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[Tellemurius]

Dude, it's a plan. Every military in the world got plan against everything. When you've got a massive totalitarian state taking over half of Europe, it's normal to plan for war against that state.

Excuse me. This plan was developed when Soviet Union and Great Britain were still fighting fascism together. And Soviets had a huge part of their country literally destroyed, all male population capable of fighting in army and women and children working on factories and plowing the fields. How could British generals consider Soviet government maniacs saying "men, forget the ruined country, we order you to attack our allies now" and Soviet people mindless slaves saying "OK, will be done"? It is clearly a traitorous, offensive plan.

Guess what now, i now have a plan to destroy you by making IEDs and lay them all around your house and blow you to pieces. Enjoy it, im evil, more likely just pissed cause you mad at old war plans.

[Felius]

Actually, Capping interest rates isn't a bad policy. A lot of problems people who take loans get into are from predatory lending. A very common source for such behavior comes from being able to set very high interest rates.
Of course if the cap is obscenely low, then it's likely loans won't be used for business building. It really depends on what the cap is to determine how it affects the economy.

It's a terrible policy. Forget about terms like "predatory lending". The country just got out of a civil war (or is in the process of doing so), and with all uncertainty involved, it's a very risky action to lend money to them. Those who would be willing to take the risk want something to compensate them for the risk, which means high interest. If they can't get an interest high enough from Libya they'll put their money somewhere safer. Basically the interest is the international rate+inflation+risk (or to be precise, it's a multiplication, as in 1.xx*1.yy*1.zz, but that's besides the point here).

By capping the interest rate, unless the cap is very high, it basically means no one will offer loans, and therefore they won't be able to use it as a source of resources. I seriously doubt the money they'll get from taxation and oil will be enough to pay for everything, which means they pretty much guarantee they'll need to pretty much print money, which leads to inflation. Might not be as bad as countries without oil, but don't expect Libya's economy to be in a decent state for a long time, specially if they actually do put forward these kind of policies.

Also, Islamic Law as a foundation sounds scarier than it really is. The real question is will it be a secular state like Turkey, a Blended state like Egypt, or a Theocratic state like Saudi Arabia. Given that Qaddafi was a blended sort, being a nut and adapting things so he could have more power, it's likely they will either go secular or theocratic, depending on who has the majority.

Them taking the foundation of Islamic Law was a given. Doing anything else causes a major regional conflict. Sub-Saharan nations could get away with taking a common law, but unless they want trouble with their neighbors they have to have the basis of their laws as Islamic. The major change from their current system might be the elimination of the Green Book. As long as they have a democracy though, they will eventually change the most nonsensical items of law they adopt. Every Islamic Nation that does tends to do so.

Despite popular opinion, I don't think it's the Muslim nature of the Middle East that spawns so many terrorists. I think it's the quantity of multi-decade dictators that reign in that area. Areas with a high ratio of dictators with a low rate of turnover seem to be the problem children of the world.

Fair enough. I don't really care if it's Muslim or not, I'd be just as worried if a country decided to say they'll base their laws on a Christian foundation, or a Buddhist foundation. I'm worried about they becoming a theocratic state like some others in the area. I hope it do in fact becomes a democratic state, but it is showing some troublesome tendencies at the moment. With any luck it's just some post-war events, and they'll stop soon enough.

[Kogan Loloklam]

I don't think that the Civil War will be that much of a factor. Maybe for a month or two if there are Qadaddi holdouts, but as long as there aren't any large spikes in attacks against foreigners you will still see a lot of outside investment in Libya just because of the potential it has. Of course I can't think of any investor area that is stable enough to really help them grow. They hate Turkey, Italy, and the United States. They might react okay to French Investors, but probably not. There might be some residue anger against the other European Powers. Russia might be able to do it. The big ones they would tolerate would be Tunisia and Egypt, but neither are that well off as it is.

I think for the immediate future it'll all be internal growth anyway even if there was high interest and safe environments. If their Oil Money gets reinvested in their economy like how the UAE is doing, they might actually do quite well. I think Libya could go either way still, and I think the Low interest rates will do them good as it'll keep them somewhat stable in the unstable global market we are in now.

They really need to use that oil money productively if they don't want to remain a third world nation though. They have huge imports of basic living necessities and really only have oil and oil byproducts to offer the world. While it's enough for today, there is no assurance some technology down the road won't obsolete their entire industry someday. Without any other natural resources to fall back on, they could easily be stuck in a third world state if they aren't careful.

But I'm optimistic. They have a shot at wealth and success.

[Sheb]

Actually, they kinda like the UK, France and Italy for helping them out during the war. Oil money will pour in soon. Now, let's hope they use it to build stuffs rather than buy more golden guns.

[Montague]

I think the civil war worries are that the varied factions that banded together have just defeated the old regime will realize that they hate each other, too. Secularists, Socialists, radical Islamists, various tribes ethnic groups and all the moderates in between will have another civil war because they can't agree on what kind of society they want to make the new Libya.

Sort of how the Northern Alliance, made up off disgruntled ethnic groups, mujaheddin, secularists, democrats, Royalists, remnant Communists, both radical and reformed turned on each other the moment the Taliban regime was routed after the US invasion of Afghanistan.

I think the difference here, however is that Libya has a lot of oil and thus it has a lot of easy money. It also has something of a middle educated class, its somewhat westernized, I think it will be somewhat easier for them to figure out a good solution when the people understand that there is more to life then farming and fighting, unlike Afghanistan.

[Felius]

The point is, investors want a return on their investment. Either they get the profits from any business they build/buy/operate on the country, or they lend the money and get interest in return. If they cap the interest, it'll greatly reduce the amount of loans offered, maybe even completely drying it. Without loans, they'll lack a lot of the money they'd need to rebuild, which means they're pretty much screwed. It's risk not because of a potential civil war, but because people don't know what policies they'll enact now that Gaddafi is down. They might be friendly to the international capital, but they might as well put lots of barriers for anyone to put money in or out of the country. Plus, there's also the issue of what they'll do with the international resources lent or invested during the previous government. All which means a lot of uncertainty.

I don't think the oil money is big enough to deal with everything they'd need to deal. They can't simply sit on their oil fields and use that money to suppress any economic problem that appears, the country is too big for that. They'll either find a way to get international capital to rebuild, or they'll probably start printing money in a attempt to bankroll themselves. If they go for the later, it pretty much means the country will get screwed hard with inflation and a myriad of other economic problems.

[Sheb]

Well, Libya's population is 6.6 millions. Before the war, it was exporting 1.3 million barrels a day. At current European price, that's around 144 millions $ a day, or 20$ per person per day. Of course the output is much lower now, but it still far from a negligible ressource. (The US's budget is 30$ per person per day)

[Felius]

Well, Libya's population is 6.6 millions. Before the war, it was exporting 1.3 million barrels a day. At current European price, that's around 144 millions $ a day, or 20$ per person per day. Of course the output is much lower now, but it still far from a negligible ressource. (The US's budget is 30$ per person per day)

How much of it was destroyed during the revolution?

But fair enough, giving a quick look in Libya's economy, it might fare better than I expected, due to the oil exports. It still is unlikely to be able to attract foreign investments, but that might not be as much of an issue as it would be, at least in the short term.

[Aqizzar]

It still is unlikely to be able to attract foreign investments, but that might not be as much of an issue as it would be, at least in the short term.

It's already attracting foreign investments, Britain, France, and China especially.  It had foreign investments in the first place, and I think it was Britain that pledged to help get their industry back on its feet.  I'm sure there's palms being greased but its better that everything just going to pot.

[scriver]

A big part of Europe is dependant on Libyan oil. Individual countries and the EU alike will want to see the production restored as soon as possible, because we all benefit from it.

The oil must flow.

[Felius]

It still is unlikely to be able to attract foreign investments, but that might not be as much of an issue as it would be, at least in the short term.

It's already attracting foreign investments, Britain, France, and China especially.  It had foreign investments in the first place, and I think it was Britain that pledged to help get their industry back on its feet.  I'm sure there's palms being greased but its better that everything just going to pot.

The issue here is: What interests they'll have and what they'll do with the foreign investments done during the previous administration. Right now investments are part because it has lots of potential, specially with direct investments that might lead to a cornered market if they play their cards right, and part the "civilized" nations wanting to rebuild it. Of course, there will be also lots of companies interested in putting a stake on the oil, which is always profitable. But let's wait and see. Hopefully I'm wrong, and they won't screw their economy.

And scriver, Europe can handle it. Buy it from other sources, and so on. The prices will soar, but they'll live. 

[PTTG??]

For refrence; Libya has the largest oil reserve in Africa, and is eighth in the world. Notably, it is light, sweet crude, easily accessible, and close to Europe.

It apparently had 77 years remaining assuming constant consumption in 2010; while slowed by the conflict, I suspect that intensive development could remove it much faster than that.

[Siquo]

Hey, you guys remember where this "Arab spring" started?

Oh yeah, Tunis. Elections went very well, and the "soft islam"-party (Ennahda) has won. This is probably what will happen in the other countries as well. Too bad, because the democratic secular center-left instigators that I was vouching for lost big time in those elections, not even ranking 3rd or 4th... Could be worse though, it's not turning into a theocracy.

[olemars]

In most of these countries, repressing the islamists and religiously conservative and casting them as some sort of bogeyman the security state must protect the people from, has been a major strategy. It's worked great as a way to shore up foreign support and to some extent some dependency from the general public, but it's also created strong underground movements. It's no surprise we see a backlash from this now that things are opening up.

The political pressure is on these moderate islamists now. They've made a lot of promises to follow up on.

[Siquo]

Careful now, big difference between "Islamic" and "Islamist".