Country FilesNorthCountry Profile 2014: LIBYA

Fri,17Nov2017

Country Profile 2014: LIBYA

Local forces defy Tripoli

In spite of the breadth and determination of the forces ranged against him, there is every chance that Libya’s prime minister, Ali Zeidan, will still be in office at least at the start of 2014. This will not be the result of any intrinsic strength in his position, nor of any weakening in his opponents’ determination to oust him.

 

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ar-infographie-libya-2014Local forces defy Tripoli

 

In spite of the breadth and determination of the forces ranged against him, there is every chance that Libya’s prime minister, Ali Zeidan, will still be in office at least at the start of 2014. This will not be the result of any intrinsic strength in his position, nor of any weakening in his opponents’ determination to oust him. Instead, Zeidan will benefit from the fractured state of Libyan politics. No faction, even that of the relatively powerful Muslim Brotherhood, can muster the necessary military force, popular support or votes in the General National Congress (GNC) to push him out.

The corollary of this is that there is also no group or coalition in the country capable of setting the agenda or exerting sufficient authority to resolve the most pressing problems of security, financial stability or constitutional settlement.

Libya will therefore enter 2014 adrift politically, with about half its oil production shut in, state investment programmes stalled and subject to endemic corruption, as well as a high level of violence between small rival militia units in Tripoli, Benghazi and their hinterlands.

A DISCREDITED ASSEMBLY

Several of these issues will come to a head in the first months of the year. In February, the 200-member GNC will reach the end of its notional 18-month mandate without having even begun the key task of setting up the constitution- writing process. This date may mark the definitive end of the current political process.

Even if the already discredited assembly is not disbanded, it will be further marginalised. With a significant number of deputies no longer attending, the task of securing the necessary 101 votes for a majority will become almost impossible.

There are no signs that the GNC’s crisis committee or any other body has the ability to overcome the blockades of four main terminals in the eastern part of the country.

The group demanding autonomy for Cyrenaica in control of these terminals may lack broad popular support but is well entrenched. It has rejected financial inducements to step down. Any military attempt to wrest back the export terminals would be disastrous. But the political cost to Tripoli of the federation they want is unacceptable.

As oil output fell from about 1.5m barrelsaday to a maximum of 650,000 after July, the cost to the state treasury of these blockades is likely to be about $20bn in lost revenue by end-2013, equivalent to a third of gross hydrocarbons earnings and about the same proportion of the government’s budget.

FUNDS RUNNING LOW

Combined with the finance ministry’s failure to control spending, there is a risk that the government will run out of cash in the early months of 2014 even before a new budget is agreed. Pressure will be put on the central bank to underwrite state spending with its $143bn of foreign currency reserves.

But this will be difficult to justify without reining in out-of-control spending on salaries and accounting, particularly where a full two years of expenditure has gone with almost nothing to show for it in terms of infrastructure or development.

The high incidence of financial corruption will rise up the agenda. Militia violence and attacks on the government will also increase as the wages of thuwwar [‘revolutionaries’] are cut. This combination of challenges means that there is no chance of the central government delivering any kind of social improvements to communities in the southern province of Fezzan, in Cyrenaica, or to communities in the Jebel Nafusa south of Tripoli.

While remaining part of Libya in a formal sense–and strongly dependent on the central government for salaries, subsidised staple foods, fuel and free electricity – these areas will increasingly

adopt informal autonomous systems of governance and will remain unruly. And the Zintan-based militia holding the late Muammar Gaddafi’s son Saif al-Islam will continue its refusal to hand him over to the ministry of justice. So while other trials of former regime senior officials go ahead, the most important will not.

 

TOP LIBYAN COMPANIES

No companies from Libya featured in The Africa's Report's Top 500 Companies in Africa 2013.

 

TOP LIBYAN BANKS

Rank 2012Rank 2011Bank nameCountryTotal assetsNet interest incomeLoansDeposits
3535WAHDA BANK*LIBYA6,263,532133,50300
 


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