By Jason Pack

For a range of reasons, 21st century civil wars have tended to be more protracted and multiparty than those of the 20th century.

One is that the 21st century’s international system is more fractured and therefore promotes proxy intervention while consistently hampering mediation efforts. Another is the decreasing importance of territorial control to the outcome of civil wars.


After the first Deloitte/CBL phase of the audit is complete, new terms of reference should be issued including all of Libya’s ministries and semi-sovereign institutions, such as the National Oil Company (NOC), the Libyan Investment Authority (LIA), the Organization for the Development of Administrative Centers (ODAC), the General Electric Company of Libya (GECOL), and all of Libya’s lesser-known semi-sovereign institutions like the Economic and Social Development Fund and the AB itself.

All of Libya’s economic institutions should be forensically audited by a team of international technocrats, neutral international expert observers, and knowledgeable diaspora Libyan intellectuals, and the details of the exact process and the results should be published online in both Arabic and English.

Only the disinfecting light of transparency can clean out the cobwebs and corruption that hide in dark corners. There can be no successful mediation between a new set of eastern or western political figures so long as the real economic interests of the status quo players remain hidden in the shadows.

As past experience has made all too clear, international bureaucrats and interested multinational corporations (like the “Big Four” accountancies) paradoxically lack the relevant expertise and connections to Libyan civil society to get the real job done.

The Big Four are profit-driven corporations while international institutions are constrained by various hierarchies and bureaucratic procedures. Neither should be blamed for conforming to their essential nature and lacking the political prerogatives necessary for a task such as this.

Given their unique experience and institutional knowhow, they should be involved in such an audit but should be directed by real Libya hands like knowledgeable retired ambassadors and special envoys operating in a conclave with the top think-tank and business experts on Libya’s economy.

Heretofore, what we have witnessed from the major powers in the mediation of Libya’s civil war and audit of its financial system is a business-as-usual approach, with U.N. committees, international working groups, and major corporations playing their standard roles.

Some of the diplomacy has been tactful, and the proposed compromises ingenious, but despite the skill and good intentions of certain players, we still know where this will lead, which is likely nowhere useful.

A new approach is needed, and it can build on the groundwork being laid between eastern and western political figures via the Morocco dialogues.

A new approach is needed

For it to be successful any audit process must not be conducted as business as usual and delegated to giant corporations and regular functionaries at international institutions like the U.N., World Bank, or IMF.

For those interested in the details of how I would assemble a “Libya dream team,” please consult my previous report It’s the Economy Stupid: How Libya’s Civil War Is Rooted in Its Economic Structures, published with IAI in Rome.

Briefly put, only if led by real Libya experts, brought on exclusively for this mission, and conducted truly comprehensively do these audits stand a fighting chance of promoting genuine transparency and real structural reforms.

Otherwise the status quo powers will simply do what they have done to previous attempts: throw wrenches in the works and prevent progress by using the bureaucratic procedures and structures of those institutions against the genuine goal of the mission.

Simultaneously to expert-led audits, Libya’s oil must be gotten flowing and the proceeds used to reform how wealth is distributed and how the entire economy is structured.

An American-led attempt to restart Libya’s oil production by arranging a mechanism whereby oil revenues could remain frozen (or more precisely “unreconciled”) in the NOC’s Libyan Foreign Bank account certainly represents a step toward addressing superficial technical aspects of Libya’s economic difficulties, but these discussions have not yet proposed genuine solutions to the root causes of conflict.

Similarly, pushing for reforms of the Presidential Council and a reshuffling of which political figures get to represent eastern or western Libya will amount to nothing if reforms of the CBL, the dinar rate, subsidies, and salaries are not fundamentally tied to any political deal.

From experience, I know that it is extremely unlikely that any of these suggestions will be implemented, but patriotic Libyans and those qualified experts passionately interested in Libya’s future should still demand them.

We should all unite in a push for “economic transparency and structural reform” to be the clarion call for civic, international, and humanitarian engagement in Libya’s conflict.

Libya’s civil war is extremely complex but only economic transparency followed by fundamental reforms to the opaque, counterproductive, and corrupt structures of the economy can yield genuine results in removing the causes of fighting and militia recruitment.

Some forward-looking statesmen at the U.N. and various Western countries have taken this issue to heart and pushed for an economic track to go alongside the disarmament and political tracks of the 2020 Berlin process.

Nonetheless, the economic track is still treated like an unwanted stepchild. It is not publicly lauded, nor are its workings and findings shared transparently. However, now is the time to move the economic track to the foreground and give potential reformers the limelight and kudos they deserve.

One possible way to do so is presented in my January 2020 report, “An International Financial Commission is Libya’s Last Hope,” now being re-released in Arabic translation alongside this new preface.

Libya’s macroeconomic position and overall infrastructure is the worst it has been since the end of the sanctions period of the 1990s.

Libyans of all political persuasions are ready to unite behind genuine reforms even if they impose short-term pain, potential medium-term uncertainties, and even long-term economic externalities for certain sectors or communities.

Back in January 2020, I called for the main heads of Libya’s political bodies and semi-sovereign economic institutions to request international help in convening a technocratic commission to:

Firstly, make transparent to the Libyan people where their money is being spent, where their subsidized products are being transported, and where the billions are actually kept; and

Secondly, rewrite the rules of Libya’s economy in a transparent way, taking into consideration genuine expert advice and the will of the Libyan people. This can now be done as a follow up to the Deloitte audit of the CBL.

Also in this now re-released paper originally published in January 2020, I explained that enforcing the arms embargo and boxing out international spoilers was crucial, but only the first step to achieving a mutually hurting stalemate.

This has now largely been achieved. The current military stalemate is partially useful as it ends needless suffering and allows improvements in the security situation so civilians, technocrats, and businesspeople can return to Tripoli and communities across the country.

Yet on its own, the military stalemate will not end Libya’s Wars of Post-Gadhafi Succession.

No lasting political deal can emerge if the underlying causes of violence remain unaddressed — the semi-sovereign prerogatives of Libya’s new breed of oligarchs who have overstayed their legitimate mandates, the unfettered access to secret funds, and the corrupt distortions of the market mechanism that are embedded in Libya’s current economic institutions.

No matter how many power plants and mobile electricity generation units are added to the Libyan power grid, load-shedding will still be necessary every summer if electricity remains subsidized and demand growth is unchecked by the functioning of a rational market.

No matter how much oil revenue flows into Libya, fights to control key institutions in Tripoli will continue until transparency mechanisms are created to showcase how funds flow to and from Libya’s communities and institutions.

No matter how peaceful Libya becomes, there will always be an incentive to join a militia if doing so can provide preferential access to subsidized goods (including foreign exchange).

Intelligent and civically-minded Libyan patriots, especially those of the younger generation, are willing to put the past behind them and forget old grievances about whose cousin, and which tribe, started which war.

They need the help of their genuine allies abroad to provide the protection, technocratic expertise, and political cover to actualize their visions of reform and renewal.

The plan contained in “An International Financial Commission is Libya’s Last Hope” is one way forward.

Hopefully, it will be enough to start a discussion and spur policymakers to consider bolder actions than the business-as-usual, 20th century approach to mediating civil wars that has remained dominant.


Jason Pack is a Non-Resident Fellow at the Middle East Institute and the Founder of Libya-Analysis LLC. The views expressed in this piece are his own.





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