By Jason Pack
This paper argues that peace in Libya can be achieved via a Libyan-led International Financial Commission empowered with the tools to compel transparency and reform Libya’s institutions and dysfunctional incentive structure.
.PART THREE
BACKGROUND, SOVEREIGNTY, TIMING, AND LEVERAGE
What is the Current War for Tripoli Really About?
Since its inception in April 2019, the battle for Tripoli, or what I have termed elsewhere the Second War for Post-Gadhafi Secession,13 has essentially led to a stalemate.
General Hifter’s attempts to use the so-called Libyan National Army to conquer Tripoli via a blitzkrieg without massive external support were never credible and they were eliminated by the retaking of Gharyan in June 2019.
Now Hifter’s attempts to take Tripoli via attrition in the wake of the “zerohour” assault announced in December 2019 rely largely on Emirati airpower and Russian, Sudanese, and Egyptian mercenaries and trainers.
This is not to say that the anti-LNA or pro-GNA side is doing any better — its ranks are riven by dissension and many groups allied with it have not dedicated most of their fighting strength to the battle.
Were the anti-LNA coalition not propped up by Turkish support and a lopsided reliance on Misrata’s battle-hardened militiamen, Tripoli would have long ago fallen.
On Jan. 2, 2020, Turkey’s parliament approved a bill to enable Turkish troops or mercenaries to be deployed to Libya to support the GNA.
This is the first time that a foreign country has overtly stated its commitment to sustained military intervention in Libya’s civil war.
In response, the LNA launched a preemptive, and largely successful, invasion of Sirte on Jan. 6, 2020 — fearing that any upcoming increase in Turkish mercenaries, logistics, and airpower would tip the battle throughout the country against them.
The LNA’s recent capture of Sirte is the most 12 significant development in their campaign to conquer Tripoli, both strategically and symbolically, since their devastating loss of Ghariyan in mid-2019.
Moving forward, in an attempt to gain a leg up and in the absence of any concrete international pushback for the overt introduction of foreign forces, we can expect to see the near complete foreign penetration of the strategic and operational aspects of both warring coalitions — leading to the further protraction of the battle on the ground.
If history is any guide, the more protracted the battle becomes, the more this favors Hifter. The anti-LNA coalition’s unity is quite tenuous, while Hifter has proved in his prior conquests of Derna and Benghazi that he is willing to play the long game.
Hifter has long grasped that Libya’s economic semi-sovereign institutions17 are fundamentally at the core of any political/ military struggle. He made the departure of Central Bank Governor Sadiq al-Kabir his rallying cry when he took over the oil crescent ports in June 2018.
Yet Kabir remains in place despite overstaying his mandate as CBL governor by many years. He remains in a situation where according to the Skhirat Agreement the Higher State Council head Khaled Mishri could in theory simply agree with the House of Representatives’ appointment of Mohamed el-Shukry and push him out the door.
The current quest to take Tripoli was arguably a last-ditch attempt to control the Central Bank and was well underway before the April 4 assault began.
Prior attempts to leverage control of Libya’s oil crescent to achieve influence over CBL policy did not work.
An insider present at the March 2019 Abu Dhabi meeting between Serraj and Hifter, where they shook hands and supposedly “agreed” on joint resolutions, told the author that Hifter appears to have speculated that the Abu Dhabi understandings set to be enshrined in the National Conference scheduled for April 14 would eventually prove not satisfactory to him, if they still left Libya’s economic institutions beyond his grasp.
Hifter was set to achieve a modicum of political and military power over Libya through this agreement and the ensuing National Conference process.
Moreover, if he had advocated for elections and made various minor compromises to secure them, he would likely have been able to be elected president. However, absent a proposed restructuring of Libya’s economic institutions, he chose violence over any of those political gains.
Those motivations for continued fighting likely still animate senior LNA command.
As the war’s evident stalemate draws in more regional powers seeking to secure their interests in Libya, key interlocutors (UN, EU, UK, and U.S.) need to help propose a way out of the current impasse that is not just a momentary cease-fire, but deals with the core of the problem that led to the war in the first place.
For any compromise to last it must address the real drivers of the conflict. Paradoxically, if the IFC can be framed as bringing economic justice to marginalized communities like those in the east and the oil producing regions, it could be accepted by both LNA top brass and certain cadre of their key social and tribal supporters.
The Skhirat Agreement failed because it was politically focused and put the main economic issues into a deep freeze, while incentivizing incumbents to oppose reform — allowing the economic drivers of conflict that led to the militia problem, the smuggling problem, the semi-sovereign institution problem, and the jihadi problem all to persist untouched.
What we can gather from the above is that Libyans are fighting over preferential access to the institutions that wield economic power, and foreign actors are supporting those sides that they perceive will secure their preferential ability to secure back-payments, lucrative contracts, and ideological allies.
This is not simply a fight for control of oil installations or the CBL’s headquarters. The fight is as complex as the Libyan economy itself. The Libyan economic system is not a straightforward rentier system where a disenfranchised populace is paid off in subventions, salaries, and welfare perks to remain quiescent.
Yes, Libya has aspects of all of those elements. Nonetheless, it is not a rationally constructed welfare state, like those of the Gulf monarchies, where according to clearly defined rules the populace gets handouts from the government and various elites receive opportunities to enrich themselves within clear parameters.
As I have written elsewhere, the precise complexities of the Libyan economy need to be studied by specialists, yet to generate the requisite information, the international community needs to summon the political will to advocate for — and incentivize — transparency. Only then can the resulting knowledge be used to undo conflict drivers.
The ideal approach would be for major Libyan stakeholders on both sides of the political divide and in both branches of divided institutions to call for international assistance and arbitration via an international financial commission to eliminate the drivers of conflict.
This would represent one way of “completing” the unfinished revolutionary process that Libyans are still fighting to shape according to their factions’ desires.
Opponents of this “national process with international support approach” would say that decentralization is a better way to undo the Libyan economy’s perverse incentive structures. I contend that the IFC-reformed Libyan economy will likely be more decentralized in its structures, with the vast majority of oil revenues dispersed and expended at the local level.
Yet, a national process with international support is needed to create these more decentralized structures.
How the Economic Fabric of the Ancien Regime Survived
What happened in 2011 was merely a series of disconnected uprisings.
A genuine root and branch revolution would have destroyed entities like the Economic and Social Development Fund (ESDF), the Organization for the Development of Administrative Centers (ODAC), CBL, and LIA — expropriating their monies, replacing them with more functional or more “revolutionary” institutions answerable to the new regime’s logic, and doling out funds at the behest of the new order.
Tsarist Russian institutions were destroyed, their liabilities or hard currency either erased or ransacked by new structures. The same happened with the fall of the Soviet Union.
Yet in Libya, due to the absence of genuine leadership or a unifying vision of what post-Gadhafi Libya should look like, the multibillion-dollar behemoths are all still intact.
Salaries and subsidies have been raised on multiple occasions, yet the mechanisms and institutional logic of using oil revenues and extreme centralization to buy off the complacency of the Libyan people was never altered.
Today, the General Electric Company of Libya (GECOL) and the LIA, as examples, appear as much facts of Libyan life as the Sahara Desert — immutable and eternal, filled with vast economic resources and huge opportunities for inefficiencies, smuggling, and self-dealing.
Due to their perceived permanence and prestige, there is an incentive for Libyans to fight to control these loci of power.
Paradoxically since 2014, as the rival governments’ abilities to govern or control territory have been steadily weakened, they still fight tooth and nail over the right to officially run Libya’s semi-sovereign economic institutions.
In fact, their legal “rights” to appoint boards of directors of institutions or award access to contracting vehicles are the only real powers that either government possesses.
In short, in a country where no government holds genuine sovereignty, it is these semisovereign economic institutions that (in certain instances) are the only functioning parts of the Libyan “state.” They have more than merely cash — they are still vested with power and legitimacy, where the governments’ ministries are not.
It follows then that as Libya’s post-Gadhafi chaos has failed to offer up any legitimate social contract to the Libyan people, a perversion of the existing Gadhafian social contract has emerged.
Each Libyan region, locality, tribe, ideological grouping, and individual feels that they are as entitled as anyone else to the money and power vested in Libya’s semi-sovereign institutions.
People do not care that the rationales for those institutions no longer exist, they simply want their piece of the pie. And they are willing to fight for it.
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Jason Pack is a consultant, author, and commentator with over two decades of experience living in, and working on, the Middle East. His articles have appeared in The New York Times, The Wall Street Journal, The Spectator, The Financial Times, The Petroleum Economist, The Guardian, Foreign Policy, and Foreign Affairs.
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Middle East Institute