Business strategies in Libya after the Arab Spring: Ramboll’s business strategy when navigating in a politically unstable country offering great business opportunities

Stine Skouby Asnæs

Student thesis: Master thesis

Abstract

The thesis’ objective is to investigate which business opportunities are relevant when considering investing in Libya after the Arab Spring. When doing business in a politically unstable environment, business strategic literature argues that the institution-based view is particularly relevant because institutional set-ups can change due to political unrest and change in power. Consequently, in order to answer the first research question, the thesis undertakes a comprehensive political analysis with the objective of determining whether the current government’s plan is realistic with regard to whether businesses can expect the institutional context to prevail or change. Determining that Libya cannot be categorized as a modern state, a strong state, or a nation-state, state failure is present, which potentially can lead to the change of the institutional context of Libya. Since the current government demonstrates a friendly attitude towards Western companies, especially towards those companies originating in countries that supported the Libyan revolt against Qadhafi, the thesis turns to analyze the potential for Libya to develop into the desired democracy and capitalist economy by applying Seymour M. Lipset as the modernization theorist and Samir Amin as the dependency theorist. Introducing the rentier economy, the economy based on revenues from oil exports, the political analysis concludes that the desired transformation into democracy and a capitalist economy is unlikely in the short term. By applying Tanja A. Börzel and Thomas Risse, the business strategy analysis argues that the functional equivalents of Libya forces businesses to undertake a proactive engagement if investing in Libya. The proactive engagement covers filling the gap caused by institutional state limitations to comply with its obligations vis-à-vis its population as well as securing a fair distribution of the wealth. Börzel and Risse argue that businesses are a source of non-hierarchical governance; political instability can be addressed by joint efforts of the Libyan state and the foreign private business. CSR commitment is only relevant in relation to the process of deciding whether or not to invest in Libya, in which the balancing of contradictory CSR elements can result in the neglect of the role of the business as an actor promoting political and economic development.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2013
Number of pages180