The Battle for Oil and Money Quietly Continues
As various analysts observing Libyan affairs started indicating a few weeks ago, the ongoing military battles being fought throughout the country represent only one of the fronts where opposing alliances are facing off. In fact, the National Oil Corporation, the Central Bank and the Libyan Investment Agency (LIA) represent three equally fundamental assets whose importance for empowering any faction with enough wealth to buttress its rule cannot be overstated.
Fortunately for Libya, despite the zero-sum logic displayed on the military battlefield, both sides have so far employed some degree of self-restraint to avoid the complete freezing of Libyan asset which would bring the country, if possible, to an even more dangerous standstill. A proof of this can be seen, as argued by The Economist, in the paradoxically consistent oil output that the country is producing despite widespread fights.
The key question of course remains that of how long will these informal arrangements actually be able to sustain themselves before reaching a fatal tipping point and squandering Libya’s last valuable institutions and assets. The question is all the more pressing now that the Tobruq-based establishment seems to be gaining the upper hand on different fronts. Since last weekend, in fact, several developments seem to indicate a consolidation of the HoR camp with regards to control of oil and finance related institutions.
Firstly, Jathran publicly slapped the Misratan camp, revealing their recent overtures towards him and declaring himself more inclined to share a cell with Qadhafi’s henchmen Abdallah Senussi rather than closing a political deal with the Fajr Libya forces.
Secondly, the Libyan Investment Authority saw yet another change at the top, with the replacement of Abdulrahman Benyezza with Hassan Ahmed Bouhadi, a move largely understood to bring the LIA key position firmly in the hands of the Tobruq establishment. Chris Wright on Forbes presents a very interesting account of the ongoing struggle for the control of this institution and of the crippling effects that the uncertainty marring the post-Qadhafi period has had on financial and developmental institutions in the country:
So will the new appointments make any difference? One person close to the LIA says of Bouhadi: “I hear he’s a good guy.” Bouhadi became a member of the LIA’s Board of Trustees earlier in 2014, and earlier served as secretary to that board, so he knows the place. A former World Bank official, Ahmed Ali Attiga, has been appointed as chief executive; when I visited Tripoli earlier this year, his was a name people had hoped to hear being connected with the LIA, so perhaps there is hope.
Both both men could just as easily find themselves removed in this uncertain environment. Last month I spoke with Libya’s central bank governor (again, his position depends on which side you talk to – some Libyan powers consider him to be suspended) Saddek Omar Elkaber, and what he said about the central bank could apply equally to the sovereign fund (which it is closely linked to in any case). “The challenges are huge,” he said. “There is safety and security, human development, the autonomy and integrity of the institution, capacity-building, fighting corruption, maintaining stability in the banking sector, establishing the right environment for the private sector to be established and to grow locally, and paving the way for international investors to come.” Over the last few months, he said, “we almost stopped everything. Because of the problems with safety and security, we will not be able to attract the right people to come and help us.” Tellingly, the interview took place with him not in Tripoli but in Malta.
Thirdly, the Central Bank has confirmed its ability thus far to channel funds towards the Tobruq administration, despite the uncertainty currently surrounding its leadership. In this sense, it appears that the control of Tripoli and of several institutional offices is not yet proving key to ensure the control of the pursue strings for the Misratan camp. The surreal organisation of a marathon, last Sunday in Tripoli, with the purpose of luring back foreign companies, workers and diplomats camp to take a slice of the city’s and country’s cake, however, is possibly the strongest indication of the difficulties currently faced in the capital.