Canan Atilgan / Veronika Ertl / Simon Engelkes

Breeding Ground of Extremist Groups

In conjunction with uncontrolled migration towards Europe, permeable borders and the availability of weapons in the post-revolutionary disorder make Libya a fertile breeding ground for extremism and terrorism. During the revolution, established jihadist factions were already fighting alongside the rebels and, following the overthrow of the regime, took on posts in Libya’s political system next to moderate Islamists. However, the continuing state disintegration opened the doors to another actor: the so-called Islamic State. As in other territories, IS turned the undefined power situation in Libya to its advantage and established a territorial presence.

Returning fighters from Syria formed the first Libyan IS offshoot and were later supported by IS representatives dispatched from Syria and Iraq in the creation of three provinces (wilāyāt) in the east, west and south of the country. IS initially settled in the eastern city of Derna, but was driven out by other jihadist groups. It then moved westwards along the coast and installed itself in the coastal city of Sirte, which became the first region outside of the Levant to fall under the territorial control of IS. Sirte

was considered its most crucial base and was retaken following months of fighting by militias and U.S. air strikes. With regard to the total number of IS fighters in Libya, the estimates fluctuated between 6,000 and 12,000. What is interesting here is that the majority of IS fighters in Libya – up to 70 per cent in Sirte – were made up of foreign fighters, primarily Tunisians. While being displaced from Sirte constituted a heavy territorial defeat for IS, it would be inaccurate to

speak of an ultimate victory over the group in Libya. Moreover, the victory over IS provides scope for other Islamist factions to proliferate, which – unless the country is stabilised and gains political peace – presents an ongoing terrorist risk. Libya’s neighbours face cross-border security challenges as terrorist factions spread, especially through the recruitment and training of fighters by groups in Libya and their return to their home countries after the military defeats of IS.

Attacks by terrorists trained in Libya, for example in Tunisia in 2015 and Algeria in 2013, also show the increased risk of attacks emanating from Libya as a retreat for these groups. For Europe, too, there is an increased risk of terrorism due to the strengthened international jihadist networks. The Tunisian Anis Amri, who perpetrated the attack on a Christmas market in Berlin at the end of 2016, was in contact with IS in Libya. The Manchester attacker had connections to Libyan IS networks as well. Salman Abedi is thus the latest link in the chain between the situation in Libya and the threat to Europe posed by international terrorism.

The continuing state disintegration facilitates the spread of extremist groups in Libya.

Furthermore, Libya’s instability is one of the main reasons behind the internationalisation and growing autonomy of armed factions in the Sahel region. In Mali, the epicentre of Islamist violence in Sahel, in Niger and in Chad, the dissemination of weapons from Libyan holdings fuelled the equipment of insurgencies, which were dominated by Islamists and tribal groups. The tribal areas along the Libyan borders in the south are, moreover, key to regional security. The conflict in Libya has underpinned the crises in Sahel, a region with historically weak governments and widespread zones where the state has little authority.

The lack of state structures in Libya turns the country into a magnet and transfer route for foreign fighters, as well as the logical junction for jihadism in North Africa, given its use as a place for training and retreat for extremists. Unless the situation were to change by means of a political peace process and the construction of a legitimate government with an effective monopoly on power, the activities of terrorist factions will remain a security risk for the region and for Europe.

At the same time, however, it must be determined that IS in Libya has no far-reaching control over territories and populations; local support for IS is relatively low. Experts believe that the strong clan and tribal structures are proving to be an important counterbalance to radicalism. The Libyan localism seems to not only be hindering a democratic process, but also a jihadist expansion.

From Fortune to Bankruptcy

Once the country with the highest per capita income in Africa, Libya is now on the brink of national bankruptcy. The country’s oil reserves are estimated at 48 billion barrels, making them the largest reserves on the continent and the ninth largest worldwide. In 2012, production of crude oil amounted to 70 per cent of Libya’s gross domestic product (GDP), 99 per cent of the nation’s exports and 97 per cent of state revenue. As a result of the escalating violence, however, the oil production declined sharply in the subsequent years and is far from being a stable supply since the oil industry in

Libya has become part of a pronounced wartime economy. In addition to this, there is the dramatic decrease in the global market price of oil. The banking system has likewise almost completely crumbled due to the liquidity crisis. The state budget has been put under considerable strain by the appeasement policy of unproductive salary and pension payments.

40 per cent of budgetary expenditure flows into salaries and subsidies respectively and less than half is currently covered by revenue while the remainder comes from depleting currency reserves. Meanwhile, illegal economic activities, especially the smuggling of people and goods, have developed into a profitable industry. The shadow economy has also been able to greatly expand its capacity by linking criminal networks with territorial access for militias.

The war in Libya has led to a reorganisation of the smuggling cartels and turned the country into the regional hub for illegal trade in drugs, medicine, vehicles and people. The economic collapse of Libya has drastic consequences for neighbouring countries, too. The economic collapse of Libya has drastic consequences for neighbouring countries, too. Tunisia and Egypt are most seriously affected by the developments. The dramatic economic weakness in Tunisia is therefore ascribed in large part to the crisis in Libya. The Economic Community of West African States (ECOWAS) estimates that the chaos in Libya cost Tunisia at least 4.3 billion euros by the end of 2015 alone.

After the collapse of the Libyan economy, Tunisia’s GDP sank by 3.7 per cent and 3.8 per cent in 2013 and 2014. Furthermore, Tunisia traditionally satisfied 25 per cent of its oil demand with Libyan oil bought at preferential prices. However, this supply was difficult to sustain following the collapse of Libya’s oil sector. In the tourism sector, Tunisia saw a slump of 30 per cent in the numbers of Libyan tourists (around 1.8 million annually prior to 2011). A further problem is the return of around 60,000 to 90,000 Tunisian migrant workers.

Money transfers from Libya have sunk by one third since 2011. The return of tens of thousands of workers is an additional burden for the country which already has a high unemployment rate. At the same time, informal trade flows between Tunisia and Libya make up almost half of the trade between the two countries. Almost 40 per cent of the Tunisian economy is informal. Smuggling, as well as other illegal activities often represent the only source of income for people in marginalised border areas. With a revenue of 850 million euros, border trade provides a living for approximately ten per cent of the Tunisian population.


Dr. Canan Atilgan is Head of the Regional Programme for Political Dialogue Southern Mediterranean of the Konrad-Adenauer-Stiftung based in Tunis, Tunisia.

Veronika Ertl is Research Associate at the Regional Programme for Political Dialogue Southern Mediter-ranean of the Konrad-Adenauer-Stiftung based in Tunis, Tunisia.

Simon Engelkes is Project Coordinator at the Regional Programme for Political Dialogue Southern Mediterranean of the Konrad-Adenauer-Stiftung based in Tunis, Tunisia.


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