VZCZCXRO5881
PP RUEHTRO
DE RUEHTRO #0901/01 3251604
ZNR UUUUU ZZH
P 201604Z NOV 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 4152
INFO RUEHFR/AMEMBASSY PARIS PRIORITY 0616
RUEHLO/AMEMBASSY LONDON PRIORITY 0929
RUEHMD/AMEMBASSY MADRID PRIORITY 0032
RUEHRO/AMEMBASSY ROME PRIORITY 0474
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHEG/AMEMBASSY CAIRO PRIORITY 1294
RUEHTU/AMEMBASSY TUNIS PRIORITY 0661
RUEHTRO/AMEMBASSY TRIPOLI 4674

UNCLAS SECTION 01 OF 02 TRIPOLI 000901 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG; ENERGY FOR GINA ERICKSON; COMMERCE FOR NATE 
MASON 
 
E.O. 12958: N/A 
TAGS: ECON PGOV LY
SUBJECT: LIBYA'S MINISTRY OF ECONOMY AND TRADE WELCOMES COOPERATION 
WITH U.S. 
 
¶1.  (U)  Summary: In a meeting with visiting NEA/MAG Director 
Stephanie Williams, Under Secretary for Economy, Trade and 
Investment Taher Sarkaz emphasized the importance of U.S.-Libya 
cooperation and outlined steps his ministry taking to facilitate 
trade and investment.  Libya is keenly interested in technical 
economic assistance, particularly in the area of small- and 
medium-sized business development, which the GOL views as a key 
potential area for future growth.  Sarkaz commented favorably on 
the U.S.-Libya Trade and Investment Framework Agreement (TIFA) 
currently being negotiated, and expected it to be finalized 
soon.  Williams highlighted the importance of capitalizing on 
the new period of bilateral cooperation ushered in by 
implementation of the U.S.-Libya claims agreement and 
underscored U.S. interest in pursuing further cooperation on 
economic and trade issues.  End summary. 
 
¶2.  (U) Visiting NEA/MAG Director Stephanie Williams, 
accompanied by A/DCM and Econoff, met with Under Secretary for 
Economy, Trade and Investment Taher Sarkaz on November 6. Sarkaz 
stressed the importance to the GOL of U.S.-Libya cooperation in 
the areas of economy and trade.  Citing various studies the 
General People's Committee (ministry-equivalent) for Economy and 
Trade had undertaken with assistance from the World Bank and 
private consulting firms, he said the GOL is keenly focused on 
facilitating greater trade and developing Libya as a more 
attractive destination for foreign direct investment (FDI). 
Those efforts were informed by a desire to diversity to the 
extent possible Libya's economy, which was largely dependent on 
oil and gas. 
 
¶3.  (SBU)  Sarkaz said the ministry had focused in the last 
several years on easing rules governing the establishment of new 
companies, a subject in which he was personally interested.  Of 
particular concern were efforts to expedite the entry of new 
foreign investors into the market, including introduction of new 
laws that would allow foreigners to own 100 per cent of their 
investment projects in Libya. (Note: Investors are currently 
required by law to have a Libyan partner; the percentage of the 
joint venture that must be Libyan-owned varies by sector.  End 
note.).  He noted that the minsitry had facilitated the issuance 
of a law that allows Libyan nationals to invest their own 
capital in Libya and offers them incentives on par with those 
offered to foreign investors. (Note: In a hangover from Libya's 
more revolutionary period, there were until recently tight 
strictures on the types of economic activities, particularly 
those related to investment, that Libyan citizens could 
undertake.  End note.)  Noting that the ministry was heavily 
involved in privatization efforts, Sarkaz said the General 
People's Committees were under instructions to help shift the 
focus in Libya's economy from the public to the private sector. 
(Note: In a separate meeting, the Secretary of the GPC for 
Manpower, Employment and Training recently told us that the GOL 
was working to reduce the number of public sector employees from 
one million to 130,000 in the net 3-5 years.  End note.) 
 
¶4.  (U)  Pointing to the Misurata Free Trade Zone (located east 
of Tripoli), Sarkaz also discussed efforts to create a law 
governing free trade zones to help promote Libya as a transit 
hub between Europe and Africa.  Efforts are underway to 
establish a parallel free trade zone west of Tripoli in the 
Zwara-Abu-Kammash area, a project headed by Saadi al-Qadhafi, a 
son of  Muammar al-Qadhafi.   That project is particularly 
important since a large percentage of Libya's trade flows across 
its western border with Tunisia.  In addition, Libya was working 
to develop its port and transport infrastructure to enable it to 
better capitalize on its long coastline and proximity to 
south-central Europe. 
 
¶5.  (SBU) Addressing Libya's needs for technical assistance, 
Sarkaz said there is a great need for Libyan economic experts to 
visit the U.S. and learn from their American counterparts, 
particularly with respect to helping grow the small and 
medium-enterprise sector.  Sarkaz also expressed interest in any 
help the U.S. could provide in helping make the GOL more 
efficient and eliminate the waste of public funds.  He 
acknowledged that Libya needed to modernize its customs 
authority, ports authority, tax system and banking system to 
underpin other reforms the GOL is pursuing.  He asked for U.S. 
assistance in introducing a computerized database to collect and 
analyze economic data, with the goal of providing up-to-date 
 
TRIPOLI 00000901  002 OF 002 
 
 
statistics to decision-makers and planning advisors. 
 
¶6.  (SBU)  Sarkaz noted that negotiations for a U.S.-Libya Trade 
and Investment Framework Agreement (TIFA) were underway, and 
that it was expected to be finalized soon.  Williams welcomed 
the news and underscored U.S. interest in further economic 
cooperation. 
STEVENS