INDiplomacy interviewed Romano Baruzzi, the officer that the Italian Trade Agency (ITA) sent to Tripoli with the delicate task of reviving economic relations between Italy and Libya. Romano Baruzzi gave us some insights about the current situation in the North African country and talked about what his office is planning to do to support Italian companies in Libya.
Libya is a key economic partner for Italy. For this reason, Italian institutions have been following closely the recent developments on the ground, that seem to be leading the country towards the conclusion of the conflict that began in 2014.
The UN-led peace talks reached a first important result last March, with the election of the government of national unity led by PM Abdulhamid Dbeibah. The Italian government has always expressed its willingness to support Libya’s economy during this delicate phase of political transition.
The improvement in the political situation in Libya, and the consequent economic opportunities that have opened up in the country, brought the Italian Trade Agency (ITA) to reopen its office in Tripoli. The man tasked with reviving economic relations between Italy and Libya is Romano Baruzzi, an experienced officer who has previously worked in Japan, Hong Kong and the US.
We had a chat with Trade Commissioner Romano Baruzzi, who gave us some insights about the current situation in the North African country and explained us what his office is planning to do to support Italian companies and promote Made in Italy products in Libya.
With the recent improvement in the political situation in Libya, the Italian Trade Agency decided to reopen its office in Tripoli. What is the situation today in Libya?
Certainly, our presence in the country is significantly smaller if compared to the years before 2011, when more than 100 Italian companies operated in Libya. In September, the Italian Trade Agency reopened in Tripoli a Promotional Desk with the aim of giving support to Italian companies interested in the market through targeted assistance services, the organization of promotional initiatives and the participation, both in presence and online, of Libyan economic operators to fairs, workshops, forums and B2B meetings organized by ITA in Italy.
What can you tell us about commercial relations between Italy and Libya today?
We are still far from the numbers of 2008 that saw Italy’s trade with Libya exceed €17 billion. However, all indicators show a strong recovery of bilateral trade in 2021. In the second quarter of 2021, Italy was the first destination market for Libya’s exports, with a market share of 21% ahead of Spain (12%), China (11%) and Germany (10%).
During the first 8 months of 2021, bilateral trade exceeded €4 billion, increasing by 179.87% if compared to the same period in 2020. Italy reached a market share of 16.88% ahead of China (11.84%), Spain (8.68%), Germany (8.14%) and Turkey (7.57%). During the first 8 months of 2021 Italy’s exports to Libya grew by 31.8% if compared to the same period of the previous year.
In 2020, trade between Italy and Libya had reached a total value of €2.6 billion, making Italy Libya’s second trading partner after Turkey which totaled €2.89 billion, and ahead of China with €2.38 billion, Germany with €1.10 billion and Spain in fifth place with €0.91 billion.
Since hostilities ended, an important phase of economic reconstruction in Libya has begun. What opportunities does this situation offer to Italian companies?
The large financial resources deriving from the exploitation of oil, together with the need to rebuild the country make Libya a market full of potential. In theory, in this phase of reconstruction, Italian companies can play a leading role thanks to their natural industrial vocation and by virtue of the geographical proximity and historical ties that unite Italy and Libya.
What are the sectors of greatest interest for Italian companies in Libya?
The sectors in which most of Italian companies operate are the construction, energy, (in particular oil), industrial plant engineering and infrastructures sectors.
The Libyan economy appears to be particularly interesting for Italian companies: on the one hand, many opportunities are offered by the infrastructures and construction sectors, considering that Libya has great capacity to finance public investments and that has suffered considerable damage from the conflicts of 2011, 2014 and 2019, in addition to decades of neglect; on the other hand, companies active in traditional Made in Italy sectors, such as agri-food, furniture, jewelry or even pharmaceuticals, find in Libya a favorable situation, both for the considerable purchasing power of growing sections of the population, and for absence or very low level of customs duties.
As for the mechanics sector, the absence of a manufacturing industry of significant size limits the opportunities for capital goods, while the market for machines and appliances related to construction and the oil industry has more potential.
What are the main challenges that Italian companies have to face in Libya? And how can they best prepare to handle them?
In Libya, the delicate stabilization process means companies must overcome some very difficult challenges, both on a political-commercial and economic-financial level. This is true for everyone, not only for Italian companies. Careful analysis, monitoring and scouting activities would certainly help Italian companies to enter and / or return to Libya with in a more secure and stable manner.
What is the Italian Trade Agency doing to support Italian companies in this complicated phase?
The Italian Trade Agency recently launched Export Tutor, a new initiative that is part of the Export Pact [signed in June 2020 by the Ministry of Foreign Affairs]. Export Tutor aims at supporting the internationalization of Italian companies in a structured way. Export Tutor is one of the many innovations introduced in the last two years in order to make ITA’s services and other internationalization tools offered by Italian institutions available to a larger number of companies. These include a number of free services, free spaces for Italian companies within foreign fairs, regional desks, the one-stop shop export.gov.it. The Italian Trade Agency is offering more “easy to do with” services with the aim of encouraging Italian companies to export their products abroad.
Are there any upcoming events or fairs that Italian companies can attend in order to get to know the Libyan market better?
In the first half of 2022, if there will be the necessary conditions of stability and security in the country, the Italian Trade Agency, together with the Embassy of Italy in Tripoli, will take part, together with a delegation of Italian companies, to Libya Build, the largest construction fair in North Africa, that will be held on May 23-26. We are also planning to hold an event on renewable energy with B2B meetings between Libyan and Italian companies.
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