News / Middle East

Turkish Businesses Look for Improved Ties With Libya

Cranes operate at the site of the football stadium in Benghazi, Libya, Jan. 19, 2013.Cranes operate at the site of the football stadium in Benghazi, Libya, Jan. 19, 2013.
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Cranes operate at the site of the football stadium in Benghazi, Libya, Jan. 19, 2013.
Cranes operate at the site of the football stadium in Benghazi, Libya, Jan. 19, 2013.
Turkish businesses have been lobbying for almost a year to receive compensation for work they had to abandon during the uprising that ousted former Libyan leader Moammar Gadhafi. Now it seems their efforts are going to be rewarded as Libya and Turkey move to improve political and economic ties, reflecting Turkey’s increasing clout in the region.
 
Turkish businessmen have been prowling the halls of Libyan ministries and patrolling the marble-floored corridors of Tripoli’s five-star hotels for months to find people who can help get them paid what they are owed for contracts abandoned during the revolution.

Until recently their efforts had not met with much success. The new government has been struggling to solve bigger immediate challenges than reimbursing Turks. But on a recent visit to Turkey, Libyan Prime Minister Ali Zidan pledged to slash through the red tape.

As Libya seeks to rebuild, Turkish companies will play a big role - if for no other reason than cost. Turkish firms can do the work for less than their European rivals, said Libyan lawmaker Abdurahman Al-Shater.

“The advantage of the Turks is not political influence, it is price-wise, the Turkish contractors in the price and the quality much cheaper than if you compare it with UK companies or France or Italy or Greece,” said Al-Shater.

More than 3,000 Turkish nationals evacuated Libya in February 2011, and the debt owed to about 100 Turkish firms is estimated at $20 million. The Ankara government has mounted a concerted campaign to get its businessmen, mostly in the construction sector, to be paid ahead of those from other countries.

And it seems to have worked.

About half the outstanding contract payments owed to Turkish firms will be forthcoming in weeks, with some compensation for breach of contract [restitution] paid, as well. But to get the money, Turkish firms will have to begin work again on the abandoned projects.

Libyan-Turkish trade last year stood at around $2.5 billion and Turkish firms are eager to see that grow. At last year’s Libya-Build exhibition, more than 400 of the 800 foreign companies participating were Turkish.
 
The debt settlement is a reflection of Turkey’s growing political clout in the region. Since the Arab Spring uprisings, Turkey has been pursuing an ambitious foreign policy and Turkey’s construction sector is positioning itself as a key player in rebuilding the region’s post-conflict economies.

Richard Griffiths, president of the American Chamber of Commerce in Libya, does not agree entirely with lawmaker Shater’s view that there are no politics involved.

“Certainly with the Turks it is a mixture of the two. They have found what I believe is the perfect the combination of political support, which is not too overbearing, and also the effort which I, of course, would like to see from the US companies that they are very much here, engaged and present," said Griffiths. "When there is a delegation or trade show or event you will always find the largest group are the Turks and frankly they are the ones who are reaping the rewards for it.”

For many Libyans there is a natural affinity with Turkey. Islamist modernizers see Turkey as a model: a modern, commercially successful democratic Muslim state.

And for Libyans who fear the growing interest of Gulf countries with a tendency to involve themselves in Libya’s internal politics, Turkey is a useful counter-weight.

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