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Libya rebels in squeeze to manage ‘crisis economy’

FEATURE

05/02/2011

BENGHAZI — The Libyan opposition is courting loans secured against oil revenues and the frozen funds of Moamer Kadhafi’s regime to manage a “crisis economy” in territories under its control.

“We are managing an economy that is in crisis in Libya’s liberated areas,” Ahmed al-Abbar, who manages the economic portfolio for the Benghazi-based Transitional National Council, told AFP in an interview.

He said the TNC’s top priority was to secure access to regime funds frozen abroad but, should this fail or fall short of needs, the focus would shift to opening credit lines with governments or financial institutions.

“If we are unsuccessful... then we will request loans secured against the frozen assets and oil. We all know that loans to Libya are guaranteed by the fact of its wealth.”

The TNC is already negotiating credit lines to cover essentials such as salaries, subsidised food products, medication and fuel in rebel-held areas, Abbar said.

“The figure is not final yet ... but our budget takes into consideration that at any moment we might be responsible for the whole of Libya,” the official said.

Abbar said members of the TNC itself were not being paid salaries.

“We are not begging for money but we do need money at the moment as loans that we will pay back,” said Suleiman Fortiya, one of two representatives serving on the TNC from the besieged port city of Misrata.

Libya’s third city, racked by more than seven weeks of violence that has turned entire streets into rubble and claimed hundreds of lives, would likely account for one of the council’s “highest costs,” Fortiya told AFP.

Misrata’s first job would be to repair infrastructure, as well as providing medical and financial support to families left without a breadwinner and to the war-handicapped.

“Those who lost their legs, arms and eyes will need special support... And we still haven’t calculated the cost necessary to help the families who have been left without a father.”

He said efforts were at present concentrated on direct aid to Misrata, so as to avoid shipments of food and medical supplies having to be sent through the eastern port city of Benghazi where the rebels have their capital.

The sea route between the two cities doubles as a conduit for arms and reinforcements to rebels in Misrata who, supported by Nato strikes, have made new gains this week although Kadhafi’s forces continue to shell the city.

Abdel Hafiz Ghoga, chairman of the council, said the first mechanisms used to finance the revolution against Libya’s longtime leader Kadhafi were funds recovered from local banks after loyalist troops retreated from the east.

“Before Kadhafi’s regime left Benghazi, they broke into the central bank and took quite a bit of the liquidity available in its vaults,” Ghoga said.

However, he said, rebels were able to “locate quite a bit of liquidity” in other local banks and this had carried them over until they were able to secure additional funding.

“We were able to pay out the February and March payrolls. Our crisis team has done a wonderful job,” he said.

Ghoga said the council was “in the process of preparing additional budgets” which he hoped would “include some of the frozen assets” of the Kadhafi regime held overseas.

Libya is rich in oil and natural gas but the resources have brought limited benefit to the rebel council as security concerns and the flight of staff have held up a potentially lucrative resumption of operations.

“The only shipment of oil we made brought us $129 million,” said Wahid Bughaighis, head of the National Oil Co., adding that shipping the cargo of crude “cost $70 million, so you don’t go far with that.”

“We have arrangements with Qatar to help us cover our needs,” he added, referring to a deal with the Gulf state which is in charge of marketing oil sales from rebel-held areas of Libya.

Bughaighis said the rebels were importing diesel, fuel oil and liquefied petroleum gas.

But an electricity power plant north of Benghazi, which fed on diesel and natural gas from the eastern oil town of Brega before it fell to forces loyal to Kadhafi, has started to feel the pinch.

“We have decreased output by 25 percent so we have breathing time for shipments to come in,” he said.

The oil facilities of Agoco, Sirte Oil and Zueitina are currently under rebel control, alongside the oil fields of Sarir, Nafoora and Misra, although production has yet to resume due to security concerns, Bughaighis said. AFP


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