Transitions

Looking for a New Holiday Destination? Try Libya (No, Seriously!)

The way the world's media report on Libya these days, you'd think the whole country is one big battlefield, all flickering flames and crazed jihadis. Oddly enough, the people who live here don't necessarily see it that way -- despite their continuing frustrations with a dysfunctional central government and the frightening antics of uncontrolled militias. When most Libyans look around, they still see, in essence, the same old country they've always loved, and they can't help imagining what a success the place would be if they could just open it up to the outside world: Unspoiled Mediterranean beaches with year-round sun. An astonishing range of Roman ruins and other ancient sites. The romance of the Sahara's great sand ocean. And all of it just a short ferry ride away from the European Union.

Maybe it's not as crazy as it sounds. Last week the town of Awjila, located in the desert to the southwest of Benghazi, held its second annual tourism and culture festival -- its second, of course, since Libyan's ended the 42-year-old dictatorship of Muammar Qaddafi in 2011. Awjila, an ancient oasis town, boasts a lovely sampling of traditional architecture, in some cases dating back to the 12th century, as well as some of the world's tastiest dates. (Palm tree agriculture is a mainstay of the local economy.)

Needless to say, Libya would benefit enormously from the establishment of a proper tourism sector. The country urgently needs to diversify its economy and reduce its dependence on oil -- precisely why the Libyan authorities appear determined to embrace the country's potential as a tourism destination.

Yeah, so Libya still suffers from security problems. But consider the example of Croatia. The Balkan Wars had barely ended when the first adventurous European Union tourists were already setting off to explore the delights of that beautiful nation on the Adriatic. By 2005, a mere ten years after the war, Croatia was already being named by the Lonely Planet guidebook as one of the world's top destinations. Last year, the country drew 17.4 million tourists, generating billions of dollars of income. Croatia's population: 4 million (a little bit less than Libya's).

Of course, Libya first has to get its rampaging militias under control before it can even start considering to invite visitors -- and that's a goal that admittedly remains a long way off. Ikram Imam, Libya's tourism minister, acknowledges the importance of establishing the rule of law and improving security conditions before the country can really start to develop the sector. Still, she does her best to sound optimistic.

That isn't even the only problem, though. After years of Western-imposed sanctions and corresponding isolation from the world economy, Libya has little tourist infrastructure worth the name. Years of Qaddafi-imposed socialism have left the service sector underdeveloped. It will also be interesting to see if the deeply conservative Muslim population is willing to tolerate the sight of Western visitors freely consuming alcohol. Neighboring Egypt, where tourism has taken a dive since the Arab Spring broke out, has found itself confronting the same problem. Last year, the news that the Muslim Brotherhood-dominated government (which has since been kicked out of power by the Egyptian military) was thinking about banning the sale of booze on the country's beaches pummeled the already sagging tourism industry.

But you can't blame Libyans for hoping, and Awjila embodies those hopes better than just about any other place in the country. It's not just the beautiful buildings, either. Awjila is a place where Islamic Arab culture mixes congenially with that of the Berbers, the indigenous inhabitants of North Africa. The town prides itself on its festivals and colorful wedding parades, all featuring unique customs, music, and food. Visitors can also watch traditional horse and camel races -- not to mention experiencing the glorious vastness of the nearby Sahara.

The Awjila Festival, in short, is a reflection of what most Libyans would like their country to become: a peaceful state that embraces diversity and celebrates difference in an environment welcoming to visitors from around the world. Not a bad dream at all.

So forget about the occasional pesky car bombing. Ignore those silly travel advisories from the U.S. State Department and the European Union. And don't worry about the fact that you probably won't see any other tourists around. Show a sense of adventure. Come to Libya. You certainly won't forget the experience.

Mohamed Eljarh is the Libya blogger for Transitions. Read the rest of his blog posts here

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Venezuela's Government Versus the World's Airlines

International airlines serving Venezuela are not on good terms with the country's government. The government owes them close to $3 billion in ticket sales, and is now trying to "negotiate" the debt, i.e., water it down so that it doesn't have to pay as much. In fact, one could say the government is downright expropriating the airline's hard-earned profits.

How did the two parties get to this point?

The story begins in 2003, when Hugo Chávez first established the country's currency exchange controls to trim capital flight. He decided that purchases of dollars would have to be approved by the central government at a fixed price.

As part of the implementation of the exchange, Chávez decided that airlines could sell their tickets in bolívares, the local currency, and the government would let them change the proceeds into dollars at the official rate. (In the photo above, the late Chávez indulges in his dreams of flight.) Venezuelan tourists flying overseas could also get access to dollars at the official rate for their personal expenses. The official rate remained fixed, a black market for currency appeared, and Venezuelans began traveling overseas in droves to take advantage of the government's cheap dollars. And airlines seemed happy: Since local airlines are over-regulated to the point of atrophy, foreign airlines had little competition. In essence, the Venezuelan government has been subsidizing wealthy Venezuelans' overseas vacations for years. The airlines were more than glad to transport them.

Sadly, the Venezuelan government hasn't upheld its side of the bargain.

Months have passed since the last time airlines were allowed to repatriate their profits. In the meantime, they continued selling tickets in bolívares, as Venezuelans continued flying abroad. As the gap between the black market and the official rate widened, airlines continued to find it profitable to sell tickets. But with their coffers flush with bolívares, the airlines now have too much cash in their hands. Since the Venezuelan currency is quickly losing its value -- inflation last year was close to 60 percent -- they have begun investing in local real estate. Partly as a result, prices for offices in Caracas have gone through the roof.

The crisis came to the forefront a few weeks ago when the Spanish airline Air Europa decided it would stop selling tickets in local currency and consider pulling out of Venezuela altogether. Other airlines have hinted at similar moves. Given their large exposure to Venezuela's risk and the real threat of not getting their money back, the game might not be worth it. Panama's Copa Airlines, for example, said that it has about $400 million trapped inside the country, and United Airlines has told investors its cash is also being held up. American Airlines and Colombia's Avianca have already cut back on their sales in local currency.

In response, the government made Air Europa an offer it cannot refuse: it promised the company a combination of cash, government bonds, and cheap airplane fuel. Air Europa has not responded, but this feels like a final offer from the government, given the dire state of its finances. By acknowledging it does not have the cash to compensate the airlines, the government is reneging on its promise and, essentially, defaulting on its debt.

The Venezuelan government is used to rewriting the rules under which it does business. It did so with oil companies operating in the country, and it has also done so with the slew of companies it has nationalized. The government does not court foreign direct investment, so it basically does what it wants.

The prospect for the airlines seems dim. Yesterday, in an announcement that amounted to a devaluation of the official dollar rate, the government surprised the airlines by announcing that their ticket sales would now be translated into dollars at a new, higher rate. It also said it was exploring ways to honor its commitment to past sales.

The airlines had better brace themselves. After the Venezuelan government expropriates their profits, many airlines will decide to leave the country altogether, leaving Venezuelans increasingly isolated from the world. Venezuelans may not face the travel restrictions faced by Cubans, for example, but if there are no airlines serving the country, and with increasing restrictions on the amount of currency available for travel, the government doesn't need to actually block the exit of its people.

Its regulations and the realities of the market will take care of that.

Juan Nagel is the Venezuela blogger for Transitions, co-editor of Caracas Chronicles, and author of Blogging the Revolution. Read the rest of his posts here.

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