Libya’s economic conditions could turn sharply for the worse, as rival authorities vie to control rapidly shrinking national wealth, says a report from the International Crisis Group.
The struggle affects oil fields, pipelines and export terminals, as well as the boardrooms of national financial institutions.
Combined with runaway spending due to corruption and dwindling revenue because of falling exports and energy prices, the financial situation – and with it citizen welfare – faces collapse in the context of a deep political crisis, militia battles and the spread of radical groups, including the Islamic State (IS).
If living conditions plunge and militia members’ government salaries are not paid, the two governments competing for legitimacy will both lose support, and mutiny, mob rule and chaos will take over. Rather than wait for creation of a unity government, political and military actors, backed by internationals supporting a political solution, must urgently tackle economic governance in the UN-led talks.
(Source: International Crisis Group)