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March 04, 2013

Richest Businessman Says Libya Better Off

by Jamie Dettmer

Despite problems buffeting the country, Libya’s richest businessman says all Libyans are better off now than they were under Moammar Gadhafi.

However, Hesham Husni Bey's optimism is tinged with frustration because he believes Libyans don't understand free markets and feel the government should provide everything.

As Libya’s top businessman, Bey has a habit of speaking his mind. He did so both times he met Gadhafi’s son and heir-apparent, Saif al-Islam, upbraiding him publicly for his vaunted reform process in the years before the country’s Arab Spring uprising.

His complaints that proposed reforms wouldn't unshackle the private sector earned him time in jail, one of the several times he was imprisoned by the Gadhafi government.

“This young man comes to the podium and started to talking about sovereign funds, about big projects, about things that did not sound right. It is not anything to do with the private sector. It was about big money slushed on the side that he wanted to control," Bey says. "They want me to come up and I said, ‘Sorry, I don’t believe you.’ They didn’t like it. I was imprisoned seven times and one of them was two weeks after this statement.”

For much of the Gadhafi era, the private sector wasn't allowed to operate, but after 1986 there was some opening up. Bey’s HB Group, started by his Turkish-born grandfather as a maritime transport company, began to take off, although Bey tried to avoid trading with the government.

Today, there is little going on commercially that Bey isn't involved with. He has shareholdings in most Libyan banks and is the country’s major distributor of retail goods. He owns many of the franchised Western brand stores sprouting up in the capital, Tripoli, and in the eastern city of Benghazi.

In the driveway of his Tripoli compound on the Mediterranean Sea sits a gleaming Porsche Panamericana, one of the few distractions he allows himself. The others are his family, he has a son and two daughters, and sailing.

While the Italian-educated businessman is encouraged by Libya's post-revolution spirit, he is frustrated with the lack of understanding about how free markets work, and worries that everyone wants to feed at the public trough.

Bey worries the potential of the private sector could be thwarted by a national mentality that wants everything from the government.

He believes Libya’s new leaders are involved in mass institutional bribery, arguing that half the budget is spent on government operations and the salaries of 1.2 million public employees, with about another quarter devoted to subsidizing housing, food and energy.

This continues the dependency of the Gadhafi years and doesn't help educate Libyans about the economic facts of life, according to Bey.

He suspects that post-revolution politicians, many of whom are Gadhafi holdovers, want to carry on with business as usual to protect their interests.

Above all, Bey is appalled by the failure to kick-start the economy by unleashing the real estate market, which he describes as being held back by restrictive regulations and chaos about property rights.

Bey believes free market begins in the housing market and feels housing transactions need to be freed from under government regulations and handled by the free market.