Editor's note: Isobel Coleman is the author of "Paradise Beneath Her Feet" and a senior fellow for U.S. foreign policy at the Council on Foreign Relations in New York.
New York (CNN) -- Libyans poured into the streets Thursday to celebrate the death of Moammar Gadhafi. After months of intense fighting, rebel fighters finally overran Gadhafi's last stronghold in his hometown of Sirte, marking the end of his 42-year rule.
Although Gadhafi's rule effectively ended two months ago when he fled Tripoli, his death provides closure and a sense of relief to many in the country who had opposed his tyrannical rule. It also greatly reduces the likelihood of a prolonged insurgency by Gadhafi loyalists and allows the transitional government to move forward with the hard work of building a new political system.
The challenges ahead are great: Since the Gadhafi regime so effectively monopolized the public sphere, Libya has no real civil society or effective political institutions.
After decades of tyranny, there is a deep distrust of government. There is also fear of revenge killings by those who suffered under Gadhafi's brutality. Tensions are already evident between Islamists and secularists, and between technocrats returning from abroad and those who stayed and opposed the regime at enormous personal expense. Well-armed militias have yet to be formally disbanded or integrated into a national army; large caches of arms, including some sophisticated missiles, are not accounted for and could end up in the hands of extremists.
Nevertheless, of all the Arab states that have been convulsed by revolts this year, Libya has by far the strongest economic prospects. Its relatively small population of 6.5 million and vast oil wealth give it the best chance of meeting the economic aspirations of its citizens.
Just recently, the transitional government announced that it had discovered an additional $23 billion in the Central Bank of Libya, enough to cover the costs of government for at least six months. It has an additional $160 billion in foreign assets, which are frozen overseas but will eventually be released.
Libya also has a relatively well-educated population. Public education was free and compulsory through secondary school under Gadhafi, and the country enjoys a literacy rate of nearly 90%. In the 2007-2008 school year, women enrolled in universities outnumbered men significantly.
According to the Transitional National Council constitution, legislative and presidential elections to form a new government must be held within a year of liberation. The constitution also stipulates that no member of the council can participate in this newly elected government, a provision meant to limit the influence of the interim body. So far, transitional leaders seem willing to abide by that provision, but jockeying for power has only just begun.
Interim Prime Minister Mahmoud Jabril, American educated and unabashedly secular, announced recently that he would step down at the close of the fighting, but it is not clear if he will follow through on his promise, or if he does, who will succeed him. Jabril and Ali Tarhouni, the acting Finance and Oil Minister who was teaching economics in the United States before joining the rebellion, have been criticized for being outsiders, too secular and too connected to remnants of the former regime.
Some are pointing to Abdel Hakim Belhaj, the NTC commander of the militia in Tripoli, as a major player in the future political field. Belhaj was arrested in 2004 by the Central Intelligence Agency and rendered to Libya, where he was held and tortured in the infamous Abu Salim prison. The warrant for his arrest accused him of ties to al Qaeda, which he has denied. Belhaj has also disavowed extremism and pledged tolerance.
Islamists will undoubtedly play an influential role in Libya's new government, and outward signs of Islamic piety, suppressed under Gadhafi, are now on the rise across the country. But leaders across the political spectrum continue to insist on moderation and tolerance. Mustafa Abdul Jalil, chairman of the transitional council, has called for a Libyan state founded on Sharia that is also inclusive of women and minorities. U.S. and European support for the rebels over the past seven months generated positive feelings among Libyans for NATO countries, which points to a possible Western-aligned Libyan government that is nonetheless markedly Islamic in character.
Gadhafi's death marks an important moment of transition for Libyans. Reconciliation and integration will be imperative at this point, especially as the dust of war clears and evidence emerges of brutality committed by both rebel forces and Gadhafi loyalists. As demonstrated painfully in Iraq, lasting stability requires opportunities for Gadhafi supporters to participate in the new order, but with war wounds still fresh, this will require remarkable leadership and forbearance on the part of transitional leaders.
A stable, prosperous Libya undergoing a process of democratization will enhance the chance of successful transitions in neighboring Tunisia and Egypt. This helps explain the sense of jubilation across the region that erupted on the news of Gadhafi's death. The era of tyrants seems to be coming to an end. Protesters in Syria and Yemen held out signs asking their leaders if they want to go the same violent way.
The opinions expressed in this commentary are solely those of Isobel Coleman.