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Libya: a failed state. Where next and why its future is important

Understanding Libya Since Gaddafi by Ulf Laessing (Hurst Publishers, 2020).

BY Keith Boyfield



Libya: a failed state. Where next and why its future is important

Understanding Libya Since Gaddafi by Ulf Laessing is a powerful and compelling book. The author was Reuters’ correspondent reporting from the chaos of post-Gaddafi Libya, a country fragmented into a cluster of competing militias, in the aftermath of the Colonel’s fall from supreme power.

Laessing is remarkably good at explaining the practical challenges of reporting a civil war, filing accurate stories, and resisting attempts by various vested interests at influencing his final copy. The fact that he is fluent in Arabic helps but he also risks his life reporting from the front line. Few journalists can match his experience of what life has been like in this mayhem.

Libya’s future development is crucial to both Europe and the Gulf since it remains a major source of oil and gas, as well as being geographically pivotal in the illicit trade of drugs, armaments and people. Unless institutions commanding respect are firmly established, the country will decline into a cauldron of disorder and terrorism — a dangerous joker in the heartland of the Mediterranean.

Reading Laessing’s analysis it is striking to learn just how dependent Libyans became on the state for their livelihood under Gaddafi’s forty-two year reign of eccentric terror. By 1987, around three quarters of the adult working population were employed by the state, often in unnecessary jobs. Leaving aside the oil and gas sector, Libya emerged as an ersatz economy with even basic foodstuffs imported from Europe.

As if things were not bad enough under Gaddafi when the public wage bill amounted to a hefty 17 percent of the state budget, after his dramatic exit matters simply got a lot worse. By 2014, the public payroll soared to $19 billion, close to 43 percent of the total state budget of $44.5 billion. Currently, Libya has the highest proportion of state employees in the world, an astonishing fact confirmed by Sadik el Kaber, the Governor of the Central Bank.[i]

Subsidies on everything from bread, to fuel, to domestic airline tickets cost over $10 billion a year. No wonder there was nothing left for roads, infrastructure or schools. Hospitals ran out of medicine. Electricity power cuts became the norm, with blackouts lasting up to 12 hours. People struggled to get drinking water.

Officially, the army numbered more than 100,000 yet less than one in ten showed up for duty. They did, however, remember to collect their pay cheques.

This book illustrates just how bad things can get when there is no rule of law, a loyal army or police force. In Misrata alone there were no less than 236 rebel groups numbering 40,000 battling it out following Gaddafi’s demise. Life became in Thomas Hobbes’ memorable phrase ‘nasty, brutish and short.’

The All Powerful State Implodes
Libya’s all encompassing subsidy regime hinged on earnings from oil and gas exports. Control of this vital export commodity was the kernel of power, which explains why there was so much vicious fighting over the proceeds.

While the country’s economy was entirely beholden to oil and gas the political leadership had failed to build any sizeable refining capacity, so petrol had to be imported. Libya’s highly skewed terms of trade also explains why it was obliged to import nearly all its food and beverages.

Diversification of the economy was minimal. The private sector was moribund, neglected by Gaddafi who feared any form of independent power base. Nor were things helped by his dislike of foreigners, whom he referred to as ‘spies.’ Libya’s insularity was further reinforced by the ban on English language tuition in schools.

Yet after Gaddafi was forcibly toppled from power everyday life grew increasingly worse for ordinary Libyans. A downturn in oil production coupled with damaging oil blockades by rebel groups in Eastern Libya led to a halving of foreign currency reserves, although it is worth cautioning that accurate figures on Libya’s net assets worldwide are difficult to come by. The Central Bank responded to this emergency by printing money, thereby triggering a 60 percent decline in the black market value of the Libyan dinar through the course of 2015. As a result, wealthy Libyans shunned depositing their money in banks, exacerbated by the fear that employees might leak information on their holdings to kidnappers.

A Country Divided
In the chaos that proceeded Gaddafi’s fall from rule, rival power centres – it would be inaccurate to refer to them as governments – were established in Tripoli and the eastern city of Benghazi. However, their decree did not extend far, as they competed with various rival militias for the foreign exchange generated by Libya’s lucrative hydrocarbon reserves.

Tripoli was home from December 2015 to the UN recognised Government of National Accord (GNA) which singularly failed to command widespread accord. However, as Laessing explains, the GNA attracted the support of key allies, including the United States (US) and most notably, Turkey, which adopted a highly interventionist line providing military advisers, fighters, drones and armoured vehicles to the besieged Tripoli-based regime claiming national sovereignty. Most controversially, as part of this negotiation, the GNA signed a memorandum of understanding on maritime boundaries granting Turkey exclusive exploration rights in the Eastern Mediterranean. Not surprisingly, this provoked considerable concern from the other countries affected by this claim, notably Egypt, Cyprus and Greece. Behind their concern was a deep unease that President Erdogan was seeking to reinstall Ottoman colonial rule in Libya (it is worth remembering that Mustafa Kemal Ataturk fought alongside Libyan tribesmen against the Italians in 1911-12).

In direct opposition to the GNA were the forces under the command of General Khalifa Haftar, who returned home after a two decade spell of exile in the US to carve out a separate parallel state based in Benghazi. To help fund his operations the Central Bank’s branch in Benghazi resorted to issuing fake dinars printed in Russia — a whole new take on quantitative easing.

In his bid for dominance he received the enthusiastic support of Egypt, which was keen to deter any fundamentalist Islamist group gaining power; likewise the United Arab Emirates (UAE), which built Haftar an air base in El Kahdim. Further support was offered by French special forces and around two thousand Russian mercenaries on the payroll of the Wagner group.

Haftar needed funding for his troops and his administration and the best way of achieving this goal was to seize control of the Central Bank in Tripoli, responsible for channelling and distributing those all important oil and gas revenues. Accordingly, he launched an offensive on Tripoli in Spring 2019, but in doing so he overreached himself and his abortive assault was repelled with the help of substantial military support from Turkey, and hitherto rival militias, who came together because of their deeper hostility to General Haftar. Fighting went on for well over a year: according to the World Health Organisation, the siege of Tripoli led to over two thousand deaths, many more casualties and displaced people, as well as numerous human rights violations.

A ceasefire was eventually brokered in October 2020 with a new national government emerging in Spring 2021, headed by Abdul Hamid Debeibeh, one of the country’s richest men, backed by the United Nations (UN) and committed to elections on 24 December 2021.

Debeibeh is faced with an array of tough challenges stemming from Libya’s decade long experience as a failed state. Foreign forces are still present on the ground and as yet there is no clear sign when they will depart despite a series of UN Security Council resolutions calling for them to leave the country. He also has to unite divided institutions, including the Central Bank, and adopt a workable plan on how to share out the country’s all important oil revenue. His most daunting task is to unify the military into a national fighting force and demobilise all the various militia who hold sway over many parts of the country. The UN estimates there are 18 million weapons in this country of 6.5 million people, half of whom are aged under 24 with many of them unemployed.

Where Does Libya Go Now and Why It Matters?
For Europe, Libya is important because it is an abundant source of high quality oil capable of producing up to 1.6 million barrels a day. The Italian company ENI is a major player operating the Mellitah gas complex west of Tripoli and the Greenstream gas export pipeline to Italy. German and French oil companies are also active in Libya, albeit their operations are handicapped by militia activity.

Libya is a key conduit for many illegal immigrants from Sub-Saharan Africa intent on finding a better life in Europe. In just three years, from 2014 to 2017, it is estimated that 600,000 desperate migrants made the hazardous crossing across the Mediterranean from various spots along the West Libyan coast. In May 2015, in a lurid warning, Mohammed El Ghirani – at the time Foreign Secretary in the Tripoli-based GNA administration – told Ulf Laessing that, ‘If Europe does not support us then the continent’s skin will turn from white to black.’

Leaving to one side Ghirani’s hyperbole, regulating migration flows certainly cries out for a responsible government in Libya, yet both the coastguard service and detention camps have been effectively run by militia groups, some of whom are actively engaged in illegal trafficking. Ironically, since 2016, millions of euros of European Union (EU) support have funded this programme. Any new national government will need to take a firm grip of this racket, but in practice this goal is likely to take several years to achieve.

Maritime boundaries are another crucial issue that require international mediation. Turkey’s claims across the Eastern Mediterranean have sent shock waves across the region.

Libya has been both a cause and symptom of greater friction between Turkey on the one hand, and Egypt, Saudi Arabia and the UAE on the other. Over the last year moves have been made to repair relations and this trend needs to continue if Libya has any hope of becoming a unified and stable country, as opposed to being a potential host for disruptive terrorism permeating the entire region.

The omens are not promising. The Cambridge Middle East & North Africa Forum has conducted some revealing polling across Libya that suggests that 66.4 percent of those surveyed believed that the continuing crisis did ‘not provide democracy the appropriate environment to be practised as it should.’ Significantly, a mere 15.5 percent believe in the potential of a federal system to address Libya’s problems; while a third (32.7 percent) felt that federalism may prove a cause for damaging division in the future.

Perhaps surprisingly, there is a fair amount of support for the restoration of the monarchy and a constitution based on that adopted in 1951 where the King does not exercise political control but is a symbol of national unity. More than a fifth of respondents (21.6 percent) backed the idea while nearly a third (31.5 percent) were prepared to consider the proposal.

Libya’s future may possibly centre around a restored monarchy capable of bringing together the country’s disparate tribal groups and rivals. Spain has shown how this can be done, Libya may follow its example.

Libya could carve out a prosperous future. Fortunately, as Laessing points out, it has ‘no history of religious violence or division between different branches of Islam.’ Libya needs to diversify its economy, become more self-sufficient in its agricultural and food capacity, and develop neglected parts of the economy, such as tourism. To do so it must encourage an entrepreneurial market orientated economy with less reliance on all pervading subsidies. A barometer of how far it is succeeding will be the degree to which Libya’s diaspora are attracted back to the country. This hinges on the rule of law and personal safety being firmly established.

Gaddafi’s legacy lives on. His son, Seif al Islam el Gaddafi, has recently emerged from hiding in a move that suggests he envisages a return to power. Bizarrely, some Libyans look on him as a saviour who may be able to stamp out the warring militia factions. However, when recently interviewed by The New York Times (30 July 2021) he gave every indication that he believed he had a divine right to rule, hinting that he might run for office in any forthcoming national election. But first he needs to deal with an arrest warrant issued by the Libyan Military Prosecutor’s Office with regard to charges of war crimes.[ii]

Ulf Laessing sums up Libya’s dilemma concisely when he writes, ‘As long as unemployment, poverty and the absence of the state exists, the revolution’s losers will struggle to find their place in the new Libya, and more fighters will join IS [Islamic State] or other extremist groups.’ In short, this is why Libya’s future is important to us all.


  1. Robert F Worth, ‘Qaddafi’s Son Is Alive. And He Wants to Take Libya Back,’ The New York Times, 30 July 2021,
  2. Ilya Barabanov and Nader Ibrahim, ‘Scale of Russian mercenary mission in Libya exposed,’ BBC News, 12 August 2021,