EAST MEDITERRANEAN

Oil rich Libyan people are on the edge because of economic crisis

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While the Prime Minister of the Government of National Unity Abdülhamid Dibeybe and the Head of the Government of Stability, Fathi Bashagha, elected by the House of Representatives, are fighting for power, Libyans take to the streets due to the long-lasting power cuts, the inadequacy of basic services and rising prices.

Power outages, which lasted more than 15 hours a day and became routine in many parts of Libya, became a more important problem as the summer temperatures increased. In the country where youth unemployment exceeds 50 percent, food prices, especially bread, are constantly increasing. In addition to poor living conditions, the closure of the country’s largest oil fields as political leverage in early April increased the unrest. In the face of this picture, the last straw was that the two political poles based in Tripoli and Benghazi left the table where they sat at the end of June without an agreement for a constitutional framework and roadmap to the elections.

A group organized through social media called for demonstrations and civil disobedience in all cities of Libya on July 1 with the slogan “Youth Revolution”. Protests were held at many points in Benghazi and other eastern and southern cities, especially in the capital Tripoli, demanding that the legislative and executive organs be abolished, a state of emergency be declared and elections be held as soon as possible in the country. A group of activists raided the House of Representatives, setting parts of the building on fire and releasing classified documents they had obtained from the House. The documents revealed that 69 million Libyan dinars ($ 14 million) were spent on members of parliament for personal expenses such as food, drink and oil purchased for personal cars while the public was in the grip of the economic crisis. While the protests may seem spontaneous, this highlights the potential for growing unrest to enhance violence.

Political division

In Libya, where there are two power centers based in Tripoli and Benghazi, political and military wings have been holding reconciliation meetings for two years under the auspices of the United Nations (UN). During the political talks in Geneva, it was decided to hold the presidential and parliamentary elections in the country on December 24th, 2021, but the elections could not be held on the scheduled date. The House of Representatives in Tobruk elected Fathi Bashagha as prime minister on February 10th, when most of the deputies in the west of the country did not attend, on the grounds that the mandate of the current National Unity Government (UBH) expired on December 24th, 2021, and on March 1st, gave a vote of confidence to the Bashagha government. Prime Minister of UBH, Abdulhamid Dibeybe, accused the House of Representatives of deviating from the roadmap determined in the Geneva Agreement, and said that he was at his post and that he would hand over the task only to an elected government.

The last attempt at reconciliation between the two poles was held in June. The negotiations between the Libyan State Supreme Council and the House of Representatives, which were held under the leadership of the UN in Cairo, the capital of Egypt, did not yield any results. There was no consensus in the meetings held in Geneva on 28-30 June with the President of the State Supreme Council Khalid al-Mishri and the TM President Akile Salih and the delegations with them, and Fathi Bashagha, who was elected Prime Minister by Tobruk, also threatened to enter the capital Tripoli by force. Having raised the same threat before, Bashagha has not been able to go to Tripoli and take over the government until today.

Crashed


The internal conflicts that have been going on since 2011, triggered by foreign powers cost Libya $576 billion (according to the UN’s 2020 report), and destroyed Libya’s socioeconomic structure. The closure of oil fields, which account for more than 90 percent of state revenues, for political purposes led the country to spend without being able to save, and the state’s coffers were quickly emptied. The devaluation decision of the Central Bank of Libya, implemented in January 2021, reduced the purchasing power by three and a half times. The depreciation of the Libyan dinar rapidly increased the price of major consumer goods, which were imported, and the cost of fixing the problems in the country increased.

The reduction of oil production as a political trump in Africa’s richest oil country, the fact that the names of Libyan politicians from both wings cannot reach a political consensus and are frequently involved in bribery and corruption scandals create unease among the people struggling with the economic crisis. It is also known that behind the scenes of the current division lies the dispute over who will control the Libyan budget. The point reached today is a complete disaster; UBH in Tripoli controls the Central Bank, that is, state revenues, but has no official budget. The Bashagha government, elected by the House of Representatives, which has the power to issue a budget, has an official budget though no revenue.

It is alleged that UBH, which has not had an official budget since 2019, is trying to meet its cash needs with short-term tactics by liquidating state-owned cash-rich companies. It is difficult to predict the long-term damage of these temporary solutions, which alleviate the cost of the crisis in the short term. Despite its rich natural resources and great manpower potential, Libya is now exhausted by political conflicts, restless and very impoverished compared to 11 years ago.

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