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tv   World Business Today  CNN  August 26, 2011 1:00am-2:00am PDT

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don't have that engine to make the hurricane bigger. now we have the engine. it is back. it will be a category 3, and it will stay a 3 until it makes landfall in north carolina. now, there's a chance it misses but not that big of a chance. then it rolls on up all the way to jersey shore into potentially new york. and in fact, probably even shut down the transit. they'll shut down the subways if this happens. this is a big deal. piers. >> it certainly is. chad myers, thank you very much. that's all for us tonight. the top stories right now -- in libya, fierce battles continued thursday in areas controlled by gadhafi loyalists. mostly in southern tripoli. meanwhile the rebels national transition council plans to relocate its headquarters from benghazi to tripoli.
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the leader of libya's national transitional council called for more financial support for the new government from other nations. japan's about to get another new prime minister. kan announced his resignation. parliament will vote on tuesday to choose the country's next leader. kan was struggling for approval even before the march disaster struck japan. his ratings have gotten worse since. people along theest east coast are getting ready for hurricane irene. six states are in emergency mode. thousands of toof tourists and residences have been evacuated. it's been 11 days since the hunger strike began, but he says he'll keep going until death or until parliament approves his version of tough anti-corruption legislation. those are the top stories from cnn, the world's new leader. i'm zain verjee and world business today starts now.
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good morning from cnn london. >> and good an from cnn hong kong. i'm andrew stevens. welcome to world business today. >> more qe or no more qe some that's the question at jackson hole. and liquidity on wall street. one look at the potential impact of hurricane irene on downtown manhattan. >> but first, ben bernanke's impending speech at jackson hole is front and center in investors minds this friday. let's take a look at how that's affecting european markets. they've opened on the day of the big conference lower with particularly heavy losses coming from the dax down to the untune of 2%. we've also got the cac 40 being led lower by stocks after a company being down graded by one
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of the brokeragers. but it seems we're raising some of the optimism that we saw earlier this week. >> seems to be that any big moves by ben bernanke is starting on to be discounted now at that meeting. here in asia, it was pretty much the same sort of story. shares edging higher at the start of trade, but the word to describe what was going on here also very cautious. that's how the day ended. the nikkei up just a fraction, 0.3%. apart from the fact that it doesn't have much of an impact. australia down by about a third of one percent. >> in the u.s., stock markets dropped off sharply on on thursday. investors seemed to hit the breaks after three days worth of gains. take a look at the declines. on thursday, the dow ending the day down to the tune of 1.5%. similar situation for the
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broader s&p 500 index, but it was the nasdaq that was down nearly 2%. as to definitely feeling the brunt the most. >> and in the pre-market action in the u.s., it looks like stocks may be getting a bit of a reprieve with futures point to go a slightly higher open today.dow as you see this. certainly a lot more on that crucial ben bernanke speech at ja jackson hole, but wall street traders also looking at the closely at the weather. >> that's right. up and down the east coast of the united states, people are currently bracing themselves for hurricane irene. this is the most serious hurricane threat to the country since hurricane katrina six years ago. currently six oil refineries are sitting in what could be the path of the storm. the likelihood of irene actually disrupting smis on the eastern seaboard of the u.s. already sent again and oil prices higher
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on thursday. now, utility companies are also warning about pretty extensive power outages in the affected regions. they're preparing for strong winds to top he will trees and knock down power lines if the storm does make landfall in those areas. for some indication on the financial damage, experts say that's reason's path is looking very similar to hurricane gloria's, that was category 3 storm that hit the u.s. east coast back in 1985. it cost a total of $900 million. but what i want to show you is that that pales in comparison to the costliest hurricane ever on record, it is of course hurricane katrina standing at $81 billion. it was another category 3 storm that of course devastated parts of the gulf coast back in 2005. and on top of the financial costs, it's the damage hurricane irene may do to the country's financial center that's also causing concern. irene could be the most
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destructive hurricane to hit new york city since 1938 and the every a eventual all path of the storm sun known. michael bloomberg, the mayor there, reminding new yorkers to be vigilant. >> the national weather service is now predicting that new yorkers will begin to feel the effects of irene in the early hours of sunday morning and based on the latest forecast, it will be a category 1 storm. let me remind you you that this kind of forecast is very imprecise and we're talking about something that a long time away in meteorological terms. so what we have to do is assume the worst, prepare for that and hope for the the best. irene's exact course, strength and time of arrival remain difficult to be predicted with precision because this is a very large and also very slow moving hurricane. >> let's not forget wall street is in lower manhattan. and as chad myers explains, that area could be one of the hardest hit when irene reaches new york.
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? t >> the true threat with a land falling hurricane just to the west or right at new york city will be in-undays, will be water going into new york harbor. it's also the tip of manhattan. if you push water up that harbor and then up the two rivers, this is the east river, this is the hudson river, you will get the water to back up and go up. it's called storm surge. the storm surge will be all the way through battery park. it will also be all the way up the west side here of lower manhattan. a little spot right there. that's where the world trade towers used to be. that's a big hole now as they've been digging that out to put other things in that area. a little bit farther to the other side would be new jersey, as well. completely in-undated. flying you right into here, this is all old swamp land, this is all landfill in the first place.
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they put buildings here because it was very expensive property. and back to the other city, this is hoboken, jersey city, water everywhere here as about an eight foot storm surge would go over the board walk, the concrete walk that's along the water, and get all the way back into the buildings here of southern new jersey. and this is just one of the areas here. this is one of the a marios that's the craziest scenario here of damage to new york city with water rushing in from the south, all the way as the storm pushes water in as a rotating hurricane at 85 miles to 100 miles per hour. i though you've heard of typhoo typhoons cyclones. different oceans call them different things but it's the same. we call them hurricanes. remember, there are subways that could get flooded, too. let's check on the progress of hurricane irene right now. jennifer delgado is at the cnn
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"weather center." how is it looking? >> right how it looks like it's been weakening over the last several hours. we're waiting for the latest update from the national hurricane center. but you have to to keep in mind, too, new york city, that's the u.s.'s most densely populated city. so a lot of concern there. right now it is pulling away from the bahamas. you can see over on the last several hours, the eye becoming cloud filled, pulling in more drier air as we go through today, it will continue to move up parallel well offshore from florida. and thens as we go through saturday morning, looks like it will start to approach the carolinas. and i also want to point out to you the winds 185 kilometers. we still could see a bit more strengthening out of it. right now category 3. likely making landfall it looks like very close to cape hatteras as we go through saturday afternoon and then it looks like continuing to skirt up the coastline of the u.s. and as we go through sunday,
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things will deteriorate for parts of the northeast, specifically new york, as well. we do have a hurricane warning still in place for areas in red. you can still see that includes north carolina. tropical storm warning in place for south carolina. and that means conditions are expected within the next 48 hours. you can see 48 hours for the hurricane watch areas up along areas including del mar as well as new york. we're worried about the winds and heavy rainfall, but the storm surge potentially will be very bad. we're talking very rough seas as irene makes its way up the coastline and we're talking for areas, you can see the carolinas, very dangerous winds. this is going to cause power outages. the same for the northeast. if about it continues to hug along this track, that is going to be bad for new york. if it moves over towards the east a bit more, certainly that will be an improvement for new york city and we're hoping, again, new york city really dodge this is one. last but not least, we have a
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extra typhoon and the winds right now 241 kilometers. if you put this in the atlantic with the winds right now, this would be a category 4 and you can see the effects working in through parts of the philippines. there is that's really impressive there and since this time yesterday, it's really intensified. and the track now a bit moreover towards the west. so it looks like it will be passing that northern coastline as we go 24 hours out, look at the winds still 232 and we won't see a lot of weakening out of it or forward speed will be rather slow, too. so that will increase the had toing potential for the parts of the philippines as well as we go 72 hours out towards taiwan. and then five days out, it's still going to be just off the coast of taiwan. so certainly this is going to be a problem. i know we're all talking about hurricane irene, but we still have to watch the super typhoon, as well. back over to you. >> jennifer, as always, many thanks. and coming up, the countdown
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is on for ben bernanke's speech in the u.s. we have full analysis in just a moment.
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it's been a volatile week for gold. it's heading back up again after tuesday and wednesday's big selloff. as you see, $1786 per houps. a rise of $21.35. you're watching world business today. >> well, investors are turning their attention from wall street to wyoming hoeisting the world' top in the central bank. ben bernanke will be commenting and they'll be looking to see if
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he announce as third round of support for the world's largest economy. this is the venue that bernanke chose to announce a second round of quantitative seizing. the $600 billion that he pumped in to the u.s. economy brought some confidence back to the world's markets, setting off a rally for stocks. take the s&p 500, for example. from the time that bernanke announced qe-2 until the program actually ended, it gained 24%. >> a lot of people in the market hoping he'll do a qe-3 for the same sort of effect. we're joined now by frederick newman from hsbc global research based here in hong kong. nice to have you on the show. two question this is one. what do you think ben bernanke will say and what would you like him to say? >> well, the market would like to hear him say we'll print more money as we just heard, but we don't think he's likely to announce that. it is just 00 big a step now.
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inflation is too high in the u.s. to just turn on thepresses. what we'd like him to say is layout the options and simply say if things were to continue to deteriorate in the u.s., the fed stands ready to act. and that could be in the form of printing more money or some other measures potentially. >> there has been suggestions that he's running out of tools, if you like, to tackle the problem. is that true or does he have plenty more to use against this? >> actually, he has quite a bit more to use. the fed can print money, it can buy certain assets in the u.s., it can start buying stocks, it can start buying houses and mortgages. it's more that the government in terms of fiscal stimulus, there we spent all our bullets so far. but in terms of monetary policy, there are still options left on the table. >> some will call this a med indicated high particularly for the u.s. markets because we see the reaction in the stock markets for for this and the
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time has come for the u.s. economy really to to suck it up and for people to deal with with the pain and take it from there. is there any truth in that, do you think or does the economy still need a lot of support? >> i think the u.s. still needs all the support it can get. there are massive pressures on deleveraging, high unemployment, a lot of americans tell out of jobs. so it's important for policy makers to do everything they can. and a big risk if you're a monetary policy official, ben bernanke or trichet in europe, the economy can spin into a deep recession. >> people are deleveraging as you said. even if borrowing costs are low, people aren't necessarily going to start spending more. they need to deleverage first. so you're pushing on a piece of string in a way. >> but if you push really hard on a string, sometimes you end
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up pushing it and i think the they're here is that, yes, the demand for money is very low, but that means perhaps the fed has to to be all the more aggressive in doing something p we tend to have the view that the entire american economy is on its back. but really 90% of americans still pay their mortgages, we still have a lot of people who would potentially buy a house if the mortgage rates came down just a little bit more. so at the margin, there is still some effect that can be gained. >> let's take a hypothetical here. aggressive printing of money to get the u.s. economy going again. what would the impact of that be in asia? >> well, it's a bit tricky for asia because obviously a lot of that money would eventually head into asia because here the prospects are bright and it does fuel in-nation in this region. >> which is a big problem right now. >> in hong kong, for example, we have inflation of 7% currently. so that would be a worry for asian policymakers that more and more of that money would come into to asia and just stoke
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inflation. but that's obviously not something that ben bernanke has to worry about at this hospital in time as he delivers the speech. >> certainly won't impress the chinese policymakers. okay. fred, as always, thanks so much for coming this. it's no surprise, but at least now it's official. japan is getting another new prime minister. we'll have a live report. and also look into the time line for will power shift after the break. [ female announcer ] what if your natural beauty could be flawless too? discover aveeno positively radiant tinted moisturizers with scientifically proven soy complex and natural minerals. give you sheer coverage instantly, then go on to even skin tone in four weeks. aveeno tinted moisturizers.
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strength for the euro, the pound and the yen gechagainst the u.s dollar, this coming ahead of the jackson hole meeting as the federal reserve will be deciding potentially upon a third round of quantitative he'sing. welcome back from cnn london an hong kong, this is "world business today." >> it's been nearly six months since the double disasters that struck japan leaving the country financially reeling and also struggling for sablt. japan's prime minister was having popularity problems even before the tragedies of march 11th, but now that situation has hit a watershed moment. he's announced that he's stepping down as prime minister. let's go hilive in tokyo. why has he now decided it's all too much for him?
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>> reporter: well, he's decided because he made a promise earlier in the summer that after two key bills can it pass the parliament, which happened today, that he would officially step down. what he did today is gave up his post as the head of the party, in effect that means the premiere shift, the next premiere will be voted in by the full parliament next week on tuesday. and what this means for squa pan is that an unpopular prime minister, one who was deeply criticized for his handling of the disasters, for the nuclear crisis and also the economy, the economy is big here, it is what many analysts say eventually did lead to the demise of prime minister kan, he is now out of the way. it clears the way for the sixth prime minister in just five years for will country. that ongoing revolving door, that political instability is leading some analysts now to say that this shows japan is broken on a number of fronts. here's what one analyst told us. >> the broken political system
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is begin to ning to reflect the broken economy system, the inability to deliver positive growth in a long term sense and the inability of the politicians to deal with that. >> reporter: that political instability just in week led moody's to downgrade japan's credit rating just on on wednesday saying that there needs to be more secure political leadership in order to have any sort of positive sxhik outlook not world's third's largest economy. >> this message just doesn't seem to be getting through, does it? is there any indication that the next prime minister will fair any better than his predecessors? >> reporter: not at all. in a eat thing. if you talk to anybody, any economic analyst, any business leader, even corporate squa pan, they're all extra or thely pessimistic that the next guy will do any better. so it leave as lot of people,
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especially here in japan, to toss up their hands and say does it even matter. the question is whether or not the next premiere is going to be able to get some sort of consensus to bring back some of that magic. and we're talking about six years as go. so it's got to be some be who has some sort of populous platform in order to move this country forward. but again, a lot of people are saying that they are just in the that optimistic it will happen again. >> just explain to us when that analyst, when you talk about this broken political system, how is it broken? what has happened in japanese politics for us to reach this sort of stalemate? >> it is a very, very long answer and we could write books upon this. many people say it really gets down to the consensus driven
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culture of japan, that you have to have consensus to move anything forward. the parliamentary system, as well, thrives on consensus. but it's extraordinarily difficult to get that especially when you have so many political facts out there and people who just don't want to rock the boat. and that's something that's really a part of japanese culture. if they can find the right person who is willing to rock the boat, it's still acceptable to that norm of culture that's going to be a little bit of magic that this country certain needs. >> certainly sounds like it needs something magical to happen to get this thing moving again. as always, good to talk to you and thanks for your analysis. naoto kan sur privived a li more than a year, more than his predecessors. investors around the world are wondering what bernanke will
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say. after the break, we'll look at what's putting the fed chief under pressure.
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from cnn london and hong kong, welcome back, you're watching "world business today." >> let's check back on how the european markets are fairing about 90 minutes into this final trading session of the week. all eyes firmly fixed on the underside of the atlantic where we will have ben bernanke and his colleagues meeting at jackson hole, wyoming. and despite a lot of optimism
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about potentially a third round of economic stimulus in the form of quantitative easing or qe-3, it seems the market is not necessarily buying that argument. as you can see, these markets suffering. the kax down tdax down the most. >> most of the markets in asia down, as well. the nikkei did manage to eek out a small gain despite of or perhaps because of the resignation of naoto kan. the nikkei up just a fraction. nina. >> turning now to the u.s. pre-market action, after some sharp falls on on thursday's session, stocks looking a little shaky as we head towards the start of trade on wall street. futures pointing to just a slightly higher open at the
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moment, but almost flat. futures up in excess of about a tenth of 1%. >> let's take a quick look at the apple reaction now. it did it end up losing ground on wednesday in reaction to the resignation of steve jobs as the company's ceo. you'll remember in the pre-markets, the losses for apple were up on to 7% at one stage, but they did narrow and once trading started, the buyers were there. shares finishing less than 1% lower on on thursday. jobs of course an inspiration to many people including the company's co-founder, steve wozniak. here's what he told piers morgan about his former boss. >> after seef met me and we compared ourselves, what pranks we had pulled and what electronic -- what we'd done in electronics, and i come up with some very strange genius computer design, i didn't even think i'd ever have a job doing it, so after steve met me, never
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ride to be the designer of the pair. he went more global. he always thought in terms of products. how will they affect people. it's in the how do you connect a few chips together, it's what are they going to do that's useful. it'sing point. and the end user should always be number one. >> he also did think of the end user before wozniak was pretty reluctant to claim any credit for apple's success. >> i don't want any credit for starting the whole personal computer revolution. he's really admired so much today for recent products that i've had absolutely no involvement with. ipods and ipads and itunes stores and retail stores and all these other things. and pixar. who could have so many successes one after another after another and really no failures? >> he was sacked by apple at one stage, but he certainly bounced back. wozniak talking about his former
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colleague, steve jobs. >> we lauf good comeback. gordon gekko famously said that, too. what about a comeback some always a chance. and about if n. a few hours time, we'll know when the federal reserve or central bank there stands -- we'll know where it stands on extra support for the world's largest which i. we are of course talking about quantitative easing.which i. we are of course talking about quantitative easing. it was this time last year that ben bernanke introduced qe-2. that was an unconventional measure to support the country's fragile economy. just this year, the political environment may have proved a little more challenging as maggie lake explains. >> reporter: it was the comment that took the u.s. political world by surprise. >> printing more money to play politics at this particular time in american history is almost
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treasonous in my opinion. >> reporter: with that, texas governor and republican presidential candidate rick perry put ben bernanke on notice. a big new stimulus program for the american economy, another round of quantitative easing, will be met with heavy fire on the campaign trail. but many believe perry went way over the line. >> to the extent that he has people thinking that the fed doing its normal job is somehow or other a treasonous act is grossly irresponsible and to the extent that people think that perry know what is he's talking about, it does put a constraints on the federal reserve to be able to be more aggressive. >> reporter: he's not the only political fair to rail against the fed. ron paul has been the fed's bed nuoir for years. >> it's a dib brat policy of the federal reserve to depreciate the economy. that's what their business is. that is why our dollar since
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1913 has lost 98% of its value. that's dishonest, immoral and the reason why we ought to get rid of the federal reserve. >> reporter: the possibility that increased political scrutiny could stay the fed's hand even as risks for a double dip recession deepen is troubling to many p the president of the federal reserve of dallas, richard fisher, says, "we'll do what's right. we are indifferent to political criticism." but many fed watchers say bernanke and company do worry about how they are perceived. >> they worry about their reputation, their political legitimacy. and if key politicians are criticizing you, you have to think twice about what you're doing. >> reporter: some fed watchers still believe better in an in anky will pave the guy some kind of quantitative easing at jackson hole this friday. >> we're kind of like we were last year at this time where the fed's forecast was being marked down, the unemployment rate was high. eventually the fed acted. and i think they'll do it again.
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>> reporter: vince reinhart says one they think you can predict, ben bernanke will at that time political heat no matter what he decide to say do about if the u.s. economy weakens further. maggie lake, cnn, new york. okay. we want to bring you developments now from libya, and even amid talk about rebuilding libya, there is still pockets of fighting between rebels and gadhafi holdholdouts. rebels have mounlsed the transfer of hair leadership from benghazi to the traditional capital tripoli and that's where sara sidner joins us. first of all, has there been much movement in the past 24 hours in it tthe hunt for gadha? >> reporter: we haven't heard anything new. there are have been plenty of rumors going around, but the sole hid fact is that moammar gadhafi and his closest allies
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and family have not been found. there is a lot of speculation, but that's all it is. yes, it's important that the opposition is able to prove that they can find him, but they're really trying to move fort politically and even folks in the street who own businesses and homes here in some parts of the city are trying to clean up and open up their shops and prepare to try to get back to business as usual. and that will be some time because while one part of the city is trying to clean up and return on to normal, another part of the city is fighting battles in the streets where gadhafi forces are still apparently in some of these neighborhoods. this is the first time this morning that we've heard gunfire coming from just to the left of me, which is most likely around the martyr square around where the celebrations have been going on especially in the evening time. but, yeah, people are trying in some parts of tripoli to get back to business as usual. it will be interesting to see how that progresses in the next
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few days. >> from your observation, how well organized are the rebels in securing tripoli? >> reporter: organized is a strong word actually. one issue they're facing is you have people from all over the country. you have people from benghazi, from misrata, groups of people who don't seem to have one central command. and so in parts of the city, people are celebrating with these massive guns and in other parts of the city, they're fighting their hearts out trying to secure the area. you would think that they would find a central point, gather together and do these battles together so that they can take care of business as quickly as possible. but that's not what's happening here. you're having battles in one part and celebrations in another. and at some point, i think they'll have to come together and figure out a way to try and take care of business first and celebrate a bit later.
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>> sara sidner, thanks so much. nina. turkey was once a supporter of the gadhafi regime, but now the country is taking a stand to aid the transition period. and an important news conference just wrapped up in istanbul. ivan watson is on hand with all the details. you and i were both listening in to that conference as it happened. turkey has always been pretty clear on where it stands in terms of aid to the nchtc. it's already given them $300 million. >> reporter: that's right. it rushed $100 million in cash last month for to help the ntc pay salaries and just by food, an additional $200 million in the pipeline, actually the turkish government coming under some criticism from opposition parties here, questioning the means with which this money was transferred. but yet turkey has gone from a moment where the turkish prime
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minister who was receiving a human rights award from gadhafi last year, billions of dollars in turkish investment in libya, to now being a stalwart supporter of the ntc. and we heard the de facto prime minister of the ntc standing alongside the turkish foreign minister calling for the rest of the world to officially recognize the ntc as the government of libya. take a listen. >> i would like as i said last nig night, please do not create legitimacy vacuum because this can bring political vacuum in the country if this does take place. >> so what he's calling there specifically, he was asking for the african union to come out
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and recognize the ntc has libya's government. tomorrow at a meeting at its headquarters in cairo, somehow they seem to think that this can help lead to a smoother transition in libya. and you just heard in sara sidner's report how chaotic things are on the ground there. hopefully some kind of a smoother transition from the gadhafi areregime to a post-gadi period. >> ivan watson from turkey wrapping up the events in that conference between the turkish foreign minister and also thent. >> a lot going on. we'll keep you fully abreast of all developments from wall street and jackson heole and le i can't. that's it for us. thanks for joining us.
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events continue to unfold in libya's capital. we take a special look at the future path for the north african country. just nine months ago, the so-called arab spring dawned in tunisia and changed the face of the arab world. egypt followed. and more dramatic events in will i be libya. now the national transitional council is already looking at forming a government and rebuilding a country torn apart by war. >> a committee charged with the task of the transition process has set out a number of goals. the most immediate objective
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will be it restore the wake services like food, water, electricity and of course restoring security is essential. in the long run, the committee also hopes that libya's new government will be able to bring together a 200 member assembly. now, that assembly would be given the task of drafting a new constitution, but this whole process could take at least eight months if not more. of course the transition will require funding, so where will this money come from? libya itself could actually dip into its own coffers because it's got meant of assets abroad. the imf estimates they add up to about $150 billion, but the yort of these assets were frozen in accordance with a u.n. security council resolution. so the transition team will have on unfreeze he's assets. more than a billion dollars has also been pledged by the international community. much of this money, though, has yet to materialize.
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of course one of the main sources of income in libya is oil. protection has obviously been disrupted by the war. so getting those oil facilities back up and running is key. >> at the start of the year, libya was coming close to pumping 2 million barrels of oil a day. but as jim bolden reports, getting the industry back up and running will take more than just time. first the fighting has to stop. before there can be a complete assessment of how bad libya's oil infrastructure has been damaged. >> there are pictures of damage being inflicted on those cities and those terminals. we don't know what the extent of that damage is. and how quickly they can be repaired. we don't know what damage has been inflicted on the oilfields themselves or on the pipelines. >> at one time libya was responsible for 2% of world oil
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production. and was a key exporter to europe new links with italian oil giant ne. 85% of libyan exports once flowed to europe. >> libya will take this time to come back to even a million barrels per day, let alone to their previous peaks. we can see about 200,000 to 250,000 a day, maybe half a million by the end of this year. >> at least the national transition council said early on they would honor the oil service contracts signed before the civil war began. about the line, only after hostilities full will you cease, employees and experts are allowed back into oilfield it is asset damage could libya then once again become a player on the international oil markets. jim bolden, cnn, london. investors are keeping a wary eye on events unfolding in libya. it has the world's eighth largest reserves the crude oil,
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but the body of the country has had a dramatic impact on oil prices around the world. according to robin mills, it has added as much as $20 a barrel. >> the time that the libyan unrest began, that put $15 or $20 in the price. now the price has fallen back to a little over $100. i'm talking about brent crude oil. of course u.s. prices are will her. so i think you can see that oil prices could fall as libya comes back by another $10, $15. >> what would you say is the best case scenario here? they're hoping by the end of 2011 they can boost production to 400,000 to 500,000 barrels a day. is that realistic? >> i think that sounds realis c realistic. the arabian gulf oil company saying they could do 250,000 barrels within these weeks or so. confident they could restart
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production in a few week. so yes, i think half a million barrels a day by the end of the year is plausible. >> this is a country that has had an intense leader for more than 40 years, but has enormous potential, tenth largest proven oil reserves, fourth largest natural gas reserves in african. the potential is there, but it's been unrealized. >> absolutely. if you look at libya's record production, 3 million barrels a day was reached in 1970, which was just the year after gadhafi's coup. and it's never got back to those heights since, which i think tells you something about how bad i will the industrial this has been hanged. now i think there's every possibility they could get back to the 3 million barrels a day within a few years if they can get in the required investment. >> speaking of investment, how important is it in your view to unlock the some $150 billion tied up by governments frozen assets to get piled back this to the energy sector?
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>> i think it's vital step for getting the economy going and enable the transitional government to buy hugh than tearian supplies and get some of the reconstruction work going. i'm not so sure it's necessary for the oil industry in the sense that you have a lot of foreign companies there who are well capable of funding the production and bringing production back online themselves. once oil production does restart, if libya were to get back to pre-war levels, it could be earning $50 billion a year easily in revenues. which of course provides a very substantial about fund for reconstruction. but, yes, getting at that sovereign wealth unlocked is very critical in the short term. >> libya's ntc head this week as it look it is on money to manage the country's change of government. it wants up to $5 billion to be released from libya's row zen funds for humanitarian relief. that's on top of $1.5 billion to be freed up by the international community.
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>> the u.s. government has taken honorable steps and very welcome steps of releasing the $1.5 billion of frozen assets. this will be helpful for the first injection so as to get us off the ground because it is very difficult now financially. up next, we speak to a libyan businessman who is driving change through support of the victims of the libyan conflict.
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in this week's pace time, we profile one libyan businessman who is using his personal wealth to support those most impacted by the conflict. >> when you're lucky enough to be in position to help, that's
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what we should do. that's what we did do. >> reporter: he's a promise thept libyan with businessman and billionaire. he's converting his petro dollars in to humanitarian help. >> it started as soon as the freedom movement started on the 15th. we knew we had to do something or the situation wagituation woe and worse. we established the ngo to assist in various things, medical, et cetera. we started immediately. the first shipment we had into libya was on the 22nd of february. >> reporter: after seeing the first images of rebellion in eastern libya six months ago go, he set up the nonprofit organization providing aid and relief on to displaced libyans. so far he says he's spent $15
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million of his own personal wealth delivering food and water and around 100 tons of medicine and medical supplies. but getting the aid to the people who need it most is not without its challenges. >> i think one of the biggest issues we have is not just the supplies. either e it's the funds, as well. a lot of people are helping. some might get delayed. but i think what you have is a spirit of supplies and then it goes down and then you have -- it it's not consistent, not properly hamanaged. it needs more communication and interaction and that's what we try to do. we were asked by the u.n. relief fund to assist help in how to get the supplies into the western region. and how to distribute it and the tribals and the different
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locations. >> reporter:s as libya and it people look to the future, they're preparing to be there for the long term. >> as long as it takes and as long as we can. it's not something that we just decide to drop off. it doesn't have to be money. it could be time, effort. so maybe money dries up, but not the effort and the determination. so we just grow on. as long as it takes. you can't overnight just build a nation. it has to take time. we have to create businesses, et cetera. it will take time. >> for more about the program, visit our website, or accepted yosend your comment. you can check out our web page in arabic, as well. and that's it for this edition of cnn marketplace. thanks for watching.
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