By Tim Eaton

Libya’s political, security and economic crises are interconnected and cannot be separated.

An economic track thus must operate in conjunction with political and economic tracks. Arguably, none of the three currently exists.

There are major disagreements over the path of political discussions, while the security track has been largely absent since 2015. Yet, the economic track has been the most under-developed, and must be moved beyond technical discussions if it is to be utilised as a tool of reconciliation.

Despite the UN Special Representative Ghassan Salamé’s emphasis on undermining the “economy of predation” international efforts have been focused upon re-unifying state institutions that split in 2014 and instituting economic reforms.

International efforts have sought to bring together the Central Bank of Libya based in Tripoli with its rival based in Bayda with a view to forming a reunified Central Bank.

The US-brokered economic dialogue has, meanwhile, sought to provide a forum for the UN-backed Government of National Accord to work with the Tripoli CBL to agree and institute economic reforms.

These include measures to devalue the Libyan dinar and reform the subsidy regime which would undercut some of the profiteering of those engaged in what has become a burgeoning shadow economy.

Despite repeated indications that the announcement of reforms is near, they are yet to materialise.

Such goals are laudable and would provide clear benefits, yet they do not address the core of the problems that Libya faces. CBL reunification cannot make up for the absence of a unified government and economic reforms do not address the distribution of resources. Competition for resources is a key driver of the conflict.

The hyper centralised nature of the Libyan state means that those who control Tripoli have by far the greatest access to the state’s financial resources, meaning that the city will continue to be subject to power struggles, as the recent fighting indicates.

Similarly, the dispute over Field Marshall Khalifa Haftar’s refusal to allow the National Oil Company based in Tripoli to market crude from the oil crescent was over the Central Bank in Tripoli’s control of the distribution of state funds.

Thus, what is needed is a means of making the distribution of resources a core element of settlement negotiations. In the absence of such a settlement (and/or in the aftermath of elections should they occur) rivals will continue to seek to abuse existing structures to compete over resources.

This is a lesson that should be learned from the Skeirat process, which did not address resource distribution.


Tim Eaton is a research fellow with Chatham House’s MENA Programme, Libya. His research focuses on the political economy of the Libyan conflict. Earlier this year he authored a report on the development of Libya’s war economy which illustrates how economic activities have become increasingly connected to violence.




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