The news on Gaddafi’s 42-year regime falling apart revived the hopes that the seven-month conflict will end shortly. This already caused a rise on the markets for some major oil companies yesterday.
Stock markets rebounded with oil firms taking the lead, especially European energy firms best placed to exploit future Libyan business opportunities. Italian oil company ENI – the most active foreign company in Libya before the conflict began – jumped 6.33%, while France’s Total rose 2.25%, and Shell 2.41%.
International oil prices were starting to fall on 22 August because of the prospect that shipments from the Libyan oil fields will hit the market again. It could be a year or more before Libya produces enough oil to start exporting it in large amounts but once the oil is flowing, it should bring the prices down even further.
There is optimism in the air about Libya’s future, with the largest oil reserves in Africa and the ninth largest worldwide. The North African country is considered to be a highly attractive oil area due to its low cost of oil production (as low as $1 per barrel at some fields), and because of its proximity to the European markets.
The world has welcomed the end of the Gaddafi era, some Libyan embassies already raised the rebel flags. Maybe this happened a bit early. One of Muammar Gaddafi’s sons, Saif al-Islam, claimed that in Tripoli the government has “broken the backbone” of the rebel offensive there. He turned up in a government vehicle at a hotel held by loyalists, a day after the rebels said they had detained him. A BBC correspondent said Saif al-Islam seemed confident and full of adrenalin.
Both parties in the conflict claim they have control over most of the capital.
But despite all smoke and mirrors: this is the end of Gaddafi’s regime and the crucial question for Libya is now: what next? Will the country learn from the lessons provided by Iraq and – more recently – Egypt?
The European Union already called on the Libyan opposition forces to abide by humanitarian and human right laws, especially not to pay revenge on those who have been involved in the Gaddafi government. At present, everything depends on the potential of the National Transition Council (NTC) to ensure a rapid reconciliation process and establish the rule of law. Some cracks in the unity of the Libyan opposition sent disturbing signals in the last phase of the insurgents’ fight against Gaddafi but the NTC has the support of the world to go ahead and build up a democratic future for a country that has suffered 42 years of dictatorship. However, NTC has neither the expertise nor the experience to carry out this challenging task by itself. In addition, it will be potentially vulnerable to disruptive Islamist influences.
Therefore, the new rulers of Libya will have to find partners to guide the country through the transition process and stabilize the country. Once transition brings back the normality in Libya, elections, the selection of a new government and the decision on a new constitution will be much easier to tackle.
The fate of Libya depends on the wisdom of its leaders – and the hope that the rest of the world will not seek short-term gains instead of long-term stability for the re-born country.
(Mariela Zamfirova, MBA, 23 August 2011)