Community Dynamics and Economic Interests
By Tim Eaton, Abdul Rahman Alageli, Emadeddin Badi, Mohamed Eljarh, and Valerie Stocker
This paper is based on approximately 200 interviews carried out by the authors – in person and remotely – with a wide range of Libyan actors between November 2018 and September 2019. This the paper does not claim to cover all armed groups in the country.
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Revenue generation and resource mobilization … cont.
Taxation
In southern cities, some armed groups ‘tax’ businesses in return for providing protection or turning a blind eye to illicit activity. Some levy similar informal charges on public institutions such as banks located in the areas under their control.
Failure to accept an offer of protection may lead the armed group to deliberately create security problems that then render its services indispensable. Protection rackets appear less common in the south than in the north, primarily because there are fewer businesses, at least legal ones, to protect or extort money from.
On the other hand, illicit businesses, such as running transit houses for migrants, are a good source of revenue for armed groups, in particular in Sebha. In small towns with a greater degree of social cohesion there are less opportunities for racketeering. Talking about the currency exchange and transfer shops in Qatrun, a local explained: ‘They don’t need to pay protection money to any militia.
Qatrun is a village, everybody knows everybody, and if anything happens you can find the culprits easily.’ While most Libyan armed groups do not directly engage in human smuggling, many demand payment to allow non-Libyan smugglers to operate in their areas and properties. Some agreements are explicit, while others are deliberately informal in order to obscure the Libyan involvement.
A well-established smuggler in Sebha told one of the authors of this paper that he had moved his operational base from one part of the city to another in order to strike a deal with a more powerful tribe. In return for the tribe’s protection, he agreed to provide a share of the profits of the business.
In some southern towns, municipal authorities have begun taxing businesses through local police forces or armed groups in order to supplement municipal budgets. Such practices are not state-sanctioned and do not follow any official guidelines. For instance, the municipality of Kufra has long generated tax revenue from road tolls on merchants and car dealers; the main group enforcing this regime is the Subul al-Salam Brigade.
The security directorate of Qatrun imposes a tax on foreign businesses, such as Mauritanian merchants and retailers. As a local explained, this tax is presented as optional but that is only nominally the case: ‘Nobody will force them to pay the tax, but if they don’t have police protection nobody will intervene if they get shoplifted and lose their merchandise.’
In a context of financial and governance crises and municipal councils having to run on tight budgets, informal taxation may be seen as a valid coping strategy. However, it also opens the door for abuse of authority, as armed groups can collect tolls and business taxes almost at whim, sometimes with the endorsement of local officials.
Outside urban areas, road tolls are the most straightforward source of income for armed groups. It is nearly impossible to move goods through southern Libya without paying tolls, whether travel is by paved road or desert track. Tolls are usually collected at checkpoints by armed groups that control the adjoining sections of road.
These groups mostly have a permanent presence in these locations, and sometimes official security mandates. Thus, travellers can know in advance where they will pass through checkpoints and which actors they will encounter. Checkpoint locations sometimes change hands, and groups that are not generally in control of a road section may appear spontaneously.
The number of checkpoints in the south has increased significantly in recent years. For example, the road connecting Sebha to northern Libya is heavily controlled by armed groups. Interviewees noted a visible increase in the number of checkpoints between Sebha and Mizda via Shweirif in late 2018.
Also in late 2018, travellers complained that a trip from Sebha to Tripoli by road took at least twice as long as it had before (14+ hours instead of seven or eight hours). Over the course of the 2019 South Liberation and Purge Operation in the Fezzan, LAAF forces demolished checkpoints 17 and 18, south of Sebha, which had been held by Tebu groups widely criticized for demanding tolls and harassing travellers. However, most checkpoints in Tebu-controlled areas south and southeast of Sebha have remained in place.
According to a fuel smuggler from Qatrun, in December 2018 there were 18 checkpoints between Sebha and al-Tum (a checkpoint at the Libya–Niger border). The roughly 320-km-long road section from Qatrun to al-Tum is controlled by two Tebu armed groups (Desert Shield Battalion and Umm-al-Aranib Martyrs Battalion), each of which operates several checkpoints.
For these and other armed groups present in the border zones, collecting tolls is more complicated once paved roads end, as is the case between Qatrun and the gold mine of Kuri Bugidi at the border with Chad, or in the southwestern border triangle between Libya, Niger and Algeria (the so-called Salvador Pass).
In these areas, armed groups set up position at bottlenecks that cross-border transporters cannot avoid. Cross-border merchants and smugglers sometimes may also pay armed groups in advance, to avoid complications on their journeys. At the border crossing of al-Tum, Tebu forces register the entry and exit of vehicles and charge ‘customs fees’ for merchandise.
This occurs without any official oversight, as there is no system in place for immigration and customs control. Every day, according to a January 2018 report, an average of 150 vehicles transit through al-Tum.
Once merchants and smugglers have crossed the border into Niger, they also need to pay off government forces there. Merchants are taxed according to both their ethnicity/tribal affiliation and the nature of their merchandise. Within these categories, rates tend to be the same or very similar across the southern region. Interviewees described rates as ‘fixed’ or ‘commonly agreed upon’.
As fuel and cooking gas smugglers noted, predictable rates are good for business. ‘Every checkpoint has a known rate and this way trust is built between the smugglers and the armed groups,’ said a Qatrun-based fuel smuggler. Traders who share the same tribal affiliation as those running checkpoints and who are acquainted with them may be let through at a discounted rate or for free.
In comparison, traders who are of a different tribe from that of the armed group have little leeway to refuse or negotiate, and armed groups often exploit this vulnerability to charge high rates. For example, Tebu armed groups systematically discriminate against non-Tebu merchants, offering special rates for Tebu merchants and smugglers, even if they are not acquainted and not from the same local community.
Illicit goods offer a significant opportunity for taxation. Interviews with smugglers indicated that the large profits to be obtained from taxing illicit fuel shipments have apparently motivated more armed groups to set up checkpoints. Interestingly, in many cases a veneer of legality appears important to armed actors operating the checkpoints even where they have no official mandate.
Interviews with human smugglers indicated that the cost of moving migrants varies significantly depending on the nationality of the migrants and whether they hold Libyan residency permits. One smuggler told one of the authors in December 2018 that the cost of a taxi for an undocumented migrant to reach Tripoli from Sebha was LYD700, whereas the cost for a migrant with a residency permit was LYD100.
While the drivers doubtless inflate prices for undocumented migrants, a significant proportion of the higher cost is likely to be due to the difference in checkpoint taxes. Crime has skyrocketed in the south in recent years and has become a revenue stream for armed groups.
It is likely that criminal acts by armed groups are more frequent than commonly assumed, because many incidents are not investigated. Common crimes include theft, robbery, carjackings and kidnapping for ransom. A distinction is usually made between armed groups (‘legitimate’) and bandits/outlaws (‘illegitimate’).
To some extent the difference lies in the eyes of the beholder, although the bandit designation usually refers to foreign armed groups (Sudanese, Chadian, Nigerien). For example, the Tebu armed groups present along the road south of Qatrun have denounced ‘illegal checkpoints’ that were set up by a Tebu group from Niger.
Foreign actors are, however, not subject to social pressure in the same way as are Libyan actors, and are hence more likely to engage in ‘rogue’ behaviour, such as seizing merchandise or vehicles, or extorting money from travellers. Over the past year, an increase in roadside robberies and kidnappings for ransom has been reported in the area between Ubari and Ghat.
To cross from Niger into Libya, traders of illegal merchandise such as drugs also use the Salvador Pass – this mountain area is known to be particularly dangerous due to its challenging topography and the presence of criminal gangs and extremists (Tuareg and other). Traders have to be prepared to pay off or defend themselves against roaming gangs.
Some southern armed groups engage in more sophisticated forms of criminal activity, although this is rare compared to in the north. For example, interviewees said that some Sebha groups had inflated security or catering contracts in recent years, and that some influential security actors had profited from business partnerships to siphon off public funds disbursed by the GNA or the Interim Government for projects and services in the Fezzan.
Engagement in economic activity at different levels within the group In the south, the redistribution of revenues outside the salary payments system varies according to the individual practice of each group’s leadership, the relations between its members and the type of revenue involved.
For instance, road toll revenues cannot realistically be captured by commanders without a fair share being allocated to low-ranking members. Some Tebu armed groups, such as the Desert Shield Battalion, have set up money collection and distribution mechanisms that emulate formal salary systems, thus offering their members a certain degree of income stability.
Revenues from road tolls and smuggling profits are centrally collected by the group. At the end of the month, each member gets a ‘salary’; the rest goes to the group leaders. This allows revenue collection to be controlled, rather than relying on arbitrary formulas or on the ‘whoever is at the checkpoint takes all’ rule.
By contrast, revenue distribution is less transparent within certain armed groups involved in more sophisticated revenue-generation schemes; these benefit armed group leaders and their business partners without necessarily creating income for rank-and-file members.
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About the Authors:
Tim Eaton is a senior research fellow with the MENA Programme at Chatham House, where he focuses on the political economy of the Libyan conflict. Tim previously worked for BBC Media Action, the BBC’s international development charity, on projects in Iraq, Egypt, Tunisia and Libya, and helped to set up and manage its Libya bureau from 2013 to 2014.
Abdul Rahman Alageli is an associate fellow with the Middle East and North Africa Programme, based in Tripoli, Libya. He is currently an adviser to the GNA Chief-of-General Staff of the Libyan Army. Abdul Rahman previously worked with the stabilization team of the Libyan Prime Minister’s Office in 2011 before becoming the national security file coordinator in the Office of the Libyan Prime Minister and a member of the Libyan government’s National Security Coordination Team until 2015.
Emadeddin Badi is a researcher and political analyst who focuses on governance, conflict and the political economy of Libya. He has worked with multiple international development organizations and business risk firms as a consultant, and his analysis has been published widely.
Mohamed Eljarh is a Libyan affairs specialist who has covered Libya’s developments since 2011. He is the co-founder and CEO of Libya Outlook, and he acts as the regional manager for CRCM North Africa in Libya. Previously, Eljarh worked with the Atlantic Council and Foreign Policy magazine.
Valerie Stocker is a researcher who has studied Libyan politics and society extensively, mostly focusing on the southern region. She has worked with various development organizations since 2013, conducting fieldwork and analysis on conflict dynamics, peace processes, migration and other subjects. Valerie was based in Tripoli for several years starting in 2008, and has previously worked as a freelance journalist and business risk consultant.
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