October 20th, 2011
08:40 PM GMT
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London (CNN) - Deposed Libyan leader Moammar Gadhafi’s death injects fresh impetus into Libya’s move toward a stable economic and political influence in the region, but the transition remains difficult, according to regional experts.

The export-led country’s huge oil reserves, the largest in Africa, are a key resource to assist the country’s recovery, but a return to prewar output will be slow and complicated. According to the International Monetary Fund, oil has accounted for more than 95% of export earnings and 75% of government receipts in 2010.

If properly managed, they could contribute to the country’s long term prosperity, according to Edward Djerejian, the founding director of the Baker Institute for Public Policy at Rice University.  And under Libya's new leadership, the National Transitional Council, there are hopes oil capacity – over time – will increase, helping push down global prices.

But markets remained relatively steady as news of Gadhafi’s death swept the globe, with his departure being factored into prices as his regime fell, Zin Bekkali, chief executive of frontier markets’ specialists Silk Invest noted.

Focus is turning to the country's investments, and, given its key geographical position, relationships with neighbors such as Niger and Algeria - where some Gadhafi family members fled the uprising.

Under Gadhafi’s 42-year rule, the country’s economy was virtually closed, with a shallow business community and unreliable relations globally. With the dictator now dead, the NTC will be under scrutiny for its ability to develop the country’s education system and build a diversified industry outside of oil, Bekkali said.

While the transition from a dictatorship has thus far been well managed, particularly by the French, the NTC are yet to fully prove themselves, he said. “Hopefully now they will be able to get investors and businesses back into the country,” Bekkali said.

Bakkali points to Libya’s potential to build relationships in the region, saying the world will be watching to see if the country builds its economy with economically rational decisions, or if politics - based on history and recent alliances - will play a large role.

Libya’s Investment Authority’s significant investments around the world – some $64 billion in 2010, according to Global Witness – is largely frozen but could eventually bring wealth back to the country.

But while Gadhafi’s death provides new hope for the country’s future, the impact on its recovery should be kept in perspective, according to Henry Smith, analyst at specialist risk consultancy Control Risks. “Clarity over Gadhafi’s position is of huge emotional and symbolic significance for Libya,” Smith noted. “However, the impact on Libya’s broader political transition process and domestic oil production risk being overstated.”

Security remains the “crucial variable” for increasing oil production, he said. Security – and oil production – will be in inextricably linked to the stability of the political transition process. Gadhafi's death and the country's transition provide opportunities, "but the operating environment remains complex and significant," Smith said.

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soundoff (27 Responses)
  1. Anonymous

    "The winds of change" are blowing throughout the world...in the end, justice and righteousness WILL PREVAIL!

    Kim Jung Il, you are next...tell him this message:
    you have 2 choices now
    1. save your life and your family's by giving up your dictatorship and letting your country become an independent and free nation to build anew against exploitation and opportunists waiting to pounce down South OR
    2. run like a rat because the people WILL SOON rise against you and your family...They will no longer be victims and voiceless!
    North Korea WILL someday become a free and independent nation and WILL be respected model for the global world community...
    tick tock, tick tock, tick tock

    October 20, 2011 at 11:47 pm |
  2. rami saba

    so much troubles in the world

    October 21, 2011 at 2:40 am |
  3. amal

    grammatical error- " is largely frozen but could eventually bring wealth back TO the country"

    "TO" is missing. Expect better from CNN

    October 21, 2011 at 3:26 am |
  4. 1alan1

    I wonder where their 140 tones of gold is at. I have never seen that mentioned anywhere since this war started. I wonder who got it?

    October 21, 2011 at 5:43 am |
  5. Mario De Kauwe

    Ok explain this to me. When LTTE leader Prabakaran was killed, they called for a war crimes investigation. But the video clearly shows that Gadaffi was alive when he was captured, and then you see that he is dead... NOW.. UN, BAN KI MOON, AMNESTY INTERNATIONAL... WHERE ARE YOUR WAR CRIMES INVESTIGATIONS!!!! HYPOCRITES! yes I am sad that Gaddafi is gone. Im just disgusted by the double standards of the the so called 'saviours of human rights'.

    October 21, 2011 at 6:00 am |
  6. Springpama

    Now, Gaddhafi is gone, oil reserves will be looted by greedy western countries USA, Britain, France, Italy, etc. They had been eyeing on oil reserves since long long years. There will be a puppet government of western nations in Libya. They will do to Libya as they have done in Iraq after removing Saddam Hussain. Why these, so called democratic countries, do care for Somalia, Sudan? Because there is nothing to loot.

    October 21, 2011 at 7:24 am |
  7. Kme

    Recovery, I doubt that there will be much of a recovery since the place was and will be in a state of chaos, Gadhafi or not.
    There are plenty of new punks to take over and they will be fighting for the position.

    October 21, 2011 at 7:31 am |
  8. tekage

    Everyone is in join about his death but they yet to know the true intend of the world on Lybian. They're getting rob. Gaddhafi was just trying to prevent that, but some are just to blind to see and I'm saying this not as a Pro Gaddhafi. I'm saying this as a pro-country choice. Stop sticking your nose into every other country that you don't see fit in your eyes. People like the "BIG" nation are the reason some country are in civil war.

    October 21, 2011 at 8:12 am |
  9. tekage

    I forgot to add. Now since there a weak structure in their government. Here come these "big" nation with "helping" hands... Yay... AWESOME.

    October 21, 2011 at 8:15 am |
  10. snowblind

    kim II can't be overthrow like this. so gaddafi will not be if will not give up nuclear programm,FACT!
    the west stabbed him in a back and iran, n korea...now are learning a lot about gaddafi mistake. so you can only dream on.
    i will not be suprised that even more ruler in the middle est will seak nuclear program from now on

    October 21, 2011 at 8:55 am |
  11. ruth mamar Gadafi

    thank God for his death, now the country is at peace congratulations libya may you have a wondaful and God fearing leader once again congrate.

    October 21, 2011 at 9:51 am |
  12. Big mc

    This is the revolution we need in Africa, it should serve as an example to other African leaders who re bent on em-backing on Gaddafi s path

    October 21, 2011 at 10:32 am |
  13. Arnon

    Whole story is a huge crisis in the west and Libya easily obtainable resources.
    Libya huge country with huge oil reserves but only a few millions of residents
    Now West is a huge economic crisis.
    So West took over Libya and its resources
    This whole story
    And that foul play must learn from our world all interests and Israel if you want to continue to exist have to worry only about its own interests, she can lie and play games but always strive for the interests of Israel and the Jewish people

    October 21, 2011 at 11:24 am |
  14. Steve Thompson

    Here's an article showing how much oil Libya produces and which countries benefit the most from the country's exports:

    http://viableopposition.blogspot.com/2011/02/muammars-oil-libyas-contribution-to.html

    It will be interesting to watch whether Libya suffers from internal violence over which tribal group controls the country's only valuable resource.

    October 21, 2011 at 12:42 pm |
  15. Strange

    Its strange that people are happy for someones death . Its very ugly that media shows the horrible videos and deaths not only for this case but for every tragedy that happen just to make a news . Who decide if we are good or bed , if we are in a good way or in a bed one . Only GOD can judge us so why so happy for someone we do not know but just we have heard as it is presented to us . It is presented to us as bed and we just close our eyes and say bed . Some people love to live in democracy some not. I love democracy but i can not say the same thing for the others . Its not logic that i impose my ideas to the others that democracy is good. It was qualified as a bed one . Than the justice should judge him and our Lord is the real judge that matter but making lough to someones death it is scary . The values we pretend we have with such loughs with such photos shows how near the animal behaviour we are and the difference is very small . Than after that a good courage to predict values . In what values we live in what we believe inside us or in what should make others happy with . Be real and do not prejudice no one . Give a possibility to your self to be much more human and not "human" just for saying . And should be a linternational ow for such photos that media present without censure its not normal . I was seeing a young kid in china that was crashed by a van and than by another car and the media presented that just as a news speaking for humanity and at list didnt showing by their self some humanity by censuring those horrible scenes. Peace

    October 21, 2011 at 4:09 pm |
  16. Eric Te

    What kind of recovery will Libya do? There will again conflict of interest among those interested in different post, Again another war. Iraq is the best example. Obama wont think that killing Gadhafi will be a great points to his political career. Wake up....This will be your last term.

    October 21, 2011 at 4:26 pm |
  17. Madjet Bravo

    Muslims are war freak people and they will not experience peace because they are all evil just read the bible...

    October 21, 2011 at 4:28 pm |
  18. Strange

    @ Madjet : Muslims , Jews , Christians all believe in the same GOD . I am Protestant (Christian) as long as all people believe honestly in our GOD why you and which gives you the right to prejudice ???? Just belive truly in GOD not in religion not in human behaviors its their right to believe in what they wont . Just a curiosity Jews and Muslims are brothers between them both suns of Abraham (ones Isac descent the others Ismail descent ) with this human religion we are destroying our self jut believe truly in GOD and be a good and honest Believer

    October 21, 2011 at 4:35 pm |
  19. sombodyelse

    who runs the country now?

    October 21, 2011 at 5:39 pm |
  20. Pueblo

    W What kind of recovery will Libya do? There will again conflict of interest among those interested in different post, Again another war. Iraq is the best example. Obama wont think that killing Gadhafi will be a great points to his political career. Wake up....This will be your last term.

    October 21, 2011 at 6:08 pm |
  21. Dave

    This is the least informed article on Libya I have read to date. Horrible.

    October 23, 2011 at 10:41 pm |
  22. Steve Thompson

    Here's an article showing how much oil Libya produces:

    http://viableopposition.blogspot.com/2011/02/muammars-oil-libyas-contribution-to.html

    It will be interesting to watch whether Libya suffers from internal violence over which tribal group controls the country's only valuable resource. Once again, Libya will be divided into those who have and those who do not.

    October 24, 2011 at 12:29 pm |
  23. truthspeaks

    New Libya Same As The Old Libya only worser with the sharia law

    October 24, 2011 at 8:50 pm |
  24. ImarhiaNgr

    Words cannot express my disgust to the so called civilised world happy in the death of an African freedom fighter the West called Mad Dog, we call him Brother Leader. They all dinned with him, shake his hand and stab him to death. What hypocrites Western leaders are, give me a break, are they really human? Gaddafi did not steal his people money and hide it in European banks like many African leaders do, but invested heavily outside his country making Libya with the highest GDP in Africa and Middle East. CNN forum is not enough to lash out my distaste about the demise of our dear African beloved freedom fighter, though with many of his mistake. Just give me interview on camera and will tell what you would like to hear. NATO = Neutralisation Alliance Terrorist Organisation You killed Gaddafi because of Libya oil

    October 24, 2011 at 11:10 pm |
  25. ImarhiaNgr

    This is exactly what happened to Parice Lumumba of Congo, because he was a stunch anti West primitive ideology of colonia suppremacy to inflict whatever carnage on the people of Africa for thier own selfish ends. When would the so called Western Civilisation just leave us alone so that we will develop like your nation with fair trade and equity? Sadly, the puppets installed NTC are trators to our independence nationalism, inviting foreign government to destroy what has taken years to build. Well, history will vilify Gaddafi as your nation will soon be like any other African country looted with the help of Nato. Arabs nation, do you think there is true love of Western nation towards you? You are kidding, they will destroy your infrastructure to 1000 years of less development and help you rebuild with your own money.

    October 24, 2011 at 11:20 pm |
  26. MAKA

    Well libya has the most stable economy in africa, After the NATO attacks libya is one of the most unstable economies.
    The libyan people had one of the best social security facilities in africa not to mention the world, with Involvement / inteference from the west Libyans are going to be heavily charged for water, electricity etc.

    The Western Democracy that the libyans are crying for is not attractive in the true sense of the word. We should start seeing intense desent for the leadership of the country by libyans within the next 8 months while the west watches and smiles from afar.

    October 26, 2011 at 6:28 am |
  27. MAKA

    Gaddafi was a very smart individual, after realising africa's over dependence on the west for a number of things he started initiatives to rid africa off of the dependency, RASCOM is just one example where he put up an investment of 300 million dollars to support satellite infrastructure in africa. He also supported African Union operations to a large extent. It is very sad to see how the African leaders watched quietly as Gaddafi was hounded and later assasinated.

    Gaddafi was also very shrould kindly visit this blog to find out how western oil companies were extorted off of money.
    http://makanyan.blogspot.com

    October 26, 2011 at 6:40 am |

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