Questions Arise over Libya's Finances

By Samir Sobh for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Libya Business News.

Recent rumors, articles and analyses by some experts — including those not involved in economics and finance — have confirmed that Libya is on the verge of bankruptcy as a result of the ongoing wars between various groups, and the existence of two governments: one legitimate and recognized internationally, headquartered in Tobruk and led by Abdallah al-Thani; the other under the leadership of Omar al-Hasi, located in Tripoli.

One issue worsened this pessimistic outlook and led to talk of the bankruptcy of the state: the Dec. 10 Central Bank of Libya statement, which is considered by the West and some Libyan political and economic circles to represent the administration and those working in it.

The report suggested that this oil-producing country — with many great but unexploited natural resources and a territory larger than that of Egypt — is nearing bankruptcy. This notion was dismissed out of hand by Western economists and major petroleum companies, which still have important interests in Libya and work discreetly there, though the most important oil fields have halted production and export ports have been closed by armed groups with various allegiances and dubious loyalties.

In any event, the Libyan central bank’s statement, which aims primarily to absolve the administration, has not provided proven and trustworthy information with figures, details or even the names of those responsible for bringing Libya’s finances to their current state.

Those who produced and published this report argue that the current “catastrophe” is due to the corruption and malpractice of the public treasury and long-term, continual waste in line with the decreased production of oil and decline of world oil prices. This occurred alongside delays in the dialogue designed to manage disputes between the conflicting parties in Libya.

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