Libya has been under the control of many people throughout its existence, including the Persians, Greeks, Romans, Vandals, Ottomans and Italians. Libya was also ruled by Islamic Caliphates and, immediately after its independence in 1951, by King Idris, Libya’s only king. King Idris was overthrown in a military coup d’état in 1969, led by Colonel Muammar Gaddhafi who ruled until his overthrow in the 2011 Libyan Revolution. The State of Libya was subsequently established, with a fragile government originally overseen by the National Transitional Council until late 2012. After elections, the General National Congress’ elected representatives are now governing the country.
The Libyan market has been and continues to be strong for the oil industry and is potentially a very lucrative market for many other lines of business. According to Oxford Business Group’s ‘The Report: Libya 2010’, significant opportunities exist for multinational organisations in the fields of oil, mining, banking and finance, construction, transport, telecommunication, retail, healthcare, education, agriculture and tourism.
Organisations considering doing business in Libya will be challenged by the uncertainty of the government’s future direction, including how cohesively it functions internally. Businesses that were successful in Libya in recent years almost certainly had strong ties with Gaddafi government ministries. With the fall of the Gaddafi government, returning organisations may need to restructure their business contacts. Both returning and new organisations may find they will need to invest significant amounts of time in building a series of new and wide reaching relationships.
Libya in Focus
The State of Libya is located in northeast Africa, with the region’s longest coastline along the Mediterranean Sea. It is Africa’s fourth largest country after Algeria, DR Congo and Sudan. Libya was traditionally divided into three provinces – Tripolitania, Cyrenaica and Fezzan – which remain important in terms of clan divisions and loyalties. There are an estimated 140 clans in Libya, who may value clan loyalty over a pan Libyan identity, especially in times of conflict.
Libya’s has a population of approximately 6.5 million people as of 2013 according to the CIA World Factbook. Over 90% live along the coast in the major cities of Tripoli or Benghazi, or in larger towns and smaller cities. Most Libyans have a mix of Arab and Berber roots. Smaller numbers of Libyans trace their background to Turkish, Greek, Italian, Maltese, Tuareg, Tebou or sub-Saharan African cultures. Over 97% of Libyans are Muslim, with most following Sunni Islam. There are small numbers of Christians, often from Egyptian or African migrant communities. Arabic is the official language with Libyan Arabic the predominant spoken dialect. Arabic remains the main language of most lines of business. English is understood by some people in urban areas and amongst some of the well educated.
According to the IMF, Libya’s GDP is an estimated US$88 billion as of 2012. The IMF also reports a quick recovery of GDP growth in the aftermath of the 2011 Revolution, predominately due to the return of the major oil companies. Oil revenues continue to represent more than 80% of Libya’s GDP.
Core Cultural Values
Honour and Respect
The concept of honour is much more than simply being treated with respect. Honour is also all about the reputation of a person and, more importantly, respecting their entire family, their clan and their religious values. Libyans expect to be treated with a high level of dignity as a reflection of their status and reputation. This is manifest in everything from how formally and deferentially they are greeted to their expectation of others recognising their position within Libya’s complex social and political hierarchy.
Tribal and Clan Identity
Libyans are very likely to identify first and foremost by their clan affiliation, then as members of a larger tribal group determined by their clan, then as Libyans. The clan system applies to Libyans both of Arab and Berber descent. According to an article published in the 24 February 2011 edition of the Christian Science Monitor, about 30 of the estimated 140 clans have significant political influence. The article also emphasises an east-west divide in clan groupings.
Relationships and Trust
Libyans place a lot of importance on relationships. Family and clan ties remain important and usually set the boundaries defining trust. Libya’s recent history also means most businesses need connections in the right places – especially in the right government offices – to conduct their business successfully. As the State of Libya restructures after the Gaddhafi era, organisations will need to spend significant time establishing connections, networking and understanding who knows who (and in what capacity), as these are the main catalysts in getting things done. Do not be surprised if your Libyan colleagues pay a lot of attention to your job title, professional qualifications, and who you know.
Important Business Values
Libyans expect to be treated with politeness, dignity and in a way that reflects their status and reputation. They will also treat guests with the same good manners as long as guests behave in an honourable and respectful fashion. Libyans consider it a great insult to treat another person with disrespect. Libyans who believe they have not been treated with respect will almost certainly feel embarrassed, ashamed, or even humiliated. Never behave in a way that comes across as too informal or that seems to ignore status. Old fashioned manners will certainly be appreciated.
Try to understand the basics of tribal and clan culture and who has the power that could impact your line of business. Forging business relationships may require the need to make connections with several groups. This will help to access the widest market reach possible – and perhaps to hedge bets should political and social power shift as Libya continues to sort out its future.
Once connections have been made, expect the need to establish a good working relationship before getting down to business matters. Libyans from all walks of life prefer to do business with someone they have met face to face. It is also important to make frequent visits, which shows your commitment to the market. Try to keep your team consistent; avoid sending a different person on every visit. Do not underestimate or try to rush relationship building.
Do’s and Don’ts
Although most Libyans will overlook small political and social faux pas, visitors doing business in Libya should be aware of the following pitfalls that could jeopardise their business relationship.
- Expect things to take time. Libya is still restructuring politically, which also impacts business. Be prepared to deal with infrastructure challenges. Be patient.
- Develop your repertoire of small talk. Most Libyans have a passion for football as well as the latest technology.
- Keep your feet on the floor. Never show the bottom of your feet or shoes toward another person, including crossing your legs, as this is symbolically highly insulting throughout the Arab world.
- Refuse gestures of hospitality as it could cause embarrassment for your hosts. This includes offers of coffee or tea in meetings, no matter how many you have already had.
- Discuss difficult political topics, especially to do with Libyan Revolution.
- Assume that modern/Westernised Libyans have the same values as you. Beneath the surface, traditional cultural values may prevail.