الجمعة، سبتمبر 09، 2011

Libyan Investment Authority: What’s Next?

} As Libya’s National Transitional Council (NTC) begins to take over the reins of power in the country, attention is turning to a series of governance issues, and immediately, where the funds are to come for the stabilization and reconstruction of Libya’s infrastructure after months of conflict. With the Qadhafi regime entrenched and crumbling, the allegations of mismanagement of the nation’s sovereign wealth mounts. The TNC has launched an investigation examining possible corruption associated with the management of the Libyan Investment Authority (LIA).

Beyond cleaning up LIA, the international community grapples with other straightforward questions, as the debate in the UN Security Council over the release of US$1.5 billion indicates. Only some days ago, there was considerable uncertainty over who would have authority over the LIA. This question has troubled foreign supporters of the NTC, and questions of who can legitimately accept and invest funds have limited the unfreezing of Libya’s foreign assets. By the end of this week it becomes increasingly obvious that the NTC is beginning to set up its institutional capacity to establish that authority and become the first point of contact for the LIA. The next question is at what point the international community is going to completely lift the sanctions against LIA and other government institutions (leaving Qadhafi’s formal private wealth aside for the time being).

Once there is a government authority and the funds of the LIA (and the central bank) are “unfrozen”, there are a number of scenarios for the future of the LIA that could emerge. Sven Behrendt & Rachel Ziemba






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