

3. (C) Al-Hweij said Libya would like American firms to invest
in "industrial" zones, such as the Zwara Export Free Zone (ref
B),and that he was ready to discuss such projects and the
advantages for companies that invest. As for privatization,
Libya is processing privatizing 12 companies and expects to
complete this process by the end of the year. The only sectors
left to privatize are Healthcare and Education which are still
under the auspices of the government. He noted it would be
difficult to privatize universities since the professors were
considered government employees and it was not clear how they
could be given "shares" in their institutions.

AL-HWEIJ PLEDGES HELP ON VISAS

4. (C) The Ambassador informed al-Hweij that the U.S.
Embassy's consular section would be issuing U.S. visas to the
general public by the end of this month. Al-Hweij welcomed this
news and said he pledged his help on securing Libyan visas for
U.S. business travellers who want to come to Libya.

USG PROGRAMS: COMMERCIAL LAW DEVELOPMENT PROGRAM, U.S. TRADE
DELEGATION, AGRICULTURE

5. (C) Al-Hweij said the Department of Commerce's program to
improve the commercial legal environment fit into the Libyan
government's program of revising its laws, including commercial
laws. He said the possible visit of a U.S. lawyer with
expertise in this area would be helpful in reviewing their new
commercial laws. He encouraged more direct dialogue between
businessmen and government officials, commenting there should be
"no more Cold War!" He welcomed the visit of a high-level U.S.
Department of Commerce Trade delegation in November, as well as
the visits of U.S. Trade and Development Agency and the Foreign
Agriculture Service. He said Libya welcomed any assistance that
could help diversify its economy away from oil, and to increase
employment opportunities for young people who constituted half
the population. The influx of economic immigrants from
sub-Saharan Africa was another challenge for Libya.


TRIPOLI 00000258 002.2 OF 002


6. (C) Comment: The newly-appointed Secretary for Industry,
Economy and Trade appears determined to resolve the Caterpillar
import ban issue. The upcoming visit of the Caterpillar
representative will be a good test of whether al-Hweij, who
clearly understands the connection between this issue and future
commercial and economic relations with the U.S., will back up
his words with actions. His anti-corruption rhetoric is
refreshing and laudable if he really intends to apply it across
the board as he insisted. The ultimate challenge will come when
he confronts the extensive commercial corruption of the
political elites here, including that of the al-Qadhafi family
itself.
CRETZ