August 22nd, 2011
05:14 PM GMT
Libya is on the verge of a new dawn but what will tomorrow bring for this war-torn nation, one of Africa’s top oil and gas producers?
The World Bank estimates the country’s gross domestic product stands at $62.36 billion, with estimated growth of 4.2 percent last year.
Libya is an export-driven economy though, thanks to its dependency on oil and gas.
Such sectors employ almost three quarters of the population, though unemployment remains high.
Thanks to historic trading links, Italy is by far Libya’s biggest business partner, accounting for more than 40 percent of exports and 19 percent of imports.
Europe’s largest oil and gas companies pumped money into Libya to get its valuable commodities out of the country.
And as those petrodollars found their way into the pockets of Gadhafi and his family, they duly invested them in sovereign debt of the very nations who later stood against the regime.
So where is Gadhafi’s money now and what will happen to it?
A financial statement obtained by Global Witness shows that Libya’s Investment Authority had around $64 billion as of September 2010.
Here is the breakdown of those assets, according to the report with figures in 000' U.S. dollars:
- $593,237 in cash (held in U.S. and Canadian Dollars, British Pounds, Swiss Francs and Euros)
- $20,202,466 in deposits
- $7,199,841 in equities
- $3,185,220 in bonds
- $3,995,280 in hedge funds and alternative assets
- $24,710,972 in subsidiaries
- $4,300,600 in other assets
Some 68 percent of Libyan Investment Authority’s holdings are in Europe. Within its equity portfolio lie hefty chunks of Europe’s best known names in media, transportation and banking. The LIA owns strategic stakes in:
- UniCredit, Italy’s biggest bank: 2.6%, worth $1.3 billion
- Pearson, publisher of the Financial Times: 3%, worth just under $412 million
- Finmeccanica, aerospace and defense contractor: 2%, worth $119 million
- Other stakes in Siemens, BASF, Lagardere, Nokia, Telefonica and Pfizer, among others.
Gadhafi’s cash assets were held across a range of top-draw currencies, such as the U.S. dollar, the pound, the Swiss franc, the euro and the Canadian dollar.
Most of the above assets are frozen and are likely to be deployed to fund reconstruction across the country once the security situation has improved.
In fact, thanks to the astute financial investments made by Gadhafi’s regime, some experts say money is one thing Libya will not be short of.
Jan Randolph, Director of Sovereign Risk at HIS Global Insight said earlier today “money is one thing the Libyans don’t have to worry about. They’ve got lots of it and little debt.”
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