LIBYA DESK
Since there does not seem to be any quick resolution to the crisis surrounding the Central Bank of Libya (CBL), the country is poised to experience macroeconomic shocks in the next weeks, which could potentially create important social unrest —or at least a socio-economic crisis. Any unrest would hardly be controllable by political interests and would target all Libyan stakeholders, without managing to change much to the political landscape.
A closer look
The summer break is now over in Libya as schools are reopening. This time in an ever more uncertain landscape, where the foreign exchange has passed the 8 LYD to USD point and where prices are slowly but surely rising. This relates to the rate when exchanging via bank checks, which is what most Libyans use to get foreign currency. Interestingly, the sense of alarm is not yet fully palpable among Libyans, notably since the electricity and fuel crises experienced over the summer are now stabilising due to supplies of fuel from eastern ports.
Nonetheless, the risk of such energy shortages remain high and people face uneasiness regarding the near future. Poor weather conditions have resulted in heavy rain that caused floods in Sebha, just weeks after the same happened in Kufra. The memory of Derna’s natural catastrophe is still fresh, and these natural occurrences are met with anxiety by many who no longer trust the quality of their infrastructure against bad weather. In fact, Libyans feel underprepared for the upcoming rainy season and harsh rains have already hit the green mountains and parts of western Libya this week as well. The country’s political divisions seem deeper than ever and make any rapid response to crises more difficult.
Upcoming macroeconomic shock
Economic experts have told LIBYA DESK they expect Libyans to first face the crunch of the expected economic crisis by October, as we are already witnessing prices of everyday goods going up slowly. As aforementioned, it is difficult to pinpoint how long Libya will manage to import goods, notably via the LFB, thus further bringing uncertainty to markets and encouraging speculation. There is notable anxiety regarding the future supply of medicines and food if the CBL crisis remains unresolved in coming weeks. Since there is a war of narratives and Libyan media are in majority held by interest groups, it is near impossible for the everyday Libyan to comprehend the actual state of the economy. Media outlets affiliated to the GNU and officials refuse to cover such developments, instead saying that all is well.
On the other hand, figures like al-Kabir are more interested in throwing oil on the fire than providing a level-headed account of the economy or working toward a workable solution. Key stakeholders are engaged in a war of attrition whose victims will be far removed from their circles, i.e. ordinary Libyans. Posts on social media are increasingly showing public fears and anger, with many complaining about the difficulties of life. On September 17th, protests occurred in Misrata, primarily accusing Dabaiba for deteriorating economic circumstances. In other words, the CBL crisis looks like it might not only become a trigger for social unrest, but the trigger that many in civil society had awaited to take to the streets and voice their anger against years of livelihood deterioration and political stagnation.
International actors need to keep an eye out for public opinion and keep the possibility of social unrest in their calculations. Many international and some domestic actors are actually looking forward to such an event, as they believe they could direct such social unrest in a way that benefits their interests. Those realising that social unrest is hardly controllable and wishing to bring a solution to Libya’s crises, should comprehend that dealing with the symptoms of such crises as opposed to confronting them head on is the wrong strategy.
The only way to avoid deterioration and civil violence is by alleviating people’s suffering and improving government services. Without this, the situation will get more volatile and civil unrest will likely be met with repression, thus leading to further despair among the population and a dangerous sense of powerlessness upon which the Libyan political elite thrives.