By Vanessa Tomassini.
“Husni Bey, Libyan, born in Benghazi; they call me a businessman, but I don’t know if I am. I am president of HBGroup Holding, a family owned holding with financial interests in various sectors ” minority, majority, and other companies holding 100 percent shares “. The HBGroup Holding is active in the financial and banking, insurance sectors, with Sahara Insurance and ATIB (Assaray Trade and Investment Bank). HBGroup has also minority interests in other banks such as the Sahara Bank, Jumhouria Bank and Wahda Bank, of which we hold between 1 and 2 percent. We also deal with the distribution of high-end consumer goods and have interest Real Estate Development companies. Being the Libyan market small in size, we hold a diversified portfolio, to avoid risking monopolizing any sector. Our strategy is to avoid monopolising any sector. So, we avoid exceeding maximum 30 percent market share. That said, it does not mean that we have 30 percent everywhere, but that the goal is always to have a maximum of 30 percent of the market in which we operate. We are ten brothers and sisters in the 3rd generation, and today we are expanding in the fifth generation. We are from Benghazi, so we consider ourselves Libyans more than Libyans”. That is the story of the well-known Libyan entrepreneur and internationally successful businessman Husni Bey. In this 360-degree conversation, we intend to analyze the recent developments in the Libyan economy, between progress and challenges, less than two months before the presidential and parliamentary elections, scheduled for next December 24, despite the numerous unknowns of the North African country.
Will you also run for the elections? Have you ever thought about it?
“I have no right to run because I am married to a Tuniso-Lebanese lady. So, I will not divorce to take a second Libyan wife just to run for election”.
Why do you think there is always this limit in Libyan law?
“I believe that in the Muslim and Libyan mentality and culture, one always tries to see either black or white, you or me, friends or enemies, there is never the middle way. You are either totally friend or completely enemy. So, we don’t have limbo or the colors of the rainbow. We have hell or heaven.”
Now, what stage is Libya going through, hell or heaven?
“I prefer not to go to that religious or pseudo-religious discourse. Economically and politically speaking, Libya’s fundamentals are solid, but managing these assets and governance have always been terrible. Always for that speech of all and nothing. Italo Balbo the Governor of Libya in the 30s’ gave the name ‘Libya’ to our country. Before that, we were three different or non-homogeneous cultures amalgamated in a State called Libya in 1951 after the name Italo Balbo called it so in 1934. Let’s say the economic fundamentals of Libya today are strong, but the management leaves a lot to be desired. We can speak of mismanagement, the bad conduct of the institutions in 42 years plus ten, or better 32 years plus ten because Libya’s first decade of Gaddafi was an Eldorado. From 1973 to 1978, in particular, after the 1969 revolution or coup, the great oil crisis of 1973 and consequently boom saw Libya’s wealth decoupled ten times in just a few months. At that time, any movable asset could be repaid and amortized in a few months, while fixed capital assets can be amortized in three or four years. But this excessive influx of petrodollars into the state coffers made the regime realize it no longer needs the Libyan Business community. “To turn into a curse” In fact, in 1978, Gaddafi carried out the so-called economic revolution. It took away from the private individual all their assets, properties, and money ” from everyone”, indifferently so introducing this new economic system that I would not call socialist because it also goes beyond extreme communism, taking everything away from everyone. He eliminated private property overnight, effectively nationalizing even the barber and the fruit and vegetable shop as well. Then in 82, not more than 4 years later the system collapsed, there was the failure of this New State Economic Theory collapsing with the collapse of oil markets, the loss of the war in Chad in 1986, and the Lockerbie UN Blockade in 1993, Gaddafi Regime then found itself having to deal with the Libyan population’s expansion, increasing not less than 1.5% per year. In a short time, he found himself managing a population of three to four and a half million. Today we are 7 million. Some say 8 million. We don’t even know how many we are. Some say 7, others 7.4, some say 8.3. If you ask the Libyan authorities how many we are, no one has a perfect number. It’s a bit like playing the lottery.”
Isn’t it risky to go to elections like this?
“It is not risky because what matters in the elections is the register of voters, that is the Libyans who registered for the vote: 2.8 million if I’m not mistaken, and that’s already enough. Nearly 50 percent of the minimum number is a substantial figure in a country that has little experience in democracy and voting. The names are registered in the electoral register, and I took part in the first three elections, I saw that it is numerically impossible to falsify or cheat.”
Speaking of your activities, you mentioned banks. How is the banking sector in Libya today?
“It is a dysfunctional sector as the Central Bank of Libya owns tearages Libyan banks thus creating a conflict of interest There is a conflict of interest between the role of the Central Bank as governance and that of ownership. All these years, we have been very good at making the wrong monetary policy choices combined with the political polarisation and the split in the Central Bank of Libya Board of Directors a solicitor CBL. We made wrong monetary policies in the 90s until 2000, and from 2015 until January 2021 despite a respite in October 2918 with the introduction of a FX Surcharge. Actions that avoided Libya follow the paths of Venezuela, Iraq and Rhodesia. Except for small banks, or banks that are not really private – because when you say a private bank, you mean a bank not totally owned by the Libyan Central Bank or by other government body – there are quite aggressive private banks. Still, the policies of the Central Bank are very restrictive. As I said in a recent interview with The Libya Herald, where I contradicted what Dbeibah is saying that we are rich and have lots of money. Banks are full of money but have no instruments for the best use of these funds. I believe that there are many important fields to exploit these riches in the best possible way. As for the banks’ deposits and money supply, perhaps this care little in terms of dollars, but for the Libyan economy, which has a GDP of 50-60 million, the 140 million are a lot of private money in search of opportunities. Prime Minister Dbeibah said that the banks have a lot of money, that the private sector must participate. But what are the sectors available where the private sector can participate? Today in Libya have almost 85% of GDP generated or controlled by state-owned companies. 75% of the Libyan GDP does not even have the means of profit and loss narrations to evaluate efficiency and profitability because it receives funds from the state budget. Imagine a country where 75% of GDP is state-owned, and state budgets are granted instead of having a profit and loss account. It is a catastrophe. We absolutely need to change this model. And frankly, I must say that Libyan laws allow us to move to a model free market mix model of competitiveness and liberalization. So, we do not have in Libya problems of laws, but we have a serious issue and a serious problem of the misconception of the state employee who wants to monopolize more than anything. State employees have monopolized the economy for 4 decades, and he wants to keep doing it. He does not want to give up the power he has acquired over 40 years plus 10”.
What are the difficulties that you encounter working in Libya daily?
“The mentality of the Libyan civil servant. Our greatest enemy and Challenge are the Government Employee mentality. We have no problems with the Libya lapsing existence but we face costs, waste of time and issues in their application and enforcement. The Libyan Laws and rules allow for maximum and indefinite competition between public and private entities.”
Can you give us a concrete example so that those who have never been to Libya can understand us?
“A common example is when the civil servant tells you: I would like a law that allows this. But the law is made to prohibit and regulate, so if no law prohibits or regulates, the relationship is contractual. It’s like saying I would like a law that allows me to drink water. It doesn’t exist. That is the biggest problem. The law, in general, says that everything is allowed. The law says you can have flowers, and the Libyan state employee looks for a law that allows you to have red flowers”.
And instead for a foreign company? Are there any particular limits?
“It’s the same. Today, there are no preferences, just as there are no preferences between the private and public sectors. There is no blocking of foreign companies. Only that Libyan law provides that some activities are purely Libyan. Anyone who wants to come and undertake an exercise in industry, health, education, of any kind, there are no restrictions, except for those who would like to come to be a merchant.”
We know, correct me if I’m wrong, that Libya bases its economy mainly on the Oil and gas sector. Has it undertaken diversification?
“Until the law 23 enacted in 2010 for all Libyan economic activities, and the law n.9 of 2010 for foreign and Libyan investment in Libya, the private sector could not expand. As I said before, there is this reaction on the part of the public employee of not allowing the private sector to go further. We are saying that Libyan GDP produced by the private sector represents only 15%. It is not the private person who does not want to do. Suffice it to say that since 1978 there has never been a master plan for the private sector. By investing in an unregulated area, the latter risks losing everything. Because they threw him down, it happened in 2007, and it is happening today in Tripoli. 70% of the activities in Libya are out of order, illegal because in forty-four years, it has never been planned for the private sector. There has been no plan for private industrial or commercial areas: even the little achieved has been done as a favor between one and the other. That cannot give the diversification that we all hope for. Furthermore, we must not forget the great differences in the evaluation of the Libyan dinar, between the exchange rate on the black market and the official exchange rate.”
How have these differences in exchange rates, particularly the black market, affected the Libyan economy?
“Negatively for 80% of the Libyan people. These exchange rates have impoverished 80% of the population, who lost up to 90% of their savings in some periods. Today it is losing 60%. Meanwhile, those who could obtain an official currency rate made a profit of 600-700-900- 1000 percent from 2015 to 2018 and up to 2020. It was a catastrophe that could have been avoided with a different monetary policy to avoid inflation which even officially reached 25%, but which, in my opinion, exceeded 40% over the last four years”.
But has this course changed now?
“It changed after it lost two-thirds of its value, the difference between official and parallel exchange stabilized and stopped at two-thirds which would be 200 percent, while in some periods it touched 1000 percent.”
Let’s move on from the purely technical side for a moment. What role did the businessmen play in achieving a certain kind of stability and reconciliation among Libyans?
“In terms of reconciliation, the private individual has every interest in achieving stability. But as we all know, when the opportunity exists to have 500-600-700-800-900 percent, there is no God who commands. So, everyone tries to exploit the situation. Few have fought for the unification of the currency. Not to give credit to my person, but I was one of the most ardent critics of Libyan policies, of the different exchange rates that destroyed Libya, impoverishing 80 percent of the population and enriching 2 percent. We could avoid this crime if what was done on January 3, 2021, and in October 2018 had been done in 2015. We would have lost part of the value and not two-thirds “.
Do you think an economic agreement between Libyans and foreign countries that can benefit all parties can work better than a political or military solution?
“There is no crisis in the world that is fundamentally not economical. Since Adam and Eve, I keep saying that all crises are economic, even if we use different descriptions. The confrontation between communism and capitalism was also of an economic and not ideological nature”.
Why does the Libyan government not invest and conclude contracts with companies such as Eni and Total to invest in other resources, such as wind and solar energy?
“Now they are discussing with Eni and Total about solar energy, but as long as the gas that generates electricity in Libya is not considered a cost, or because they say rather than going to burn it we use it to generate electricity, so it doesn’t cost us nothing when the value of what is actually pumped to Italy has a value of 2.5 billion dollars, they certainly have no interest. If, on the other hand, the model change, and even that gas used locally as the one that goes to Italy costs two and a half billion, then also the terms will change. But, unfortunately, half of the gas produced is retained in Libya for the operation of power plants and 20 percent exploited in Libya to generate electricity and run our cars and trucks, which on the total value of Libyan production represents about 350 thousand barrels per day. So as long as these have no value, no one is interested in carrying out alternative projects”.
Do you think Libya will one day be able to export electricity generated from alternative sources?
“Not only will it be able to export, but it will certainly satisfy our internal needs. We are experiencing a terrible crisis of lack of electricity in the summer and winter seasons. That is a shame in a State that produces so much energy and cannot generate electricity for the country”.
In your opinion, does Sirte have the potential to become an economic and financial hub and act as a gate to Africa?
“All of Libya is a gateway to Africa for Europe. It is a big lie, it could be if you build big highways as your Mussolini thought of making a link up to the Atlantic Ocean in West Africa, and another up to the Arabian Ocean in East Africa, maybe something could be done. But both today and in the future, I find it unlikely, as the transport costs from Libyan ports to populated areas of ‘land locked’ nations in terms of mileage and energy are at least double those incurred by sea. It is much cheaper to transport by sea to West Africa, to the port of Douala, and go to this ‘ land-locked.’ America has built itself, starting with infrastructure. Putting on a road could change for all other reasons, not just for transport, doing many other things along the way rather than being a gate to the ‘Africa, as there are no competitive advantages for Libya to become only a transit point”.
What are the advantages that Libya offers?
“Compared to neighboring countries, stability. We are one of the largest territories, the third in Africa, and the seventh or eighth worldwide. But as long as we have these internal conflicts, we can be very destabilizing. We see this with migrants, who were used to putting political pressure on Europe in Gaddafi’s time, but are now free to do what they want. The other advantage is that we have a small population and therefore we can offer job opportunities for our neighbors and neighboring countries. But, unfortunately, our policies, which did not grant work permits, attracted the worst of these countries and not the best, because they were always under the risk of being abused by the police and security forces”.
This interview originally appeared on the Italian “Strumenti Politici“.