VZCZCXRO3032
PP RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHTRO #0258/01 0880918
ZNY CCCCC ZZH
P 290918Z MAR 09
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC PRIORITY 4657
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHLO/AMEMBASSY LONDON PRIORITY 1036
RUEHFR/AMEMBASSY PARIS PRIORITY 0722
RUEHVT/AMEMBASSY VALLETTA PRIORITY 0401
RUEHRO/AMEMBASSY ROME PRIORITY 0502
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 5184

C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000258 
 
SIPDIS 
 
STATE PLEASE PASS USTR; STATE FOR NEA MAG; ENERGY FOR GINA 
ERICKSON; MASON AND HISHAM ELKOUSTAF; CAIRO FOR TREASURY LIAISON 
ALEX 
SEVERENS; LONDON AND PARIS FOR NEA WATCHERS 
 
E.O. 12958: DECL: 3/24/2019 TAGS: LY ECON EAGR EPET EFIN PGOV ETRD

¶1. (C ) Summary: On March 24, the Ambassador met with Mohammad Ali al-Hweij, the recently-appointed Secretary of the General People's Committee for Industry, Economy and Trade (Economy ministry-equivalent) to discuss economic and trade issues as well as Libya's total ban on the import of Caterpillar's equipment. Al-Hweij said Caterpillar needed to find new agents in Libya (as the current ones were sons of government officials) and welcomed the visit of a Caterpillar representative and was confident the issue could be solved. He also said Libya wanted U.S. firms to invest in export free zones to help Libya diversify its economy away from oil. He pledged his ministry's help in securing Libyan visas for American companies. End summary.

CATERPILLAR BAN: SOLUTION IS MULTIPLE AGENTS AND NO RELATIVES OF GOVERNMENT OFFICIALS

¶2. (C) Responding to the Ambassador's urging that the Caterpillar issue had to be resolved expeditiously, Al-Hweij said he was aware of the problem (ref A), explaining that it was not acceptable for U.S. companies to have exclusive agents; rather, the Libyans would prefer that Caterpillar work through more than one agent and have multiple distributors throughout the country. They would like to see at least three agents with one each covering Tripoli, Miserata and Benghazi. He noted the current Caterpillar agents were the sons of government officials, which constituted "corruption" according to the law. Al-Hweij welcomed the upcoming visit of Caterpillar's regional manager, inviting him to come meet with him "anytime." The Ambassador said he appreciated this approach and hoped the issue would be solved before the expected visit of National Security Advisor Muatassim al-Qadhafi to the U.S. so that a Trade and Investment Framework Agreement (TIFA) could be signed. He also welcomed Al-Hweij's confirmation that he would act across the board against any commercial practices that violated existing laws against corruption.

U.S. COMPANIES ARE WELCOME TO INVEST IN FREE ZONES

¶3. (C) Al-Hweij said Libya would like American firms to invest in "industrial" zones, such as the Zwara Export Free Zone (ref B), and that he was ready to discuss such projects and the advantages for companies that invest. As for privatization, Libya is processing privatizing 12 companies and expects to complete this process by the end of the year. The only sectors left to privatize are Healthcare and Education which are still under the auspices of the government. He noted it would be difficult to privatize universities since the professors were considered government employees and it was not clear how they could be given "shares" in their institutions.

AL-HWEIJ PLEDGES HELP ON VISAS

¶4. (C) The Ambassador informed al-Hweij that the U.S. Embassy's consular section would be issuing U.S. visas to the general public by the end of this month. Al-Hweij welcomed this news and said he pledged his help on securing Libyan visas for U.S. business travellers who want to come to Libya.

USG PROGRAMS: COMMERCIAL LAW DEVELOPMENT PROGRAM, U.S. TRADE DELEGATION, AGRICULTURE

¶5. (C) Al-Hweij said the Department of Commerce's program to improve the commercial legal environment fit into the Libyan government's program of revising its laws, including commercial laws. He said the possible visit of a U.S. lawyer with expertise in this area would be helpful in reviewing their new commercial laws. He encouraged more direct dialogue between businessmen and government officials, commenting there should be "no more Cold War!" He welcomed the visit of a high-level U.S. Department of Commerce Trade delegation in November, as well as the visits of U.S. Trade and Development Agency and the Foreign Agriculture Service. He said Libya welcomed any assistance that could help diversify its economy away from oil, and to increase employment opportunities for young people who constituted half the population. The influx of economic immigrants from sub-Saharan Africa was another challenge for Libya. TRIPOLI 00000258 002.2 OF 002

¶6. (C) Comment: The newly-appointed Secretary for Industry, Economy and Trade appears determined to resolve the Caterpillar import ban issue. The upcoming visit of the Caterpillar representative will be a good test of whether al-Hweij, who clearly understands the connection between this issue and future commercial and economic relations with the U.S., will back up his words with actions. His anti-corruption rhetoric is refreshing and laudable if he really intends to apply it across the board as he insisted. The ultimate challenge will come when he confronts the extensive commercial corruption of the political elites here, including that of the al-Qadhafi family itself. CRETZ