Libya has built on its warming ties with Washington to take fresh steps to reduce its dependency on oil, deciding to liberalise the real estate market and boost investments in tourism.
The decisions were taken by the General People's Congress (GPC), which acts as a legislature under Colonel Moamer Kadhafi's government, at its session last week in the central coastal city of Sirte, officials said.
The GPC has decided to abolish a law that prevents citizens from owning more than one home, one of the socialist measures adopted in the 1970s in line with Kadhafi's Jamahiriya, or "state of the masses", regime.
Libyan officials said the law has been reversed to allow citizens to rent and own homes, offices and land, a move effectively liberalising the market.
The measure allows private sector investments in the real estate sector, reducing the state's burden of providing housing for the population.
The GPC has also decided to fully open the tourism sector to local and foreign investments and exonerate them from taxes.
Libya has been trying to reap the benefits of its desert oases and beaches as well as archaeological sites on the coast - such the Roman theater in Sabratha and the ruins of the city of Leptis Magna.
The drive to reactivate tourism started in 1997, when a first law allowing foreign investments was passed under certain conditions, and the government listed the sector in 2000 as a priority for development.
But those measures were greeted with little enthusiasm and the only major achievement reported was the opening in 2002 in Tripoli of the luxury 300-room Corinthia Hotel, owned by the Libyan/Maltese Corinthia Group.
The Corinthia nevertheless set a new benchmark for future tourism projects and gave foreign businessmen a quality hotel.
Libya's efforts to reduce its dependency on oil started in the late 1980s, when international petroleum prices tumbled dramatically, and the task became more urgent for Tripoli after international sanctions imposed in 1992.
The falling oil prices and the sanctions, imposed because of Libya's involvement in the 1988 bombing of a PanAm airliner, reduced the government's ability to continue its generous subsidies.
The dwindling financial power of the government caused unemployment to rise in the 1990s to between 25 and 30 percent of the active population.
Diplomats said Libya now has more chances to lure investment with the end of UN sanctions last year and the warming of ties with Washington over its decision to dismantle secret programs for weapons of mass destruction.
Oil accounts for 94 percent of Libya's exports, 60 percent of its government revenue and 30 percent of its 34 billion-dollar GDP, according to official figures.
So far, Libya's liberalising measures increased mainly investments in its oil and gas sector, which provide the fastest and most guaranteed return.
An Arab economist said more than 90 percent of contracts signed with foreign companies last year were related to the energy sector, whereas in the 1970s, 50 percent were in the construction sector.
Arab press reports have attributed the growing liberalising drive to the reformist prime minister, Shukri Ghanem, who was retained in his job by the GPC in a March 6 reshuffle, but diplomats said Kadhafi has always been the one behind it.
"The Revolutionary Committees," the main political organisation, "do what Kadhafi tells them to do," said a diplomat.
The GPC also restored the energy ministry, abolished in 2000, and named an oil expert close to the Revolutionary Committees, Fathi Ben Shatwan, at its head.
The move is expected to facilitate talks with US oil companies who were allowed by their government in February to reopen negotiations with Tripoli on their re-entry into the country they left after US sanctions were unilaterally imposed on it in 1986 over charges of terrorism.
The energy ministry and others were abolished in 2000 because the GPC said it wanted to devolve central power to the provinces. But the move worried foreign investors who wondered if contracts and cooperation agreements could be abolished as easily.
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