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The Libyan Political Dialogue: An Incomplete Consensus
The Libyan Political Dialogue: An Incomplete Consensus
Libya: Amid Political Limbo, Time to Rescue the Economy
Libya: Amid Political Limbo, Time to Rescue the Economy

The Libyan Political Dialogue: An Incomplete Consensus

The preliminary political agreement that emerged from UN-led talks between Libyan rival factions at a signing ceremony in the Moroccan coastal resort town of Skhirat last week was a critical first step toward ending the Libyan civil war. Yet one side’s refusal to come on board without further amendments to the text potentially makes the agreement stillborn. Under the leadership of UN Special Representative Bernardino León, Libyan, regional and international actors should therefore put all their efforts into reaching a broader consensus on the text before proceeding to the next mileposts on the political roadmap, first and foremost the establishment of a national unity government, as well as security arrangements in Tripoli to support it.

On 11 July 2015, eighteen out of the 22 participants of the UN-facilitated Libyan Political Dialogue signed a preliminary framework agreement in Skhirat, Morocco, that charts a way out of a conflict that has divided Libya into two rival sets of parliaments, governments and military coalitions since July 2014. The Political Dialogue includes four representatives from each parliament – the internationally recognised House of Representatives (HoR) in Tobruk and its predecessor, the General National Congress (GNC) in Tripoli – as well as boycotting members from both sides and a number of independents, mainly former bureaucrats. The GNC delegation stayed away from the final talks in Skhirat and refused to sign the agreement, demanding further changes based on its perception that the text effectively sidelines its camp from the proposed political arrangement.

The Skhirat agreement envisions the creation of a consensus-based national unity government (“Government of National Accord”) that would have wide powers to govern from its seat in Tripoli, including foreign and security policy and oversight of state finances and institutions. It would extend the life of the HoR, the parliament elected in June 2014 and currently based in the eastern city of Tobruk, for at least another year and make it the sole legislative authority. And it would set up a separate body, the State Council, to absorb GNC members. It is the ambiguity concerning the State Council’s powers and role in the new setup that prompted the GNC’s refusal to sign on to the deal.

Giving Libyans Hope

In light of Libya’s growing chaos and fragmentation, even the incomplete consensus secured in Skhirat is an achievement, although a very limited one: it gives Libyans hope that a year-long conflict could be coming to an end. The presence of six mayors, including from the country’s three main cities (Tripoli, Benghazi and Misrata), and representatives of two main political parties, the liberal-leaning National Forces Alliance (Tahaluf al-Quwwat al-Wataniya) and the Muslim Brotherhood-led Justice & Construction Party (Adala wa Binaa), at the signing ceremony was further evidence that many constituencies support the deal. Other negotiating tracks, representing municipal councils, political parties and women, also signalled their backing, as did Libya’s neighbours and the wider international community.

Despite this building consensus, however, the GNC’s objections must be taken seriously ­– both because the GNC represents a significant constituency with understandable concerns and because it has the power to derail the agreement’s implementation. The GNC’s principal concern is uncertainty over how the State Council’s members will be appointed and what powers, if any, it will have. Unlike a previous draft (released on 8 June and opposed by the HoR), the text adopted on 11 July does not give the State Council any powers and indeed is vague on what specific role the institution will play. The GNC is understandably upset about this change, as the 8 June draft had raised its expectation that it would play a meaningful role in the new order, one it could defend toward its political and military backers.

The GNC has indicated it wants the State Council to have equal weight to the HoR in approving legislation and making appointments to key state positions, including the heads of Libya’s financial and oil institutions and its public prosecutor. It also demands that decisions taken by the HoR since August 2014 be invalidated. At the heart of this request is its fear that the HoR will not cancel its appointment of General Khalifa Haftar, the pro-GNC camp’s chief military opponent, as head of the Libyan armed forces. Their fears are not out of place. In a 15 July televised interview Haftar alluded to the possibility he might oppose the agreement if he sees it undermining both his authority and formal recognition of the armed forces he leads, stating that while he supported the Political Dialogue – which he said “was in Libya’s interest” – if the final agreement is not in the “interest of the Libyan people, there is no chance it can succeed”.

Some members of the GNC delegation (and many in the pro-GNC camp more broadly) were willing to accept the 11 July agreement with reservations, ie, on the understanding that after the signing the GNC’s concerns about the State Council would be taken into consideration and addressed in the agreement’s annexes. A powerful hard-line faction in the GNC, however, sees the agreement as aiming to marginalise the GNC and is therefore holding out to secure ironclad guarantees that the GNC (like the HoR) will at least have veto power over giving confidence to, or revoking it from, a future national unity government. The GNC hardliners have a key ally in GNC President Nuri Abu Sahmein, who has the power to decide whether to put a motion up for a vote. For example, Abu Sahmein refused to allow a vote on the draft agreement in early July and likewise refused to authorise the GNC delegation’s participation in the final Skhirat meeting, which led to the agreement being initialled on 11 July.

Participants in the Political Dialogue appear to have mixed views on whether the text can still be amended before it is considered final. HoR delegates say that after the signing ceremony the text became binding. Some independents closer to GNC circles, however, said they signed the document with the understanding that there would be room for some adjustments. The UN delegation has stayed ambiguous on the matter. The fact that no actual text was attached to the two pages of signatures collected in Skhirat is testament to such ambiguity.

It should be possible to amend the 11 July agreement to accommodate at least some of the GNC’s demands without subverting the HoR’s legislative authority. Both sides owe it to the Libyan people and the country’s future to show the flexibility necessary to reach a final, mutually acceptable text of the framework agreement. One way to reflect some of the GNC’s concerns would be to specify the composition and responsibilities of a new State Council in an annex to the framework agreement rather than in the main body of the text.

Avenues for Compromise

The pro-HoR camp, which opposes further revisions, should understand that the advantages of adopting a more accommodating line toward their rivals in Tripoli outweigh the disadvantages of refusing to amend the agreement. Without the GNC on board negotiations on the formation of a national unity government will be moot. Moreover, without key GNC figures backing the deal there is a real risk of a military escalation in the capital. Their continued participation is essential to ensure that the Tripoli-based militias also support it. At the moment, security forces in Tripoli control access to all government and state institutions, such as the Central Bank and the National Oil Corporation. The GNC’s opposition to the agreement could therefore mean that the future government will not be able to use these buildings unless pro-agreement armed groups seize them. The calculation apparently made by some Misratan participants that a coalition of pro-agreement militias from Misrata and Zintan would be able to take control of the capital from the deal’s opponents is short-sighted and underestimates the resilience of some of the security forces present there.

For its part, the pro-GNC camp – particularly GNC President Nuri Abu Sahmein – should show goodwill toward the negotiations, end belligerent rhetoric and stop taking unilateral security decisions. (As the debate on the latest draft agreement was taking place in early July, Abu Sahmein sidelined the Tripoli-based army chief of staff in initiating an internal restructuring of the GNC-aligned army units and took the podium at a military parade in the centre of the capital vowing to resist any attempt by HoR-allied armed groups to enter the capital.) The GNC leadership must understand once and for all that the international community will not extend legitimacy to the GNC as such and should therefore grasp the opportunity to retain influence through the State Council and national unity government.

Some of the GNC’s demands – for the State Council to have equal weight to the HoR in approving legislation and for decisions taken by the HoR since August 2014 to be invalidated – are unrealistic, given the HoR’s and its backers’ absolute and explicit refusal to accommodate them. However, the State Council’s role could perhaps be fine-tuned to accommodate the core interests of both sides and thereby reach a deal. While the State Council should have the power to review and advise on legislation drafted by the HoR, its responsibility should be of a strictly consultative nature. Yet on critical political matters, such as approving a new government and making appointments to key state positions as part of the transition, the HoR and State Council should jointly reach consensus, thus giving each veto power. As for the council’s composition, the GNC should have the right to have 90 of its members join the new institution.

Moving the UN Process Forward

To move forward, the UN-led process would benefit from modification as well. Participants in the talks, the UN and international actors should acknowledge that the rush to the initial 11 July agreement was short-sighted if it was their aim to stabilise Libya through the creation of a consensus-based governing arrangement. Part of the problem has been the talks’ format. As the HoR refused direct negotiations with the GNC, all five groups participating in the Political Dialogue held separate one-on-one sessions with the UN team, which then drafted language that it showed to them for approval. From the participants’ perspective, this approach created too many surprises and thus caused unnecessary delays. Moreover, successive drafts appeared to favour once the pro-HoR camp, then the pro-GNC camp, each time prompting the losing side to accuse the UN of bias.

If talks resume on a mutually acceptable text, the best way to proceed would be for the participants to agree to hold direct face-to-face talks, with the UN as facilitator. To be effective, each side would need to empower its delegation to negotiate rather than serve as a mere conduit for proposals requiring their approval at every stage. Such a change in the negotiating process would accelerate the time needed to reach an understanding on all the pending issues and minimise the risk of eliciting destructive inflammatory reactions to each amendment.

There are good reasons to hurry, both for Libyans and for regional and international actors worried about Libya’s trajectory. The Islamic State and other jihadi groups have spread their presence in Libya dramatically since 2014, taking control of several towns in the Gulf of Sirte and carrying out a series of attacks against foreign workers, oil infrastructure and military and civilian targets in areas controlled by either of the two main camps, most recently striking twice in Misrata. Libya’s neighbours, Egypt foremost among them, are growing worried that further delays in reaching a political deal will increase security threats to their interests. The migrant and refugee crisis in the Mediterranean and the EU’s desire (backed by strong political pressure from certain member states) to find a Libyan partner to combat people smuggling has also created new urgency. An October 2015 deadline – the point at which the HoR’s term will lapse if no accord extending it is found – also looms, pushing some in the pro-GNC camp to stall for time in the hope that, after October, the international community might grant it recognition. Finally, the deadline of León’s mandate, currently scheduled to expire in September, also adds pressure, since he has been the talks’ architect.

The procedure to select the unity government’s prime minister and his two deputies will be the most critical step for the agreement’s implementation. Together these three positions will form the Presidency Council, each having equal veto power on key government decisions, most importantly in the security sector. They will then also be tasked with proposing the government line-up. The Skhirat agreement offers no agreed procedure on how such key figures will be chosen. While UN mediators have a procedure in mind, Libyan participants have many different – often conflicting – views. The UN mediator will have to convince the GNC that a truly inclusive government of national unity can be formed. Negotiations over the choice of persons to join the unity government and the appointment of the heads of contested state institutions, such as the National Oil Corporation and Libya’s sovereign wealth fund will succeed only if both the HoR and the GNC agree on some effective power-sharing arrangements.

Such agreement is unlikely to be reached unless the UN team reaches out to and engages the regional actors who have some influence on the Libyan parties, Egypt and the UAE for the HoR, Turkey and Qatar for the GNC. Pursuing a regional track should be a priority of the UN mediator.

It is also urgent to accelerate discussions of security arrangements to implement the agreement. One of the UN-led process’s main shortcomings has been the absence of a parallel security track that could have created a forum to bridge rival armed groups. While some progress has been made in creating points of contact between opposing armed factions in north-western Libya, thanks to the involvement of tribal leaders and local military commanders’ goodwill, a broader dialogue between the military coalitions in the east and west never kicked off. As for the south, no attempt has been made to even start reaching out to armed groups there.

The difficulty was in part due to the gradual fragmentation of the two main military blocks – Operation Dignity in the east and Libya Dawn in the west – and the erosion of a command and control structure that led to the absence of clearly identifiable interlocutors that the international community could use as focal points for dialogue. The noticeable deficit of security-sector expertise on the UN team (recently addressed by the addition of a EU security team), and most importantly their inability to enter Libya, was a further hurdle. Countries supporting the UN should provide greater resources to the security track.

Negotiators in Morocco, and those regional and international actors that support the process, should have no illusions that the agreement that appears within reach is just a beginning. The most difficult issues remain: how to de-escalate the conflict, implement security arrangements and create an effective unity government. Even as these negotiators sharpen their pencils to tackle these difficult issues, armed groups back home are oiling their weapons to be ready to pounce on their adversaries if and when the political process breaks down – or in order to bring it down as it lingers. It is therefore critical for all involved in the process to create the optimum conditions in which it can proceed and not start under a cloud of recrimination caused by an agreement based on an incomplete consensus.

Tripoli/Brussels

Libya: Amid Political Limbo, Time to Rescue the Economy

As the UN-backed effort to form a unity government is yet to bear fruit, the conflict in Libya could face further escalation in 2017. In this excerpt from our Watch List 2017 annual early-warning report for European policy makers, Crisis Group urges the European Union and its member states to first focus on supporting a political settlement, which will contribute to solving the wider issues of uncontrolled migration flows and instability in the region.

This commentary is part of our annual early-warning report Watch List 2017.

The Libyan conflict will most likely continue without a decisive political and military settlement in 2017. Various political actors contest the legitimacy of the Government of National Accord, but a lack of consensus – among Libyans, neighbouring states and international stakeholders – on what should replace it suggests it will remain in place even as its effectiveness deteriorates and its opponents consolidate their positions. In this state of suspended animation, the European Union (EU) and its member states should make it their top priority to help stabilise Libya’s economic situation. The country’s financial collapse would cripple its few functioning and critically important institutions, precipitate a humanitarian crisis, fuel the war economy, complicate efforts to tackle migrant and refugee flows and, more broadly, further hinder international attempts to put the country on a more stable political footing.

Stalemate, But For How Long?

The interim government created by the Libyan Political Agreement on 17 December 2015 has had limited success in imposing its authority since its arrival in Tripoli in April 2016 and is unlikely to survive in its current form. But what will replace it? And how?

A best-case scenario would see its composition, organisation and responsibilities renegotiated – and Prime Minister Fayez Serraj and other core Presidency Council members replaced – to meet the approval of the Tobruk-based House of Representatives, whose endorsement is required to implement the agreement in both letter and spirit. This is not a silver bullet; it would need to be accompanied by a bottom-up process based on local governance where possible, with the aim of linking the urgent need to rebuild the central state with the reality of diffuse local power. At the very least, stabilising the centre offers opportunities to build institutional capacity and improve service delivery until solutions to thornier issues, such as demobilising militias and restructuring the security sector, can be found.

In the absence of concerted international pressure on Libyan factions to negotiate a new political deal, a breakthrough is unlikely.

The worst-case scenario is that forces under General Khalifa Haftar, bolstered by recent military successes in Benghazi, the Gulf of Sirte “oil crescent” and southern Libya, make good on his pledge to try to retake Tripoli. This would lead them into a major military confrontation with Tripoli-based Islamist militias and forces from Misrata that have been fighting the Islamic State.

The more likely scenario is that Libya remains in limbo. This is because Haftar’s forces are unlikely to advance significantly toward Tripoli, even with Egyptian, Emirati and perhaps Russian backing, as they lack sufficient support in western Libya. At the same time, in the absence of concerted international pressure on Libyan factions to negotiate a new political deal, a breakthrough is unlikely. The question then becomes how to stop the economic situation from deteriorating further until an opportunity for a political breakthrough arises.

Map of Libya. International Crisis Group.

The Oil Must Flow

Whatever its ideological and geopolitical dimensions, the conflict is largely about control of hydrocarbon resources and access to state funds. According to the National Oil Corporation (NOC), oil sector closures have cumulatively cost over $100 billion in lost revenues from oil exports since 2013, resulting, according to the Central Bank of Libya, in a fiscal deficit of 56 per cent of GDP for both 2015 and 2016. The Bank’s foreign-currency reserves are estimated to have fallen below $40 billion, compared to $75 billion in March 2015. Oil production has increased since September 2016 – when Haftar-aligned forces seized most oil facilities in the Gulf of Sirte – from around 250,000 barrels per day (b/d) to 700,000 (still far below the 1.8 million b/d of 2010). Even if production reaches 1 million b/d by the end of March 2017, as the NOC projects, the economic outlook remains bleak. With crude oil prices at $50 a barrel, production increases will not cover expected government expenditure of around $40 billion in 2017. Libya could be bankrupt by the end of the year.

Even before then, without careful economic stewardship and proactive government measures, the economy is likely to worsen and hardships increase for a population mainly dependent on government salaries. The liquidity crisis (with banks unable to dispense much cash) could worsen, the dinar could come under further pressure, and basic services such as electricity could face severe constraints due to poor management and cash-flow problems.

Political factors make the outlook even grimmer. Rifts and rival claims for control of the NOC, Central Bank and Libyan Investment Authority (LIA, the sovereign wealth fund, with over $60 billion of assets) could limit the activities of these key institutions, constraining public spending. Moreover, the Central Bank appears unwilling to authorise transfers to the government because the latter lacks parliamentary recognition. The government’s consequent inability to access and use state funds could undermine the loyalty of security forces, whose salaries it pays, and stimulate the illegal economy, including trafficking of migrants and subsidised goods.

Focus on the Economy (and Security Forces)

Europe has two strategic priorities in Libya: ensuring that the country is not a source of regional instability and finding a partner able to reduce the migrant flow. For both objectives, a political settlement is key. It may seem elusive now but will be far more difficult to accomplish in a collapsing economy, as warlordism and zero-sum calculations intensify. Such deterioration would not only increase the flow of migrants from sub-Saharan Africa but also see the number of Libyans trying to cross the Mediterranean continue to rise, a trend that started in 2016.

Economic troubles are negatively affecting the security forces, including those tasked with countering illegal migration. Some units are suspected of taking bribes to look the other way or even becoming party to the people-smuggling. This in part enabled over 160,000 migrants to cross the Mediterranean from Libya in 2016 – a record high, alongside a record number of deaths. Seeking agreements from the government on migration control, as the EU and its member states are doing, is a fool’s errand as long as it has no effective control over the security forces (even leaving aside human rights concerns). The government will not be able to exercise that control without a peace settlement based on a political process accompanied by a security track that involves key military actors and addresses disputes on security forces’ structure and chain of command.

The EU and its member states should [...] channel their energy toward addressing the economy.

While the EU and its member states should not walk away from the overarching goal of a comprehensive solution to the conflict, they should at the same time, and urgently, channel their energy toward addressing the economy. In particular, they should intensify efforts to broker an agreement on the disbursement of the 2017 budget between the government, House of Representatives and Central Bank. To resolve the internal rifts within the Central Bank and NOC, they should urge Prime Minister Serraj to promote talks between the rival chains of command in these institutions, as he did in 2016.

The EU and its member states should continue to make clear that they will not tolerate oil sales or related contracts outside official channels and ensure, through more careful vetting and improved monitoring, that Libyan security forces participating in EU anti-migration efforts are not involved in, or profiting from, people-smuggling or maritime trade of subsidised fuels. They should also ensure that any greater reliance on Libyan authorities for anti-migration measures does not result in migrants being denied the protection to which they are entitled under both international and European law.