U.S. Defense Secretary Leon Panetta was in Tripoli on Saturday on the first visit to Libya by a Pentagon chief to
study up close the security needs of the new government. “The purpose of my trip to Libya is to have an opportunity to look at that situation up close but to also pay tribute to the Libyan people to what they did in bringing (Muammar) Qaddafi down and trying to establish a government for the future,” Panetta told the traveling press. “There are going to be challenges here, there are going to be difficulties, but I think any country like Libya, that was able to do what they did and showed the courage that they did … I’m confident that ultimately they’re going to be able to succeed in putting a democracy together in Libya.
“The indications I’ve had are that they’re making progress, trying to bring the tribes together, trying to get the country together.”
Later, addressing a joint news conference with Prime Minister Abdurrahim El-Keib, Panetta said Libya faced tough challenges in uniting the forces that toppled Gaddafi, securing arms caches and building an army, police force and democratic institutions.
“This will be a long and difficult transition, but I am confident that you will succeed,” he said.
Asked about the militias that wield the real power on Libya’s streets, Panetta said: “I’m confident they (the interim leaders) are taking the right steps to reach out to all of these groups and bring them together so they will be part of one Libya and one defence system,” he is quoted by Reuters as saying.
“I have a good sense that they know how to deal with it.”
Earlier Panetta had told the AFP correspondent traveling with him: “Obviously, we’re prepared, if they want to, provide whatever assistance they ask us to do. NATO countries have indicated the same willingness to do that.”
Enforcement by the Atlantic alliance of a U.N.-mandated no-fly zone over Libya was crucial in the months-long battle to oust Qaddafi that began in February.
Libya’s new rulers are also facing a big challenge as they try to disarm militiamen who fought to topple Qaddafi and secure thousands of surface-to-air missiles stockpiled under the former regime.
Pressure to disarm the former rebels has mounted after local media reported several skirmishes between militia factions in Tripoli, with some resulting in casualties.
There are concerns that the Man-Portable Air Defense Systems, or MANPADS, could be used by militant groups against commercial airliners and helicopters.
Panetta traveled to Libya from Turkey, where he held wide-ranging talks. On Thursday, he was in Iraq to take part in a ceremony marking the end of the U.S. mission.
Sanctions lifted
His visit came a day after the United Nations and the United States lifted sanctions on Libya’s central bank in a bid to ease a cash crunch in the post-Qaddafi era, diplomats said.
The Tripoli authorities have stepped up calls in recent weeks to release the estimated $150 billion frozen abroad to help pay salaries and keep services running.
The U.N. council ended a freeze on the assets of the Central Bank of Libya and the Libyan Foreign Bank (LFB), which was ordered in February as part of sanctions against Qaddafi.
The U.S. government said it would be freeing more than $30 billion dollars of assets belonging to the central bank and LFB in a bid to help the new Libyan government, which overthrew Qaddafi after months of bloody fighting.
The Tripoli authorities have stepped up calls in recent weeks to release the estimated $150 billion frozen abroad to help pay salaries and keep services running.
In a letter to the Security Council, National Transitional Council chief Mustafa Abdel Jalil said the release of funds was “essential for the economic stability of Libya.”
The official request for the lifting of sanctions was made one week ago and no objections were made by any of the council’s 15 members enabling the assets freeze to be lifted on Friday.
On top of the $30 billion held in the United States, Britain’s Foreign Secretary William Hague said his government would immediately act to free about 6.5 billion pounds ($10 billion) held in Britain.
The easing of the sanctions “marks another significant moment in Libya’s transition,” Hague said in a statement.
“It means that Libya’s government will now have full access to the significant funds needed to help rebuild the country, to underpin stability and to ensure that Libyans can make the transactions that are essential to everyday life.”
Hague said Britain would pressure the European Union to quickly release frozen sums.
The White House said it had “rolled back most U.S. sanctions on the government of Libya.” The move unlocks all Libyan government and central bank assets within U.S. jurisdiction.
“These measures, along with the steps taken today by the United Nations Security Council, will allow the Libyan government to access most of its worldwide holdings,” the White House said in a statement.
On a U.N. level, an arms embargo and an assets freeze against Qaddafi’s family and associates remains in place, along with some financial institutions including Libya’s key sovereign wealth fund.
The U.S. government also said it was keeping sanctions against the Qaddafi family.
Central banks around the world had been nervous about releasing funds frozen under sanctions because they considered there were not sufficient guarantees about where the money would go.
“There are huge amounts being held and treasuries were nervous they could face legal action later,” one western diplomat said. “But now the central bank is operating again, free of Qaddafi, we can have some confidence.”
The reason most assets were not unfrozen earlier was uncertainty over who legally owned them and concerns that in some cases it could be Qaddafi’s family or aides, diplomats said.
They said the delisting of the two banks did not necessarily mean all frozen assets would be instantly available to Tripoli as foreign institutions holding them might seek formal authorization from governments.
A U.N. resolution in September eased sanctions on Libya’s national oil company.
Fighting essentially ended in Libya when Qaddafi was killed in October and the U.N. Security Council authorized the release of about $18 billion to help the government. But by late November only about $3 billion of that had been made available to Tripoli because of the legal problems.
Libyan Foreign Bank was until recently more widely known as the Libyan Arab Foreign Bank. Entirely owned by the central bank it was set up to carry out transactions abroad, especially for Libya’s foreign trade.
Libya can generate substantial revenues from oil exports, but these were halted by the conflict and are taking time to restore, leaving a hole in government finances.
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