September’s Political Risk Advisory Briefing from KCS Group Europe focuses on Libya.
Since the fall of Muammar Gaddafi in 2011, after 42 years in power, Libya has been in a state of perpetual turmoil. A succession of convoluted councils and governments, claiming to exercise sovereignty over some or all of Libya, have come and gone. Politically, Libya is a failed state and has been so for the best part of a decade. This is lamentable, considering that reserves of oil, the largest in Africa, were discovered well over 50 years ago.
Libya is a story of wasted opportunity and squander but will always have potential by virtue of these vast reserves. Like so many states it has fallen victim to the “resource curse”. A historic absence of strong institutions checks and balances, the endemic tribal politics of the country, and a tendency towards “strongman” politics will all conspire to hamper Libya for generations.
At present, an ex-Gaddafi general is at the gates of Tripoli, besieging the UN-backed Government of National Accord (GNA) inside. There is now little optimism for a negotiated settlement, or even for a temporary ceasefire. Daily airstrikes from both sides are indiscriminate as they try to alter the ground war below. Despite General Khalifa Haftar’s stalled advance, and a dearth in popular support, it is possible that he will be Libya’s next leader as head of the Libyan National Army (LNA).
This will be unpalatable to many, both in Tripoli and outside the country. It is anyone’s guess what he would do with this newly acquired power, yet few are confident of a long-lasting or meaningful peace. Tripoli looks as though it may withstand the assault. If it does, Libya will remain in the doldrums, partitioned and stagnated by conflict.
Oil companies will simply hope for stability in whatever form it comes. A strongman in Libya may give new-found optimism and security to the Libyan oil industry, and potentially, for the country as a whole. At what price this is to be achieved, or by whom, remains to be seen. If we have learnt anything about Libya, it is boom and bust, all or nothing.
Based on selected Grey Area Dynamics Libya has a possible risk rating of 6. To read the full report, which covers the areas of Political Landscape, Economy & Business Opportunities, The Migrant Trail and Conclusion please click here