Libya is strategically placed, adequately supplied with talent and well endowed with natural resources
Libya's new leaders face big challenges in rebuilding a country run for decades on the whims of a temperamental dictator, but if they succeed the opportunities for investors will be substantial, and will go well beyond the crucial oil sector, according to a new report from the Economist Intelligence Unit.
There are few institutions that work, and even fewer that work to the benefit of the general population, so the challenge amounts to little short of building a functioning state from scratch, the report says. Views on what form that state should take are as diverse as the regional, ideological and sectarian interests making up its would-be architects, and these stake holders must be persuaded to support the process-or at least not to obstruct it-before it can even begin.
But Libya is strategically placed, adequately supplied with talent and well endowed with natural resources. If the state-building exercise is successful, it can quickly become a stable and thriving economy, offering a range of opportunities to business investors both at home and abroad.
The report, Libya's year zero: Finding opportunity as a country rebuilds, sets out three political scenarios for the post-Qadhafi era, and examines the outlook for investors in a series of business sectors.
Scenario 1 (60% probability): According to plan - Elections to replace the National Transitional Council (NTC) with an elected government based on a new constitution take place more or less on schedule, although the election results in a weak government and parts of the country remain insecure.
Scenario 2 (30% probability): Permanent transition - The NTC struggles to overcome internal disputes and is distracted by security problems and by outbreaks of popular protest at its failure to deliver adequate services, and therefore fails to stick to its blueprint. The NTC becomes a de facto regime.
Scenario 3 (10% probability): Prolonged instability - The NTC loses control of security and fails to establish an effective interim government. Local groups including remnants of Qadhafi-era people's committees and Islamist militias take charge of different parts of the country, threatening the viability of Libya as a unified nation state.
Assuming the first scenario comes to pass, the report sets out the state of play and outlines likely developments in 5 key sectors. Oil is one, of course, and the report sees the first task as bringing the country's existing oil producing and exporting infrastructure back into operation, following neglect and wilful damage during the uprising against the Qadhafi regime. In the longer term, raising the country's oil output towards its potential will offer further lucrative opportunities.
The report also looks at financial services, power and water provision, telecommunications and tourism, which all hold promise as the country rebuilds and puts in place a stable regulatory and operating regime for local and foreign private companies.
Libya's year zero: Finding opportunity as a country rebuilds.
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