Moral Outrage
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US and Europe confiscating the sovereign wealth of Libya

The objective of the war against Libya is not just its oil reserves (now estimated at 60 billion barrels) nor the natural gas reserves of which are estimated at about 1,500 billion cubic meters. In the crosshairs of “willing” of the operation “Unified Protector” there are sovereign wealth funds, capital that the Libyan state has invested abroad. The Libyan Investment Authority (LIA) manages sovereign wealth funds estimated at about $70 billion U.S., rising to more than $150 billion if you include foreign investments of the Central Bank and other bodies. But it might be more.

Even if they are lower than those of Saudi Arabia or Kuwait, Libyan sovereign wealth funds have been characterized by their rapid growth. In just five years from 2006 onward, LIA has invested over one hundred companies in North Africa, Asia, Europe, the U.S. and South America: holding, banking, real estate, industries, oil companies and others. Libya, after Washington removed it from the blacklist of “rogue states,” has sought to carve out a space at the international level focusing on “diplomacy of sovereign wealth funds.” Once the U.S. and the EU lifted the embargo in 2004 and the big oil companies returned to the country, Tripoli was able to maintain a trade surplus of about $30 billion per year which was used largely to make foreign investments.

The management of sovereign funds has however created a new mechanism of power and corruption in the hands of ministers and senior officials, which probably in part escaped the control of the Gadhafi himself: This is confirmed by the fact that, in 2009, he proposed that the 30 billion in oil revenues go “directly to the Libyan people.” This aggravated the fractures within the Libyan government.

U.S. and European ruling circles focused on these funds, so that before carrying out a military attack on Libya to get their hands on its energy wealth, they took over the Libyan sovereign wealth funds.

Facilitating this operation is the representative of the Libyan Investment Authority, Mohamed Layas himself: as revealed in a cable published by WikiLeaks. On January 20 Layas informed the U.S. ambassador in Tripoli that LIA had deposited $32 billion in U.S. banks. Five weeks later, on February 28, the U.S. Treasury “froze” these accounts. According to official statements, this is “the largest sum ever blocked in the United States,” which Washington held “in trust for the future of Libya.” It will in fact serve as an injection of capital into the U.S. economy, which is more and more in debt. (A few days later, the EU “froze” around 45 billion Euros of Libyan funds.)

[Excerpts of an article by Manlio Dinucci, originally published in the Italian press]

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