Abdullah Alkabir
Despite all alternative proposals, and warnings, from economists who are well aware of the repercussions and consequences of the new foreign exchange tax, the Governor of the Central Bank, Al-Siddiq Al-Kabir, insisted on implementing his decision to devaluate the Libyan dinar against foreign currencies, after obtaining permission from Speaker of the House of Representatives, Agila Saleh, who was swift in issuing his approval of the measure.
This step did not come as a collective position, neither from the Board of Directors of the Central Bank, nor from the House of Representatives, but rather the two heads agreed the measure for political reasons, without ignoring the economic crisis, which is the most prominent natural result of the ongoing political and legislative crisis in the country.
Protesting the legality of this step will have no effect, as long as the judicial authority is not as effective as it should be, in addition to the burden of cases that require great effort and a lot of time to consider and decide on its offices and filings. However, there is hope that the judiciary will quickly step in and nullify the decision.
The political motives for the decision are not a secret to anyone, as Al-Kabir has not been in agreement with the House of Representatives and its speaker for about a decade. Rather, he was dismissed and his replacement appointed more than once, but the position of the High Council of State, based on the terms of the political agreement, was to reject any change in sovereign positions except by consensus of the two chambers. So, the governor was protected from such dismissal.
The escalating dispute between the Prime Minister of the Government of National Unity and the Governor of the Central Bank is the main reason for the new emergency alliance between the Governor and the Speaker of the House of Representatives. The Governor’s accusation of the government’s excessive spending without study as being the reason for the financial and economic imbalance that has befallen the state.
This, however, raises questions about the Governor’s silence throughout the past two years of such spending, because the governor was accompanying the Prime Minister on most of his internal and external tours, and was familiar with all the contracts concluded by the government, and all pledges and promises made by the Prime Minister!
One of the reasons given by the governor for imposing a fee on foreign exchange sales is “the absence of any reform measures by the government.” The truth is that such measures require transparency and cooperation between the Central Bank and the government.
In fact, we reckon that no reform will work as long as the state of political stalemate and institutional division continues. Against the backdrop of what is even more dangerous to the state’s monetary stability, which is the counterfeit currency offered by the ruling criminal gang in the east of the country, with which it drains millions of dollars from the parallel market.
The most dangerous aspect of the governor’s recent statements is what he said about counterfeit currency and parallel spending, both of which the governor levelled the accusations to unknown culprit. This is as if he did not know that the Speaker of Parliament’s absurdity is primarily responsible for parallel spending, with his insistence on establishing a new parallel government that facilitates the ruling gang in the east of the country continue to plunder money.
The governor must answer this question. Did he transfer money to this government? And if the answer is no. Then, where does it get the money from? In this way, the mystery will end, and we will know everything about this parallel spending.
The well-known procedure for combating currency counterfeiting especially denominations of currency that are susceptible to counterfeiting is to impose controls and not accept them for circulation in banks, and to alert people to the need to ensure they are genuine before accepting them.
With this procedure, they will be invalidated, and the Central Bank can stop dealing in the denominations that are subject to counterfeiting, and withdraw them from the market temporarily. While, the remaining usual legal procedures should be undertaken by the Attorney General.
What are the decisions and actions taken by the Central Bank to combat counterfeit currency? Such an issue we believe is more worthy of attention and focus than pointless disputes with the government.
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