Libya Defence and Security Report Q4 2008 - research report released
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| companiesandmarkets.com |
2009-10-23 18:23:01 -
Libya Defence and Security Report Q4 2008 - a new market research report on companiesandmarkets.com www.companiesandmarkets.com/Summary-Market-Report/libya-defence- ..
Libya´s current membership of the UN Security Council should allow it to play a leading role among Arab and African states in diplomatic efforts to block the arrest and trial of Sudan´s president, Omar al- Bashir. The ICC´s Chief Prosecutor Luis Moreno-Ocampo has called on judges to issue a warrant for the arrest of al-Bashir, who is accused of personally
ordering genocide and other war crimes. However, the Arab League and the African Union (AU) have both called for the case to be suspended, arguing that it could hinder ongoing efforts to achieve a negotiated peace in Darfur.
The latest macro-economic figures for Libya indicate that real GDP growth will accelerate to almost 7.0% in 2008, thanks to increased hydrocarbons and strong growth in the non-oil sector (albeit funded largely by oil-derived wealth). With global energy prices expected to remain elevated throughout the forecast period, our core scenario is for real annual GDP growth of above 6.5% between now and 2012. However, political developments pose significant downside risks to this outlook. In particular, Colonel Muammar Qadhafi´s recently announced plans to disband the majority of Libya´s Ministries, and to distribute oil wealth directly to citizens´ committees may have an adverse effect on future growth if it goes ahead.
At present, the Libyan defence industry is practically non-existent, and what does survive is almost entirely state owned. Multinational involvement has been legalised only relatively recently, with the lifting of the UN arms embargo in September 2003, and of the EU arms embargo in 2004, and foreign companies are now beginning to penetrate the market. The authorities in Tripoli have been in talks with several European defence companies, eager to establish themselves in what should become a significant market, now that the EU arms sales restrictions have been lifted. As larger foreign companies move into Libya, its domestic defence sector is likely to experience a large expansion. Libyas extensive military equipment is in desperate need of modernisation. Precise details of the modernisation path to be taken are not yet known.
The prospects for Libyas defence industry look reasonably good. Defence expenditure is estimated to remain at about US$670mn in 2007, rising to some US$730mn by 2010, as the defence industry opens for foreign investors, and new technology and hardware becomes available to Libya. The signing of new defence contracts and the trading of Libyas valuable oil reserves will provide further funds for military expenditure. This will see import figures rise substantially over the coming years, as Libya updates and replaces its ageing Soviet equipment.
