With Libyan leader Colonel Muammar Qadhafi now dead, and the rebel Transitional National Council (TNC) now the de facto government, the future of the country remains uncertain following the 2011 civil war. The TNC has tasked itself with commencing the constitutional reconstruction of the countrys political system. Nevertheless, until an elected government takes power, there is a very high risk of a security vacuum in the meantime, which could be exploited by rebel splinter groups, surviving Qadhafi loyalists, or Islamist militants.

What is certain is that the war has done very considerable damage to the Libyan economy, including its crucial oil industry. We have revised our forecast for real GDP growth in 2011 downwards to minus 23.2%. Until security is restored, it will not be clear just how much economic/infrastructure damage has been done or how long it will take to rebuild.

However, the assassination of rebel commander Abdel Fattah Younes in July points to future power struggles within the TNC. The rebels have thus far been united only by their opposition to Colonel Qadhafi. With Qadhafis departure from the political scene, differences between rebel factions could soon become more visible. In particular, Libya remains divided between the eastern region of Cyrenaica, centred on Benghazi, and the western region of Tripolitania, centred on Tripoli. Neither half of the country will wish to be dominated by the other. Also, there are divisions over what form the new Libyan state will take. Negotiations over a new Libyan constitution are likely to drag on for months, if not years. Thus, the emerging Libyan polity is likely to be an unstable one for the foreseeable future.

The Next Steps

There are, broadly, different scenarios:

The TNCs Constitutional Process Moves Forward

It should not be automatically assumed that a new regime will be a secular and democratic government but this does offer the best chance of that outcome. In this case, there is the prospect of good relations with the West and significant, oil-funded, contracts to re-equip the Libyan military.

Anarchy

As was the case in Yugoslavia and several other countries, deposing a long-term, strongly autocratic ruler can result in chaos. The TNC could collapse, and the political vacuum exploited by an unexpected group, or groups. The risk for Libya is that anarchy could allow the emergence of Islamist forces.

Partition

De-facto or de-jure partition is the outcome unwanted by anyone. In this scenario traditional internal eastLibya west tensions could split the country down the middle. The TNC is fiercely opposed to partition, but the reality on the ground could still dictate this outcome.

For the foreseeable future, Libya will remain an unstable polity. This means that the country will continue to pose a security risk to its neighbours, and potentially other Mediterranean countries.