Date: Sun, 21 Sep 2014 23:47:38 +0200
Libya: Let the scramble for oil money begin
The war for control of Libya's key institutions is on, but the international
community can still make a difference.
Last updated: 21 Sep 2014 06:12
Jason Pack
<http://www.aljazeera.com/profile/jason-pack.html> Jason Pack
Jason Pack researches Middle Eastern History at Cambridge University. He is
President of Libya-Analysis.com and is the author of In War's Wake: The
Struggle for Post-Qadhafi Libya.
Rhiannon Smith
<http://www.aljazeera.com/indepth/opinion/profile/rhiannon-smith.html>
Rhiannon Smith
Rhiannon Smith researches international development at the UK's Open
University. She has worked extensively in Libya on post-conflict development
issues, most recently for the Italian organisation "No Peace Without
Justice."
The ever-deepening political, ideological and geographical fault lines
dividing Libya into two power blocs have finally reached the gates of one of
the country's most important and well-respected institutions: the Central
Bank.
Last week, the House of Representatives (HoR), Libya's
internationally-recognised governing body, dismissed the governor of Libya's
Central Bank
<http://www.nytimes.com/2014/09/15/world/africa/libyan-parliament-fires-cent
ral-bank-chairman.html> , Sadiq al-Kebir. His expulsion appears to be a
tactical move based on the HoR's belief that he was siding with its rival,
the previously-defunct General National Congress (GNC), which was
re-established after the conquest of Tripoli by the Misratan-led alliance
(MLA) at the end of August.
This is the opening manoeuvre of an all-out scramble for control of the
county's oil wealth. Although the bank and oil sector appear firmly in the
grip of the HoR and their anti-Islamist backers, this could shift suddenly
if the MLA retaliates. Now is the time for international and regional actors
to smooth the differences between the two factions before things escalate
further. And yet, rather than mediating between the polarised sides,
yesterday's Madrid conference of Libya's
<http://www.aljazeera.com/news/middleeast/2014/09/madrid-conference-seeks-en
d-libya-crisis-201491710586811538.html>
<http://www.aljazeera.com/news/middleeast/2014/09/madrid-conference-seeks-en
d-libya-crisis-201491710586811538.html> neighbours did not invite
representatives of the MLA, the de facto power holders in Tripoli.
Partisan wrangling
On September 10, Kebir cancelled a decision made by his deputy, Ali
al-Hibri, who attempted to transfer approximately $10m from the GNC to the
HoR, which took the cancellation of funds as a sign that Kebir supports the
MLA, and was going to use the bank's funds to prop up MLA's rival
government.
This touched on a raw nerve. While not yet particularly vulnerable to a
direct assault on its base at Tubroq by Ansar al-Sharia or MLA-aligned
forces, it is likely that internal dissensions over support for Khalifa
Haftar and outside intervention could lead the
<http://www.latimes.com/world/middleeast/la-fg-libya-chaos-20140916-story.ht
ml#page=1> body to fall apart and be eclipsed by the reinvigorated GNC
<http://www.latimes.com/world/middleeast/la-fg-libya-chaos-20140916-story.ht
ml#page=1> . It is an act of striking short-sightedness that international
actors are ignoring this dimension, especially by inviting only HoR
representatives to
<http://thediplomatinspain.com/en/rajoy-inaugurara-el-miercoles-la-conferenc
ia-de-madrid-sobre-libia-2/>
<http://thediplomatinspain.com/en/rajoy-inaugurara-el-miercoles-la-conferenc
ia-de-madrid-sobre-libia-2/> Madrid.
Feeling its precarious legitimacy threatened, the HoR has selected
anti-Islamist Hibri to run the bank and protect its $100bn from their
opponents. In doing so, a potential olive branch towards negotiation has
been lost. Similarly, the HoR-appointed Prime Minister Abdullah al-Thinni
should use his second chance to select a crisis cabinet - his first attempt
was announced and rejected on September 17 - to mollify existing tensions by
suggesting a possible national unity government.
Unfortunately, he has shown the inclination to do the opposite - proclaiming
the GNC and its backers as terrorists with whom he will not negotiate.
Outside Arab attempts to promote the anti-Islamist camp have also partially
destroyed the credibility of the HoR. The mystery air strikes
<http://english.alarabiya.net/en/News/africa/2014/09/15/-Unidentified-Jets-S
trike-Islamists-in-Libya.html> on September 15 on weapons depots in Ghayran
are not enough to tip the balance towards the anti-Islamists in the western
military theatre; rather, they are fuel on the fire which will effectively
weld together the diverse opponents of General Haftar's campaign.
The struggle for oil
The Central Bank
<http://www.middleeasteye.net/news/libyas-civil-war-focuses-control-central-
bank-assets-219810124> has become the most prominent victim of the struggle
between Libya's opposing forces, and it is likely that the National Oil
Corporation (NOC) will be next. Independent-minded technocrats may find
themselves out of a job over the coming weeks as the HoR attempts to
preventatively subordinate the oil ministry and NOC to its demands.
What would a Misratan-led alliance retaliation look like? MLA forces could
use their control of Tripoli to retaliate against the HoR
<http://www.washingtonpost.com/world/middle_east/under-militia-power-libya-c
loser-to-failed-state/2014/09/09/810254ba-384a-11e4-a023-1d61f7f31a05_story.
html> by curtailing the functionality of the bank and the NOC or holding
managerial personnel hostage until their demands are met. The MLA may have
avoided initiating such a retaliation while the Madrid conference meets.
In the words of a retired Western ambassador to Tripoli, "I had been
expecting the Misratans to take advantage of their dominance in Tripoli to
exert influence over national institutions. But they seem to have been
exercising restraint because they are sensitive to their reputation and need
for sympathy outside Libya. The recent dispatch of emissaries to Chad and
Sudan
<http://www.libyaherald.com/2014/09/16/salabi-and-nizar-kawan-in-chad/#axzz3
DbeJLMDC> highlight this trend. It may have been unwise to not invite the
MLA to the Madrid conference. I suspect that they will react in due course
to attempts to cut them out of the dialogue."
There is no doubt that the MLA has the capacity to initiate a counter
attack, however, they will think carefully before turning up the heat;
paralysing the Libyan banking and oil sectors would deny all Libyans the
wealth that they eventually wish to monopolise. Nevertheless, if a final
impasse is reached then it might be in the MLA's interest to deny their
rivals access to the oil money. This could happen without coherent planning
if enraged militia commanders simply haphazardly attack oil installations.
We may have had a taste of what is to come on September 17 as a rocket hit a
storage tank at Libya's largest field, al-Sharara, abruptly halting Libya's
economic recovery.
Backlash against bias
Unfortunately, it is now distinctly possible that all hopes for dialogue
between the HoR and MLA camps might disappear
<http://www.middleeasteye.net/news/international-powers-spain-attempt-libyan
-civil-war-mediation-1162200519> . This would be increasingly likely if
upcoming UN sanctions target only the Islamist camp without penalising the
anti-Islamists for their part in the recent malfeasance. In such a scenario,
the MLA would likely feel itself the aggrieved party with nothing to lose by
pushing forward a further power grab. If hardliners in the Islamist faction
put sufficient pressure on the Central Bank and NOC to do their bidding,
international actors would have to assume that these institutions are no
longer answering to Libya's legitimate authority
<http://www.reuters.com/article/2014/09/02/libya-security-cenbank-idUSL5N0R3
3BN20140902> and a new UN resolution could be passed detailing the legal
risk of dealing with the Libyan Central Bank. In that instance, Libya's
ability to process oil payments and export crude would abruptly
short-circuit.
The war for control of Libya's key institutions is certainly on. However,
the international community still has the opportunity to influence the
conditions of the battlefield. If international actors continue to view
Libya's opposing forces through the dichotomy of anti-Islamist and Islamist,
legitimate and illegitimate, ally and enemy, then the sides will continue to
polarise and a lose-lose outcome will become harder to avoid. At present
outside actors are driving Libya's militias towards the point of no return,
yet if western and Gulf nations recalibrated their approach they could
facilitate compromise between Libya's factions.
Jason Pack is a researcher at Cambridge University, lead author of Libya's
Faustian Bargains: Breaking the Appeasement
<http://www.atlanticcouncil.org/images/publications/Libyas_Faustian_Bargains
.pdf> Cycle and President of Libya-Analysis.com.
Rhiannon Smith researches international development at the UK's Open
University. She has worked extensively in Libya on post-conflict development
issues, most recently for the Italian organisation "No Peace Without
Justice."
(image/jpeg attachment: image001.jpg)
(image/jpeg attachment: image002.jpg)