On 8 December the Libyan leadership wrote to the United Nations calling for funds frozen by the Security Council at the beginning of the revolution to be released. The letter was signed by Mustafa Abdel Jalil chairman of the National Transitional Council, Abdurrahim El-Keib interim Prime Minister, Hassan Ziglam Finance Minister and Saddeq Omar Elkaber Governor of the Central Bank.
These funds totalling around $150 billion were frozen by a stroke of the pen in New York one weekend in February. The funds frozen in Britain were many times greater than funds frozen in any previous operation of the kind. Since then national treasuries have been wrestling with many thousands of applications for the release of funds for essential purposes, but economic life inside Libya has been kept going largely by smoke and mirrors. Most Libyans live on salaries or handouts from the state which were never generous. The state was funded by oil production, which stopped almost completely during the revolution. Although oil production has reached half the old level, and funds are beginning to flow, Libya still desperately needs its assets back.
On the other hand there is serious doubt outside Libya about whether these assets could be responsibly and accountably absorbed. Elkaber told Reuters that member states of the UN had expressed doubts about whether the new Libyan leadership was united and cohesive enough to be trusted with the cash. The British foreign minister Alistair Burt said in Tripoli, also on 8 December, that Britain will release Libyan assets frozen in the UK once authorities in Libya demonstrate they can manage them effectively. “There’s an issue about us holding onto assets, but clearly the government here has got to be absolutely certain that it can handle the assets and that the banks can use it effectively.”
Up to now the UN and its members have been able to argue that the first step towards releasing the assets was up to the Libyans. That step has now been taken. It remains to be seen how long the politicians and lawyers in New York and other capitals take to clear up this enormous and complicated mess.
Meanwhile the assets are melting away. The survivors among the few close associates of Qadhafi who were arbitrarily blacklisted are actively seeking ways to hide their wealth. Other family members and cronies who escaped blacklisting are awaiting developments, and meanwhile scraping by in the likes of Monte Carlo.
By Oliver Miles, Director, MEC International Ltd. Any opinions expressed are those of the author, and do not necessarily reflect the views of Libya Business News