New efforts in Libya

Kamel Abdallah , Tuesday 19 Mar 2024

Kamel Abdallah discusses two new approaches to the Libya crisis.

New efforts in Libya


The United Nations hopes to implement two new approaches to ending the political impasse in Libya, an effort backed by the US against the backdrop of its international tug-of-war with Russia. Washington has resumed its diplomatic drive in Egypt’s western neighbour for fear that the Russian competitor will establish a military foothold on the shores of the Mediterranean, in US-led NATO’s southern backyard.

But first, the Libyan factions must be brought on board the new UN drive.  They had long managed to absorb Western pressures pushing for the completion of a stalled political process aiming towards legislative and presidential elections. The last attempt to hold these elections fell apart in December 2021.

A high-level US delegation led by the US Special Envoy for Libya Richard Norland has just completed a working visit to Libya to rally support for the UN-facilitated political process.

These occurred in tandem with meetings held by UN Secretary-General’s Special Representative for Libya Abdoulaye Bathily with key Libyan leaders and shortly before an Arab League-sponsored meeting last week in Cairo between the Head of the Libyan Presidential Council Mohamed Al-Menfi, Speaker of the House of Representatives Aguila Saleh, and Head of the High Council of State Mohamed Tekla.

Norland and Bathily’s discussions with Libyan figures focused on ways to break the stalemate between the rival factions and bring the political process back on course towards the elections. Libyan factions have long been working on a complex set of rules and conditions for the elections, including fair electoral laws and a possible formation of a new government to oversee the process.

The new approaches that Norland and Bathily presented to their Libyan interlocutors aim, firstly, to address the country’s current economic straits and the government’s worsening budgetary crisis, and, secondly, to revitalise the Libyan national reconciliation drive in the hope of coaxing key Libyan leaders back to the dialogue table.  Bathily had formally invited the heads of five key Libyan institutions -- the Presidential Council (PC), the House of Representatives (HoR), the High Council of State (HCS), the Government of National Unity (GNU) and the Libyan National Army (LNA) -- to a meeting in November 2023, but the meeting never materialised.

The Libyan economy has been beset by high inflation, rising prices, the fall of the Libyan dinar against foreign currency, a situation aggravated by untraceable government spending and the confusion surrounding the counterfeit 50 dinar notes that have been recently circulating in the market. Further economic havoc was caused when an eastern Libyan court issued a ruling authorising the sequestration of oil revenues pending government budgetary restructuring.

The ruling was based on a suit filed by Osama Hammad, the prime minister of the government formed by the Tobruk-based House of Representatives (HoR) to replace the Government of National Unity (GNU) headed by Abdul-Hamid Dbeibah. The suit has been characterised as a step to undermine Dbeibah who, with international backing, has refused to step down.

In an unprecedented move, the Governor of the Central Bank of Libya (CBL), Al-Siddiq Omar Al-Kabir, formally requested HoR Speaker Aguila Saleh to ask the House to approve a temporary “adjustment” of the exchange rate of the Libyan dinar against foreign currencies and a 27 per cent tax on foreign exchange until the end of the year. The CBL regards these measures as necessary to combat inflation and stem the erosion in the value of the dinar caused by the release of counterfeit money into the market, which, according to CBL data, caused the dinar to fall by at least 6 per cent.

Because of the institutional bifurcation in Libya, there are two national mints, one overseen by the Tripoli-based CBL and printed in the UK and the second overseen by the parallel CBL in the east and printed in Russia. A third source has been releasing counterfeit dinars into the market, presumably for currency speculation purposes. Some Libyan reports have pointed accusatory fingers at Russia, prompting the Russian Embassy in Libya to issue an official statement denying any Russian link to the currency.

Because of the ongoing political schism and institutional bifurcation, Libya lacks a unified national budget. Osama Hammad’s HoR mandated government sponsored a budgetary bill that was approved by the HoR, but his government is not internationally recognised. Yet, the HoR refuses to deal with the internationally recognised GNU. To circumvent this, Norland has asked Libyan leaders to reactivate the High Finance Committee (HFC) which was established last summer to unify government spending procedures across the country. Three months after the HFC was created, the HoR called for its dissolution, withdrew its members from it, and formed an alternate committee to oversee budgetary reform.

In his briefing to the UN Security Council on 15 February, SRSG Bathily lamented the interruption to the work of the HFC which the Presidential Council had formed with the support of the US, the EU, Egypt, the UN, and Italy, all of which are members of the Economic Working Group on Libya formed by the International Follow-up Committee for the Berlin Process.

The Libyan officials have been trading accusations over responsibility for the economic and financial crisis, often to advance their own interests. The direction of finger pointing reveals the growing tension in the relationship between CBL Governor Al-Sadiq Al-Kabir and the GNU Prime Minister Abdul-Hamid Al-Dbeibah and, simultaneously, signs of rapprochement between foes, such as Al-Kabir and HoR Speaker Saleh.

Regarding the second approach, Bathily supports the initiative of the Presidential Council and the African Union’s High-Level Committee on Libya, which is chaired by the Democratic Republic of the Congo, to organise a national reconciliation conference in Sirte in late April. The UN special representative hopes such a conference will help bridge the views of the main Libyan factions, especially on continued bones of contention related to the long-awaited elections.

Meanwhile, some key Libyan stakeholders are trying to mobilise support and promote bilateral understandings for the creation of a new national unity government to oversee the electoral process. However, the UN is wary of unilateral Libyan steps and has accused their authors of attempting to evade their commitments to the internationally sponsored political process, as Bathily said in his reaction to the meeting between members of the HoR and the HCS in Tunisia three weeks ago to discuss the formation of a unified government.

The US and the UN oppose such a step and insist that, instead, Libyans should resolve their outstanding differences over the electoral laws and regulations so that Libyans can elect their representatives in government.  In a tweet on his official X (Twitter) account, following a meeting with several HCS members, Bathily “re-emphasised the need for the major Libyan stakeholders to agree on a sustainable compromise on the electoral laws a basis for a unified government leading the country to elections long awaited by the Libyan people who aspire for legitimate institutions.” 

The US supports this view, maintaining that there should be no new interim government in Libya before all the preparations for elections are complete, enabling Libyans to go to the polls, as they had hoped to do on 24 December 2021.

* A version of this article appears in print in the 21 March, 2024 edition of Al-Ahram Weekly

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