As the U.S. becomes less capitalist, Libya is becoming more so.
Mark Mobius is investigating the country as his next potential frontier market.
Even if he doesn’t end up investing in the nation, stints to off the radar places like this at worst help Mr. Mobius maintain his emerging markets branding.
After a long period of strained relations with the West, Libya has made considerable efforts since 2003 to normalize and improve diplomatic ties. These include abandoning its weapons of mass destruction programs and paying compensation to the families of victims of the bombings of Pan Am flight 103 (in 1988) and UTA Flight 772 (in 1989). As a result, most international sanctions against the country were lifted in 2004, and in 2006, the U.S. removed Libya from its state-sponsored terrorism list on which Libya had stayed for 27 years. Since then, Libya has attracted a wave of interest from international companies operating mainly in energy and construction. Our hotel was full of business people, particularly oil company executives and oil field employees working on the country’s extensive oil and gas deposits – Libya has the largest oil reserves in Africa.
More importantly for us as investors, the government is moving to privatize state enterprises and develop a capital market. We visited the nascent stock exchange and were impressed by the good systems in place. Only a handful of stocks are listed now, but with many more state-owned companies in areas such as infrastructure, power and telecoms destined to be privatized and listed, we expect that the opportunities to invest in this market will expand. Since 2003, more than 100 government-owned companies have been privatized in the oil refining, tourism and real estate areas.
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