Attachments
Libya’s sovereign wealth fund has been under UN sanctions since the revolt against Muammar al-Qadhafi in 2011. These measures restrict investment that would enlarge the fund. The UN has eased them, but further changes would better protect the Libyan people’s patrimony while posing minimal risks.
What’s new? The UN Security Council has granted the Libyan sovereign wealth fund permission to reinvest some of its assets that have been frozen since 2011. But Council members remain reluctant to reform the sanctions constraining Libya’s finances while the country is divided. They also lack confidence in the fund’s competence.
Why does it matter? The Security Council imposed an asset freeze on the fund during Libya’s 2011 civil war, with the aim of preventing the Qadhafi regime from plundering the fund, estimated then at over $60 billion. Over a decade after the regime’s ouster, the sanctions still act as a brake on the fund.
What should be done? Council members should make further reforms to the sanctions regime to enable the fund to grow, while maintaining safeguards. Since resolution of Libya’s political crisis is not imminent, they should also define a realistic plan for long-term sanctions relief. The fund should do more to enhance its credibility and transparency.