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Libya’s Interim Government: A New Chapter?

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In March, Libya’s new interim government was appointed, intending to replace both the warring Government of National Accord (GNA) based in Tripoli and the Interim Government situated in Tobruk. Referred to as the Government of National Unity (GNU), the challenges that the newly appointed government has to overcome are innumerable. Will the formation of a homogenized and unified state be achieved, or is this the tipping point of the nation’s downfall?

Historical Background

The Second Libyan Civil War is more than just domestic insurgency and competition. It is a regional conflict that has enmeshed the Gulf, the wider Mediterranean and the international community. Endowed with natural resources and rich in oil reserves, Libya has been in chaos since the Arab Spring movement and the NATO campaign that toppled Muammar Gaddafi’s regime in 2011. Efforts to rebuild the country and form a new democratic government led to the eruption of a civil war between rival governments in 2014. The fighting has been concentrated between the Tripoli GNA administration, led by Fayez al-Sarraj, and the Tobruk administration, which appointed Field Marshall Khalifa Haftar to lead the Libyan National Army (LNA). The civil war has led to the disruption of economic progress and has heightened one of the most severe ongoing humanitarian crises, with 200’000 internally displaced persons and 1.3 million in need of humanitarian assistance.

Map 1: Libya’s Key Cities dominated by LNA (orange) and GNA (green) forces.

The culmination of the civil war came with the Battle for Tripoli in 2019, when the Tobruk-based LNA led by Haftar, after gaining control of eastern and southern Libya, turned its attention to the capital. After the 14-month siege, during which the LNA fought for the possibility to serve as the interim government, the conflict saw an increase of foreign intervention. Key players such as Turkey, Russia, Egypt and the UAE backed the LNA, providing critical assistance such as drones and air-defense vehicles, while French and pro-GNA militias attempted to secure their foothold and counter the LNA-led attacks.

Libya is home to Africa’s largest oil reserves, which justifies the international attention the crisis is receiving. By the end of the Gaddafi era, Libya was producing 1.6 million barrels per day (b/d), but current crude production has been very volatile and decreasing due to domestic instability. Many oil-storage facilities have been damaged or destroyed during key battles, and armed groups and militias often ransack oil fields and facilities. Most international oil companies withdrew their personnel as soon as the civil war started in 2014, severely hampering the flow of oil trade and industrial activity. The weaponization of the country’s oil reserves has cut off vital funds to the regime and has made the struggling energy sector even more reliant on imports than before.

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Figure 1: Libya’s Crude Oil Production in the 2010-2021 window.

LNA Military leaders initiated a series of blockades in their effort to coerce the government into meeting their demands. By cutting off the channels through which oil revenues flow legally, which is via the Libyan central bank, the militias have caused a fatal blow to the sector which accounts for almost 60% of the national GDP. Oil drives the Libyan economy, and this has been the case ever since the beginning of oil exports in 1961. With only two oil terminals being operational, in Bouri and Al Jurf, the Libyan economy is on life support, depending on positive speculations following the formation of the new interim government. Following the end of the 8-month LNA blockade, a major obstacle preventing a political settlement was removed and the resumption of vital oil exports was resumed. In April, Libya voluntarily reported to the Organization of the Petroleum Exporting Companies (OPEC) for the second time, claiming that it pumped 1.168 million b/d of crude.

Figure 2: Libya’s GDP Annual Growth in the 2010-2020 window.

Following a mediation by the United Nations in February 2020, a ceasefire agreement was signed as a result of negotiations between loyal forces to the GNA and to Haftar. The agreement was off to a bumpy start, with negotiations of the Joint Military Commission failing to produce results even after Haftar’s forces withdrew from Tripoli. However, a Russia-brokered agreement between a member of the Tripoli government and a pro-Haftar government official paved the way for the end of the oil facilities blockade. The Russian intervention, combined with a successful meeting of military officers from both warring sides led by Egypt in late September, set the stage for the installation of a formal ceasefire deal. The 23rd of October agreement verified the informal nationwide ceasefire that both sides had been observing since August.

The Next Big Steps

In March, Libya’s House of Representatives confirmed the Government of National Unity (GNU) as the country’s interim administrative authority, headed by Abdelhamid Dabeida as Prime Minister and a three-member Presidency Council headed by Mohamed al-Mnefi. The GNU enjoys the support of the UN, and key players like the US. Its formation was a breakthrough in efforts to overcome the internal political division, but there are already challenges up ahead.

Map 2: Libya’s key areas held by LNA (red), GNA (blue) and other militia (green) forces.

The first key tasks of the transitional government are the maintenance of the current fragile peace and the organization of democratic elections for December 2021, which will create Libya’s first permanent governments since the toppling of the Gaddafi regime. In order to address these issues, the GNU has to deal with the foreign armed forces within its territory, especially Russia and Turkey. Ignoring a three-month deadline set in the October ceasefire agreement for withdrawing their forces, the two countries still maintain their foothold. Despite the asymmetry in terms of military capabilities, the two have formed the firm front of external intervention which diverts the GNU’s attention away from the stabilization of the economy and the resurrection of the rule of law. 

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The greatest challenge is the presence of some 20’000 foreign troops and mercenaries, which needs to be removed from the equation before the post-conflict scene is determined. Despite the October agreement, the key regional players maintain their foothold, showing unwillingness to depart from their spheres of influence. This makes the elimination of their presence the first major task of the Interim Government, before other omitted variables are properly addressed.

The new cabinet lacks a defense minister, showing how challenging the task of controlling these militias and proxies is. Tripoli is still controlled by militias formed to fight against the possible repetition of a Gaddafi regime, undertaking the role of patrolling forces and destabilizing elements. Given that the LNA is led by Haftar and cadres of officers formerly loyal to the Gaddafi regime, independent militia groups that have taken control of the south of Libya are less inclined to give up the fight and accept a simple diplomatic solution.

Secondly, the GNU has to secure the approval of a new constitution before the upcoming elections. Libya’s Constitutional Drafting Assembly has already drafted one, creating a two-house parliament and a directly elected president. If this draft is not adopted following a referendum in the summer, there would be little time to rewrite another draft, set up another referendum and hold the elections in time. The possibility of a delay could lead LNA supporters to revert to their own government, lay down their own constitutional framework and split the country once more.

Moreover, addressing the financial situation should also be on the top of the agenda. The debt incurred by LNA and GNA amounts to $73 billion, showing how a possible oil-revenue freeze would put a strain on national recovery and prevent the country from meeting its annual state spending levels. A country that ‘just came out of a proxy war’, as Libya’s ambassador to the UN mentioned, should prioritize the rule of law, justice and accountability in order to hold free and fair elections. However, given that the oil and energy sector is the driver behind all sorts of domestic developments, the solidification of domestic financial institutions and the securing of their functioning would put Libya on the stability path once more. The unification of the economic scenario carries with it the challenge for the GNU to pump up cash in the Libyan Treasury, stabilize the exchange rate of the dinar and reunite the divided Central Bank. The rehabilitation of the oil sector and the mending of economic rifts will be a hard task, but a necessary one if the country is to be considered united again. 

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The environment for free and fair elections, without restrictive laws on freedom of speech and association or a corrupt criminal justice system, will be hard to ensure, given the ongoing presence of critical international stakeholders. Even though the stakeholders continue to raise their stakes and reject any idea of withdrawal, Libya’s domestic political atmosphere has been relatively smooth due to the decline in violence and the military exchange. By no means does this represent a sustainable truce and ideal conditions for the interim government, yet these circumstances may prevent the re-escalation of hostilities between the LNA and the GNA.

Enjoying the support of the UN and the US, the GNU has succeeded where others failed and has initiated a new period for the economy and the political scene. There is a lot of ground to be covered still, but the new government’s goals have been welcomed. It represents a balanced alliance, with the potential to steer the country out of the present political and financial turmoil, but being called to juggle many things at a time. Supposing these issues are addressed, and with a spirit of caution and humility, Libya may be converging towards a democratic state 10 years after its first effort.

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