The new Libya: various aspects

[Graycap]

There has been a great deal of spontaneous community organization in Libya, which has offset much of the institutional disorganization (or even lack of institutions, which was a hallmark of Qadaffi's rule). There is also a widespread sense of 'ownership" of the revolution by the people themselves--a sharp contrast to US regime change in Iraq. Most of the "looting" has involved carting off souvenirs from Qaddafi palaces or regime security installations.

In Benghazi, I was struck by 1) how little formal SSR had been undertaken, although by that point the NTC had been in control for 5 months--most of the policing was still volunteer; 2) how well it worked--the place seemed considerably safer than a great many non-conflict cities.

Unlike Egypt (or even Iraq), the regular civil police do not seem to have been associated in the popular mind with domestic repression, which undoubtedly will help in reconstituting them.

Sorry Rex if I ak you again the same question that maybe you have not seen (or maybe you chose to not to reply... ) but since you have been on the terrain (I was in a delegation organizing a visit in Bengazi too but we were sopped) and you say that no widespread looting has taken place.

Do you have any information about Central Bank and banking system?

I think that this kind of critical points are rather overlooked in the coverage. Libyan dinar has always been a currency with a complex history.
Its future value could have a strong influence in reconstruction (and debt settlements for Libyan state)

[Fuchs]

Its future value could have a strong influence in reconstruction (and debt settlements for Libyan state)

Their external debt is most likely not documented in their national currency, but in USD or another currency.

Most of their trading will be in foreign currencies as well, so their domestic currency value/exchange rate has little bearing on their trading.

The government will draw most of its revenues from oil after a short (1-3 years) period of establishing itself and re-establishing regular oil trade. There's thus no real reason for using the printing press for revenues, and as a consequence the printing press is unlikely to be an inflation driver in the medium term (many forms of demand might be, though).


Overall I don't agree that their currency will have a strong influence on their future. It'll likely be a quite boring and ordinary background thing.

[Graycap]

Their external debt is most likely not documented in their national currency, but in USD or another currency.

Most of their trading will be in foreign currencies as well, so their domestic currency value/exchange rate has little bearing on their trading.

That's not correct Fuchs. Especially in the italian trading experience.

You have to understand that Italy has a very long history of commercial trade with Libya and this history has witnessed different phases and the presence of a big number of very small little actors in both side of th bargain.
Small business selling small business buying.

In this framework the problem of libyan dinar conversion has played a role. Sometime a very lucrative role. Payments made in nature could open the way to make great business. During embargo there was a complex system to make receive payments.

Think only about this problem: there are big enterprises that have credits for million of dinars. The dinar had a different value in black market and official trade. The credits are from the eighties and are part of the strategic agreement signed in 2008. In the eighties there were libyan dinar for external payments and dinar only for internal use.
The conversio that will be applied will make a very relevant role in the evaluation of these credits/debts (those could become billion of euros!!)

Thanks Rex for reply

[Fuchs]

6.5 million inhabitants, annual GDP equivalent 75 billion USD.

You're talking about peanuts that won't change the overall picture.
I was talking about the medium term and stand by my somewhat educated guess.

[Rex Brynen]

Do you have any information about Central Bank and banking system?

I'm afraid I don't know. I do know that the UN reconstruction team had concerns about currency stabilization and liquidity shortages, as well as longer terms concerns about corruption and financial management.