Southern Libya remains a region of endemic instability wracked by communal conflict, a shortage of basic services, rampant smuggling, and fragmented or collapsed institutions. The region has long existed on the periphery of Libya’s politics and international concerns—but that must change. Increasingly, the vacuum of governance in the south has drawn in political actors from northern Libya and outside states. Extremists seeking refuge in the south and migrants being smuggled through the region directly impact the security of Libya, neighboring states like Tunisia, and Europe…
Is Libya’s monetary crisis “a crisis of confidence and governance” ?
Jalel Harchaoui has written a thoroughly researched and in-depth article for Lawfare exploring the monetary crisis facing Libya. Detailing the emergence of the crisis after 2011, the author suggests that rather than originating from a lack of physical security it is a “byproduct of a large government bureaucracy, unsustainable levels of welfare spending, and polarized governance”. In discussing a way out of the crisis Harchaoui argues:
Libya’s monetary crisis is a crisis of confidence and governance. This was vividly illustrated by the dinar’s continued slide against the dollar throughout 2017, despite the fact that public expenditures shrank and Libya’s National Oil Company (NOC) managed to double the amount of oil it produced between April and July last year. (The NOC funnels the dollar proceeds from all official sales of hydrocarbons into the CBL in Tripoli.) Irrespective of those fiscal improvements, the dinar has not rallied in the black market in 2017; instead, it has depreciated by 35 percent. Moreover, various electronic-payment applications have failed to make a dent into the banknote-shortage problem. Unity, in conjunction with clear communication and coordinated technocratic execution, are necessary to ameliorate the dinar crisis. Such measures are unlikely to be taken because of the politicized and fragmented nature of Libya’s Central Bank as it stands today. An even greater obstacle is corruption—in customs, law enforcement, politics, and across the banking system itself.
Click here to read the full article.