The pitfalls of the new Libyan situation

The real power in the country rests neither with parliament nor within national borders. Luckily even IS is a victim of the Libyan ‘free for all’.

On 30 March, a new    phase began in the history of Libya. As the result of the Skhirat Agreement fathered by the UN, a Government of National Accord was established in Tripoli. It has taken several months for the ministers to actually start work in their departments in the capital, and the administration is unlikely to bring an end to all of the divisive issues in the country. After all, both the old Tripoli government, which at this point is more symbolic than a true political entity, and the one in Tobruk, still headed by the anti-Islamic General Khalifa Heftar and backed by Egypt and the United Arab Emirates, are still operational.

The Government of National Ac- cord (GNA) is chaired by Faiez Serraj, an uncharismatic member of the To- bruk parliament, who heads a nine- member presidential council repre- senting various factions. Serraj faces many challenges and will be hard pressed to survive, given his own weakness and the complexity of the situation.

In the meantime, living conditions in Libya are getting worse. Oil pro- duction is almost entirely  restricted to off-shore operations, which pump out no more than 20% of the one and a half million barrels per day that were being extracted under Muammar Ghaddafi.

Oil production is at a relative standstill because a number of armed groups control the fields, ports and pipelines. In the Sirte Basin, which boasts vast resources, many facilities have been damaged. It is estimated that billions of dollars of investment would be needed to make them productive again. Since 2013, even small isolated armed groups have taken to blocking off parts of the energy sector in order to hold the central government to ransom.

At the end of July, the government signed an agreement with the oil field guards to resume production from the ports to the east of the country but only time will tell how effective this agreement is. The block on production has had disastrous consequences for the national budget, which is almost completely dependent on hydrocarbon revenue. Over the past three years, Libya has essentially been shored up by the currency reserves that the central bank had amassed during the years of high oil prices, but now those reserves are depleted and could become completely exhausted within the next few years. If the government is no longer in a position to pay wages, approximately 85% of the Libyan workforce will go unpaid, producing an immediate ripple effect: an increase in grey market transactions and emigration from Libya. People often forget that Libya is the final destination of approximately 700,000 migrants, who meet almost all of the employment needs in the agricultural, service and family support sectors. These migrants would be indirectly affected by the collapse of the public sector and the ensuing drop in household purchasing power.

 On top of all of this, Serraj has had to confront a liquidity crisis generated by the growth of the informal market (which gobbles up a sizeable amount of cash without circulating it) and the Libyans’ lack of faith in the domestic banking system, which translates into vast amounts of cash being kept under mattresses. Instead of confronting these issues, Serraj has resorted to printing more money, thus fuelling inflationary tendencies and further exacerbating the liquidity shortage. The next months will show if Serraj’s government can manage to reverse the economic trend and get at least some of Libya’s foreign investors to return. But at this point, neither he nor his ministers have shown much mettle. The unified government finds itself having to work within a rather complex political and institutional situation. The Libyan Political Agreement, negotiated with the UN and signed in December 2015 in Morocco, puts the Tobruk parliament at the centre of the new institutional system. But a minority close to General Heftar has been thwarting parliamentary operations since January, promoting votes of no confidence against the government and obstructing all parliamentary decisions. This obstructionism is the result of Article 8 of the final dispositions of the aforementioned agreement, which essentially calls for the firing of the general.

Heftar’s faithful acolytes in Tobruk will never accept this outcome. Without a solution on this point, the Tobruk parliament cannot hope to achieve much, nor can Serraj’s government, which will be forced to act as an interim administration. For similar reasons, two of the nine members of the Presidential Council headed by Serraj do not take part in meetings, thus undermining its legitimacy. Their absence is a protest regarding the issue of who should head the security forces. The rest of the Council has advocated for Minister of Defence Mehdi Bargathi, a colonel in Heftar’s army, but one who is not in the general’s favour. In any case, getting the general to work under a colonel is a plan that is not likely succeed. The problem, however, is not merely personal. Heftar represents two political issues that have remained unresolved since the fall of Ghaddafi. On the one hand, the general is popular in some parts of Libya because he is seen as the personification of a desire to overcome the fragmentation produced by the scores of different militias by creating a single army. Heftar has set up the National Libyan Army which, though nothing like a truly professional army or a truly national entity, is nevertheless viewed by many even within civilian society as the only hope for overcoming the crimes and abuses perpetrated by anti- Ghaddafi militias. From this perspective, the Serraj government is seen as the expression of a coalition of militias that have no intention of moving forward beyond the current system. On the other hand, Heftar represents the only hope of many groups in the east (including the Obeidat, Magharba and Awaqir tribes) of not being marginalised once again by Tripolitania, as was the case under Ghaddafi.

A large share of Heftar supporters are also Cyrenaica federalists, some of whom are actually pushing for the secession of the eastern region of the country. This is the group that has lobbied the hardest for the creation of parallel institutions in Tobruk and Beida: a central bank, a sovereign fund and an oil company. It is also the faction that has tried to solve the liquidity crisis by turning to the official mint of the Kremlin and having Libyan dinars printed that are completely different from the ones printed by the Tobruk government. And there is a third reason for Heftar’s popularity. Just like Egypt’s Abdel Fattah al-Sisi, Heftar is considered to be a champion of radical anti-Islamism. He views the Muslim Brotherhood and IS as equally problematic. In addition to gaining the support of anti- Islamist Libyans, Heftar’s stance en-ables the general to benefit from considerable aid from certain quarters within Egypt and the UAE. Thus it is with Egypt and the UAE that the EU must negotiate a Libyan reconciliation: a revision of the peace agreement that takes into account their interests (and those of their Libyan clients) in exchange for a solution to the Heftar problem.

It should be noted that not all has gone awry in Libya. IS, highly feared until a few months ago, has been quashed by a joint offensive conducted by Misrata militias and the oil patrols faithful to the national unity government. The US air raids in August, requested by the Serraj government, could turn out to be decisive at least politically, if not militarily, as proof of the external support for the government of national accord. The British media have also made reference to assistance received from Her Majesty’s special forces. But if Sirte should fall, the political and military fallout would be considerable. Compared to the rest of the region, Libya’s situation is not that bad. Unlike Syria, Iraq and Yemen, there is a political agreement in Libya, however tenuous. And jihadi groups do not appear to have the same hold on the local population and among the many armed groups that they enjoy elsewhere.

That being said, with the implementation of the agreement signed in Morocco in December, Libya has entered a new phase. The path to establishing the government in Tripoli is strewn with obstacles, and the chances of success are extremely low due in large part, among the many reasons, to the instability in the rest of the region and the fact that the stabilization of the country does not appear to be at the top of the agenda of some powerful Middle Eastern countries.