Economic pressures may shape Libya's future

A young Libyan girl and her brother, carrying the independence flag, head toward a destroyed tank at the western gate in the town of Ajdabiya.

JEREMY HOBSON: We are six weeks into the fighting in Libya and still no end in sight. President Obama has just written an op-ed standing firm on the mission to oust Libyan Leader Muammar Gaddafi.

But even U.S. Defense Secretary Robert Gates has said it's going to be political and economic pressure that eventually leads to Gaddafi's ouster.

For more on the economic side of things we're going to talk now with the former British Ambassador to Libya, Sir Richard Dalton, Good morning.

RICAHRD DALTON: Good morning.

HOBSON: What are the economic pressures at this point and how serious are they for Gaddafi?

DALTON: Inability to sell their oil, collapse of the labor market, there is money in Tripoli, but they are going increasingly, as the months go by, to live from hand to mouth.

HOBSON: Is there economic pressure on the rebels as well? In other words, is there a chance that countries around the world are going to get impatient with this sort of stalemate that's going on, and go back to doing deals with Gaddafi?

DALTON: I don't think that's likely for the next few months. There would be a serious international backlash. The East is gradually resuming economic activity.

HOBSON: I saw that the group of five nations called the BRICS -- the Brazil, Russia, India, China, South Africa -- these emerging economies, just said that the use of force should be avoided in Libya. What's that all about?

DALTON: Well that's about marking a separate position from the coalition. But without going so far as to antagonize the powerful countries represented at the United Nations and in the coalition.

HOBSON: But why do they want to have a separate position?

DALTON: They want to play it both ways, so whether Gaddafi stays or there is a victory for democratic forces, they want to be able to say that they had a part in it. So they don't want to commit themselves too strongly to any one course of action at present.

HOBSON: They want to be able to do deals with whoever ends up being in power in Libya?

DALTON: Yes, i mean, that's true for everybody because Libyan oil is important in the long run, and Libya as a prosperous country in North Africa although a country only with a population only of about 7 million, is a significant medium scale trade partner for many country on both sides of the Atlantic.

HOBSON: Sir Richard Dalton, former British Ambassador to Libya, former head of the British Libyan Business Council and now, with the Chatham House Think Tank. Thanks so much for joining us.

DALTON: Thank you.

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