Since the fall of the Muammar Gaddafi government in 2011, the North African nation of Libya has been in turmoil, with various factions fighting for political control. Today the Government of National Accord (GNA) holds the mantel of United Nations support in its bid to unify the country. Opposition factions and Russian-supported rebel groups vie for power and command of national infrastructure, assets, and territory.
Amid all of this strife, the Libyan Investment Authority (LIA) has worked to manage and protect Libya’s vast assets generated by its oil wealth over decades, as foreign banks, the United Nations, and adversarial groups also pursue their own agendas regarding the fund.
We sat down in Washington recently with Ali Mohammed Hassen, the chairman and CEO of the LIA, to discuss his agenda for the future.
When asked for some background on the situation Mohammed Hassen said, “The LIA reports to the GNA but is an autonomous group, independent from political conflict. The sovereign wealth fund is for all Libyans; we have to preserve it for future generations.”
Holding approximately $76 billion in assets, of which approximately $22 billion are in deposits, $10 billion in equity shares, and $24 billion deployed in various subsidiaries, the main focus of his efforts currently is to protect approximately $10 billion which is frozen at foreign financial institutions.
Hassen made it clear he is not looking to have the assets unfrozen at this current point in time, but simply to gain access to prudently manage the funds, which are currently held in negative interest rate accounts: “We respect the decision to freeze the assets, and simply want to make sure the funds are producing a rate of return for the Libyan people.”
Hassen has put together a six-point strategy to deal with the situation and gain the trust of the UN and other global partners.
The agenda starts with hiring a respected international accounting firm to audit the firm’s assets; something which has not been done for nine years. “This will improve trust. We want to be open, transparent, and compliant with UN sanctions,” states Hassen.
“Second, we will prepare a full report on LIA’s assets and their status. The report will be compliant with sovereign wealth fund standards.
“Third, we will cooperate with an international firm to improve governance and increase transparency.
“Fourth, we will comply with the Santiago Principles for a sovereign wealth fund, to include cooperation with other SWFs. These are benchmark principles.
“Fifth, we will establish a specific project to communicate with the international community to improve our reputation, which admittedly has not been very good. We want to improve our image.
“Finally, we will work to make sure we are compliant with UN sanctions and convene a panel of experts to implement a strategy to gain the trust of those in control of our wealth. Once this is done, we can request to manage the assets ourselves.”
Mohammed Hassen is hoping for real cooperation between the LIA and U.S. companies, especially the oil sector, to help stabilize the country, improve oil production, and rebuild. “The LIA will be an important partner in this effort,” he declares.
“We are not political; this money belongs to Libya. We take our instructions from our board of trustees.”