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RUEHTRO/AMEMBASSY TRIPOLI 5839

C O N F I D E N T I A L SECTION 01 OF 03 TRIPOLI 000764

SIPDIS

STATE FOR NEA/MAG; STATE PLEASE PASS USTR; ENERGY FOR GINA ERICKSON; COMMERCE FOR NATE MASON; COMMERCE FOR MARC TEJTEL AND HISHAM ELKOUSTAK OF CLDP E.O. 12958: DECL: 9/17/2019 

TAGS: ECON ECIN ELAB EPET EMIN KIPR PGOV BBSR LY

SUBJECT: LIBYA'S AGENCY FOR ECONOMIC REFORM RENEWS REQUESTS FOR AMERICAN EXPERTISE REF: A) Tripoli 386; B) 08 Tripoli 937; C) Tripoli 223 TRIPOLI 00000764 001.2 OF 003 

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

1.(C) Summary: The staff of Libya's National Economic Development Board briefed Emboffs on Libya's efforts to train the Libyan workforce in support of economic reform plans, and in particular, the NEDB's initiatives to spur private sector growth through the development of small- and medium-sized enterprises. Additionally, the NEDB is developing a "Strategic Management" system to monitor and evaluate Libya's economic development after decades of isolation from international markets. NEDB requested assistance in identifying training opportunities and apprenticeships for NEDB staff in the United States; invited U.S. experts to travel to Libya to conduct training for managers of NEDB's business incubator programs, entrepreneurs, and members of local governments; and expressed renewed interest in working with the Commercial Law Development Program in a MEPI-funded program to foster exchanges between U.S. and Libyan small business development programs. End summary.

NATIONAL ECONOMIC DEVELOPMENT BOARD: HELPING LIBYA TO "CATCH UP" ...

2.(C) On September 16, P/E Counselor and Econoff met with Said Hoderi, Director of International Cooperation at the National Economic Development Board (NEDB); Faouzi Saleh Elmozogi, Director of Human Institutional Capacity Development at NEDB; and Dr. Fathi Ibrahim, Training Manager of the Small and Medium Enterprise Department at NEDB to discuss the NEDB's work to develop a strategic plan for Libya's economic development. Hoderi, who has been working at the NEDB since its inception, explained that the NEDB was created in 2007 by the General People's Committee (GPC) - equivalent of Prime Minister's cabinet - to implement the recommendations of a report authored by the Monitor Group analyzing Libya's development needs. The report - the result of an initiative spear-headed by Saif al-Islam al-Qadhafi - recommended that Libya diversify its economy beyond the hydrocarbons sector and move towards a market-based economy.

3.(C) Elmozogi described the NEDB as a technical advisory arm that answers directly to Prime Minister al-Baghdadi al-Mahmoudi; as such, it can cut through the Libyan bureaucracy to implement programs more efficiently than other government agencies. Recognizing that Libya's development stagnated over the past 20 years, Hoderi emphasized that Libya must "speed up" its development spending. The NEDB is at the forefront of Libya's efforts to move from a centrally-planned economy to one in which the private sector would be the driving force (Ref A).

...THROUGH CREATION OF A STRATEGIC MANAGEMENT SYSTEM

4.(C) One of the NEDB's most ambitious programs entails creating a system to monitor and evaluate the Libyan National Development Program, which encompasses more than 11,000 projects. Through the Strategic Management of the Development Program (SMDP), the NEDB is developing an integrated macro-management system, with the assistance of Ernst and Young and the UN Development Program, to enable the Libyan government to mitigate the potential negative effects of accelerated spending on the economy. The system will also assist with contingency planning by running various scenarios, such as fluctuations in the price of oil, the main source of Libya's revenue. The new system would act as a "dashboard" for policy-makers and indicate which projects should be sped up and which could be slowed down. Hoderi admitted that the first report of the new system was supposed to be completed by July 2009, but the NEDB was not completely satisfied with the product delivered by Ernst and Young. He said he was not aware that another such program existed; therefore, developing a strategic national economic plan specific to Libya's unique development needs had been challenging.

DEVELOPING THE PUBLIC SECTOR, INCLUDING DIPLOMATS

5.(C) In addition to developing a strategic plan for managing Libya's economic resources, Hoderi described the NEDB's leadership in improving professional training and education in Libya. Hoderi explained that the NEDB's work in this sector began at the most basic level - through primary education reform. He said that the NEDB was working with experts from Singapore to design a new program for managing the primary TRIPOLI 00000764 002.2 OF 003 education system and to incorporate a Singaporean model for education reform. Beyond primary education, Elmozogi described several NEDB efforts to improve the quality of professional training in Libya, particularly for public sector employees, including "future leaders," diplomats, judges, and local and municipal government officials. In the first program, the NEDB is cooperating with the UK government and the London School of Economics (Saif al-Islam al-Qadhafi's alma mater), among other UK institutions, on an exchange program to send 400 "future leaders" of Libya for leadership and management training. Eventually, Elmozogi explained, 250 additional Libyan "future leaders" would also be trained in Libya. Likewise, the NEDB is working with universities in the United States (Michigan State and elsewhere), the UK, and France to manage exchange programs for 90 young Libyan diplomats (30 Libyan diplomats are currently being trained in each country). Hoderi responded positively to Emboffs' suggestions that Libyan diplomats in the United States coordinate a site visit to the National Foreign Affairs Training Center. Elmozogi said that the NEDB had also sent 70 Libyan judges to the UK to study English language and international law. Finally, Hoderi emphasized the NEDB's interest in working with the embassy to design a training and exchange program for members of Libya's local and municipal governments. "I believe Libyans would benefit from seeing how your small towns are run, even if our government system is very different from yours in the United States," he observed.

6.(C) As a corollary to training local government officials, Hoderi expressed an interest in studying how U.S. local governments incorporate small businesses into community development plans. He explained that as Libya moves from a public sector-dominated economy to one that is more decentralized, local governments ("shabiyas" in the Libyan system) will need to take responsibility for encouraging small businesses and spurring private sector growth. [Note: This may be an opportunity for a specialized International Visitors Program. End note.] Hoderi also asked if American experts could conduct training of trainer workshops in Libya for the public sector on leadership and management skills, including teamwork and communications. The NEDB has already trained 1,000 local government employees in these topics in Tripoli and would like to expand the program to other cities throughout the country.

REQUEST FOR U.S. ASSISTANCE WITH DEVELOPING SMALL- AND MEDIUM-SIZED ENTERPRISES

7.(C) According to Fathi Ibrahim, the NEDB's Small- and Medium-sized Enterprise (SME) program aims to nurture small- and medium-sized businesses by providing advice on business plan formulation, loan guarantees, and access to technology. Whereas SMEs comprise more than 90 percent of economic production worldwide, Hoderi explained that they play only a minor role in Libya's formal economy. By creating "business incubators" that will assist new entrepreneurs, the NEDB hopes to facilitate the growth of SMEs and create new job opportunities, especially in tourism, trade, fishing, Information Technology, construction, and oil services. Ibrahim explained that the NEDB had already opened incubators in Tripoli, Benghazi, and Sebha. He said that the NEDB plans to open specialized incubators in bio-agriculture, Information Technology, and for the physically challenged. Ibrahim requested embassy assistance in designing a program to send 10 to 15 managers of business incubators to the U.S. for training for 4-6 weeks at similar U.S. institutions. Ibrahim envisions a hands-on training program covering all aspects of management, including marketing services, setting budgets, and managing staff. Hoderi said that the NEDB was also considering sending the managers to Singapore for such a training program. In addition to training managers, the NEDB plans to train entrepreneurs from throughout Libya on all aspects of starting up a business - topics would include conducting feasibility studies, developing business plans, securing financing, and developing/managing budgets. The NEDB would like to conduct the training in Libya (starting in 2010) and then conduct a session in the United States.

AND RENEWED INTEREST IN THE COMMERCIAL LAW DEVELOPMENT PROGRAM

8.(SBU) In response to Econoff's inquiry regarding NEDB interest in working with the U.S. Department of Commerce's TRIPOLI 00000764 003.2 OF 003 Commercial Law Development Program (CLDP), Hoderi and his colleagues confirmed that they wanted to resurrect the study tour idea (Refs B, C). Hoderi agreed to re-establish email communications with CLDP on the latter's recommendations of early 2009 for a study tour of U.S. business incubators. COMMENT: LIBYANS SEEM VERY RECEPTIVE BUT PROOF WILL BE IN THE PUDDING

9.(C) Comment: During this latest meeting with the NEDB, the staff was more welcoming and open to working with the U.S. than in the past. The discussion broadened areas of possible cooperation to include training of NEDB staff, entrepreneurs, public sector employees, and local government leaders. If successful, such cooperation offers the opportunity to influence Libya's reform efforts at local, grassroots levels. However, past experience indicates that program implementation could be difficult. We will follow up with the Commercial Law Development Program and relevant Department offices to explore the possibilities of designing the programs outlined above. End comment. CRETZ