Libya's TNC Says Foreign Allies Have 'Priority' for Deals

Provisional government warns that some existing contracts to be subject to review for corruption.

Libya's provisional government said on Thursday its foreign allies during the war would have priority for future deals with the country and warned that some existing contracts would be subject to review for corruption.

Mustafa Abdel Jalil, chairman of the Transitional National Council, was speaking at a news conference in the capital Tripoli with Britain's Prime Minister David Cameron and French President Nicolas Sarkozy. Their joint visit was the first by foreign leaders since the fall of Muammar Gadhafi.

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Abdel Jalil said there were no previous agreements with the TNC's "allies and friends".

"But as a faithful Muslim people we will appreciate these efforts and they will have priority within a framework of transparency," he said.

The TNC chief also said existing contracts signed with the Gadhafi government would be reviewed for graft.

"The previous contracts, we have respected them... all legitimate contracts. This means review of these contracts for whatever financial corruption may have tainted them. As a member of the previous government I know well that these prices were above those used globally," Abdel Jalil said.

The TNC had previously promised to honor existing international contracts. But, according to Wafik al-Shater, an economic adviser to the TNC, they said they would leave the drafting of a new economic policy largely to the next, elected government.

For now, "it's a priority for the government to kickstart the economy as soon as possible so people can get back to work," said al-Shater.

Libya's economy largely ground to a halt when the brutal regime crackdown on a popular uprising was met by international sanctions and opened up a civil war. An embargo by air, land and sea - exempting humanitarian supplies and food - froze most trade. Inventories ran low. Hundreds of thousands of foreign workers fled, abandoning construction sites, bakeries and oil fields.

Reviewing contracts signed under the old regime could backfire, warned Said Hirsh, the London-based Mideast economist with Capital Economics.

"Whatever happened during Gadhafi's time, corruption and bribery, the foreign investors should not be penalized," he said. "Otherwise, that will probably send the wrong signal."