Prospects for Economic Reform in Libya
On March 2 a broad cabinet reshuffle resulted in a change of prime minister, from Shokri Ghanem to his former deputy Bagdadi al-Mahmudi, and extensive modifications, including the creation of four new ministries dealing with social affairs. These changes were designed to convey a clear message-that the leadership was responding to the country's social and economic discontent, which had culminated in riots in Benghazi. However, the message might have been ineffective, as the public views the new government as strongly representative of the ""old guard.""
* CERA expects the flow of development projects to continue, if not to accelerate. The prime minister's close connections to the leadership should make it easier to overcome resistance from those who have a big stake in the status quo.
* Internal security remains the number one priority. For now, the promotion of economic and social development is seen as the best approach, but this may change depending on the evolving situation.
* Ghanem's appointment as chairman of the Libya National Oil Company and his direct reporting to the prime minister confirm the desire to continue with reforms in the oil sector, though decision making will likely remain complex and often project specific.
* In the power sector, substantial investment is needed in both gas-fired generation and transmission, and new opportunities for independent power producers may emerge.
