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RUEHTRO/AMEMBASSY TRIPOLI 4738

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000937 
 
SIPDIS 
 
STATE FOR EEB (EGAN); ENERGY FOR GINA ERICKSON; COMMERCE FOR 
NATE MASON; CAIRO FOR TREASURY LIAISON (SEVERENS) 
 
E.O. 12958: DECL:  12/10/2018 
TAGS: ECON ECIN ELAB EPET EMIN KIPR PGOV BBSR LY
SUBJECT: LIBYA'S  NASCENT BUSINESS INCUBATOR PROGRAMS A POTENTIAL 
AREA FOR BILATERAL ENGAGEMENT 
 
REF: TRIPOLI 917 
 
CLASSIFIED BY: John T. Godfrey, A/DCM, Embassy Tripoli, U.S. 
Dept of State. 
REASON: 1.4 (b), (d) 
¶1. (C)  Summary: In a recent roundtable discussion, experts at 
Libya's Economic Development Board (EDB) described their nascent 
Business Incubator Program to a visiting U.S. Commercial Law 
Development Program (CLDP) specialist.  The Libyan program seeks 
to support existing businesses and to create new small 
businesses in Libya, especially in non-hydrocarbon sectors, and 
includes a component for re-direction of former WMD scientists. 
The group discussed their efforts to reach out to other business 
incubators overseas, particularly in the U.S., and welcomed the 
CLDP's help in facilitating such contact.  A representative of 
the EDB noted that the Government of Libya (GOL) could fund 
visits to the U.S. by Libyan experts and asked for detailed 
proposals (CLDP is preparing the proposals and can help 
facilitate the visits).  End Summary. 
 
TECHNOLOGY INCUBATORS BEGET BROADER BUSINESS INCUBATOR PROGRAM 
 
¶2. (C)  In a meeting on November 18, Dr. Omar Annakou, head of 
Libya's Incubator for Technology and Innnovation (ELITE), 
explained the program to visiting U.S. Department of Commerce 
CLDP specialist Marc Tetjel and Econoff.  Annakou explained that 
the program began a year ago and focused on developing Libya's 
research capacity; it will expand with the opening of business 
incubators in the major cities of Tripoli, Benghazi and Sabha. 
Part of ELITE's original mandate was to help re-direct the 
efforts of scientists formerly involved in Libya's WMD 
development program.  In addition to laboratory facilities, 
there are several precision-tooling facilities that have largely 
been moribund since the GOL decided in 2003 to abandon its WMD 
programs.  (Note: ELITE was the original program; the related 
business incubators are related to ELITE, but are broader in 
scope. End note.) 
 
¶3. (SBU) The incubators will provide information and 
communication technology (ICT) services, office space, shared 
workshops, financial management training, assistance in 
developing links to financiers, business information, training 
in business management and help entering particular markets. 
Program managers are in negotiations with a Jordanian 
consultant, who will assist in establishing the incubators.  It 
is expected that the contract will be finalized in a month or 
two.  The EDB will also open "innovation centers" in 
universities, starting with al-Fateh University in Tripoli, and 
is working to create "maritime clusters" of companies along 
Libya's coast to develop fishing, boat-building and maritime 
environmental programs.  The maritime project is being developed 
in cooperation with a French program to link Libyan and French 
small businesses. 
 
GOING FROM PUBLIC TO PRIVATE ENTERPRISES 
 
¶4. (SBU)  Another expert at the roundtable stressed the 
importance of understanding how the incubators project fit into 
the broader history of Libya's economic refom effort.  He noted 
that Libya had experienced three decades of a state run economy, 
but was now undergoing a "drastic" shift towards privatization. 
(Note: As detailed in reftel and previous, senior GOL officials 
are currently debating whether and how to implement a dramatic 
program of government re-structuring and privatization 
articulated by Muammar al-Qadhafi in his March 2008 address to 
the General People's Congress.  End note.) In his view, Libya 
had relied on oil and gas to an extent that was unhealthy and 
should focus on diversifying economic activity in tourism, 
transit, ICT technology, solar energy, and petrochemicals.  He 
flagged silicon production as a potential area for investment, 
noting that there is quartz in Libyan sand, and said no U.S. 
companies were presently working in that sector.  The GOL's 
ultimate goal is that non-oil and gas activity will eventually 
account for 50 per cent of Libya's GDP. (Note: This will be a 
stretch.  The GOL's official figures claim hydrocarbons 
currently account for about 70 percent of Libya's economy; 
however, external sources put the figure at 90 percent or more. 
End note.) 
 
LIBYA NEEDS HELP DEVELOPING SMALL BUSINESSES AND IN IPR 
ENFORCEMENT 
 
¶5. (SBU)  The director of planning for the program, Dr. Ramadan, 
praised the U.S. as "pioneers" in the idea of business 
 
TRIPOLI 00000937  002 OF 002 
 
 
incubators.  The GOL is currently trying to transform the 
collective mindset of Libyans and is looking at models from 
other countries, including the U.S. Junior Achievement program 
targeting young people.  Rather than importing foreign programs 
wholesale, the GOL is looking at how Jordan has tailored 
programs to its specific culture and needs.  Noting the 
U.S.-Libya Science and Technology Agreement signed in January 
2008, Ramadan suggested that some U.S. support for Libya's small 
business incubator could fall under this agreement.  The 
long-term goal is to help Libya's sizeable informal sector 
integrate into the formal sector. (Note: The gray and black 
markets in Libya are robust and account for a large portion of 
economic activity outside the oil and gas sector.  End note.) 
The CLDP's Tejtel pointed out that the World Bank (via the IFC) 
also offers excellent training for small- and medium-sized 
businesses.  Responding to Tetjel's question as to whether 
safeguarding intellectual property rights (IPR) was an issue, 
our interlocutors described it as "a huge need" and welcomed 
exchanges with U.S. counterparts.  CLDP could arrange for U.S. 
consultants to visit Libya to discuss various IPR protection 
instruments, including patents, trademarks, and protection of 
trade secrets. (Note: Libya lacks appropriate laws for IPR 
protection and there is virtually no current enforcement of IPR 
strictures.  End note.) 
 
GOL WILLING TO SELF-FUND VISIT BY LIBYAN EXPERTS TO U.S. 
BUSINESS INCUBATOR CENTERS 
 
¶6. (SBU)  Tetjel suggested that a group from the EDB Business 
Incubator Program could visit the U.S. to meet with counterparts 
at incubators in Washington DC, Baltimore and North Carolina. 
EDB representative Khaled Bezaylia said the GOL could fund such 
trip(s) and requested a detailed proposal. (Note: The CLDP is 
preparing proposals and can help facilitate the visits; Tetjel 
will follow-up with GOL counterparts during his planned visit 
December 13-16.  End note.)  The Libyan experts noted that 
better linkages between academia and private companies in Libya 
needed to be forged.  Because Libya did not have a strong 
history of private sector development and the number of true 
private enterprises remained small, the roles of academia and 
the private sector in research and development were still 
vaguely defined and not well understood. 
 
¶7. (C) Comment: This was Post's initial meeting with the 
stewards of the EDB's Business Incubator Program.  The tone was 
positive and suggested that there is good potential for future 
cooperation and engagement in terms of programs the U.S. could 
offer through the CLDP and programs the GOL says it could 
self-fund.  Developing Libya's non-hydrocarbon sector is 
important in the context of Libya's overall economic health and 
offers comparatively greater opportunity for U.S.-Libya economic 
cooperation than the more mature - and more tightly controlled - 
oil and gas sector.  Support for the EDB's Business Incubator 
Program, with its focus on re-directing the efforts of 
scientists formerly involved in Libya's WMD program, also 
dovetails with a key Mission goal.  As with other areas of 
putative economic reform, the EDB's Business Incubator Program 
is long on rhetoric and management-speak and (so far) short on 
tangible results.  The EDB is headed by Dr. Mahmoud Jibril, a 
key adviser to Saif al-Islam al-Qadhafi (son of Muammar 
al-Qadhafi and a key reform proponent), and therefore enjoys 
some sway within the GOL; however, the extent to which the 
Business Incubator Program has been coordinated with and enjoys 
the support of other key GOL actors such as the General People's 
Committee for Manpower, Employment and Training (Ministry of 
Labor-equivalent) is unclear and could be a limiting factor. 
End comment. 
STEVENS