Wednesday, 1 June 2011

Libya: Security of foreign personnel and assets

The critical variable for foreign investors and suppliers will be the degree to which the current war conditions continue. The talk in NATO is of a relatively quick victory which would open the way for a new government to appraise the role of foreign interests in the New Libya. The difference between the war persisting with its increasing destruction of property and other assets is that when it ends the great need for foreign aid and assistance will be enhanced.

Post-war developments will also run up against problems of priorities for rehabilitation of the economy. The regional demands for investment will be strong. Inevitably, Cyrenaica will want to adopt a budget which includes a greater proportion of State revenues in order to compensate for the past 40 years' neglect.

Ideology will also affect the choice of policies. It is not impossible that any Islamic revolutionary model would diminish the importance of the oil sector, which would deprive the foreign community of a welcome by the new administration. It may be that the view taken will be more nationalist and less materialistic. Defence will also have a considerable claim on resources because in its early days the new regime will feel exposed against both internal and external threats.

Ideology will also influence the pattern of imports which could be significantly anti-Western in nature. Even if the new government pays its moral debts to Western powers who intervened to save the reform movement from early extinction, the new administration might feel that has to be whiter than white in acting to reject overly widespread influence of the OECD states.

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

© 2011 Menas Associates

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