Coalition forces meet to talk about next steps for Libya

U.S. Secretary of State Hillary Clinton (C) speaks at the opening of the London Conference on Libya, in central London, on March 29, 2011.

Kai Ryssdal: The rebels in Libya have lost some of the ground they gained the past couple of days under cover of allied airstrikes. Pro-Gaddafi fighters have pushed the rebels back from the town of Sert.

Away from the battle, meanwhile, as President Obama mentioned in his speech last night, there was a big Libya conference in London today. NATO countries, the United Nations and representatives from more than 30 other governments -- got together to talk about the no-fly zone and what happens next.

Marketplace's Stephen Beard is in London. Hello Stephen.

Stephen Beard: Hello Kai.

Ryssdal: Now this was, we should say, more of a political gathering, not so much about the money, right?

Beard: That's right. But there's always money there somewhere, lurking in the background. No, it was, you're right, mainly political. It was about stiffening the coalition's resolve and planning for Libya's future, trying to avoid what the coalition partners think was the problem with Iraq: Not enough forward thinking before the conflict. They talked about things like what to do with Gaddafi when they've ousted him. Should he be tried as a war criminal or would it spare a lot of bloodshed and cost to persuade him to retire gracefully? So it was basically political, but there was some discussion of money. The Gulf state of Qatar confirmed that it will be selling Libya's oil on behalf of the rebels and that money will fund the considerable humanitarian effort in Libya.

Ryssdal: Well as long as we're talking about money and funding, what about once the violent stops, once the military campaign is over and the cost of rebuilding comes to mind, any discussion of that?

Beard: No, not at all. This is the great unmentionable. The assumption seems to be, first of all, on the military costs, that the coalition partners are going to shoulder their own military costs -- that in the case of the U.S., by the way, is $550 million and rising. But the cost of reconstruction, the assumption again is that Libya will pay for its own reconstruction. It has, after all, one of the biggest reserves of oil and gas in Africa. Last year it generated more than $30 billion in oil revenues for a country of only 6 million people. So the argument is Libya can easily afford its own reconstruction.

Ryssdal: I want to make sure I heard that right, Stephen, because we were told the same thing about Iraq. Deputy Secretary of Defense Paul Wolfowitz said Iraqi oil will pay for its own reconstruction. Did anybody bring that up today?

Beard: No, but there is obviously pretty widespread anxiety about this. Libya's oil output has clearly dwindled. Skilled foreign workers have fled. Some of the oil facilities have been damaged. It's going to be many months from the end of the conflict before that industry is producing sufficient revenues to rebuild Libya. Here's George Joffe, an expert on the Arab world at Cambridge University.

George Joffe: The damage done through neglect and now caused through military action is considerable and it will take a long time to put it right and somebody is going to have to pay in the short-term. And I fear that is not going to be Libya.

And, he says, it's most likely to be the U.S. and Europe. They are the richest participants in the coalition. And it does recall that warning from Colin Powell before the First Gulf War -- remember what he said? It's the rules of the china shop; if you break it, you own it. It may be very difficult for the U.S. and Europe -- leading players in the military intervention to avoid picking up some, perhaps a lot of the costs of rebuilding Libya.

Ryssdal: Marketplace's Stephen Beard in London, on the conference there about Libya today. Oil, by the way, about $104 by the barrel, if you're counting. Stephen, thanks a lot.

Beard: OK Kai.

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