Saada al-Sabiri, an economist and a presenter for Monte Carlo Radio said Libya’s economic crisis is being driven by the West, which is benefiting from the imbalance in trade and economy, reaping profits while damaging Libya’s economy and its budget deficit.
Yet al-sabiri said Libya’s production of crude oil can positively and negatively impact the international markets although she does not suspect Libya will suffer from financial bankruptcy any time soon, due to its large reserves of gold and oil.
Saada al-Sabiri, an economist and a presenter for Monte Carlo Radio said Libya’s economic crisis is being driven by the West, which is benefiting from the imbalance in trade and economy, reaping profits while damaging Libya’s economy and its budget deficit.
Yet al-sabiri said Libya’s production of crude oil can positively and negatively impact the international markets although she does not suspect Libya will suffer from financial bankruptcy any time soon, due to its large reserves of gold and oil.
Saada al-Sabiri, does the Libyan Central Bank fall under the authority of the parliament in Tobruk or under the General National Congress in Tripoli? Who is currently responsible for the budget deficit in the country?
There are discussions going on to constitutionally give the central bank its independence to solve the dilemma of whether it is affiliated with the government or the parliament. In the east, they say that the bank is theirs and that the salaries of the Libya Dawn government are paid from frozen money, which was returned to Libya to finance the Islamists. However, the government and the congress in the west say that the bank is theirs and that Tobruk and al-Bayda are receiving their salaries from Egypt, the United Arab Emirates and Saudi Arabia.
The two governments and the two parliaments are exchanging accusations about the budget deficit. There is a logical explanation for last year’s deficit which is justified by the decrease in oil revenues, and therefore instead of fiscal surpluses, which the country has become accustomed to, the state revenues were barely capable of covering imports and salaries. In addition, there is no law regulating the actual numbers of public sector workers, especially those working for the defense ministry and who are close to the two parties—this allows many irregularities.
Ministries of each of the governments were getting offers for training and vocational rehabilitation of their staff and for young Libyan people, as well as service contracts and spare parts for factories. The values of these contracts were always multiplied by four, which has become a Libyan habit in the last decades. And as usual, every time they speak about budget deficits, but in reality there is a budget surplus, which the ministries do not speak about after they use the money allocated to them. Now, the audit bureau is searching for US $ 4 billion that have disappeared.
There are international statements about a deficit in the Libyan state budget and the possibility of bankruptcy in the near future. How would you comment on this?
Actual bankruptcy is an unlikely scenario because Libya has huge reserves of foreign currencies and gold. The problem lies in corruption and in the waste of public money rather than in war and conflict.
Do Libya’s oil exports directly impact the global market in terms of increasing and decreasing prices?
Libya is an important member of OPEC and the disruption of its supplies has contributed to the increase in prices throughout the whole year. However, Saudi Arabia compensated for the difference in OPEC’s production, and this has had its clear and significant impact in the last three years. Despite the fluctuation in prices, Saudi Arabia did not stop the increase in its production and this has made it capable of compensating the price difference on the pretext of maintaining market stability.
Perhaps you have seen that al-Naimi, the Saudi oil minister, did not comment on the decrease in prices and he did not speak about any immediate cut in production in order to ease the downward pressure in international prices.
On the other hand, there is also the issue of Iran’s negotiations with the major six world powers over its nuclear programme and the partial lifting of economic sanctions imposed on the country, which came to compensate for the decrease in the Libyan supply, as a reassurance for investors and speculators in the oil market. Thus, the decrease in the Libyan oil production and falling prices actually serve the interests of Western European energy bills and gives exporters, who are not members of OPEC, an opportunity to export their oil.
Can it be said that the US and Britain specifically are seeking to deepen the gap in Libya to benefit economically from its wealth, or are they trying to take Libya back to the pre 1951 independence phase?
A big part of the conflict was about Libya’s wealth. The Gaddafi regime put the final nail its its coffin when it dared to think of changing the form and articles of the oil contracts with major companies that have been present in Libya since the fifties—specifically the American, British and French companies.
The former regime was getting ready to sign contract with Asian companies as soon as the existing contracts with these companies expire, or to open the door transparently for offers. The best offer is the one with changed sharing percentages and where the sharing of production becomes in favor of Libya. In 2010, Libya entered the gas market in a huge and scary manner because of its reserves in the Ghadames basin and the Gulf of Sirte. Total, a French oil company, has had the best chances, but the state of Qatar wanted to be a partner with Total, despite a former Libyan rejection of this partnership and this has made Libya cancel the entire project with Total.
I do not think that the West, in its current situation, wants to occupy Libya again, but it hates it to have anyone imposing his conditions on it. It also hates if others act as equals and it prefers to be the guide, the director, the one who gets the credit and the partner in all projects with preferential prices and with privileged contracts, which it chooses according to its own state of mind.
Is the Qatari intervention in Libya driven by political or economic motives?
It has its economic as well as its political motives. Qatar, with all of its investment expansion, is trying to go beyond its real size through financial means. Past events in the region have shown that whatever Qatar does, and despite its financial strength, it continues to be an ineffective state in the long run. However, Egypt, for example, with all of its economic crises and rampant and high poverty rates, remains active and it has its political and economic weight.
Through its intervention in Libya, Qatar has tried to get what it couldn’t during the days of Gaddafi: dominance over gas project, free zones and some tourism projects such as Ras Lanuf city (in the center of the Libyan coast).
This would have helped it export its gas to Europe at the lowest costs given the geographical proximity of Libya, which Qatar does not enjoy. However, after the first year of the Revolution Qatar found itself excluded and thus it has chosen to support the “Islamasized” forces to ensure its presence in the economic sector, and then comes its political role in the region.
These attempts by Qatar are similar to the attempts made during Mohamed Morsi’s rule in Egypt when Qatar tried to get privileges and shares in big projects, the most important among them is the Suez Canal project. Thus, it is clear that there is an overlapping between economic and political goals.
In your opinion, as an observer of Libya and the economic situation, will the international community intervene to restore security and economic stability in Libya?
The outside world is actually interfering— it never stopped its interference, and it will never do that. It will not allow reaching solutions which might exclude it. However, conflict is now between those interfering countries. The international community wants to ensure a place for its Islamist allies. Egypt, Algeria and the Gulf states, with the exception of Qatar, want a solution where there are no Islamists. However, if you mean military intervention, I don’t rule out this possibility.
But the real question is: does the West really want a political solution? If so, why didn’t it make a move against Darna or IS, as it did in Iraq and Syria? Is it because it wants to besiege Egypt, and to implant a new entity in each state along the lines of the Israeli state, especially given that terrorist organizations have started to change their names and they are on their way to announcing the creation of the Daash Sinai State or Emirate? Is it a strategy to control oil and to illegally sell it to major countries at a price does that does not exceed US $30 per barrel, push global oil prices to fall and put rentier states in trouble?
Are you saying that it is in the interest of the West to see a continued crisis in Libya?
The crisis in Libya as well as the crisis in the Middle East serves the interests of the West at all levels. It is true that the West is talking about the rise in the illegal immigration rates, but at the same time it is increasing its trade balance and its exports of goods, weapons and services to the region. Moreover, the West is getting rid of its militants by exporting them to conflict areas or to say it differently, by turning a blind eye on their migration to these areas—when they return, the West starts to chase them.
Stricken countries are increasingly becoming dependent on the West. Thus, the only thing that scares Europe is convergence between the affected countries, Asian countries and Russia. When this happens, the West starts to change its policy towards the country concerned, as happened in Egypt, for example, and before that in Iraq. When the conditions became calm, at a certain period of time, most of the countries who won exploration contracts were from South Korea, Russia and China.
Will the French role be different from the rest of Europe as some say, especially because France has fought terrorism in Mali and is said that it is establishing a military base south of Libya to launch attacks on militants there?
Who allowed the presence of militants in the region despite the presence of the French army in the region under various pretexts, in order to keep its presence in its old colonies? Will France move its army and weapons and establish a base that will cost it billions of Euros just to confront terrorism, at a time when France is suffering from internal and external debt, which is almost more than three thousand billion Euros, representing 97% of its GDP?! Search for the wealth of the south which has not been at all utilized by the former regime and which never told the people about it. We should not forget that what is present in the north, east, and west of the country is nothing but export ports fed by fields that are closer to the south.
