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Libya readies for dawn of new economic era

         Date: 2012-07-02

           Tag: Libya, Libya economic

Summary: Libya will come to a historic political and economic crossroads on Saturday as the first democratic elections for 40 years are held.

Libya will come to a historic political and economic crossroads on Saturday as the first democratic elections for 40 years are held.

The polls are expected mark a new beginning for the wealthy North African economy that stagnated under the dictatorship of Muammar Qaddafi.

Already, investors are watching for the outcome of the elections with an eagle eye as opportunities abound in oil, infrastructure, property and tourism.

Hugely dependent on oil wealth and the defence industry, Libya is in dire need of development in roads, ports and basic infrastructure, as well as investment in property and consumer industries.

Its tourism industry is largely unexplored, despite a colourful history and many world heritage sites such as Greek settlements and Roman ruins.

"Libya is starting from scratch after a really messy civil war," says Charles Gurdon, the managing director of Menas Associates, a political risk consultancy based in the United Kingdom.

"Qaddafi had left the country devoid of any functioning institutions and the country has no political experience, or genuine offices.

"It's starting from a very low base, and since it's been appointed, the transitional government has tried to run the country the best it can."

Fortunately, Libya's oil wealth has largely been unaffected by the civil war and the country's financial future looks bright.

Libya has the largest proven oil reserves in Africa, at 46.4 billion barrels, ahead of Nigeria with 37 billion, while Egypt has just 4.4 billion.

Nigeria and Egypt have populations of 160 million and 81 million, respectively, compared with just over 6 million in Libya.

Libya has foreign currency reserves of US$170 billion (Dh624.44bn) and exported double the value of oil that it imported in goods and services in 2010, before the civil war.

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