Liquidity Crisis and Tripoli Violence: Additional Challenges For Unity Government
This week the reconciliation of the rival NOC administrations in Tripoli and Benghazi allowed for the resumption of exports that had stopped from Tubruq’s Hariga port three weeks ago. However, Libya’s economy continues to face serious threats, as the Eastern Libyan government is set to issue 4 billion LYD by the end of this month. This money is to be printed in Russia. This would represent the first time that different parts of Libya receive their currency from rival political powers (namely the UK for the West and now Russia for the East.)
Diplomats are concerned that his development may fatally undermine the GNA as the two currencies will have different serial numbers and watermarks—making them impossible to interchange in banks. Despite this foreshadowing of possible progress made on the oil export front, the Libyan unity government will continue to face significant challenges in providing basic services.
Furthermore, Tripoli and the western region as a whole is witnessing a marked increase of kidnappings and murders of civilians and officials. Despite the GNA’s Presidency Council’s calls to diplomats to return to Tripoli, diplomats are reticent to do so until the entire city is safe. As a result, the UN Security Council’s partial lifting of the arms embargo—albeit on a case by case basis—is seen by the international community as sorely needed to expedite the Misratan-led operation against IS in Sirte. With the possibility of the GNA receiving arms in the short term thanks to the partial lifting, the GNA argues that it should be better poised to score some political and military points soon. I, however, see things differently: that arming the GNA before it has achieved unity with the LNA and other key stakeholders is a big mistake. Such arming could in fact be pushing it towards a civil war with the LNA and might not use the arms to fight Sirte.
The GNA could use a boost in popularity, as the absence of the HoR’s endorsement continues to represent a challenge. The 9 May decision to establish the ‘Presidential Guard’ with a wide mandate, seemed to be perceived by Haftar supporters as a direct circumvention of the Libyan National Army (LNA) in Eastern Libya. In the meantime, General Khalifa Haftar made a televised appearance on 18 May stating that he does not recognize the GNA. He made his statements as the GNA’s designate Minister of Defense, Madhi Al Bargathi—who heads the 204-tank battalion in the LNA— arrived at Sidra under heavy protection on 17 May to meet with Ibrahim Jadhran. The appointment of Barghathi could also be perceived as a sidelining of Haftar, as Baghathi now enjoys the authority to structure and fund the army without Haftar’s consent.