Pretending that he is not there is not going to make him go away. The move may be lest political than economic letting the rebels have access to some much needed funds.
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"More than 30 nations, including the United States, on Friday declared that Libyan leader Moammar Gadhafi‘s regime is no longer legitimate and formally recognized Libya’s main opposition group as the legitimate government until a new interim authority is created.
The decision will keep up the military pressure on Gadhafi and potentially free up cash that the rebels fighting Libyan forces urgently need. The front lines in the Libyan civil war have largely stagnated since the popular uprising seeking to oust Gadhafi broke out in February. Rebels, backed by NATO air force bombers, control much of the country’s east and pockets in the west. But Gadhafi controls the rest from his stronghold in Tripoli, the capital."