January 19, 2012: The new government has earmarked $8 billion to pay off the 200,000 rebel gunmen who overthrew Kaddafi. The money will be delivered in the form of pay, bonuses, loans, education, and other services. The big fear is that corrupt officials will steal a lot of it, leaving many of these gunmen still feeling cheated and abandoned.

The new government is already having problems with mismanagement and incompetent administrators. People, especially soldiers of the new army, are not getting paid on time. Bills, in general, are often not paid, causing local and foreign firms to stop doing business with the government. This has led to strikes in Libya, where the economy was long centrally run and propped up by lots of oil income. A lot of Libyans feel they are due a paycheck no matter what, but the new government does not want to continue the old Kaddafi era centrally controlled economy.

The oil industry is being rapidly restored to its pre-war capacity of 1.6 million barrels shipped per day. Currently, a million barrels are exported per day, and 1.5 million is expected to be achieved within ten months.

Neighboring Sudan, long the target of Kaddafi meddling, is glad to see the new government in Libya. But the Sudanese warn that many armed Kaddafi supporters are still out there, looking for trouble and loot.

Hundreds of Tuareg tribesmen have fled Libya for their native Mali (just south of Libya) and formed a new rebel group (for an independent Tuareg state in Mali). These Tuareg rebels had served in the Kaddafi era Libyan armed forces and provided security for Kaddafi himself. Many were killed during last year's rebellion, but the survivors returned to Mali with their own ideas of a rebellion. In the last few weeks, there have been several clashes between these rebels and Mali police or soldiers. This breaks a two year old truce between the Tuareg and the Mali government.

In Libya, the Tuareg were one group Kaddafi always favored. The major splits in Libya are between the east (centered on Benghazi) and west (Tripoli) along the coast (where most of the population has always lived). The third region is the dry, but oil-rich interior. Here the population is largely Berber and Tuareg (nomadic tribes in southern Libya). There are people from the coast, who comprise most of the Libyan work force in the oil fields. The people of the interior are further split by past loyalties. The Berbers hated Kaddafi, while the Tuaregs were better treated and many remained loyal to the end. The Berbers have been hostile to the Arab invaders (represented by Kaddafi and most of the other coastal tribes) for over a thousand years. Kaddafi didn’t trust the Berbers, although he tried to buy off the Tuareg (with mixed success). Some Tuareg joined the rebels early on, but many continued to serve Kaddafi. Most Tuareg live in northern Mali and Niger.

January 18, 2012: Libyan troops intercepted a convoy coming from Algeria and freed an Algerian provincial governor who had been kidnapped two days earlier. It was thought that al Qaeda was responsible, but it appears the kidnappers were local bandits seeking a big payday.

January 15, 2012: In Tripoli, two militias exchanged prisoners and signed a ceasefire, thus ending weeks of hostilities.

January 13, 2012: Rival militias clashed 80 kilometers south of Tripoli, leaving several dead and dozens wounded.

January 9, 2012:  On the Chad border, former Chadian mercenaries (serving Kaddafi) fought with Libyan border guards. Kaddafi gave Libyan citizenship to 3,000 of these mercenaries, many of whom have since turned to banditry in southern Libya.

January 7, 2012: Schools reopened, taking a million kids off the streets and into a supervised environment.

January 3, 2012: The new head of the armed forces, Youssef Mangoush, promised to bring peace internally and guard the national borders. The former is being done by recruiting members of rebel militias into the armed forces. This is hobbled by poor administration and lack of cash. A month ago, the new government promised to have a new military and national police functioning by March.

A gun battle between rival militiamen in Tripoli left four dead.

January 2, 2012:  Tunisian border guards were fired on by armed men on the Libyan side of the border. There followed a brief gun battle, after which the Libyan gunmen fled back into Libya.

January 1, 2012: The oil shipping port of Sedr became operational again.

December 31, 2011: The new government arrested nine Kaddafi loyalists, along with explosives, and charged the men with planning to blow up electrical power facilities on New Year's Day.

A Libyan militia leader threatened Egypt with retaliation if Egypt did not shut down a pro-Kaddafi TV station in Egypt that was presenting a lot of pro-Kaddafi propaganda and broadcasting the material to Libya via an Egyptian government owned satellite. The Libyan government said that discussions were already under way with Egypt about this matter.