A closer look at the Libyan economy

A picture shows the Zawiya oil refinery west of Tripoli after Libyan rebels pushing to cut off Tripoli took complete control of the key oil refinery that is the only source of fuel to the capital, its manager said.

Jeremy Hobson: The Libyan rebel authorities say Muammar Gaddafi was killed today near the town of Sirte. The news has big implications for Libya,
for the region, and for the world. The UN Secretary General Ban Ki Moon says Gadaffi's death marks a historic transition for Libya.

For more on what that means economically, we're joined now by Jane Kinninmont, an expert on Libya from Chatham House in London. Good morning.

Jane Kinninmont: Hello, good morning.

Hobson: So does Gaddafi's death -- as it's being reported -- mean for the Libyan economy?

Kinninmont: The Libyan economy has pretty bright prospects, mainly because of the country's oil wealth. It has a very small population, a lot of oil, and a lot of foreign assets. The key question is whether they're going to be able to re-establish security there. And hopefully, this will be a step towards that, although it's probably not entirely the end of the conflict.

Hobson: Libya has for so long been identified as the country of Muammar Gaddafi. What do you know -- as an expert on Libya -- about the Libya economy underneath Gaddafi? What do we have left without Gaddafi?

Kinninmont: Well, the economy has been massively state-dominated for many years, so there's really very little private sector activity there. And it's been particularly hard for small and medium enterprises to get started.

There has been some opening up in recent years towards investment, and there are actually quite a lot of laws in place that were issued last year on investment, on the stock market, on privatization. But right now, roughly 70 percent of the Libyan workforce is employed by the state; and the experience of other Arab countries suggests that it's going to take a long time to change that.

Hobson: Jane Kinninmont, senior research fellow at Chatham House joining us from London. Thanks so much.

Kinninmont: Thank you.

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