An economic or a military deal for Libya?
There is potential to open a new phase of cooperation in Libya between opposing parties by focusing on the economy. The factions are highly fragmented with the major friction between the internationally recognised government in Tripoli and headed by Fayez al-Sarraj and the internationally recognised parliament, the House of Representatives sitting in Tobruk and its military leader Khalifa Haftar.
Haftar’s forces led a quick offensive in mid-September on the oil terminals of the Oil Crescent, east of previously Islamic State (ISIS)-controlled Sirte. Haftar has handed over the terminals to the National Oil Corporation (NOC) in Tripoli, at least nominally loyal to the government in the capital.
While Haftar seems to be gaining political and military momentum, Sarraj is living through his toughest weeks since he was designated prime minister ten months ago. The head of the Petroleum Facilities Guard Ibrahim Jadhran, previously in control of the terminals and a controversial backer of his government, was the big loser of Haftar’s offensive, a situation that has weakened Sarraj’s Minister of Defence Mahdi Bargathi, who was the other eastern “pillar” of the coalition that supports the prime minister.
Sarraj’s government has been unable to deal with the issues that most Libyans care about: long power cuts, absence of cash, public services, lack of security and abuses by militias. Sarraj has failed to reach out to eastern Libya and offer political and social reconciliation, relying mostly on acquiescence towards the existence of parallel economic institutions to keep communication open with the House of Representatives in Tobruk.
Haftar’s camp is trying to capitalise on this situation and the member of the Presidential Council who is closest to him, Ali Gatrani, has suggested the formation of a five-member military council that would settle the issue of who controls Libya’s sprawling security sector. Gatrani’s proposal calls for Haftar’s inclusion among the five members, along with three members of the Presidential Council and the Speaker of the House of Representatives Aguila Saleh Issa.
Gatrani’s proposal, or variations thereof, is backed by Egypt and the United Arab Emirates and could find interested ears in Europe, where the French and Italian foreign ministers stated that Haftar needs to be included in the solution.
However, it is unclear whether all the forces that support Sarraj, including Islamists and anti-Haftar forces, would back this idea, given that it is apparent that Haftar does not see the military under the civilian government but rather independent of it.
For this reason, it is hard to predict whether the military track will yield results soon, and it is worth questioning whether pursuing it will split the camp that supports Sarraj.
Yet Haftar’s handover of the oil terminals to the NOC in Tripoli has created an opportunity for dialogue. If the oil money goes to one bank account — and that is a big if — then Libyans will be like a divided family that shares a house: The bickering could lead to the destruction of the place or the members of the family could find a way to share the house without killing each other.
This means that either Libyan or international mediation should focus on preserving the shared house by brokering an economic agreement between the leadership of the House of Representatives and the forces that support the Sarraj government.
This agreement should revolve around three instruments: a new budget to be approved by the House of Representatives, addressing the economic and humanitarian crisis of the country; guarantees that oil money will go through the NOC and the Central Bank and would be spent according to the budget; and guarantees against corruption and embezzlement, with respect for rule of law and transparency.
The strengthening — or, in some cases, the building from scratch — of monitoring mechanisms should be a relevant part of the package.
An economic deal could be a key factor in de-escalating a conflict that has often revolved around control of economic resources and would address the grievances of parts of the country, in the east and beyond, that have felt neglected. The deal should aim to stop the humanitarian and financial crisis that is affecting the lives of millions of Libyans, restoring the trust between the parties and between the government and its citizens.
A shared bank account and a shared budget do not sound romantic ways to hold Libya together but it is worth exploring whether a shared economic governance could work as the most effective tool to de-escalate and stabilise Libya.