Libya: Waste, Fraud Erase Billions in National Wealth (original) (raw)

In October 2011, Amr Farkash was enjoying life as an investment banker for HSBC in London when he heard that Muammar Qaddafi, the dictator who had subjected Libya to his bizarre and often terrifying rule for 42 years, was dead. Farkash was elated by the news. Raised in Egypt by Libyan parents, he was eager to participate in rebuilding his country, which he had never seen. “I really had no reason whatsoever to leave London and my high-status job,” he recalls recently over dinner at a restaurant in Cairo. “My life was wonderful.”

In the weeks that followed Qaddafi’s death, Farkash was seized by a vision of how rebuilding the country might also be a pathway to personal riches. The more he studied Libya, the more convinced he became that it was a gold mine—a strip of coastal desert in North Africa, next to Egypt, with a relatively well-educated population of 6 million in need of seemingly every kind of consumer product and service, for which the country would easily be able to pay by continuing to pump its usual 1.3 million to 1.5 million barrels of oil per day. The Central Bank of Libya, according to Reuters, had more than 100billioninforeignreserves,mostlymoneycollectedfromoilsalesunderQaddafi.TheLibyanInvestmentAuthority(LIA),theoverseasinvestmentarmoftheQaddafigovernment,hadabout100 billion in foreign reserves, mostly money collected from oil sales under Qaddafi. The Libyan Investment Authority (LIA), the overseas investment arm of the Qaddafi government, had about 100billioninforeignreserves,mostlymoneycollectedfromoilsalesunderQaddafi.TheLibyanInvestmentAuthority(LIA),theoverseasinvestmentarmoftheQaddafigovernment,hadabout70 billion invested with blue-chip Western companies such as Société Générale and Goldman Sachs, and an additional $50 billion or more invested throughout Africa. And in Libya, every asset you could imagine was dirt-cheap. “It was a clean page,” he remembers. “You could start from scratch.”