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Foreign Investors Face Challenge in Libya

Libya has been opening up its market to investors from outside and trying to emerge from isolation. The European Union lifted economic sanctions last month, removing another hurdle. While most Libyans are hopeful for a new, more open future, foreigners moving in realize they face significant obstacles, including rampant corruption and endless bureaucracy.

In the Medina, the old walled city of Tripoli, young and old stand idly by their stores in the hope that tourists will come in and buy something. With the lifting of economic sanctions, business for them has improved in recent months and the country has begun opening up to foreign investment.

But few people dare to talk openly about the man known simply as "the Leader", 62-year-old Moammar Gaddafi, who has held a tight grip on power since 1969. Libyans in the street are nervous and uncomfortable if asked to comment on political issues. But they are hopeful that Libya is undergoing a change.

One elderly man who has a store in the souk or market, says business is looking up. It was very difficult before, he says, but now things are easier and more people are coming. "Libya difficult but slowly, slowly Inshallah, good," he says.

But no one forgets who runs the show around here. Portraits of Mr. Gaddafi are everywhere. Mostly sporting mirrored shades, his face appears on billboards all over the city and on photos and pictures hanging in shops and offices.

Earlier this year Mr. Gaddafi declared before his General People's Congress that "the world has changed" and Libya needed to adapt to "the new realities."

Without going into too much detail, Libyans admit "the Leader" is allowing changes to take place. This Libyan man used to work for the state airline and now takes photos of tourists in Green Square. He too is optimistic, saying "the politics of the government is not like before, business is better, all is open now."

Not everyone feels the same way. Some people feel betrayed by the promises made by Colonel Gaddafi over 30 years ago. They say they are back where they started.

Libyans are only too aware of the problems faced by the country's economy and of the need for improvements in the health and education sectors. And for those to take place, analysts say, foreign know-how is needed.

Libya is a vast country with a population of under five-and-a-half million. The unemployment rate stands at 25-percent and many people hold two or three jobs to make ends meet.

Young people have become aware of what they are missing. Satellite television dishes can be seen on roofs and balconies and Libyans have cheap access to the Internet.

But many, like this young jeweler listening to local music at one of the outdoor cafes, reject talk of change, saying there is a lack of entertainment. "No, no because we haven't a bar or a club or a discotheque, we haven't in Libya," he says.

Other young people dream of going to live abroad, like 19-year-old Nizar Ennabe who will soon be going to a soccer school in England. He says travel will get easier in the future. "Libya wants peace and Europe wants peace between Libya and Europe and I think it will be easier to go any place like Australia, Europe, America," he says.

Foreign businessmen have started to come to Libya attracted by the new opportunities. Libyans are welcoming and friendly and the potential appears huge. But many obstacles remain in this once pariah nation in North Africa.

Fabio Marceglia has been working in Tripoli since the beginning of 2002 for an Italian company in the oil sector. He says the situation has certainly improved. But things are still difficult. The bureaucracy is ferocious and these are issues we have to deal with every day.

The oil and gas wealth existing in the country has attracted the most attention so far. But the decaying infrastructure and practically undeveloped tourism industry are not going unnoticed.

Businessmen say Europeans are in a good position because they are so close. But Libyans would like to see greater U.S. participation. However, there are a number of issues that will need to be resolved. Full diplomatic relations have not yet been restored and the U.S. has no embassy in Tripoli yet. Libya is still considered a terrorist nation.

On the practical level, businessmen complain there is a lack of transparency, too much corruption and an unsatisfactory banking and legal system. They say it will take time to change the mentality of the people. Mr. Marceglia says things are not yet organized in such a way so as to allow the entry of companies that have never been present in this market.

Analysts say there are still concerns that Mr. Gaddafi is not yet wholly convinced of the path he has embarked on and that he expects the West to show him it was worth it. The months to come are likely to determine just how serious Mr. Gaddafi is about his new openness to the West.