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Libya: Militia Mischief Strangles The Economy
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September 5, 2013: The government is about halfway through disbanding (or at least neutralizing) the 40,000 armed militia men who fought in the 2011 revolution and became the local government after the Kaddafi era administration was destroyed. There were about 250 militias, usually based on clan, tribe, or neighborhood ties and led by local leaders. Many were simply local defense units that continued in that function in the lawless and sometimes chaotic months after Kaddafi era soldiers, police, and secret police were killed or driven away (or just into hiding). Some of the militias had other agendas and some of them were pro-Kaddafi. Many were led by Islamic radicals and had many foreign terrorists in their ranks. Others were led by men who wanted to form a new Libyan government, but these were outnumbered. In the cities, especially Tripoli, Benghazi, Misrata, and Ziltan, a brutal competition took place over the last two years, as the more powerful militias destroyed or absorbed the weaker ones and either joined the security forces of the new national government or continued to be hostile to outside control and sought to maintain their independence. This was especially true of tribal militias in remote areas and those in the east (especially Benghazi).

While the government had oil money to pay and equip police and soldiers, that was not sufficient to get many militia members to shift their loyalty from their militia buddies and leaders. These divided loyalties make the government forces less effective than some of the militias they are ordered to deal with. The remaining militias are the most formidable, and shutting these private armies down is proving to be very difficult.

Some of the militias are actually international Islamic terrorist organizations. Some are al Qaeda affiliates, while others are independent or allied with other foreign groups. The neighbors (especially Egypt, Mali, Algeria, and Tunisia) want Libya to shut these outfits down. That is not happening, in large part because the Libyan government has other priorities, like regaining control of oil production and maintaining order in the major cities. The Islamic terrorist problem will have to wait its turn. In response, Tunisia has increased security along its Libyan border to prevent any more Islamic terrorists from getting in. Algeria and Egypt have done the same. Most of the Islamic terrorists leaving Libya (after receiving training or simply servicing in an Islamic militia) are headed for Syria, but some go to neighboring countries to continue their violent careers.

Government threats against the striking security personnel at the Brega, Zueitina, Ras Lanouf, and Sedra oil export terminals has not worked, and the rebel militias there have not surrendered control of the facilities they have been occupying since July 25th. There are similar “strikes” in other oil facilities, with the net result being that oil production is now down to about 150,000 barrels a day (a tenth of normal) and exports are only about 80,000 barrels a day. Eventually the government will not be able to pay security personnel and the oil supported government welfare system will collapse. This will cause chaos, and the government resists calls for the use of force because that could result in major damage to oil facilities that could take months, or longer, to repair. This has come as a major shock to the government because at the start of the year oil production was at 1.4 million barrels a day, nearly back to normal. Then some of the militias the government had hired to provide security at oil facilities decided their loyalties were more to themselves than the national government. Oil production accounts for over 70 percent of GDP and the government is running out of international borrowing power. Because the refineries that provide fuel for Libyans are also shut down, the government has to spend scarce cash to import fuel. That won’t last long because the government is running out of cash and credit. If oil production is not restored, the government will have burned through cash reserves and credit lines by the end of the year. After that the economy will collapse, and with that food and other essentials will not be available for most Libyans.

All this has cost the country over $2 billion in lost oil sales so far this year. Other shutdowns this year have cost another $400 million in losses. The government also issued a warning to all oil tanker companies that if any unauthorized (by the Libyan government) tankers tried to enter any of the terminals held by the strikers they will be fired on. This warning was necessary because the strikers are trying to sell some of the oil stored at the terminals to replace lost wages of the strikers and other workers there. The strikers are demanding higher pay and investigations into corruption (particularly how oil sales are being handled), as well as autonomy for some parts of the country (especially the east, centered on Benghazi). In the meantime, there is less money for government benefits nearly all Libyans depend on. Those strikers don’t seem to care that they are hurting all Libyans by interfering with the oil sales and that eventually creates a powerful public outcry demanding that the strikers be punished. The strikers get some sympathy for their anti-corruption demands. Libya is one of most corrupt nations in the world. International corruption surveys put Libya among the twenty most corrupt countries (out of 176 surveyed). Most Libyans agree with this but the corruption has been around for centuries and even Kaddafi had to live with it. So far, there have not been enough Libyans willing to step up and halt the practices.

August 24, 2013: In the northwest (Az Zawiyah town) the Wershifana tribal militia fought a town militia, leaving four dead and many more wounded. The cause of this violence is a combination of personal and family grudges and competition for resources. Local government has not been able to impose peace and the national government is trying to scrounge up troops and police to help out.

August 23, 2013: In Benghazi a senior army commander was killed by unidentified gunmen. These assassinations are usually carried out by militias that are threatened with being disbanded by the government. Journalists are also a popular target, as are businessmen who refuse to pay “taxes” to a militia.            

August 21, 2013: The national oil company declared “force majeure” (a legal step indicating that circumstances beyond its control cancelled existing export agreements). This was to protect Libya from being sued for damages by companies that had bought oil that was now not going to be delivered. This means the buyers will end up spending more to buy the oil they need on the open oil market, rather than pay a lower negotiated price. There’s a price for using force majeure, and that is lower prices for your oil in the future until you restore faith in your ability to fulfill your contracts.

August 20, 2013: In Benghazi a senior judge was killed by unidentified gunmen.

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