Libya: Follow The Money, Militias and Mercs

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December 2, 2020: In Morocco the GNA (Government of National Accord) and HoR (House of Representatives) are holding another round of UN-sponsored negotiations. This follows November 1 talks in Ghadames (465 kilometers south of Tripoli, where the Tunisian, Algerian and Libyan borders meet), October 23 talks in Switzerland and October 11 in Egypt. The October 23 discussions produced a permanent ceasefire and agreement to continue negotiations on a regular basis. The November meeting was the first time these talks were held in Libya. That previous two rounds of negotiations were outside of Libya. At the Morocco meeting it was agreed that the new parliament would be based in Benghazi, rather that Tripoli, the traditional capital. The problem with Tripoli is that it is still dominated, and often threatened by the many independent militias that often do what they want, not what any government wants them to do.

The Morocco conference still has several unresolved issues to deal with, including the continued presence of Turkish troops. The UN-backed GNA (in Tripoli), is unwilling or unable to get the Turkish force to leave. In any event the Turks refuse, insisting that they signed a binding agreement with the GNA leader. That leader, GNA prime minister Faiez Serraj, has agreed to keep his job until the current peace talks conclude and the GNA and HoR government hold national elections for a new government. The Turks are supposed to leave before that election.

Originally the GNA was created to unite the entire country via national elections and a return to stable government. That never happened, in large part because the Islamic militias that dominate Tripoli and Misrata could not agree with each other and are opposed to any national government that seeks to curb their power and privileges.

Tripoli is the traditional capital and together with nearby Misrata, dominates western Libya. Tripoli is the largest city in the country of six million, containing 20 percent of all Libyans. Misrata has about six percent. Since the UN created the GNA in 2016 there have not been elections, although the HoR government in Tobruk was created by the last national elections in 2014 and refused to cede power to the GNA. Although the HoR was created by an election the elected representatives could not agree on much. The GNA was supposed to solve that problem but couldn’t. Serraj is fed up with four years of frustration and apparently regrets signing off on the deal with the Turks.

The problem is that Libya has never been a democracy but rather a collection of powerful tribes and clans presided over by a king (until the 1960s) and then a military dictator (Kaddafi) until 2011. Since then no one has been in charge. There have been some national agreements to keep the oil facilities operating, oil exported and that money spent on essential imports. Libya cannot feed or sustain its six million population without the oil income. Take away the oil and Libya will revert to a relatively poor North African country that can only support a few million people, at most. Until the 20th century the population of Libya never exceeded a million people and until the 19th century had never exceeded half a million.

While prime minister Serraj struggled with his GNA, tribes in eastern Libya rallied around former exile Khalifa Hiftar, who had fled Libya in the 1980s after incurring the wrath of dictator Kaddafi. Now an American citizen, Hiftar, a former Libyan Army colonel, managed to revive some of the units of the Kaddafi era military and began taking control of military bases from militias or Islamic terrorists who had occupied them. The eastern tribes, and most Libyan tribes, wanted the Islamic terror groups gone. Hiftar agreed and in 2014 began to do just that, as well as expanding the network of tribes that supported him. Hiftar acknowledged the HoR government and remained loyal to it when it was forced to move to Tobruk by the new GNA.

Hiftar sees the recent Turkish intervention as yet another obstacle to national unity. He has not opposed the current ceasefire agreement and negotiations to form a united government and new elections. Turkey supports Islamic government which most Libyans oppose. People in Tripoli and Misrata have come to loathe Islamic government because the Islamic militias have not brought peace and prosperity but perpetual violence and poverty. The Turks intervened because prime minister Serraj signed an agreement with Turkey in November 2019 that gives to Turkey rights over large offshore areas that overlap with Greek claims. In return Turkey agreed to provide military assistance to prevent the LNA from seizing control of Tripoli and eliminating the GNA as a government that controlled any Libyan territory. This Turkey deal was declared illegal by most other Mediterranean nations and technically GNA did not have the authority to make it. GNA is not a government but a UN created entity that was supposed to unite the country and hold elections. The only entity in Libya close to doing that is the HoR government and its LNA armed forces. So far, the UN refuses to abandon its failed GNA experiment and has so far done little to discourage Turkey from its expansion into Libya and central Mediterranean waters that other nations have existing rights to.

The UN is backing peace conferences between the HoR and GNA to form a united government. The biggest obstacle to that is Turkey, which the UN refuses to take on. Hiftar is apparently waiting to see if this works and is concentrating on getting his forces ready for another round of fighting with the Turks. LNA forces still provides security for most of Libya and Hiftar has plenty to keep him busy with that. Hiftar backs the resumption of oil exports and without LNA cooperation that will not happen.

While Turkey is seen as an invader, Russian forces, which have been supporting the LNA for over three years, are seen as an ally in the fight against Islamic terrorism. Russia and Turkey are allies in Syria but are actually fighting each other in Libya. Well, not exactly fighting anymore but maintaining armed forces and confronting each other in anticipation of a peaceful settlement. In addition to Russia, the LNA is backed by Egypt, the UAE and Saudi Arabia. In Syria, Russian airstrikes have killed Turkish troops while the Turks have killed Syrian troops. That has also stopped, for the moment. The Libya fighting resulted in NATO countries openly backing Greece in the maritime dispute with Turkey that led to the Libya invasion.

November 30, 2020: The U.S. Defense Intelligence Agency criticized the UAE (United Arab Emirates) for providing air and logistics support for Russian military contractors in Libya. The UAE and Russia have been supporting the LNA for years and have long cooperated in that effort. It is unclear why the U.S. government would now make an issue of that support.

November 29, 2020: There are still problems with the NOC (National Oil Company), Central Bank and the UN over how to operate all these facilities and spend the oil income. Currently the NOC is refusing to turn over any oil revenue to the Central Bank until the bank installs an accounting system that is transparent and clearly specifies who gets the money and how the money is spent. There have been a growing number of complaints about corruption in the Central Bank, often in cooperation with GNA officials. In 2019 the HoR government complained that the GNA had sought, with some success, to deprive the LNA of much oil income it was entitled to. This was taking place at the time when the LNA that had upgraded oil facility security to the point where full production could be achieved. The GNA had never been able to do that. Even with full and sustained oil production there were also continuing problems with corruption in how oil income was spent. One thing the NOC and LNA can agree on is that the longer the fighting goes on the more risk is of oil production being disrupted once more. That could easily happen because NOC points out that at least $100 million must be spent, as soon as possible, to deal with long-delayed maintenance and repairs. Paying for that is easy but maintaining sufficient security for the equipment and additional tech personnel to get to the oil facilities is another matter.

While the Central Bank has a history of corruption and mismanagement, the same cannot be said about NOC. Because the Libyan oil facilities are managed by foreign contractors and regularly deal with foreign banks and financial regulators, NOC is probably the most competent and corruption-free government agency in Libya. The foreign oil companies and suppliers will not do business with Libya unless there is sufficient financial and physical security for their operations.

After 2012 oil facilities throughout Libya attracted local militias who demanded jobs as guards or simply cash to keep the facilities unharmed. In many cases there were two or more rival militias in play. The LNA sorted a lot of these situations out but the tensions between rival militias remain and occasionally get violent. The LNA has non-militia forces available as well as officers who can negotiate settlements. By 2019 the LNA had established reliable security for all oil facilities. In the last month o il production has risen from 800,000 to 1.2 million BPD (barrels per day). In August the LNA ordered preparations for oil exports to resume and that happened more rapidly than expected. At that time the NOC planned to have that up to a million BPD by the end of 2020 and 1.3 million BPD in early 2021 and 1.6 million by the end of 2021. Now the 2021 forecast is for two million BPD. The production level before the 2011 civil war began was 1.6 million BPD. Oil exports began in late October, despite threats from some militias near ports who threatened to shut that down if the militias did not receive more money for protecting the ports from other militias. The LNA was able to quickly deal with these threats.

The key oil ports include Ras Lanuf (620 kilometers east of Tripoli) and Es Sider/Sidra (20-30 kilometers further east). In normal times Es Sider and Ras Lanuf can ship 600,000 barrels a day. Nearby is the oil port of Zueitina (220 kilometers west of Ras Lanuf and 180 kilometers southwest of Benghazi). In between Ras Lanuf and Zueitina is the oil port at Brega. Ras Lanuf , Zueitina and Brega can export 800,000 BPD. Max Libyan production is believed to be about two million BPD and NOC sees achieving that as possible if the ceasefire holds and the remaining unruly militias are brought under control. Another obstacle to two million BPD is OPEC quotas. These will apply to Libya once production hits 1.7 million BPD. Libya may be able to get a temporary exemption because of the need to make much-delayed (since 2011) maintenance, repairs and upgrades.

The ceasefire agreement specified that the LNA controlled oil facilities would resume operation and oil revenue sent to bank accounts outside Libya that are monitored by foreign auditing firms. This auditing arrangement is part of anti-corruption effort to ensure that most of the oil revenue goes to purchase essential items for all Libyans. Most Libyans are dependent on oil income to avoid abject poverty. Currently the Libyan economy is not developed sufficiently to provide a comfortable standard-of-living for all six million Libyans, especially the five million still living in Libya. World oil prices are very low now ($40-$50 per barrel) because of the covid19 recession and a worldwide oversupply of oil and natural gas. Back in 2011 oil went for over a hundred dollars a barrel.

November 27, 2020: Itamilradar, an Italy based website that uses data on the movement on military air craft in Italy and the Mediterranean, shows regular military cargo military aircraft flights between Turkey and Misrata airport, east of Tripoli. Turkey says this in support of a new military training center Turkey has set up in Misrata to train GNA forces. These cargo flights increased after an EU naval blockade of Libya turned back a Turkish cargo ship and searched it for any military equipment. Turkey complained and made threats and that prevented the EU boarding party from doing a thorough search of the cargo ship. The EU warships remained on duty to block any arms shipments by sea but the EU has to decide how much Turkish bullying they will put up with. It was later revealed that the Turkish cargo ship had been seen (via satellite photos) unloading armored vehicles in a Libyan port during an earlier visit. This particular ship has been making regular trips to Libya since the Turkish invasion of early 2020.

November 23, 2020: In Tripoli a local militia attacked and sought to seize control of the NOC (National Oil Company) headquarters. The NOC security force repulsed this attempt. Militias blame NOC for delaying promised payments. NOC is withholding oil revenue because the Central Bank will not reveal where all the money goes to and for what. Despite the presence of over 10,000 Syrian mercenaries brought in by the Turks, the militias that dominate GNA territory (mainly the cities of Tripoli and Misrata) are still a menace to public safety and the only solution the Turks can come up with is to begin training a force of professional troops that the GNA can depend on for providing security in general and protection from militia demands. Creating the new security force will take six months or more and the training process only began in November. It is unclear how large this “reliable” force will be and when it will be ready for action.

The Turk mercenaries are preparing to resume fighting the LNA and the LNA is also making preparations, while also maintaining security in most of the country. The fighting between the Turks and LNA earlier in the year was a lot more costly for the Turks than expected. While he fighting was going on the Turks had to pay the Syrian (and some Tunisian) mercenaries $2,000 a month. Hundreds of these men were killed or badly wounded. As the fighting intensified many mercenaries found that they could desert and pay the local smugglers to get them into Europe. The Turks welcomed the August ceasefire because of these problems with their mercenaries. Since August the monthly pay for the mercenaries had been lowered to $600 and measures taken to reduce the desertion.

The Turks are professionals and are not looking forward to a resumption of the fighting. The LNA knows what they are up against and their main foreign allies (Russia, UAE and Egypt) have been helping with preparations to deal with the Turks if there is more fighting.

November 2, 2020: In neighboring Algeria a new constitution was approved. The new rules allow the president to order troops to serve in operations outside Algeria. Many Algerians want troops sent into Libya, at least to provide better border security along the thousand-kilometer-long Libyan border. Other Algerians fear that sending any troops across the border might lead to an escalation that would draw Algeria into the Libyan civil war. The new rules will most likely allow the army to participate in peacekeeping missions. Army leaders opposed that, especially since that could mean getting involved in the Libyan Civil War. Since independence from France in 1962, Algerian law has banned use of the army outside Algeria. Since 1962 every new long-term (more than a year or two) president, and there have only been five, changes to the constitution were attempted, usually to make the presidency more powerful. This time around the president got more power and the ability to order Algerian troops to operate outside Algeria.

 

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