Swiss companies hope to return to Libya

Swiss companies hope to return to Libya

14th September 2009, Comments 0 comments

Swiss companies hope to gain access to the Libyan market again after President Merz's apology.

Zurich -- Switzerland, which apologised to Libyan leader Moamer Kadhafi for arresting one of his sons, hopes to once again gain access to a lucrative market, analysts say.

Libya is "a market of the future" and multinationals are lining up to get a foothold there, said Hasni Abidi, director of the Study and Research Centre for the Arab World in Geneva.

It was therefore crucial that Swiss companies return to compete for Libyan contracts after having been excluded for the past year because of the diplomatic dispute.

"The pressure from the business world to quickly resolve the problems with Libya had been huge," Abidi said in an interview with AFP.

During a visit to Tripoli in August Swiss President Hans-Rudolf Merz apologised to the Libyan people "for the unjust arrest of Libyan diplomats by Geneva police."

Hannibal Kadhafi and his pregnant wife were arrested in a luxury Geneva hotel on 15 July 2008 after two servants claimed they had been mistreated.

The couple were freed after two days in custody on bail of CHF 500,000 (EUR 312,500, USD 444,000).

Supporters of the Swiss People's Party stand with Swiss flags during a demonstration asking for the return of the two Swiss businessmen who have been barred from leaving Libya, on 4 Spetember 2009 in front of the United Nations Offices in Geneva

The complaint was dropped after a lawyer for their servants -- a Moroccan and a Tunisian -- said they had received compensation.

In October, Libya responded by suspending oil deliveries to Switzerland, withdrawing assets worth an estimated EUR 5 billion from Swiss banks, ending bilateral cooperation programmes and placing restrictions on Swiss companies.
Two Swiss businessmen in Libya were also banned from leaving the country.

On his return from Tripoli Merz said he achieved his two objectives: to settle the so-called "Hannibal affair" and to get Swiss companies back into the Libyan market.

"This affair stopped everything in a matter of weeks," said Elias Attias, a consultant and former secretary general of the Swiss-Arab chamber of commerce.

About 60 Swiss businesses worked with the North African country, mainly in construction and civil engineering, tourism, the energy and oil sector and luxury items.

"Switzerland had good relations with Libya but all that came to a complete halt," Attias said.

Between January and July 2009 exports fell by 48.6 percent to CHF 97 million compared with 2008, while imports declined 85.2 percent to CHF 326 million, according to Swiss customs data.

But in reality, the consequences of the scandal are less serious than the figures would suggest.

A spokesman for the Swiss-Swedish engineering group ABB, one of whose employees is still being held in Libya, said its business in the oil and energy sector had "continued" and "had not been affected" by the affair.

While Libya had on several occasions announced the suspension of fuel deliveries to Switzerland, there had not been any repercussions for Swiss consumers, said the managing director of the Swiss Petroleum Association, Rolf Hartl.

Bern : Swiss President Hans-Rudolf Merz (R) gestures flanked by Swiss Foreign Minister Micheline Calmy-Rey after a weekly meeting of the Federal Council (Swiss Government) on 2 September 2009 in Bern

"Supplies to Switzerland were not interrupted at any time," Hartl said, with two thirds of deliveries coming in the form of finished products from Europe and one third being refined on site.

Both of Switzerland's refineries -- one of which belongs to the Libyan oil giant Tamoil -- turned to other sources after deliveries of Libyan crude stopped.

Following the official apology, Swiss companies are once again able to operate in the country, said Attias, but "it will be harder and harder as time goes by."

Abidi was more pessimistic. The “apologies mean nothing. It's an investment without a return," he said, adding that there's "nothing to show that the Libyans might be about to turn the page."

Text: AFP / Andre Lehmann / Expatica 2009

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