By Dr.Richard Mbewe
As the people’s revolutions sweep across the Middle East from Morocco to Bahrain, a number of analysts including the author have started wondering about the new political and economic order of that region, after the dust has settled down. For further discussion, the Middle Eastern region undergoing the turbulences can be divided into two parts: the Maghreb region comprising of countries of North Africa like Morocco, Algeria, Tunisia, Libya and Egypt and these are countries in the proximity to the European Union. The second part comprises of countries in the Arabian Peninsula like Saudi Arabia, Syria, Jordan, Yemen and the Gulf States including the Emirates, Bahrain, Oman and Kuwait. Quite surprisingly Iran and Iraq are out of these revolts as those countries have specific problems of their own.
The consequences of what is happening in this region have a global impact due to a number of reasons and their effects have been amplified by the global impact of news transmission. This allows for people in this region to see and want to imitate what is happening in other countries. Thus, the Egyptian revolutions has been attributed to innovations in communication technology like Tweeter and/or Facebook. The second reason why events in that region have a global impact is that the region consists of countries that are major producers of crude oil, by far the most strategic commodity in the World. Libya accounts for 2% of global oil production and 10% of the oil used in the European Union. Thirdly, the region is the passage way for the majority of products involved in international trade through the Suez Canal. Indeed, the Suez Canal is the major route connecting Europe to Asia and to some extent to America. The supply of various raw materials and finished products, of which the most important is crude oil pass through here. The Suez Canal is also a path route for the telecommunications fiber network that facilitates phone, email, internet communications between Europe and Asia. Fourthly, the region is undergoing dynamic changes as regards to demographic issues – youths account for the majority of the population, an increase in fundamentalism (especially Islamic) and social tensions including the role of women in society. The equation is made more difficult by the Palestinian issue and the future of Israel in the region, dominated by Arab states that might not necessarily be friendly to it.
Another of the major impacts of the revolution in the Middle East is economical, especially the global role of huge funds that are owned by those states. I have in mind investments undertaken by those states through specific Sovereign Wealth Funds, especially those of major oil producers like Libya.
Prior to the revolution, Libya had become very active by investing its sovereign wealth in major businesses across the African continental, especially in telecommunications. The Libyan government investment company called Libya African Portfolio (LAP) has set up an investment vehicle called LAPGreenN has invested in the telecoms business in many African countries including Uganda, Rwanda, Niger, Ivory Coast, Zambia, South Sudan, Sierra Leone, and Togo. With the ongoing disintegration of Libya and the potential power vacuum that will come up (until a generally accepted leader takes over in Libya), it has become imperative to find the answers to a number of questions as regards to these Libyan investments in Africa.
Firstly, what will happen to foreign investments undertaken by the Gaddafi regime? Since Gaddafi was Libya’s strong, he was behind all these investment decisions. In light of a new nationalist government taking over, will these investments be cancelled off and the money taken back to Libya? Also, there is a danger that there might be a power vacuum upon Gaddafi’s departure. This power vacuum might be filled by Islamic fundamentalists. They might want to keep intact these investments (especially in telecommunications) in order to foster their further development of Islam in these countries where LAPGreenN is operating, especially in Africa south of the Sahara.
Taking into consideration that telecommunication is one of the most strategic sectors of an economic of a given country, what dangers will these African governments (including Zambia) will face in the new circumstances? On the other hand, the new government in Libya might as well just want to get rid of these investments to anybody that offers the best bid. This results of such a move whereby a strategic sector falls into the hands of investors who do not necessarily have Zambia’s national interests at heart.
This situation of LAPGreenN investment in ZamTel is a classical example of how you really have to analyze any privatization investment, prior to its launching it. Had the Zambian government undertaken appropriate assessment LAPGreenN, surely they would have come up with information that there is a possible threat to this investment exhibited by a change in the political situation in Libya. This should have been proved and counter-checked by Zambian intelligence security reports from Libya, as to how long the Gaddafi regime was going to hold on to power. Now it is time to protect our national interests by our not further losing control over such a strategic company.
Disclaimer: The opinions above express the individual views of the author and do not reflect the views of any other individuals and/or institutions (both private and public) that in any way related, work and/or co-operate with the author.