UN mission in Libya to discuss reforming Libyan economy
The UN Support Mission in Libya (UNSMIL) will today host a meeting of Libya’s main financial institutions to discuss how to revive Libya’s stagnating economy.
Despite a permanent ceasefire between Libya’s warring parties, years of civil war have left the economy in dire straits. Differing exchange rates in areas controlled by the UN-recognised Government of National Accord (GNA) and forces loyal to rebel General Khalifa Haftar (the LNA) have paralysed Libya’s banking sector. Haftar’s decision to blockade oil facilities between January and September has crippled oil revenues. The lack of a unified monetary policy and depletion of foreign reserves has led to alarming inflation, distortionary debt and the inability to provide basic services.
Despite the hope that political progress will induce economic reforms, expect conditions to worsen. Endemic corruption and internal disagreements within the GNA will complicate critical reform efforts. Corruption within the Central Bank of Libya has only recently led the National Oil Corporation to deny it access to oil revenues.
Absent mass protests similar to those of last summer, the will to set aside disputes and stifle corruption will be limited. Meanwhile, a collapse in the fragile ceasefire could lead to a resumption of the oil blockade that would devastate Libya’s economy.
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