By Tom Pfeiffer
TRIPOLI, Nov 19 (Reuters) - As economic barriers fall between Libya and the West, a boom-town atmosphere fed by the novelty of consumer culture has gripped its capital Tripoli.
Hotel rooms are in short supply as foreigners flock to the Mediterranean port city to seal business deals made possible by the OPEC member country's recovery from years of sanctions.
As the sun sets and a cool breeze wafts through shady colonial-era arcades, Tripolitans stroll past shops laden with a growing array of imported goods, from veiled Barbie dolls to England football shirts, designer handbags and silk scarves.
According to the United Nations Conference on Trade and Development, foreign direct investment into Libya rose to $2.5 billion in 2007 after a slow recovery since 2004, the year after Libya gave up its weapons of mass destruction programme.
That put it on a par for inflows with Morocco and Sudan in Africa.
Near Green Square's glaring floodlights and posters celebrating 39 years of Muammar Gaddafi's Islamic socialist revolution, businessmen with the latest laptops discuss investment projects over Italian coffee and fruit smoothies.
As the number of flights to Tripoli grows, the airport's car park has overflown into a field nearby. A $2 billion project to increase passenger capacity more than sixfold is under way.
"If you don't visit a particular area for a while it becomes hardly recognisable," said Libyan singer-songwriter Ahmed Fakroun. "You ask yourself: `When did all this happen?'"
With unemployment estimated by the U.S. embassy to run at a minimum of 30 percent in Libya as a whole, the laid-back people of Tripoli appear unfazed by the level of activity and growing number of foreign visitors.
The most significant arrival by far was that of U.S. Secretary of State Condoleezza Rice, whose September trip was intended to end decades of enmity.
It raised hopes that Libya is on its way back into the international mainstream after years when it was seen in the West as a supporter of terrorism. To judge by the atmosphere in Tripoli, the shift to modernity is well rooted.
WHEEL SPINS AND NEW HOTELS
A tailback of BMWs and sport-utility vehicles forms along wealthy Ben Achour Street and young male drivers show off their powerful engines with screeching wheel-spins that send up plumes of smoke.
The noise fails to distract a group of old men playing draughts over a water pipe of tobacco.
Billboards across town advertise towering hotel developments. French perfume and Italian designer clothing stores have appeared to cater for a new class of wealthy, sophisticated Libyan with money to burn.
"Business is booming and next year promises to be even bigger," said Mustapha, a Tunisian working for Italian furniture group Doimo. "We've stopped taking more business for now as we just wouldn't be able to honour the contracts."
U.S. companies got involved in Libyan oil and gas after the end of sanctions in 2004 but many held back until this summer when the two countries agreed to set up a fund to cover terrorism compensation claims.
Today, big American brands are still conspicuously absent. There are burger bars, but no McDonalds. A man dressed in a furry duck outfit greets visitors to a family restaurant, yet Disney stores are nowhere.
Libyans interviewed in Tripoli say their country is opening to the global economy on its own terms, encouraging inward investment while eschewing symbols of western economic power.
They prefer not to discuss politics but some defend Libya's system in which young families are sold starter homes at favourable rates, flour is subsidised to ensure it stays "cheaper than sand" and few citizens are reduced to begging.
Gaddafi's Green Book, the theoretical foundation of his system of government published in the late 1970s, calls the employee-employer relationship one of slavery and proposes "Not Wage Workers, but Partners". Now his influential son Saif al-Islam has put his weight behind a campaign for more Libyans to set up small businesses.
INFLUX OF FOREIGNERS
Some Tripolitans say reforms to encourage people to retrain for real jobs rather than relying on government sinecures are a sign the country can modernise without a new revolution.
"You can get what you want in Libya, but you do need to work hard at your studies," said Abdelhafid Shtiwi, a 30-year-old desert oil field engineer. "Some people might take government money and just stay at home, but that's not much of a life."
Others say Libyan society has become a little more meritocratic -- their compatriots can be seen working as mechanics and even street cleaners where before they would have turned down such work.
They say a new atmosphere of enterprise has infected part of the population, and Tripoli's shops draw Tunisians stocking up on cheap consumer electronics and household appliances. Tripoli is some 180 km (112 miles) from the Tunisian border and in the years of sanctions, Tunisia was a relatively easy route in.
Yet Libyans with less well-paid jobs complain the influx of foreigners has pushed up the cost of living and family incomes have failed to keep pace.
"Everything is expensive, expensive, expensive," said taxi driver Mustapha. "My father is dead and I struggle to support my sisters and brothers. Only petrol is cheap."
Gaddafi has ruled out changing his system of government, which bans political parties in favour of rule by local committees. But he has suggested citizens should be handed more of the desert country's oil wealth and allowed to decide how to spend it themselves.
That reform is meant to start in January, although Libyan experts say it may be derailed by global financial turmoil.
"If the international circumstances do not permit such a programme to be carried out now, it could be delayed," said Saleh Ibrahim, a member of Libya's National Planning Council and director of the Academy of Graduate Studies.
And after so many years of isolation, some Libyans remain suspicious of the growing foreign presence: "Apart from all these hotels, are they going to give us scholarships, better education and help our government offer free health?" said economic consultant Ismail Thurki. "I worry it will be the foreigners who take the profits, not us Libyans." (Editing by Sara Ledwith)