Tag: tripoli

Lebanese Banking Sector ‘Unwilling’ to Reform

Posted on by webmaster

On Thursday, June 18, Lebanese financial adviser Henri Chaoul resigned from his role in negotiations with the International Monetary Fund (IMF.) The adviser of the Lebanese Ministry of Finance expressed his exasperation with the Lebanese banking sector.

“I have come to the realization that there is no genuine will to implement either reforms or a restructuring of the banking sector, including the Central Bank,” Chaoul said in a statement.

The adviser accused Lebanese authorities, including politicians, central bank officials, and representatives of the Lebanese banking sector of dismissing the “magnitude” of Lebanese losses and accused all actors of embarking on a “populist agenda,” according to Reuters.

The government of Prime Minister Hassan Diab had introduced a plan based on government projections of losses amounting to $83 billion in the banking sector alone. The plan’s estimations of losses presented the first quantitative diagnosis of Lebanon’s intertwined crises that have led to rapid hyperinflation and rapidly falling living standards for Lebanese people.

Fundamental disagreements

Chaoul and the IMF appear to agree with the magnitude of the losses estimated in the prime minister’s plan, but Chaoul implied that the banking sector, including its central bank and a parliamentarian fact-finding committee, had presented very different numbers, challenging the government’s estimates. The failure of Lebanese officials to agree upon the scale of its losses amounted to a “dismissal” of the true problem, according to the adviser.

The former Lebanese finance minister and current Speaker of Parliament Nabih Berri said that the government estimates had been drawn up in a rushed manner that had led to mistakes and wrong assumptions. He told Lebanese broadcaster MTV that Lebanon would be unable to pay its bond obligations until 2043 as politicians aim to reach a compromise on the true number of losses.

The IMF itself has highlighted that the uncertainty over the true scale of Lebanon’s financial woes is a major stumbling block in the ongoing negotiations, calling for a “joint diagnosis” to establish a transparent diagnosis on which to base its talks.

“Lebanon needs to reach a common understanding of the source and size of its financial losses,” IMF spokesman Gerry Rice stated on the IMF website, calling the issues “complex.”

Reforms

The IMF will only provide support if the Lebanese government is willing to implement broad reforms, which could prove unpopular. “There is a need for comprehensive reforms in many areas, which requires acceptance and consensus from the society as a whole,” Rice stated.

But many fear the IMF will require unpopular neoliberal reforms that aim to cut public spending that could face significant resistance from Lebanon’s increasingly destitute population.

Public resistance to IMF demands for reform is highly likely as the IMF is a proponent of the “Washington consensus” that calls for cutting public spending, shifting taxation onto the poor, liberalization of banking, deregulation, and privatization.

Many countries who have followed IMF reforms have only seen their populations further impoverished as public spending is cut to allow for foreign debt repayments while halting growth and inflation.

US ambitions to weaken the influence of Hezbollah in Lebanon and neighboring Syria have resulted in tough sanctions, the Caesar act, which came into effect on June 17. The sanctions are aimed at Syria but will gravely impact Lebanon, which is one of the few remaining nations to trade with Syria.

The role of the US in further worsening Lebanon’s economic prospects in the midst of its interconnected health, economic, and financial crises has led some to urge the country to find funding from China instead.

Chinese alternative

China has been eager to work with Lebanon, as it sees its ports in Tripoli as an important possible link in its Belt and Road Initiative that aims to connect Europe with China through an ambitious infrastructure project that spans the historic silk route.

Hezbollah’s leader Hassan Nasrallah on June 16 announced that China is ready to invest in Lebanon’s infrastructure.

“Chinese companies are ready to inject money into this country,” Nasrallah stated on Hezbollah’s television network Al-Manar. Nasrallah argued that China would easily match the $10 billion sought from the IMF, with few of the painful reform demands.

While inviting Chinese investment could significantly boost Lebanon’s economic prospects, it would risk the ire of the United States who could apply sanctions to cripple the economy as it is currently doing in Iran and Syria.

Accepting IMF reforms would likely spark further popular unrest, while accepting Chinese investments could trigger a diplomatic conflict with the US. Even if Lebanon had a functional and effective government, the country is left with few good choices to resolve the suffering of its people.

US Signals Potential Renewed Involvement in Libya

Posted on by webmaster

The United States is considering the deployment of its Security Force Assistance Brigades to Tunisia in response to Russian activity in Libya.

The US has nominally stayed out of the conflict except for some support to the Tripoli-based Government of National Accord (GNA) targeting local forces it considers part of ISIS. The US military appears to be concerned over what it calls “Russian involvement” in the conflict that has seen Egypt, France, Turkey, and the UAE all support factions in the messy civil war.

Increasingly sophisticated weapons

Actors in the Libyan conflict are using increasingly sophisticated weaponry, despite a UN arms embargo that all foreign powers involved in the devastating proxy war nominally support. The recent involvement by Turkish planes and drones turned the tide of the conflict in the Tripoli government’s advantage, which Haftar’s forces are now countering with 14 Russian fighter jets.

The US has published grainy photos of jets taking off in Russia and landing in Libya’s Al Jufra Airbase, while the Libyan National Army (LNA) was less covert, proudly publishing photos of its new jets on twitter.

The inclusion of Russian MiG-29 and Su-24 will likely re-balance the conflict and perhaps draw it out even further, but a new factor has emerged as the US is considering renewed involvement.

Security Force Assistance Brigades

The US Security Force Assistance Brigades are a recent innovation of the US military. The 800-strong brigades first saw deployment in 2018 and consist of a variety of troops that train, support, and fight alongside another nation’s military. Whether the deployment in Tunisia signals increased involvement by Libya’s Western neighbor remains to be seen.

The “S-Fab” troops consist of commissioned and non-commissioned officers that have received additional training at the Military Advisor Training Academy in Fort Benning, Georgia. The s-fab’s are intended to relieve “advisory duties” from the infantry units that have increasingly performed these tasks in Iraq and Afghanistan. S-fabs were deployed in Senegal in 2020 and could soon make their first appearance in North Africa.

Entangled alliances

If the US indeed plans to counter Russian involvement, it would pit itself against its long-standing allies in Egypt, France, and the Emirates. Because of the intertwined alliances in Libya, it could mean that US forces would face incoming French missiles or fight forces supported by its key strategic partners in the Middle East.

The addition of Russian fighter jets is likely to prompt increased aerial support from Turkey. Turkish C-130 planes and drones are already active in the region but Ankara is likely to increase the presence of Turkish F-16 jet-fighters, which are from the same generation as the Russian MiG-29s.

With Turkey announcing that it will soon start to extract oil from Libyan waters, the stakes have never been higher. Libya already featured significant surface-to-air fighting with anti-aircraft batteries fighting drones, but the conflict could soon see it’s first air-to-air combat. This would prove a major escalation and further evidence that the Libyan arms embargo is an abject failure.

UN: Libya Truce Talks Imminent

Posted on by webmaster

A surprise statement by the UN late Monday has signaled that Libya’s warring parties have accepted a resumption of talks to establish a ceasefire. Both the Tripoli government (GNA) and the eastern forces led by Khalifa Haftar (LNA) appear to have agreed to the draft agreement that the UN mission in Libya (UNSMIL) proposed on February 23.

Unexpected ceasefire

The talks will revolve around establishing a sustainable ceasefire agreement but also cover “associated security arrangements,” according to the June 1 statement from the UN mission in Libya.

“UNSMIL emphasizes that the resumption of dialogue constitutes a response by the parties to the desire and calls of the overwhelming majority of Libyans who long for a return to a safe and dignified life as quickly as possible” the statement said. But UNSMIL is remaining cautiously hopeful within Libya’s difficult context.

The statement made sure to emphasize that it “hopes that the response of the parties coincides with the cessation of hostilities and a reduction in the use of incitement and hate speech.” The UN also signaled directly to the foreign powers that continue to interfere in Libya’s conflict, saying “UNSMIL also hopes that all parties, Libyan and international alike, heed the desire of the Libyans to end the fighting.”

Truce amid escalation

The statement came as many expected Libya’s conflict to enter a new escalation as increased aerial firepower was being introduced to its theater of war. Turkish drones, Russian jet-fighters, and even US brigades in neighboring Tunisia were bound to change the nature of the already chaotic conflict.

The Libyan conflict has repeatedly seen both sides either call for or reject appeals for ceasefires depending on which side was “winning” at the time.

For Libyans the statement comes as a welcome surprise as the conflict has evolved from a civil war to a proxy war between several foreign powers who introduce new weaponry and mercenaries to the country, prolonging a war over which Libyans have long lost control.

Continuing talks

The current potential truce has been made possible by the UN peace process in Libya. Both parties had agreed on many points in the first two rounds of Joint Military Commission talks in February, and the UN now hopes to build on that in the next round of negotiations.

In order for the talks to produce a comprehensive and sustainable conclusion, the UN has asked both sides to empower their representatives and commit to respecting the earlier agreed-upon conclusions of the Berlin Conference in February and UN resolutions. One of the UN resolutions the local mission is most eager to emphasize is the arms embargo that both sides and their foreign backers have repeatedly breached.

The first rounds of talks were concluded in Geneva, but in the interest of time, the next round will be done via videoconference as air travel continues to be restricted due to the coronavirus pandemic.

The statement concluded with the UN mission in Libya expressing hope for a “professional, serious and responsible spirit” to build on the first two rounds of negotiations and hopefully produce sustainable peace in Libya.

 

Most Popular