Libya: At a Critical Juncture

An unnamed participant speaking at the Center for Strategic and International Studies (CSIS) recently remarked that “it would be a mistake to think that the international community’s work [is] over once Gadhafi is gone; it is only then that the real work begins.”
He makes a compelling point.
Although Tripoli fell to NATO-backed rebel forces in less than 200 days, many have warned that development activities in the post-conflict reconstruction period will last for many years. This agreement has provided an opportunity for scholars and practitioners alike. In the months since the beginning of the civil war, the intellectual community has attempted to draw actionable plans for a post-Gadhafi Libya. The number of panels convened is impressive.
Speaking to the Senate Foreign Relations Committee, Professor Dirk Vandewalle, from Dartmouth suggests that the most complex question facing new authorities is how to restructure the state with “a political formula that is acceptable to a number of different players that have traditionally been antagonistic, but that were held together by the authoritarian policies of the Qaddafi government”.
To make a modern state out of Libya, transition leaders have to hold the nation together, without the coercive use of force.Vandewalle insists that traditional tribal identities will make this difficult.
To complicate the matter further, Libya’s economy is highly centralized. The oil and natural gas industries, which are state-owned monopolies, account for about 95% of export revenues and over half of GDP. Consequently, about 90% of government revenue comes from hydrocarbons. Transitional leaders looking to earn the allegiance of tribal leaders may be tempted to to dig into these oil revenues to buy national cohesion.

In this regard, some have suggested that pushing for wholesale democratic reforms today may precipitate the undoing of the Libyan republic, particularly in light of a foreseeable struggle for national authority.  As Soumaya Ghannoushi of The Guardian reports: “The vacuum created by Gaddafi’s departure is now filled by two polarized camps”: the National Transitional Council  on one side (NTC) and the political and military leaders that liberated cities across Libya on the other. Until the power struggle between these two factions is resolved, it is unlikely that a sustainable path to development can be achieved. Furthermore, it would be unwise to liberate Libya’s frozen funds to any side without having solved the political question first.

Once these issues have been squared, controversy will move to spending (how and how much to spend). According to Reuters, Libya’s sovereign wealth fund holds around $70 billion in assets.  Legitimate transition authorities will inevitably have to tap into these funds to bring Libya up to its economic capacity. To do so, they must seek guidance from both friendly governments and the private sector. In this, the opportunities are limitless.

However, before all of the complexities associated with economic development are analyzed, Libyans must decide for themselves how to organize politically. How long this will take, or the end result of said process is, however, unknown. Thus making this a critical juncture in Libya history.


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