Ishaan Tharoor

The recent dramas gripping the country have been shadowy, shaped by backroom deals, black-market transfers and illicit smuggling.

The news out of Libya that tends to grab international attention often involves stark tragedy and disaster. If it’s not the harrowing civil war that has convulsed the oil-rich North African nation for years and split it in two, then it’s the drowning of migrants motoring out from Libya’s poorly patrolled coasts or the epochal flood that killed thousands in the city of Derna a year ago.

In recent months, though, the considerable drama gripping the country has been far more shadowy, shaped by backroom deals, black-market transfers and illicit smuggling. But it’s equally important and fraught. A rolling crisis over control of Libya’s central bank has paralyzed the economy and sparked new fears of conflict.

Oil exports have dropped precipitously in recent weeks, while ordinary Libyans are facing long lines at gas stations, restrictions on their ability to withdraw cash from banks and a collapsing electricity grid.The upheaval is the consequence of a spat that flared in August but was long in the works, experts say.

A move by forces close to Prime Minister Abdulhamid Dbeibah, who leads the government in western Libya, centered in the capital Tripoli, saw officials in the Central Bank kidnapped and led the bank’s longtime governor, Sadiq al-Kabir, to flee into self-imposed exile in Turkey. The Central Bank, which is the sole legal repository of Libya’s oil-generated wealth, ceased functioning. Oil exports were quickly shut down.

Kabir, in Istanbul, said Thursday that Libya was essentially cut off from the world financial system. “All international banks that we deal with, more than 30 major international institutions, have suspended all transactions,” he told Reuters. “All work has been suspended at the international level. Therefore, there is no access to balances or deposits outside Libya.”

At its root, the dispute is about rival power brokers’ designs on oil revenue in a country with Africa’s largest oil reserves. Dbeibah’s faction is at odds with that of Khalifa Haftar, which holds sway in eastern Libya and has cultivated deep ties with foreign powers such as Russia and the United Arab Emirates. In the tail end of the country’s ruinous civil war, Haftar attempted an offensive to capture Tripoli that ultimately failed when Turkey rushed military aid and support to the government in Tripoli.

The internationally brokered cease-fire in 2020 that followed has settled into an uneasy peace, with Dbeibah and Haftar fighting their battles through other means — for now.U.N.-led efforts to resolve the dispute are underway. But the situation is a reminder of the perilous state of affairs in Libya, which has lurched from crisis to calamity since the bloody revolution and NATO-backed campaign that overthrew Libyan dictator Moammar Gaddafi in 2011.

The country has not experienced stable governance since and is now torn apart by two rival political entities and a patchwork of armed groups. The Dbeibahs and the Haftars have emerged as powerful, quasi-dynastic clans, vying for influence over the key institutions like the Central Bank and the National Oil Corporation, through which most of Libya’s oil revenue flows. Analysts say Dbeibah’s manipulation of the bank for his corrupt ends saw Kabir warm to Haftar, who is simultaneously alleged to also be presiding over vast networks of illicit smuggling.

“Kabir had sown the seeds of his own demise,” the Economist explained. “At first he bought off his chief challengers: the people who had risen against dictatorship. After Gaddafi the state payroll almost doubled to 2.4 million in a country of 7 million. It is claimed the bank funded the warlords, paying fighters who both besieged and defended Tripoli.”

The British newsweekly added: “When the fighting ended in 2020, Kabir financed their ever-more grandiose schemes for hiving off Libya’s vast oil revenue. He paid billions to import fuel at market prices, subsidized it to make it the world’s cheapest, then let it be smuggled overland and increasingly by tanker to Europe. The more lucre and power the recipients amassed, the weaker he grew. When he tried to rein in the purse strings, it was too late.”

Deeper strains are showing. “The arrangements bridging east and west appear to be nearing a breaking point,” Libya scholar Wolfram Lacher wrote in a lengthy essay for New Lines magazine, pointing to a growing body of evidence regarding the state plunder carried out by both parties, but especially the Haftars. He added: “In the meantime, the Haftars’ greatly improved access to funds threatens to destabilize the balance of power.

[Khalifa Haftar’s son] Saddam has told close associates that he is seeking to turn western Libyan factions against each other and buy the support of selected militia leaders — a task made easier by the money he now has at his disposal. His father has informed Western diplomats that he intends to make another attempt to seize Tripoli.”ver the past week, a flurry of top regional officials, including Turkey’s spy chief, have visited the country.

The tensions have threatened a rapprochement between Egypt and Turkey, which find themselves at different sides of Libya’s divide. “Egypt and the UAE have backed Haftar in part because of his staunch anti-Islamist ideology that opposes the reliance of the Tripoli government on militias linked to the Muslim Brotherhood movement,” noted the Soufan Center, an independent global security think tank, in a memo earlier this month.

“Turkey, by contrast, has engaged regional Muslim Brotherhood-inspired movements and views Haftar as a right-wing figure dedicated to reducing Ankara’s regional influence. Russia, for its part, sees Haftar’s control of most of Libya’s oil fields as a tool in Moscow’s global competition with the United States and its European partners, all of which are backing Ukraine.”

The tangled geopolitics belies the frustrations of many Libyans who simply want a degree of political stability. “If you ask any normal Libyan, they’ll say we need one government, we need elections,” a former adviser to the Libyan government, speaking on the condition of anonymity over fears to their safety, told me. But, they added, the country’s power brokers aren’t interested in such an outcome. “Why would Haftar want one government?” the former official said. “He can print money as he pleases, now, and smuggle oil.”

A lack of Western attention here may be dangerous, especially at a moment when foreign powers could exert some pressure on Libya’s factions to get in line. “Diplomats may be busy stopping other wars in Ukraine and Gaza from growing into monstrous regional conflicts,” wrote Tarek Megerisi of the European Council on Foreign Relations. “But if they’re too consumed to take this brief opportunity, then they may well end up with a third before too long.”

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Ishaan Tharoor – Foreign affairs columnist and anchor of Today’s WorldView, the Post’s daily column and newsletter on global politics

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