U.S. sees economy, assets as Libya's priorities now

Reuters News
Posted: Aug 30, 2011 11:57 AM
U.S. sees economy, assets as Libya's priorities now

By Andrew Quinn

WASHINGTON (Reuters) - Libya's rebel leaders should look to retrieve frozen assets and revive the country's oil industry to finance its reconstruction rather than rely on aid from abroad, the State Department said on Monday.

Secretary of State Hillary Clinton will attend a meeting in Paris on Thursday which will mark a shift in international support for Libya's rebels to long-term goals from the short-term objective of toppling Muammar Gaddafi, said State Department spokeswoman Victoria Nuland.

"The days and weeks ahead will be critical for the Libyan people, and the United States and its partners will continue to move quickly and decisively to help the (rebels) and address the needs of the Libyan people," she said.

Nuland said the rebel National Transitional Council was expected to present a report outlining its priorities for international help on governance, security, humanitarian relief and economic reconstruction.

"The first priority is to get the Libyan people's money back to their governing authority and to them," Nuland said, saying any additional pledges of financial help would depend on how quickly things move.

"They are themselves very interested in getting the oil flowing again, the gas flowing again. It's a rich country. They want to support themselves, so let's start with getting their money back to them and getting the economy back on track."

The United States and prominent European members of the anti-Gaddafi coalition all face their own economic problems, which could cripple any plan to harness western taxpayer money to pay for Libya's reconstruction.


The United States, which had frozen about $30 billion in Gaddafi government assets under U.N. sanctions, won approval last week to release $1.5 billion for immediate humanitarian aid and other civilian needs.

The NTC hopes to gain speedy access to at least $5 billion in frozen overseas assets as it struggles to rebuild the country's battered oil and gas industry, which normally accounts for about 70 percent of the economy.

Nuland said the "Libya contact group" of countries which supported the NATO military mission to protect Libyan civilians would itself transform as the nascent rebel government extends its authority over the country.

She said the growing number of countries which have formally recognized the rebel council, as well as the Arab League's decision to give Libya's seat to rebel representatives, all boded well for the future.

"The international community is transitioning itself from a body that was supporting an opposition coalition now into a 'Friends of Libya' group for the long haul," Nuland said.

"There will certainly be a change of psychology," she said, adding that the international community's new role in assisting Libya could be coordinated by the United Nations.

"This is often the hardest part. ... After you've won on the battlefield then you have to win the peace."

(Editing by Todd Eastham)