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Libyan Writer Ghoma
الكاتب الليبي غـومة

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Sunday, 18 March, 2007

Between a Chimera and a Skulduggery of the Kooks?

By: Ghoma

"For Argentina had virtually disappeared as an autonomous country during...
the era of our 'carnal relations' with the United States, which took the form
of privatizations and a fictitious exchange rate."
Luisa Valenzuela, "What We See in Hugo Chavez" NYT, Op-Ed, March 7, 2007

        Back in another oil boom's windfall times, in the '70's of the last century, Qaddafi didn't know what to do with the money nor had a clue to its value. How had he handled spending all that money? In a paternalistic manner and in a showy fashion. To prove his concern and show his generosity, he's opened the spigots of the money quite wide and gave almost to everyone who was breathing and walking and showed up at the bank a "loan," a mortgage to build a house with, in the amount of about LD 20,000. Most Libyans of the time welcomed the lottery windfall and took advantage of it disregarding the reeking Big Brother's smug paternalism that went with it. Needless to say these loans were also interest-free and with very few, if any, strings attached to how one spent the money - since according to both Sacred and the Profane Books interest on money lent was nothing but usury! Some of the recipients of these allowances, gifts or just globs of generosity knew full well and others got wind of it through the well-geared and oiled grapevine news-line in the country that the government lacked the means to collect back on these 'loans'. That act on top of what was going on during the defunct regime convinced many that life, indeed, is a lottery! A drawing in all senses but a name, packaged under different names and for different purposes but the result was the same: fallen from God manna, a stake with no strings attached. And luck had to be on one's side. If, for whatever reasons, one was not there at the time of the draw or was not quick enough to realize the fleeting speed with which the window of opportunity would open and close, and didn't take advantage of it while the shutters were quite open, then it was merely his bad 'karma' or luck -God didn't will it this time around.

        One has to wait and look forward to another oil boom time, another price spike in the oil market, to hope to get one's share from the only treasure the desert is known to harbor. This time around, about 30-years later- progress or just Greenies have squeezed their brains harder, (in line with the new trends of openness and free market), there're more than one form of lotteries. Currently there're at least two: one similar to the old back then '70's, in the form of a loan or mortgage, and the other, well, while it appears substantial with all the trappings of real, in actual fact it smacks of something else: surrealism, more in line with some Ponzi schemes than a real share in the country's wealth, and much less an actual money in one's pockets? This latter consists of yet an undetermined number of fortunates or of wretcheds -it all depends on the outcome- who would receive a total of LD 30,000 divided between LD 20,000 in shares, stocks, options, whatever! in some companies existing or hypothetical -no one mentioned who chooses these lucky companies- and the rest in the amount of LD 10,000 in banks' current money accounts. The brouhaha didn't lack its full regalia. It's already underway with all required promos of an ad-campaign with photo-op sessions for the Colonel's narcissistic addiction. The lucky recipients got, so far. a certificate stating their 'ownership' in the company(ies). The deeds supposedly and presumably would make the blessed feel all the joys associated with finally having made it and had graduated to the ranks of those who now have stakes in the system -these happy-puppies are expected to defend with their claws and teeth the Jamahiri system! Hey way to go! Mu'ammer: have new recruits, goons! and raise some capital for both the already half-broken, if not bankrupted, enterprises and for the new ones the progeny now can start when money is no more a problem.

        Though, as Victor Hugo, once stated, "it is not always wise to question untoward situations to the bitter end," one may still ask why all the acrobatics? Well, the "new economy" has to hit two birds with one stone: give lip-service to Qaddafi's hash-mash collections of half-truths-half-fantasies; and the other, the one Libya was forced to swallow, that's, to meet the core tenets of US-created "new world order," open markets, free flow of capital, etc., etc. Irreconcilables? Perhaps! But we're talking about Libya: the land of half kooks and half insane!

        One may say though the workman is horrible, but the work is still admirable, helping people build their "Libyan Dreams!" Back then, as now, these acts of generosity were supposed to set the premises for a housing financing policy and solve the acute housing shortage problem and thus set the sector on its feet. But the Colonel's sloppy puts-on gestures had then missed and still are now missing few tips and clues on the concepts of housing financing, mortgage loans and their howabouts, hereabouts, and most importantly their renewal and replacement. If a country, such as, Libya - lucky enough, in certain periods to be endowed with good amounts of cash, in the normal course of things, wouldn't take that many geniuses to figure out how to set the housings or any other sector on its feet and running. By putting the seeds and letting them germinate in time will grow to full-blown crops capable of feeding more than the original numbers. Charging a cost for the money used for these loans - prime rate plus inflation- and establishing an efficient system to collect the monthly payments as well as reinvesting these returns in new loans, the system will work for eternity, in a continuous flow of both loans and their payments back. Instead what did happen? Nothing of these mechanisms ever put in place. The money was distributed and the housing crisis kept getting worse and worse especially when the money got scarcer and scarcer every year since the mid-'70's until now.

        Despite the talks, more rumors, that the Colonel and his architect-turned-economist-turned a philanthropist son, Seif, had invited the Singaporean father of its economic model, perhaps even studied some others, like Malaysia's, Dubia's[?], etc. thought about, and pondered on development and of how to make their Jamahiriya the "Scandinavia of the Middle East"! [As consumers in every sense of the term, even developmental models have to be imported!]. However, there's good grounds to expect these hallucinations, like their past ones to end mere dust to be added to the sand dunes they so much love. For, the chaotic approach already showing more warps than wool, so to speak. The privatization campaign seems to be a smokescreen to get rid and jettison some of the failed companies they cannot handle anymore. This way is a copy-carbon on another nasty experience that of Russia, after the collapse of Communism (1989), had found itself locked in. The sudden and sharp turn to capitalism by privatizing companies and giving their shares to average Joe Blow, is always prone to fall into the jaws of big fishes, the sharks, the Mafiosi, as the Russians had discovered, who'd bought the worthless shares with few cents on the dollar from the hungry or just drunkards? old comrades and made billions in the process, leaving the country on the brink of collapse, if not bankrupted! The question is why in a country like Libya would work differently? The average bu-Me'rqa has less IQ's than the average Vladimir, and thus no clues to companies, shares, etc. or how to manage and run them.

        Excluding the merchant class, Libya has very few, if any, with a spirit for entrepreneurship, and much fewer entrepreneurs to boot! Where shall they find the smart managers? Who is going to run these companies and make sure they're profitable? And when these collapse, is there any insurance to ensure people get at least some of their money back? No! These questions have not been answered nor posed yet. As usual most of these companies, as the old farms, will end up in the hands, owned by, and staffed, by no one except the same old cliques who're running all those failed supermarkets, cement factories, and bus assemblage, etc. Because loyalties and patronage, not to say nepotism, are the gear-and-shaft of the Jamahiriya, endemic to the system from day one. The goons, informers, intelligence and military officers, revolutionary kooks, and every charlatan and his cousins and nieces will pad the payrolls of these enterprises until they run them into the shoals.

        Some will say this is a pessimistic scenario, a gloomy outlook, give them a chance. Well, what's changed to make otherwise scenarios: Qaddafi's confusing and contradicting rumblings? "The spring," as Libyans say, "is seen from the house's gate." None of the working models can be implemented in a country like Libya: an autocratic regime, if not chaotic mess!- with very little education and fewer qualified managers and personnel, no experience with entrepreneurship -except petty importers and their shabby shops- and no working infrastructure. Neither, the Singaporean model ( mixed market and planning) nor Dubia's (a local retail outlet for everybody's goods and services with huge subsidies from oil), would even come close to what Libya should be emulating. Libya, given its history but above all present, is in needs its own, sui generis, model of development. A model that will take into consideration all the factors of Libya, but in particular, a country with a lot of cash and few trained brains to use it!

        If Libya cannot come up with its own way to development, then it must look to an advanced economy that contains some structural similarities: as that of Norway for example. Norway, I believe, is the third exporter of the black gold in the world, with a population not far from that of Libya. In addition to the government running a lot of enterprises, it created an "Oil Fund" where oil revenues were deposited and invested for the benefit of future generations. This generation of Norwegians, as indeed any other generations, can use the return on the money.

        Libya is far from Norway in terms of development and thus its model will be a variation to suit its present and near future conditions. Some of the European states, as well as others, run more 50% of their countries economies. In Libya, therefore, Instead of the government trying hard to get rid of the companies already is running and lose in the process good money, efforts and time. It should keep what it has and should find a way to running them efficiently, that's, on pure market bases, with really skilled managers and astute financial officers. Perhaps it is one of two ways for a government to show is capable of running anything as it should be, efficiently; the other is the bureaucracy.There's plenty of room for new enterprises: Let whoever wants to start a business or a company does so with their own money or loans from private banks -incentives must be breaks in fees, taxes, etc. As to the oil revenues, a policy has to be instituted where some of this money has to be left behind to the future generations. How much? That has to be decided on present needs. But whatever is invested, from the oil revenues, has to go primarily to infrastructures including the decrepit education and healthcare systems, etc. The rest of the money must put in a trust fund, invested in the local economy, and left to accumulate. Perhaps, only the returns on this money, if need be, should be used.

        A meaningful maneuvering of the economy entails a struggle between at least two forces, and their relative powers and numbers will decide the outcome. Between these two sides: an actual benefitting and a potential benefitting. In both cases, the stakes are high, that benefitting from the status quo will not give up easily and will fight to the last drop. Those invested in change will do the same, except their game consists, so far, in mere betting on the future. What the average Joe can do, beside staying on the sidelines waiting for which side wins the game, think of the money as his and hers, think of all these companies as theirs, think of his/her health and the schooling of their kids, etc. And demand that instead of throwing change here and there, keep all the money in one basket and make the communal and community living a little bit better and a little bit easier. Help those in need, the destitutes, with in kind goods and services: food stamps, rent subsidies, etc.

        Qaddafi is a show man, a "politician," whose understanding of economy consists of slogans; while his son is a "philanthropist," who runs a "charity organization." Both have very little to do with running an economy of profit bases. In fact until today, after 38 years, Qaddafi still has to show just one enterprise or one project that is working properly and made some money. Therefore, it's time to tell both to stick to what they know and let others handle what they know. Enough of bogus gestures and fake programs, they've not led to anywhere and will only lead to nowhere.


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