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Libya economy: Outside investment vital for growth.

Summary: The combination of widespread destruction across Libya and the largest proven oil reserves in Africa would ordinarily presage a building boom.

The combination of widespread destruction across Libya and the largest proven oil reserves in Africa would ordinarily presage a building boom.

But the biggest obstacle for the Libyan economy, which is also bolstered by about US$200 billion (Dh735bn) in savings, is its capacity to step up production and construction.

Only in the last few years did Muammar Qaddafi, Libya's ruler until his death in October in the custody of the National Transitional Council (NTC) forces, begin to open up the economy to investment from the outside world.

Now, it needs to dramatically expand everything from banking to infrastructure to prepare for its rise as a North African economic power.

"There aren't even enough cranes in the country to start anything near the level of construction needed," said Alaa El Huni, an investment banker and a former financial consultant to the NTC. "On every level, from ability to construct, labour, the capacity of the ports, to the amount of machinery, we are not able to absorb the amount of investment we'd like to."

The first major steps of the interim government have been to increase oil production back to its pre-revolution levels.

So far, it has hit about one million barrels a day and is aiming to ramp that up to 1.6m by the end of the year. But broader plans to begin rebuilding cities such as Sirte and Bani Walid, the final strongholds of Qaddafi loyalists that were heavily destroyed, as well as Misurata, where NTC fighters were most severaly attacked, have been sidelined by the more pressing security concerns.

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Publication:UMCI News (Potomac Falls, VA)
Geographic Code:6LIBY
Date:Dec 27, 2011
Words:295
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