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Libya’s Other War: Fighting Corruption for Sustainable Stability

Attempts at curbing Libya’s culture of corruption

 

Houda Mzioudet

October 23rd  2014

 

Open PDF: http://www.sadeqinstitute.org/wp-content/uploads/2014/10/Libyas-Other-War.pdf

 

Summary

 

  • Corruption permeates every sector of Libya’s society and institutions, including the government, public sector, and private businesses.

 

  • According to international organizations and observers, such as Transparency International and the World Bank (2012)[1], corruption intensified after the 2011 Libyan revolution against Muammar Gaddafi’s regime.

 

  • Despite efforts to fight corruption, Libya is characterized by impunity for corruption during and after Gaddafi’s rule. 

 

  • Promoting a culture of transparency in different Libyan sectors will help achieve good governance. This requires strong political will from Libyan civil society organizations (CSOs) and other political actors, including the support of international organizations.

 

 

Violence erupted in May 2014 when renegade General Khalifa Hiftar launched Operation Dignity, an air and ground offensive against Islamists in Benghazi and Tripoli, leading to Libya’s most severe political crisis since Gaddafi’s overthrow. Instability and an on-going political crisis has escalated since mid-July 2014 with violent episodes and political confrontations between predominantly Misratan and Zintani led militias, with the two most powerful militias in post-Gaddafi Libya at loggerheads over the future of the country.

 

On the brink of civil war, the ongoing unrest threatens Libya’s political and social stability both in the short and long terms, especially considering the country’s rapid descent into lawlessness and the decided impact on Libya’s economy. Some of Libya’s politicians, from Libya’s two largest Islamist and nationalist factions in the former GNC, as well as members of the international community argue that the deteriorating security situation in Benghazi and Tripoli has become a regional issue that prevents Libya from achieving good governance[2], making it difficult for the newly elected House of Representatives to deal with the crisis and draw a roadmap toward stability that will steer the country away from total collapse.

 

            This ongoing violence has exacerbated Libya’s long-standing corruption problem.  An under appreciated subject that is perhaps not given the required political and social attention it deserves, but that is central to the current political infighting that is wreaking havoc across the country. A high-ranking official in the Libyan Investment Authority stated that corruption is an issue Libyans have no control over, especially because many corrupt Gaddafi officials remain in positions of power[3].  The country suffers from two main types of corruption: administrative and financial, that is most evident in the bloated public sector. The various post-revolutionary governments have failed over the past 3 years to begin to remedy the very real and existing issue of widespread corruption and the mismanagement of public funds in Libya, especially in wake of the current conflict between Libya Dawn and Operation Dignity.

 

Corruption in post-Gaddafi Libya

 

         Slimane Belhaj, who is a member of the GNC audit commission and a high-ranking official in the Audit Bureau, argues that while Libya struggles with a deteriorating security situation, another war has been brewing beneath the surface. The war on corruption is being fuelled by the already tense security situation across the country[4], which is experiencing a rapid buildup of weapons among violent militias, leaving the state unable to enforce penalties on security and economic breaches. In fact, militia battles have become the main obstacle to Libya’s stability. Their frequent storming of the GNC between 2012 and 2014, and the more recent ongoing violence in Tripoli, has plunged the country into a caustic crisis that seems almost impossible to manage without a monopoly on lethal force.

 

         A year before Gaddafi’s ouster, Transparency International released its annual Corruption Perceptions Index, which is created to measure the perceived levels of public sector corruption, ranking Libya near the bottom of the list at number 146 of 178 countries.By 2012, Libya’s corruption grade dropped even further, placing it in the same ranking as the Congo and Laos at number 160 out of 176 countries.  In 2013, Transparency International ranked Libya at 172 out of 177 countries; a drop that highlights public discontent with the state’s post-revolution leaders and their fear that Libya may become a failed state. In any case, it is evident that is the security situation has worsened, and militias gained a steady grip over the country, that corruption has become an ever deeper, more pronounced matter.

 

         Eradicating corruption in Libya has proved difficult for two reasons. First a corruption culture financial irregularities, and circumventing of regulations within institutions has become pervasive across all sectors of Libyan society for decades. Second, the former regime’s perpetuation of corruption at the highest levels (through nepotism and tribal/political patronage) left behind officials who see corruption as the only effective means to ‘getting things done’. Administrative corruption has long plagued Libya’s public sector, and most notably, government institutions. The phenomenon is defined as, “distortions in implementation of laws, policies, and regulations,” and in Libya’s case, the misuse of laws for personal gain. This kind of administrative corruption, as argued by a head of the GNC Justice Committee[5], is widespread throughout Libya in the form of bribes, loan allocations, corrupt contracts, and money laundering. Extortion in exchange for public services and embezzlement of public resources are common corrupt acts that continue to afflict Libya after Gaddafi’s downfall.

 

         In the absence of a judicial authority after the revolution, financial corruption peaked alongside diminished law enforcement and waning accountability. Belhaj argues that nepotism, alongside the weak security situation, are among the most problematic issues in post-Gaddafi Libya. This is exacerbated by bribery, making it easy for people to evade the much-needed legal penalties that could create social equity, justice and stability.  An extreme lack of accountability and transparency in Libya not only feeds this type of financial corruption, but also acts as a serious obstacle to achieving good governance in the country.

 

         Nor is the health sector exempt. During the National Transitional Council (NTC) presidency, rocked the much sensitive Ministry of Health and War wounded. Public money allocated for treating thousands of former revolutionaries abroad was allegedly being misused, with the NTC and their minister’s failing to effectively address the issue early on. This incident led to early resignations of ministers, but the issue remained. As a result, Suleiman al-Zubi, GNC justice and judicial commission body president, was entrusted with establishing oversight committees for the program, instructing accountants and judges to follow-up on the cases involved in the scandal.  According to GNC health and higher education committee member, Mustafa Jebril, corruption in the Libyan health sector is also perpetuated by a lack of transparency among health institutions abroad where cases of employees creating files under fictitious names have been cited [1]. Furthermore, the Libyan government has proved inefficient at budget management, particularly in the public sector where government employees have complained of not receiving their salary for more than three months at a time. Therefore, in an effort to monitor public funds, the National Identification Numbers (NID) project, based on law 14 11 of 2014, which establishes the National Authority to Fight Corruption was instituted as a means for the government to ensure that transfers and payments are distributed correctly, leaving little room for financial and administrative manipulation.

 

            Corruption is also prevalent in Libya’s oil industry, the country’s main economic driver.  Ibrahim Jadhran, former commander of the Petroleum Defense Guard and rebel commander in the 2011 Libyan revolution, accused government officials of corruption in oil sale deals, leading to the oil crisis that rocked Libya in 2013. Jadhran shut down oil terminals in Cyrenaica, which includes about 60 percent of Libya’s oil resources, demanding that government officials investigate the illegal sale of Libyan oil and what he considers to be a corrupt oil ministry.  After an eight-month stalemate, the government offered Jadhran 30 million LYD in return for re-opening oil terminals and ending the oil conflict that was greatly affecting Libya’s state income. Jadhran, however, chose to expose the bribe in a press conference in September, arguing that the Zeidan administration’s inefficiency and failure to address the oil meter crisis was one symptom of the corruption that was rife within his Cabinet. As a result, the allegations were quickly referred to the public prosecutor, further hurting Libya’s image abroad and at home, causing the public to question the government’s willingness to be transparent and whether it was truly in the service of it’s people?

 

Efforts towards eradicating corruption and promoting good governance

 

         While government institutions have had little impact on reducing corruption in post-Gaddafi Libya due to their own institutional architecture and its many weaknesses, the Audit Bureau stands as an exception, perhaps owing in part to its 54 year history. The Audit Bureau has continuously monitored the work of government institutions and, after the revolution, was joined by civil society organizations, which lent support to the Audit Bureau and made a commendable effort serving as corruption “watchdogs.” The Audit Bureau has also been monitoring transactions within the Libyan government’s financial institutions in the private sector (i.e. the Libyan Sovereign Wealth Fund Institute) by publishing audit reports regarding their annual budgets. Audit administrators also have the right to review any contracts signed by the Prime Minister, and can interfere if any violations or irregularities are found. For example, the Libya Herald reported in March 2014 that the Audit Bureau slammed Zeidan’s government for its lack of transparency and poor governance in multiple sectors.  In its 2013 annual report[6] presented to the GNC, the Audit Bureau confirmed a 10.8 billion LYD deficit attributed to a drop in Libya’s oil production. The report also noted that 35% of the total budget went towards government wages, along with the government’s failure to enforce the NID system meant to eliminate corruption.

 

         Civil society organizations have also made attempts at fighting corruption and playing an active role in Libya’s democratic transition. The H2O team, a Libyan youth-driven NGO considered the government’s watchdog, launched a political awareness campaign regarding Libya’s new constitution and the importance of the youth presence in the political scene. The campaign also extended its activities to monitoring GNC elections, and later GNC performance in a joint initiative with Bokra, another Libyan CSO.  

 

         International and Libyan organizations and NGOs have also been making an effort to promote stable governance in Libya. For example, the Benghazi-based Libyan Transparency Association (LTA) headed by Ibrahim Ali, focuses on fighting corruption in all sectors and promoting the principals of transparency. As a first step, LTA worked on enforcing the United Nations Convention against Corruption, which Libya signed in 2003 and endorsed and ratified in 2005. The convention aimed at creating an effective international legal instrument against corruption, requiring countries to establish official offences that cover a wide range of corrupt acts. According to Ali, one of LTA’s first projects was presenting a draft law outlining the creation of a corruption authority that would enforce penalties and implement transparency policies. LTA has partnered with other organizations, including Deloitte, the World Bank, the United Nations Development Program (UNDP), and Ryman, to increase their capacity at gauging Libya’s corruption and implementing mechanisms to stop it.  LTA’s efforts emphasize the government’s inability to control corruption on its own, highlighting Libya’s need for a national strategy that includes the private sector, CSO’s, and the media to combat it.

 

Whilst political instability and violent confrontations may continue and demand urgency from the international community, the country is falling a part socially and economically. The lack of trust in government, and amongst government, owes in part to the inability to effectively manage the economy and guarantee real and fair oversight mechanisms. Whilst Libya Dawn and Dignity may take up our political attention, over the ideological future of the country, the financial and salient effects of Libya will not change unless the desired political will resumes to fight Libya’s other war.

 

Policy recommendations

  1.    International organizations such UNDP, the IMF and the World Bank should strengthen and increase their involvement in reforming Libya’s economy, focusing on developing a more transparent public sector while also promoting private sector growth. This can be achieved by supporting decentralization in state institutions and the private sector and would involve a restructuring of ministerial administrations for more accountability and transparency in remote and less developed communities, especially in southern of Libya. The Ministry of Local Governance needs to establish an apparatus that is responsible for the decentralization of service delivery and management systems, and which helps capacity building at the level of local councils, and improves participatory mechanisms in education, health, and agriculture sectors, among others. This initiative was introduced in Guinea in the 1990s and helped improve the quality of service delivery in underserved communities[7]. 

 

  1.    Increased oversight of the Libyan House of Representatives by civil society organizations (CSOs) who can then hold parliament accountable through the media by making it mandatory to broadcast their sessions and publish periodical reports of their work. CSOs can be incentivized to receive training in parliamentary monitoring through a partnerships with international media outlets such as the BBC, Deutschewelle, or Reuters, for example.   

 

  1.     

The Libyan government should implement an electronic government system by drawing on the Tunisian experience to limit opportunities for bribery and corruption. Tunisian CSOs and state institutions set up electronic administration to ease services for citizens allowing them to perform their administrative activities online without the hassle of traditional administrative bureaucracy. Though it is still limited to a few sectors, it has already shown itself to be a fast, effective and transparent method to decrease wait time for customers and build trust between citizens and the government.

 

 

  1.    Implementation of a body that documents and tracks corruption in Libya, as well as a system that allows citizens to report suspicious or corrupt activities to their local parliament with the help of civil society organizations and international organizations that can manage these activities.

This body would also advocate for tougher anti-corruption laws and develop workshops on methods for fighting corruption and exposing perpetrators. It would also, collaborate with different anti-corruption agencies in Libya and abroad.

 

  1.    Promotion of free media through civil society, the government, and parliament that will encourage journalists to investigate corruption cases. This will allow the media to play a role in holding the government accountable, and strengthen communication between media outlets and CSOs reporting on corruption issues. It is necessary that the Libyan government protect whistleblowers who expose corrupt practices.   

 

           

Sources:

 

[1]       Interviews with GNC members Abdumonen Al Yaser, Mustafa Jebril, Slimane Al Zubi,           and Slimane Belhaj (May 2014), Libyan Investment Authority head of compliance Balkis Ghagha,  and President of Libyan Association for Transparency Ibrahim Ali (May 2014).  Inrerviews were all conducted in Tripoli.

 

[2]       Martinez-Vazquez, Jorge et.al. Fighting Corruption in the Public Sector, Contributions to Economic Analysis. Oxford: Elsevier, 2007.Print.

 

[3]       Sami Zaptia, 2013 “Audit bureau Report Rebukes Government for Giving Poor Value for     Money”, Libya Herald Business Eye, April-May 2014.

 

(4)  An analysis of the deteriorating situation in Libya and its geopolitical impact on the Maghreb (Middle East Monitor)

https://www.middleeastmonitor.com/articles/africa/12272-an-analysis-of-the-deteriorating-situation-in-libya-and-its-geopolitical-impact-on-the-maghreb

(5) Audit Bureau 2013 report, Tripoli, 2013  (accessed on http://audit.gov.ly/index.php/reports/84-reports/737-2013

 

[1]International NGO, Transparency International ranked Libya 160 out of 176 in its 2012 index ranking.

Corruption Perceptions Index 2012 View Results Table View Brochure (2012 Corruption Perceptions Index)

http://www.transparency.org/cpi2012/results

[2] Interview with Abdulmonem  Al Yasser and Suliman Al Zubi who epxressed their worries that the continuing deteriorating situation can be present a serious threat to the achievement of good governance in Libya (May 2014). Also EU, USA, Algeria, Egypt and Tunisian expressed their concern about the continuing violence in Libya affecting the achievement of good governance and hinders the establishment of sound democratic institutions (Mohamed Issam Laroussi, Middle East Monitor, June 21, 2014.

[3]Interview with Libyan Invetsment Authority Compliance officer, Tripoli, May 2014.

[4]Interview with Slimane Belhaj, GNC audit commission in May 2014.

[5]Interview with Slimane Al Zubi in May 2014.  

[6]The 446-page annual report for the year 2013 published by the Audit Bureau was presented to the GNC. It can be accessed on the following link :

http://audit.gov.ly/index.php/reports/84-reports/737-2013

 

[7]« Helping Countries Combat Corruption : Progress at the Bank since 1997 », free publication of the World Bank, June 2000.

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