Arrangements being worked out behind closed doors indicate that new alliances are being forged on the ground in Libya. These will be different to those that existed during the civil warfare that erupted two years ago and that now appears to be in its final stages. Now the conflict is turning to economic questions and to control over the state assets that have been drained during the five years since the overthrow of the regime led by former Libyan leader Muammar Gaddafi in 2011. From 31 October to 1 November, the British Foreign Office in London hosted talks on the economic situation in Libya attended by British Foreign Secretary Boris Johnson, US Secretary of State John Kerry, Italian Foreign Minister Paolo Gentiloni and chair of the Libyan Presidency Council (PC) and Prime Minister of the Government of National Accord (GNA) Fayez Al-Sarraj. Vice-Chair of the Presidency Council Ahmed Maetig, Libyan Foreign Minister Mohamed Al-Taher Siyala, Governor of the Libyan Central Bank (LCB) Al-Seddiq Al-Kabeer and head of the Auditing Bureau in Tripoli Khaled Shakshak also attended the London meeting, together with representatives of the IMF and World Bank. One of the purposes of the meeting was to persuade the LCB to realise some its assets in order to create an emergency budget and help the Presidency Council and GNA cover expenses at a time when the government is embattled with parties that continue to reject the Libyan Political Accord (LPA). A statement issued by the Auditing Bureau in Tripoli said that the London meeting had succeeded in securing an agreement between the Al-Sarraj government and the LCB in accordance with which the latter would allocate 8.64 billion Libyan dinars (LYD) to the GNA for the last three months of this year in order to enable it to cover the expenses of government agencies. According to the agreement, LYD500 billion will be earmarked to government salaries for these three months, LYD600 million will go to the Libyan National Petroleum Authority, and another LYD750 million will support fuel subsidies. Other allocations include LYD500 to support Libyan students abroad and embassies, LYD300 for emergency medical services, water and sanitation, LYD690 for hospitals, ministries and pensions, and another LYD800 for electricity. However, the meeting, attended by representatives from the UAE, Saudi Arabia and France but not from Egypt, met with widespread criticisms on the part of Libyan parties opposed to the arrangements that resulted from the LPA. Criticisms from these quarters compelled the participants to deny rumours regarding the creation of a Supreme Expenditure Council in Libya. The participants stressed that the purpose of the meeting was to reach an agreement on how to control Libyan government spending at a time when political obstacles continue to hamper the transition process. Presidency Council members Fathi Al-Majbari and Ali Al-Qatrani, who did not take part in the meeting, said their colleagues who did take part had no right to agree to financial projects abroad. They said the meeting was “a conspiracy against the financial capacities” of the country in collaboration with the major powers. These accusations were made in spite of the fact that no official statement emerged from the meeting. According to an informed source, the participants agreed that no such statement would be forthcoming until ten days after the Libyan participants had discussed what had taken place at the London meeting and reached an agreement with their respective agencies in Tripoli. In remarks to a local television station, PC member Al-Majbari said that discussions of financial and economic matters should take place inside Libya and not abroad. He claimed that invitations to attend the London meeting were handed to “those with connections,” whereas all members of the Presidency Council should have been invited “since we are all presumed equal in our official capacity”. “The meeting should be regarded as a form of consultative session… Decisions should be taken in accordance with the regulations of the Presidency Council or the parliament and on the basis of the laws of the Libyan state,” he said. Al-Majbari, who has since met with Egyptian Foreign Minister Sameh Shoukri in Cairo, also criticised the fact that invitations had not been extended to Omar Tantoush, chairman of the financial committee of the House of Representatives (HoR) in Tobruk and Abdel-Salam Al-Hassi, head of the HoR's accounting authority. It appears from the opinions expressed by the parties that reject the LPA that the chief reason for their disapproval of the London meeting was the fact that they had not been invited. Meanwhile, the humanitarian situation in Libya remains critical. A World Bank report released at the time of the London meeting said that 435,000 people in Libya had become homeless and that around 2.4 million Libyans were in need of some form of humanitarian assistance. Although the report noted that there had been no official figures for some years, it cited a UN report to the effect that 1.3 million Libyans lacked food security. The World Bank report observed that a large proportion of the population that had once enjoyed a sense of security was now on the brink of falling into poverty due to disruptions in oil production, declines in oil prices, political stagnation and the conflict ravaging the country. The country's economic straits have worsened considerably over the past two years. Standards of living have deteriorated in tandem with a severe shortage of currency due to a lack of confidence in the country's banking system. There is an ongoing bifurcation in government structures, with two rival governments operating in Tripoli and Tobruk, and this problem extends to Libya's main economic institutions, most notably the National Petroleum Authority, the LCB and the Libyan Investment Authority. The latter recently lost a suit it had filed in the British courts against the US-based investment bank Goldman Sachs, which the Libyan Investment Authority accused of duping it into investments that caused it to lose more than $1.2 billion. Along with the severe deterioration in the economy, the military situation in Libya has grown increasingly uncertain since September. New dynamics are at work as various parties manoeuvre to forge new alliances different to those that have existed over the past two years. This activity may pave the way to a new round of conflict, but this time with economic aims. In the Wadi Al-Shati region of south-western Libya, there has been a rapprochement between the Third Brigade charged with protecting the south of the country and forces commanded by Mohamed Bin Nayel. The former is affiliated with the Misrata forces, while the latter serves under Libyan military leader Khalifa Haftar, making this a unique arrangement given the longstanding antagonism between the two sides. Bin Nayel also took part in the Haftar forces that seized control of the Petroleum Crescent region, in which Misrata is located, in September. People close to Haftar have had uneasy feelings towards Bin Nayel, who was taken captive by the Third Brigade during engagements in late 2015. He was subsequently released in a prisoner exchange deal between Misrata and the Muqarha tribe, one of the negotiators for which was a former commander of the Gaddafi regime, Abdullah Al-Senousi. It was Al-Senousi, who earlier engaged in negotiations with Islamist prisoners in the Nahda Prison in Tripoli, who recommended the rapprochement, according to Libyan sources. The sources said the reason Bin Nayel had agreed to enter new arrangements with the forces from Misrata was that he feared the rise of powerful rivals in the south. Foremost among the possible challengers are Ali Kaneh, eyed to succeed to the command of the southern zone following the unification of its military in order to better control the region. This plan was discussed during a Libyan army meeting held in Qirqat Al-Shati in October. According to the sources, Bin Nayel also fears that his forces might be poached by Kaneh. Tensions have been mounting between the two men since the latter accused Nayel of engaging mercenaries from the Libyan Justice and Equality Movement and from Sudan and Chad and using them against the Petroleum Crescent region in September. Libyan news reports also relate that GNA Defence Minister Al-Mahdi Al-Barghathi is thinking of moving his ministry's headquarters from Tripoli to Al-Jafra where it was based during the Gaddafi era. The news has angered Haftar's forces, which have interpreted it as a preliminary step in arrangements to launch a surprise attack against the Petroleum Crescent in collaboration with the forces of Ibrahim Al-Jadhran, former commander of the Petroleum Facilities Guards, and of the Benghazi Defence Squadrons loyal to Al-Sadek Al-Gharyani. Haftar's forces have grown increasingly suspicious of Bin Nayel, who was promoted to the rank of brigadier-general following his release from Misrata at the beginning of this year. Bin Nayel has not taken any action with regard to the developments in Al-Jafra in central Libya at a time when Haftar and his forces have been expressing concerns over a possible military campaign to oust them from the Petroleum Crescent and seize control of the oil-exporting ports there.
