Libya eager for foreign investment, ties with US within eight months

TRIPOLI, Sept 28 (AFP) - Prime Minister Shukri Ghanem said Sunday Libya was seeking to lure foreign investment, particularly in the oil sector, and to resume normal relations with the United States within eight months.

"There are signs indicating that a return to normal American-Libyan relations will occur in the next eight months," Ghanem told AFP.

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Washington and Tripoli have not had diplomatic relations since 1981.

Despite the recent lifting of international sanctions against Tripoli, Washington decided to maintain its own sanctions, imposed since 1986, on Libya, which it accuses of supporting terrorism.

"American companies are seeking to return to Libya, but the US administration is blocking them," Ghanem said, adding: "We know that the return of American (oil) companies will be beneficial for them and for us."

Ghanem, an economist asked in June to head a government tasked to open up Libya's controlled economy, said: "these (US) companies themselves are seeking the lifting of unilateral sanctions and are negotiating with the US administration" to that effect.

He downplayed the importance of Washington's accusations that Libya supported terrorism.

"America knows that its interest and that of its companies is to establish friendly relations with all countries," he said.

Libya agreed last month to make payments to families of the 270 people killed in the downing of US Pan Am flight 103 over Lockerbie, Scotland in 1988, and the 170 people who perished in the French UTA plane in 1989.

Its announcement that it would make the payments, totalling 2.7 billion dollars, paved the way for the United Nations to lift sanctions last week following their partial suspension in 1999.

Spanish Prime Minister Jose Maria Aznar also became this month the first Western head of state to visit the country since the imposition of UN sanctions more than a decade ago.

Oil and gas provide about 90 percent of revenues in foreign currencies in Libya, a member of the Organization of Petroleum Exporting Countries which has an oil production quota of 1.3 million barrels per day and proven reserves amounting to 30 billion barrels, or three percent of the world total.

"We have opened the investment sector to foreign companies because we cannot remain closed to the world," said Ghanem.

"We admit that we have many problems related to infrastructure and bureaucracy, but this should not prevent us from opening up the country for foreign investors," he said.

Ghanem said the rehabilitation of the infrastructure was ongoing, with plans to provide soon about one million mobile telephone lines and another 1.5 million land lines.

He said the budget for development in 2003 amounted to 3.7 billion dinars (2.8 billion dollars) while that of the oil and gas sectors reached two billion dollars (1.5 billion dollars).

But Ghanem said the high number of foreigners in the country was causing unemployment to rise and that his government would take action to stop it.

"The Libyan economy is affected by numerous contradictions, including the presence of one and a half million foreigners working in Libya while there are more than 200,000 Libyans out of work," he said.

"This contradiction is not natural, and as of now, is unacceptable."

He indicated that his government would put pressure on the national oil company and other enterprises to employ Libyans instead of foreigners.

In an effort to confirm his strong policies on Africa, Libyan leader Moamer Kadhafi has dropped visa restrictions on Africans, many of whom now are working illegally in the country.

Ghanem said his government would crack down on foreigners by applying the immigration laws more strictly.

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