By Sami Zaptia.
Tripoli, 11 November 2021:
Speaking exclusively to Libya Herald today, Abdalla Fellah, the head of the Libyan Business Council (LBC), Libya’s only legally recognized business council, has slammed the decision by the Aldabaiba government to ‘‘go backwards to price controls’’ on food products. He says this is an outdated and desperate method by the government to attempt to fight rising prices and inflation.
Fellah was speaking following the government’s announcement of price controls earlier in the week and its decision yesterday to exempt foodstuffs from customs duties.
Not being honest and transparent with public
The LBC head attacked the government for not being honest and transparent with the public about the real fundamental causes of price rises. He said it did not point out that Libya imports at least 80 percent of its foodstuffs and that food prices had risen globally. This imported inflation, he added had many other inputs including the cost of all types of transport, including shipping costs. This have in turn been affected by fuel prices, including Europe’s gas price hikes.
Fellah said the government finds it convenient to use the private Libyan business sector as a punching bag, hiding its miscomprehensions of international and local economics and hiding its inefficiency and ineffectiveness.
Short-term, knee-jerk, reactive policies
Fellah accused it of following short-term, knee-jerk policies and of being reactive rather than proactive in its policy stance. He pointed out that even the Union of Consumers has already rejected the government’s policy moves as retrospective.
Going back to Qaddafi-era cooperatives won’t bring down prices
The LBC head noted how there have been populist calls in the media for the return of the Qaddafi-era subsidised food cooperatives. He said this is the ultimate proof that the average person in the street does not understand the causes of price rises. He pointed out that even if cooperatives were to reopen, prices will be high because they reflect international price rises.
They forgot to mention the dinar devaluation!
Fellah said the government fails to point out that prices have shot up partly because the official Libyan dinar exchange rate has been adjusted about fourfold. The LD used to at around 1.4 per dollar, now its LD 4.45 per dollar. This has been inputted into all imported food prices. The high prices have nothing to do with profiteering businesses – its imported price rises.
Its retrospective going back to Qaddafi-era practices – the future is the private sector!
The head of the LBC was saddened that there are those in government who still see the Qaddafi-era economics as a viable option. He says the future of Libya is the private sector through a free market and open competition.
All of Libya should become a duty-free zone – not just foodstuffs
He said central state-controlled economics had been practiced for decades by the previous regime and it had failed miserably. Libya should be looking forward and implementing radical policies -not going back to tried and failed policies.
He called for all products into Libya to be duty-free adding that the contribution of customs duties to the state coffers and the economy is minimal and disproportionately burdensome on businesses. He believes that by removing all duties and inviting foreign investors to invest and use Libya as a base for manufacturing and exports would drive the economy at a much higher level.
The development of ports for re-exports and transit trade is one example he highlighted. He said Libya’s ports should be deepened to take the largest ships in the world. He pointed out that currently many goods arriving in Libya are unloaded in neighbouring ports such as the Malta Free Port and then shipped on smaller vessels to Libyan ports.