Libya, a country shaken by continuous outbreaks of violence since the 2011 civil war, has experienced a strange calm over the past two years. However, several signs point to the fact that this period of stability may be coming to an end. Libya’s split into two parallel administrations, one based in Tripoli in the west of the country and the other in the east, seems consolidated. But political fragmentation and fluid alliances and agreements make any arrangement for power-sharing temporary. At the heart of the latest dispute is control of Libya’s Central Bank.
Last week, the Presidential Council, the institution that holds the head of state, issued a decree dismissing Sadiq Kabir, the governor of the central bank. Kabir, who has the support of parliament – dominated by factions loyal to the eastern strongman, Khalifa Haftar – considers the decision illegal, and refuses to leave his post. On Tuesday, the Rada militiasurrounded the bank’s headquarters as a measure of pressure on Kabir, a key figure in Libyan politics over the past decade. Days earlier, a senior official at the central bank had been kidnapped by another armed group.
Stephanie Koury, the UN special envoy for Libya, warned at a Security Council meeting on Tuesday of the effects of the escalation of tensions over the past two months: “Unilateral actions by military and security actors have heightened tensions, reinforced institutional divisions and complicated efforts for a negotiated solution.”
“The root of the conflict is the struggle between Kabir and [el primer ministro] Abdulhamid Dbeiba. They were allies before, but Dbeiba has been making moves for months to remove him,” says Mohamed Eljarh, an analyst at the Libya Desk consultancy. Meanwhile, researcher Wolfram Lacher, of the Libya Desk, think tank German SWP says: “There are several reasons why some actors want Kabir to be removed. The main one is that the current level of spending is unsustainable, especially because of the large amount of subsidised oil smuggled out of the country. And he is trying to cut costs.”
Libya was plunged into chaos after the civil war that ended the dictatorship of Colonel Muammar Gaddafi. The transition to democracy was derailed in 2014 by power struggles between the various political factions and the state’s failure to disarm the militias that overthrew Gaddafi. Since then, the country has been a taifa kingdom. Its main armed actor is the self-proclaimed Libyan National Army, led by General Haftar, which controls the east and south of the country, and has launched several failed offensives on Tripoli to take control of all of Libya.
The Central Bank of Libya and the National Oil Company (NOC) are the only two national institutions that are still functional, and they play a very important role. Through the NOC, the State receives 90% of its revenues, which the central bank then channels to the various institutions. But this body remains responsible for directly paying all the country’s civil servants, who represent more than 65% of the workforce. Libya has the largest oil reserves on the African continent, a magnet for all kinds of ambitions, patronage networks and nepotism.
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“To be viable, a possible replacement for Kabir would need the approval of the United States and the International Monetary Fund, and that requires an internal consensus in Libya that does not exist now,” says Lacher. One of the problems in the North African country is that the mandates of all its political institutions, both the Parliament – elected in 2014 – and the institutions that emerged from the political process sponsored by the UN in 2021, the Presidential Council or the Prime Minister, have already expired. Thus, any discussion about the legitimacy of the respective sides is sterile and, in any case, force of arms usually ends up prevailing.
Power struggles
The recent power struggles in Tripoli appear to have empowered Haftar, who is no stranger to them. “The situation in the east is more stable. There is a real economic boom and political unity,” says Eljarh. This cohesion will continue at least as long as the veteran general, 80, lives. Two of his sons, Belgassem and Saddam, are gaining increasing prominence in running the family political empire, although it is not clear who will be the heir.
According to Lacher, one of the risks to the country’s future stability could come from the use of the vast funds controlled by the Haftar clan, which are partly derived from oil smuggling – most of the oil wells are located on its territory, which gives it a position of strength in negotiations with Tripoli. There are signs that the Haftars are using this financial windfall to rearm themselves. For example, they have recently acquired a Russian frigate and drones made in China.
According to several Libyan sources, they have also tried to buy drones from a Spanish company. As this is a violation of the UN arms embargo, the Spanish authorities have opened a process in which Saddam Haftar is a person of interest. Therefore, according to the newspaper The RepublicHafter was reportedly detained at an Italian airport a month ago. His reaction, as a pressure measure on Madrid, was to order a partial blockage of the Al Sharara well. This field is operated by a group of oil companies, including the Spanish Repsol. However, the Spanish government denies the existence of any legal action against it.
Curiously, the biggest obstacle to a new major violent explosion could lie in the main foreign powers that support the two parallel administrations: Turkey, with military bases in the west, and Russia, in the east. “Moscow and Istanbul are interested in collaborating in other scenarios that are now considered more important, especially Ukraine. Therefore, they do not want a deflagration,” reflects Lacher. From Benghazi, the eastern capital, Eljarh introduces nuances to this analysis, which is dominant in Western foreign ministries: “Russia could want a war at some point to strengthen its dependence on Haftar. In any case, Haftar has already shown in the past that he can launch military offensives without the approval of his supporters.”
With no prospects of success for the UN plan to hold elections to unify and pacify the country, Libya seems condemned to perpetual turmoil, every time political and military actors want to renegotiate their quotas of money and power by force.
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