Back on Track
Libya was a major market for Slovenian firms in the 1970s and 80s, but trade dried up after the North African nation was isolated by the international community following the 1988 Lockerbie plane bombing. In addition, after gaining independence, Slovenia’s main focus was establishing trade with the West.
But at the turn of the century, with the lifting of the sanctions by the United Nations in 1999 and by the United States in 2004, Libya was put back on the world map. And trade has been flourishing. In the case of Slovenia, trade between the two countries reached almost EUR 150m in 2008. Prime Minister Borut Pahor believes this can increase by ten times in the near future.
Ocean of opportunities
On current form he may be right. In March 2010 alone the Slovenian construction company SCT secured a EUR 330m contract for a motorway in Bengazi while Neimar Invest won a EUR 110m deal to build a housing development in Sirt and a EUR 40m contract for a children’s hospital in Tripoli.
The significance of these contracts for the Slovenian economy has been underlined by SCT boss Ivan Zidar: “This contract and deals associated with it are big enough to keep the entire Slovenian construction sector busy for the next five years,” he says.
Infrastructure and construction are where the main opportunities lie in Libya for Slovenian companies according to Pahor. “Libya is building a lot, building large-scale and is ready to give a chance to Slovenia,” he says.
The economy minister Matej Lahovnik agrees. He believes Libya’s large-scale infrastructure plans present an excellent opportunity for Slovenian construction companies, for the engineering sector, the wood-processing industry and all companies involved in housing equipment or household appliances.
“I especially see many opportunities for the Port of Koper, which can become a window for the foray of the Libyan economy onto EU markets,” Lahovnik has said, explaining that the Libyan delegation stressed it was “interested in ways to expand trade through Koper, which has an exceptional geostrategic position”.
Some problems remain
There are some issues, however, that still need to be tackled, particularly in the area of bank guarantees for Slovenian businesses in Libya. It has been reported that the Slovenian government wanted to let the state-owned bank NLB in on the action, but Libyans are reserved about a bank they do not know and which is not listed, preferring a Swiss bank or Italy’s Unicredit, in which the Libyan central bank has a stake.
Slovenian leaders are keen to resolve this issue, not least because they want to help construction workers diversify away from the housing-bust hit Slovenian market.
The increased activity has intensified talk of opening embassies in each country. At the meeting with Al-Mahmudi last month, Pahor suggested that given the hard times, opening embassies today needs to be restricted to countries where special reasons exist for this.
“Slovenia sees special reasons for the embassy in Tripoli – political and economic,” the prime minister said.
Al-Mahmudi added that huge steps have been taken to improve relations following Pahor’s visit to Libya in November last year. During his visit to Slovenia, agreements on cooperation were signed in the fields of transport, health care, higher education, tourism and economic cooperation. Pahor and Al-Mahmudi also hope to deepen cooperation when it comes to visa policy. Slovenia is among the EU counties pushing for a framework visa agreement between the EU and Libya.
They are all developments which promise to help Slovenian trade with Libya back to the levels of the 1970s and 1980s.