The international community has a responsibility to make amends
Tim Eaton
The structure of a fund to reconstruct Derna must navigate political divides to be Libyan-owned and internationally overseen. A precedent for this is a fund developed in 2011 amid the civil war.
The tragedy that befell the Libyan city of Derna and the surrounding areas after two dams burst on 11 September 2023 following devastating floods has cost thousands of lives. Official estimates of the death toll stand at more than 4,000, but tens of thousands remain unaccounted for. Civil society figures report victims being buried in unmarked graves without being identified. Many thousands are also displaced. The death toll is therefore likely to be much higher.
There is plenty of blame to go around, from the failings of the Libyan state to maintain the dams that burst, to the flawed response of local authorities to the oncoming storm. Anger among the Libyan population is widespread, with calls growing for an independent international inquiry – rather than the several disconnected probes under way by Libyan agencies. Instead of taking responsibility, the response of the local authorities has been to close ranks, restrict press coverage and deflect blame. But the Libyan people are not appeased by this approach.
The scale of the challenge to respond to the crisis is especially daunting for a state whose bickering authorities have demonstrated little willingness to date to compromise in the national interest. Beyond the immediate challenge of supporting the victims and coordinating aid, there is a need to forge a plan for the reconstruction of the city. The World Bank and UNDP are conducting damage and recovery assessments, but with a significant part of the city completely destroyed, the cost of reconstructing Derna is likely to reach $1 billion.
The truth is that little of the money to reconstruct Derna is going to come from the international community. On 16 October, this was acknowledged by Abdulaye Bathily, the UN Special Representative, who noted that ‘related costs will be mostly borne by Libyan national resources’. This raises a critical set of questions over how this money will be managed, allocated and accounted for. The Libyan state has a questionable record of managing public projects. The ongoing governance divide and dispute between the House of Representatives and the internationally recognized Government of National Unity (GNU) has meant that the development chapter of the budget – which should focus on upgrading and building the nation’s infrastructure – remains blocked.
Politics is already threatening to get in the way. The eastern-based Government of National Stability (GNS) – which is not recognized internationally – initially issued a call for an international donor conference while the GNU has issued a request to the World Bank for assistance. Both governments already each had a vehicle for reconstruction in the Derna region, though the record of these funds inspires little confidence. The GNU-affiliated fund did not have its budget fulfilled and the GNS-affiliated fund stands accused of corruption.
Neither had made progress on reconstructing the city from the damage inflicted upon it in 2018 during a siege spearheaded by the Libyan Arab Armed Forces and neither will be up to the task of responding to the Derna tragedy. In a recent Chatham House webinar, a leading activist said that the level of trust the local population placed in the authorities was so low that they were refusing to leave the area because they believed that no reconstruction would happen unless they remained to apply pressure on the authorities. Libyans rightly fear that funds earmarked for reconstruction will end up lining the pockets of those with vested interests.
An agreement between the rival authorities over the structure of a reconstruction fund that is transparent and accountable is imperative. This will require international mediation, and there is a growing consensus on the international side of what is needed. ‘A unified national mechanism is required to effectively and efficiently take forward the reconstruction efforts in the flood-affected areas’, the United Nations Support Mission in Libya noted on 2 October. Options exist for the shape of the fund that could be developed.
These include the development of a World Bank-managed Multi-Donor Trust Fund. However, given that Libyan funds will be at play, there may be only limited willingness among Libyan authorities to allow international organizations to manage the funds without a direct role in decision-making. If the Libyan authorities could be convinced, then such a fund could deliver on its aims. If they refuse, no trust can be placed in the competing Libyan authorities to run their own funds without a degree of oversight that can only meaningfully be provided by the international community.
To achieve agreement among Libyans over the establishment of the fund, a potential route may be the Libyan High Financial Committee. The committee was formed this summer by the Presidency Council as an attempt to reach consensus on budgetary issues. After making some progress, divisions within it have emerged and eastern representatives withdrew. They could however, be encouraged to return to reach agreement on the structure of the fund, with international mediation.
For a precedent of a fund that is Libyan-owned and internationally overseen, it may make sense to look to the Temporary Financing Mechanism (TFM). The TFM was formed by the opposition in 2011 to distribute funds to those in areas of the country liberated from the Gaddafi regime. It was managed by a Libyan Advisory Committee and a steering committee chaired by Libyans and including donor states. The TFM responded to terms of reference developed in partnership with the international community and followed procurement rules provided by the World Bank. Critically, it also subjected itself to audits and published its books online every three months.
If progress is negligible, the possibility of releasing Libyan-specific assets frozen under sanctions for the fund could be used as leverage to encourage Libyan authorities to agree to highly robust mechanisms for accountability and transparency.
Failure to reach agreement will result in a chaotic situation where reconstruction efforts will, at best, be uncoordinated, and at worst, be completely ineffective or absent. It is critical that the international community coalesces around a position to work with the Libyan authorities to agree a suitable model. In so doing, they would be wise to leverage the anger and despair of a population that the international community has largely forgotten as it has focused on forging deals between rival elites. Libyans do not need or want pictures of foreign officials with the same discredited elites, they need action.
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Tim Eaton – Senior Research Fellow, Middle East and North Africa Programme, Chatham House.
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