By Suliman S. Al-Shahomy
It is not possible now to speak about the efficiency or feasibility of any economic policies that could save the current crumbling situation.
It seems that the economic policies, including series of financial tools run by the Central Bank of Libya (CBL), aim at controlling the inflation and the prices by increasing or decreasing money supply or interest rates.
It seeks to control the financial tools run by the financial ministry through increasing or decreasing the public spending like salaries, subsidies, establishing or maintaining general projects, triggering the government revenues via increasing or preserving governmental funds like taxes and customs, or trade tools led by the ministry of commerce through ratifying commerce, and import and exports laws.
All the previous tools should be integrated to achieve the general purposes of policies endorsed by the government or that might need authorisation from legislature authorities. All those economic policies are not able to provide a viable solution for the crumbling Libyan economy. The reason, in my opinion, lies within the Presidential Council (PC) and its shorthanded tools, it is trying to make a hole in the air by approving a general budget for mostly unaffiliated institutions.
It can’t administratively control, for the existence of another kind of power, either militia, tribal or regional.
All the PC tools will be a fatal failure; it is still too far from succeeding, for the current decomposition and the loss of state prestige. The CBL in Tripoli, owner of state treasuries, is ripping off the PC, evading from the adoption of importation budget proposed by the Audit Bureau worth $15 Billion, with three different US Dollar rates.
Firstly, for the government supplies and transfers;
Secondly, for the merchant’s stores with 120% increase; and
Thirdly for citizens’ transfers and purchases with 100% increase.
It delayed the decision for their upcoming meetings under the auspices of the World Bank and the PC international backers’ ambassadors.
The CBL surprised everyone when it sent a letter and announced the allocation of $750 Million for the necessary supplies for citizens with the official price, considering that talks about importation budget would take long, and citizens can’t wait. But the CBL didn’t specify such allocations or mechanisms to divide it along different items, or how to distribute it among the commercial banks or merchants based on geographical distribution. And based on the previously failed experience in 2016, when the Audit Bureau uncovered rooted corruption cases, it is happening again, and no doubt thieves are getting prepared for such massive meal.
At the opposite side, the House of Representatives (HoR) government and its affiliated CBL continue selling delusions to citizens, promising near solutions to their crises. I always call to unify state institutions, apply economic policies to resolve defects, restore balance to the economy.
I see no hope for economic solutions; the solution is more of a mirage, the closer we get, the more it moves away. The PC financial procedures won’t work, nor the CBL generosity.
I am not pessimistic, but the core problem is that we all turn a blind eye to the cause of the illness, exclusion, refusing talks or getting to the same table are our biggest problems.
The exit is not to sit and wait for the PC to spend the money or what is left of the printed money, without reconciliation with the CBL at Al-Baida city, nor ratifying the importation budget by the CBL in Tripoli, a crisis like power cutouts, despite number of power stations, gas and fuel production, crumbled with number of people closing the valve, without caring about the consequences.
Authority with no power is needless.
The authority that begs criminals and thugs can’t, by no means, build or fix the crumbling economy.
Money should be used to impose power, unite institutions, no matter who is the manager or responsible, losing power over institutions means losing the country.
Suliman S. Al-Shahomy – A Libyan Finance Expert and the Founder of Libyan Financial Market.