Last Sunday former President Bill Clinton asked the CEO of Walmart if he would open a store in Libya.
Surely Libya needs more jobs and needs to get its economy going, but I am not sure how a Walmart would do that. A large proportion of the goods that [...]]]>
Last Sunday former President Bill Clinton asked the CEO of Walmart if he would open a store in Libya.
Surely Libya needs more jobs and needs to get its economy going, but I am not sure how a Walmart would do that. A large proportion of the goods that Walmart sells in the United States are imported into the United States, not made there. Seventy-five percent of the foodstuffs in Libya are imported from elsewhere. Libya has no real manufacturing base. Libya’s supply chains are hardly up to the task for feeding into a group of Walmarts. Most of the managers and even greeters may have to be foreigners initially. The people setting up the supply chains would also likely be non-Libyans given the complexity of what needs to be done and the lack of applicable training for most Libyans.
The finance for the setting up of the Walmart(s) would have to be via foreign direct investments likely from the United States. Those investments would need some insurance from the Overseas Private Investment Corporation. There would also need to be lots of cooperation and aid from the US government and the Libyan government regarding security for the initial buildings and the entire supply chain within Libya. Maybe the World Bank, the International Finance Corporation and others could be involved in developing the basic infrastructure and connections needed. Effort would also be required for improving the capacity of the Libyan government to handle economic development and the development of businesses.
Physical as well as financial security would be keys to the success of a Walmart in Libya. It would not take much for some trucks or even a store to have problems. Walmart is definitely an American brand and there are lots of Salafis and others who would want to do damage to anything representing an American brand. Consider what happened to the French Carrefour markets in Tunisia during its revolution. Think of what happened to outlets of major American food chains like KFC during the recent riots against that repulsive anti-Islam film. Think of the increasing anti-Americanism amongst some groups in the region and you can see that there could be some physical security issues.
Financial security may require that the payrolls, insurances, cash flows for inventory, maintenance, upkeep and more be kept offshore in part for a while. As the security and banking capacity situations in Libya change this could change. There could also be some significant foreign exchange risk involved, especially if the new Libya becomes more unstable and cannot get its economic act together. However, a good risk management team could hedge this if they knew the country well.
There are also some inherent financial and physical risks by simply being in North Africa and near Egypt and Tunisia, two countries that are still in the midst of trying to find their ways. Their revolutions are likely far from over. There is also a problem with Al Qaeda in the Maghreb and other AQ-like groups floating around the region. The instabilities to the south of Libya are hardly comforting.
Even so, my sense is that President Clinton’s heart was in the right place even if his logic needed a bit more work.
Libya needs foreign investment. There is a lot that American companies can do in Libya.
There are many people in Libya who are pro-American given that we helped their country gain some independence from the wretched regime of Qhaddafi. Many of the expatriate leadership of Libya of the older generations spent some time in the United States. We could gain a lot by helping some of the younger people, appropriately vetted, to get scholarships to visit and study in the United States. Sometimes the best way to make friends and future allies is to give them a good experience in the United States and provide high-quality education and training. There are great opportunities even within the massive and volatile risks of Libya.
That said there are many people in Libya including some militias, extremist groups, pro-Ghaddafi remnants and more who do not like the United States, to put it mildly.
It will be vital to understand the overall environment on the ground of who is who and where they stand before moving forward. It may be a big mistake to write off Libya because of the vicious and evil behavior of a few when the majority of the country could benefit. But we need to be sure.
However, dropping Libya as a place to help may end up delivering it to the extremists and that is a very bad idea.
There is another side to the Walmart story. What about all of the small mom and pop stores, green grocers, kiosks and others in Libya who may be put out of business due to the Walmart. Many of these have been put out of business here. How would Libyans react to being put out of business by a massive American company?
On the other hand, if Walmart and other US companies take the leap into the new North Africa they could help develop countries and their people while at the same time making serious profit. However, the Walmart model may not be the best one to start out with.
Indeed, there are risks. Normally in such situations the only companies that come in are the oil and gas companies or other major energy companies that have vast experience working in conflict and post-conflict zones.
Maybe President Clinton was trying to get a discussion and debate going in US business communities as well as in the government about how the US could help the economies of these hurting countries in a (hopefully) post-conflict environment. This is an important thing to consider even if the situation looks dismal from afar.
Developing the economies of these countries will be far from easy and there are likely to be many bumps along the road – some of them very steep and risky. However, with the right incentives and the right risk management, it may be possible to make a difference and to do well by doing good.
Perhaps there could be some tax breaks and free land to build on in return for training and educating Libyans and increasing the percentage of Libyans working at the Walmart or other such stores. There will need to be some give and take. I know that the tax breaks and free land (for a limited time of perhaps 10 to 20 years and then the lease fees kick in) are contentious. But Libya needs to move forward and get its people — especially its young people — employed. Maybe the United States could improve its reputation in the region by doing just that.
You make more friends by creating jobs than dropping bombs. Developing a better security situation in a region via real strategic thinking can involve a lot more than just the military and the State Department. Sometimes businesses can make a big difference.
However, many businesses need to be sure that they are not going to walk into mine fields before they move forward with serious investments.
There is a certain menace attached to Libya now. Violent extremists created that. Should we give up on the rest of the Libya because of the people who want to destroy it rather than build it up?
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News and views relevant to US foreign policy for Sept. 12
“U.S. ambassador to Libya killed in Benghazi attack”: Reuters reports that the US ambassador to Libya, Christopher Stevens, was killed yesterday along with three of his staff when protestors and heavily-armed Islamist militiamen stormed the embassy compound and a [...]]]>
News and views relevant to US foreign policy for Sept. 12
“U.S. ambassador to Libya killed in Benghazi attack”: Reuters reports that the US ambassador to Libya, Christopher Stevens, was killed yesterday along with three of his staff when protestors and heavily-armed Islamist militiamen stormed the embassy compound and a safehouse in the coastal city of Benghazi.
The attack, which occurred shortly after the US embassy in Cairo was stormed by a mob, was ostensibly staged over an anti-Islamic film that has been publicized in the US. It is also possible that the demonstration in Benghazi over the film served as “cover” for a pre-planned assault on the compound:
The attack was believed to have been carried out by Ansar al-Sharia, an al Qaeda-style Sunni Islamist group that has been active in Benghazi, a Libyan security official said. Witnesses said the mob also included tribesmen, militia and other gunmen.
The Islamist militia denied it had taken part in the assault on the compound, which AFP suggests was strangely well-coordinated given the fact that the film cited as the reason for the demonstration had not been publicized for very long. Unknown persons set up a firebase in a nearby farm to support the men who breached the walls and set fire to the buildings:
Ansar al-Sharia cars arrived at the start of the protest but left once fighting started, Hamam said. “The protesters were running around the compound just looking for Americans, they just wanted to find an American so they could catch one.”
“U.S. Suspects Libya Attack Was Planned”: The New York Times reports that the Obama Administration has reason to believe the attack in Libya was preplanned – it is not clear if the assault in Egypt is also being investigated for premeditated actions – by al Qaeda sympathizers. The US announced it was pursuing an investigation but had no firm evidence yet:
If it were established that the deaths of the American diplomats resulted not from the spontaneous anger of a crowd about an insult to Islam but from a long-planned Qaeda plot, that might sharply shift perceptions of the events. But officials cautioned that the issue was still under urgent study.
The White House would not comment. “At this stage, it would be premature to ascribe any motive to this reprehensible act,” said Tommy Vietor, a White House spokesman.
But according to comments reported by the Christian Science Monitor, Libya’s Deputy Minister of the Interior Wanis al-Sharif has suggested that there was a link between the attack and the announcement yesterday –posted on the 11th anniversary of 9/11 by al Qaeda’s official As-Sahab news outlet – that Ayman al-Zawahri’s deputy, the Libyan national Abu Yahya al-Libi, was killed by a US drone strike in Pakistan.
Al-Zawahri, the Associated Press reports, “urged Libyans — al-Libi was born in the north African country — to attack Americans to avenge the late militant’s death, saying his ‘blood is calling, urging and inciting you to fight and kill the Crusaders.’”
The Deputy Minister of the Interior has subsequently blamed the American government for not taking precautions over this announcement. The US government has yet to respond to this apparent attempt by al-Sharif to deflect blame for the attack’s successful penetration of the embassy grounds after the outnumbered and outgunned Libyan guards stationed there abandoned their posts.
“Romney Campaign Denies Acting Rashly on Libyan Situation”: The National Journal reports that the Republican Party is deflecting criticism from both parties over their presidential nominee’s assertions that Obama was “sympathizing with those who had breached our embassy in Egypt instead of condemning their actions.”
Romney’s comments referred to a statement, now since walked back, by the US embassy in Cairo condemning the anti-Islamic film for inciting hate. The statement was released shortly before a mob converged on the compound and scaled the wall, but at a press conference in Jacksonville, Florida, Mitt Romney painted the embassy’s statement as a response to the attack after it happened rather than to the film before the protest took place.
Ben Smith reports that in addition to cited condemnations coming from Democrats, Republican foreign policy experts have voiced dismay over Romney making his remarks before more reports were available to judge what had happened in Cairo.
But the campaign has hit back on the criticism of its actions, with Romney not retracting his initial remarks and instead telling reporters that “it’s never too early for the United States government to condemn attacks on Americans and to defend our values.”
Statements published by Jennifer Rubin at the Washington Post – whose editorial board strongly criticized Romney’s remarks – show that several of Romney’s hawkish advisors, most notably former UN ambassador John Bolton, are rallying to his defense and blaming the media for mischaracterizing their candidate’s remarks.
And according to the National Journal, other “senior Romney advisers, who would not speak on the record,” are practicing damage control by presenting the remarks as part of:
]]>“[t]he larger point of Romney’s statement, which accused the administration of initially siding with protesters in Cairo, was that Obama is misreading the violent underbelly of the Arab Spring and jeopardizing U.S. interests in the region.
“This was a story that was building the entire day,” a senior Romney official said of the developments that took place late on Tuesday and into Wednesday morning. …. [a]nd the statement was about the consistent failure of this administration to engage constructively with the aftermath of the Arab Spring.”