Why SWFs are Important: The Case of Libya
Libya has gone through a tumultuous revolution. The North African country is in the midst of jumpstarting its banking sector and trying to restart oil operations. Luckily, Libya has a sovereign wealth fund to tap for reconstruction and deep reserves of oil underground to continue to fund it. For some countries, this is why they created sovereign funds.
Sovereign wealth funds have played the roles of savior and stabilizer in the past, just look at Ireland, China, and Kuwait as great examples.
The Libyan Investment Authority (LIA) at the end of June 2011, had around US$ 64.9 billion. The new government also will have access to foreign reserves from the Central Bank of Libya. The total amount of the LIA and Central Bank of Libya’s assets is around US$170 billion.
Cash, stocks, and bonds make up 77% of LIA’s assets, with 45.5% in cash. Some of this cash will most likely be used to finance post-Gaddafi reconstruction. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]