Thursday, 31 March 2011

Libya: Uncertainty likely to remain and hinder early restoration of normal economic life

The war could arrive at the gates of Tripoli, but not until the Interim Transitional National Council (ITNC) can succeed in surging through Sirte and on to Misrata and Tripolitania. Therefore, for the time being and other considerations apart, the threat of fighting on the streets of Tripoli should be enough to deter all but the bravest of companies from an early return to their assets in Libya.

The capture of Tripoli and of Colonel Qadhafi are key elements in the opposition's policy toward the state. Inevitably, unless decisively defeated, Tripolitania will be a central target for armed and covert operations by eastern Libyans. Any immediate improvement in the situation is, therefore, difficult.

At best companies, in present circumstances, can encourage local employees to keep a watching brief over physical assets. They could secure, where possible, the integrity of its workforce through the payment of wages (for example) and could continue to support their activities in Libya through visits and establishment of a presence on the ground to indicate a continuing corporate interest in commercial Libya.

At the moment, however, the prognosis must be that there will be a continuing struggle without there necessarily being an early settlement because neither side currently has the ability to win outright. The exception here is if the UN military intervention remains firmly in support of the revolutionaries.

Uncertainty is likely to remain to hinder an early restoration of normal economic life although the wide-scale official recognition abroad of the revolutionary government would be a major step forward.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2011 Menas Associates

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