Bloomberg News

Libyan Divisions Widen as Elections Test New Government

May 17, 2012

For most of the day, Tripoli’s international airport was paralyzed, with planes idle on the tarmac and ticket counters unmanned, as air traffic control and ground staff went on strike.

While the protest lasted less then 24 hours on May 13, it showed the challenges Libya’s central government, which took control of the airport from militias a month earlier, faces in imposing its authority on a nation that holds Africa’s biggest oil reserves. Last week, former rebels demanding unpaid wages stormed and occupied the offices of Prime Minister Abdulrahim el-Keib, leaving at least one person dead.

With their economy stagnating and security deteriorating, Libyans are casting ballots on May 19 in local elections in the second-largest city, Benghazi, and a month later for a national legislature tasked with writing a new constitution. The votes may determine whether the nation fragments further or is able to lure the investors it needs to rebuild after Muammar Qaddafi’s 42-year rule.

Foreign companies “want to see a government that has got serious authority, that is able to govern, has security and legal controls,” John Hamiliton, a Libya oil specialist at the London-based consultancy Cross-Border Information, said in a May 14 interview. “None of these things exist now.”

Benghazi was the birthplace of the revolution that, backed by North Atlantic Treaty Organization airstrikes, led to Qaddafi’s ouster and death. It is also the main city in the eastern province of Cyrenaica, which some tribal leaders declared in March a semi-autonomous region, saying it was ignored by the ruling National Transitional Council, like Qaddafi’s government before it.

No Regime Change

“We got rid of Qaddafi, but not the regime,” Hana El Gallal, who quit the 72-member NTC and is now a Benghazi civil rights activist, said in an interview. Many people are more concerned about the local vote so they can establish an alternative government in the east because of fears that the NTC will rig the national election on June 19, she said.

If the national elections “go wrong, we don’t need the national congress,” El Gallal said. “By then we will have our own council.”

The election in Benghazi is being organized without consulting the NTC, repeating the act of defiance by Libya’s third-largest city, Misrata, in February.

“Democracy should begin like this,” with local elections, said Younis Fannush, an official with the secularist National Forces Coalition, one of three loose blocs dominating Libyan politics. “That’s how it worked with Misrata.”

Misrata Rebuff

Officials in Misrata announced this month they would no longer recognize the four officials the NTC appointed to represent the city as part of the interim national leadership.

Misratans themselves have stepped up efforts to revive the local economy, which is based on trade and is centered on Qasr Ahmad, the deepest and most modern container port in Libya.

With improved security provided by local militias, Italian and Japanese staff are returning to Misrata’s steel plant, LISCO, said Farouk Ben Hamida, who helps run his family’s clothes-importing business.

In the rest of Libya, he said in a phone interview, “there is too much uncertainty.”

Oil workers this month urged the interior and defense ministries to protect them against armed groups, the state-owned National Oil Corp. said on May 13.

“What some armed groups are carrying out in the oil and gas sector is aimed at impeding work, spreading chaos and instilling fear in the workers,” the Tripoli-based company said in a statement on its website.

Oil Protests

The statement followed demonstrations that blocked the headquarters of the Arabian Gulf Oil Co. in Benghazi to demand better pay and more transparency over the use of Libya’s oil revenue, leading the company to cut about 30,000 barrels of its 370,000 barrel a day output.

Libya, Africa’s third-biggest oil producer after Nigeria and Angola, pumped 1.35 million barrels a day last month, approaching prewar levels of 1.6 million barrels a day, according to data compiled by Bloomberg. Companies operating in Libya include Total SA (FP), ConocoPhillips (COP:US), Repsol YPF SA (REP) and Eni SpA. (ENI)

Attracting foreign investment will depend on beefing up security as well as reaching consensus on addressing structural problems, the International Monetary Fund said in an April report. They include state control of banks and a public sector wage bill that jumped to 19 percent of gross domestic product this year from nine percent in 2010, it said.

Musa Al-Koni, a member of the NTC, said the ruling council had dented public confidence by not holding its meetings in public and by reversing a decision to fire the Cabinet on May 4.

“We made many mistakes, too many,” he said in a May 13 interview in Tripoli. “Everything has been paralyzed until after the elections. When there is an elected assembly, it can establish good rules.”

To contact the reporter on this story: Christopher Stephen in Tripoli at cstephen9@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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