”Libya needs to redesign the historical model of spending government funds in the country from the existing model of government companies and funds doing it all’’, leading Libyan businessman Husni Bey explained from Washington DC exclusively to Libya Herald.
Bey was recounting his contributions during the Panel 1 Roundtable on ‘‘The Future Role of Reconstruction’’ at the ‘‘Libyan American Forum for Development and Reconstruction’’ held in Washington D.C. between 28 to 29 April.
The event was co-organised by the USLBA, and the Libya Reconstruction and Development Fund led by its Director General Belgassem Khalifa Haftar, alongside a high-level Libyan delegation that included businessmen, university presidents and experts specialised in several fields.
More than 90 American companies and institutions and several officials concerned with African and Middle East affairs attended the forum.
Several memorandums of understanding were signed at the forum by the Fund with the USLBA and leading US companies and institutions. Bey reported he witnessed the signing of MoU’s, included the education, health, finance, infrastructure, technology, planning and AI sectors.
Libyan government money is finite
Continuing his recounting of his panel contribution, Bey said ‘‘Libyans need to believe that government money is finite. These notions of infinite government money will take the country to collapse. We Libyans must accept that public funds are finite and limited, no matter how much money a government may be able to create (print), this will lead to inflation and money losing its purchasing power’’.
Budget deficit: Monetary financing leads to the collapse of Libyan dinar
‘‘Monetary financing of budget, any budget, leads to the collapse of the local currency the Libyan Dinar. We can see the results of budget overspending, as throughout our existence as a nation we have seen our currency depreciating since 1982, 2000, 2013 2018, 2021 and 2024 and likely depreciate more in the years to come, if we do not change the model now’’.
Libyan dinar will continue to depreciate by 25 percent per annum if we continue overspending
‘‘The exchange rate of the US dollar was at 0.33 dinars in 1982 and today it is at 6.40 LD/dollar. If we go on spending more than revenues, we will see our currency depreciating 25% per year leading most of our people to extreme poverty while few will enrich themselves in the process. We need not reinvent the wheel or the lamp, we must draw a line of where government spending ends and where private investment, domestic or Foreign Direct Investment (FDI) begins’’.
Government budget financing should be limited to substructure only
‘‘I am from Benghazi and our house is within the new Benghazi Downtown Development Plan. No government funds can finance superstructure (over ground development). Government budgets must focus on infrastructure, education, health, police, processes, governance, courts and record keeping’’.
Creating a “Special Purpose Vehicle’’ for downtown Benghazi
Referring to the Reconstruction and Development Fund Bey said ‘‘The Fund can establish a Special Purpose Vehicle (SPV) whose capital is the value of all the downtown area. The shareholders would be the rightful legal owners of these lands with over 40% government and 60% private ownership. This is the ‘‘Beirut Downtown Al Hariri Model”. Through an idea the Fund will own real estate legal value of not less than LD 280 billion (about US$ 40 billion), bankable guarantee-able assets”.
A potential US$ 300 billion worth of finished assets
”This would be A footprint of 40 million square meters and can be as much as 200 million marketable built area valued at over 2 trillion dinars (US$ 300 billion) worth of finished asset, with 60 million sqm of roads, public gardens and squares. Just imagine the wealth and GDP growth. I will probably not see it in my lifetime, but I love just to imagine it happen!
We can do it, but we must change the model to build trust through transparency and abiding the rule of law’’, concluded Bey.
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