Clinton’s ‘Failed State’ Warning Hangs Over Libya as NATO Officials Meet

U.S. Secretary of State Hillary Clinton’s early warning that Libya may become a failed state risks turning into reality as three weeks of Western military intervention have failed to stem the chaos that’s split the country in half.

Clinton on March 2 said Libya may become a “giant Somalia.” NATO Secretary General Anders Fogh Rasmussen on April 11 raised the possibility of a Libyan “failed state.” Moussa Koussa, Muammar Qaddafi’s lieutenant who defected last month, warned also that day of a Somalia-like collapse.

“It looks like a very untenable situation,” Geoff Porter, an analyst at North African Risk Consulting, said in an interview from New York. “Where we are heading is a de facto partition, between Tripolitania and Cyrenaica,” the historic names for western and eastern Libya.

The seven-week-old uprising aimed at ending Qaddafi’s 42- year rule has pulled a coalition led by the North Atlantic Treaty Organization into Libya and split the country between the oil-rich east, controlled by rebels, and Qaddafi’s stronghold in the west. Eni SpA (ENI), the biggest foreign oil producer in Libya, said last month its worst fear was that a breakdown in authority would shut production for years.

Oil Exports Hurt

Anarchy like that in Somalia, where areas have been ungoverned since a 1991 civil war, or in Sudan, whose southern portion voted to secede this year, would exacerbate concerns about oil investments. Libyan crude oil exports would be limited to about 29 percent of pre-crisis levels at first, if peace permitted all state-operated fields to return to full production, Nomura Holdings Inc. said in an April 7 report.

Foreign oil companies evacuated expatriate workers and “the shortage of human capital makes it difficult to bring all the fields back into production,” the report said.

Clinton and her NATO counterparts will meet tomorrow in Berlin to discuss next steps for the Libya mission. Foreign ministers and other officials from the “contact group” of nations involved in Libya are meeting today in Doha, Qatar.

“If Libya can be held together, it will not be a failed state,” said Elliott Abrams, senior fellow at the Council on Foreign Relations in Washington.

Oil production in Libya, which has Africa’s largest oil reserves, dwindled to a “trickle” last month, according to the International Energy Agency. In January, Libya was Africa’s third-largest producer.

Crude Down

Crude oil erased earlier gains in New York to trade near its lowest price in two weeks. Oil for May delivery fell as much as 88 cents, or 0.8 percent, to $105.37 a barrel on the New York Mercantile Exchange, the lowest price since March 31, and was at $105.50 at 9:08 a.m. London time.

If the rebels can control the eastern part of Libya, maximum oil flow will be around 300 million barrels a day, Michael Lo, a Hong Kong-based analyst at Nomura, said in response to an e-mailed question.

Preliminary data show global oil supplies beginning to look “thin” as the Libyan fight strains spare production capacity held by the Organization of Petroleum Exporting Countries, the IEA said yesterday in its monthly Oil Market Report.

NATO’s Rasmussen said prolonged fighting would invite “terrorists and extremists” such as al-Qaeda to exploit the disarray and called for a political settlement “sooner rather than later.” The danger was also flagged by Koussa, who most recently was Qaddafi’s foreign minister and previously the Libyan regime’s spy chief.

Avoid Civil War

“I ask everybody to avoid taking Libya into civil war,” Koussa told BBC television in his first remarks since abandoning Qaddafi and flying to the U.K. on March 30. “This would lead to so much blood and Libya would be a new Somalia. More than that, we refuse to divide Libya. The unity of Libya is essential to any solution and settlement.”

Somalia has become a haven for extremists in its central and southern regions. A Western-backed government controls a swath of the capital Mogadishu, where it fends off the Islamist al-Shabaab militia, which the U.S. accuses of having links with al-Qaeda. The country also is home to pirates who operate off the Horn of Africa, menacing trade in the Indian Ocean.

Libya, whose post-colonial history has been dominated by Qaddafi’s dictatorship, also has divisions drawn along tribal lines and lacks political parties or a constitution. The country is a colonial construct, forged under Italian rule by fascist dictator Benito Mussolini, who in 1934 combined the once-Ottoman provinces of Tripolitania, Cyrenaica and Fezzan.

Tribal Divisions

David Smock, an analyst at the Washington-based United States Institute of Peace, said Libya’s tribal divisions are parallel to clan rivalries in Somalia, where squabbling and animosity preclude national unity.

“Most failed states end up failed states because they have ethnic divisions and it is difficult to coordinate all the groups,” Smock said by phone from Washington.

Rebels this week turned down an African Union cease-fire plan that would leave Qaddafi in power. NATO, operating under a United Nations mandate, has used its firepower to cripple Qaddafi’s air force and destroy an estimated 30 percent of the regime’s military hardware.

Preventing a partition and forcing Qaddafi’s exit have been non-negotiable conditions set by a coalition still divided on whether to arm rebels in a bid to break the stalemate.

U.K. Foreign Secretary William Hague said only Qaddafi’s relinquishment of power will mean the end of NATO’s military campaign. “It will end with the departure of Qadaffi,” Hague told BBC Radio 4 from Qatar today.

Artificial State

Alessandro Politi, a former adviser to the Italian Defense Ministry, said by telephone from Rome that keeping Libya whole flies in the face of history.

“All this talk of unity is somewhat ridiculous when we are talking about an artificial state,” Politi said. “Qaddafi ruled with an iron fist, keeping it together, but the real Libya is a loose collection of tribes.”

Should the impasse continue, Libya risks joining African neighbors Chad and Sudan to become one of the most unstable nations in a 2010 failed-state index, assembled by Foreign Policy and the Fund for Peace. The index ranks states according to 12 measures including demographic pressures, public services and human rights. It now groups Libya with countries such as Mexico and Ukraine as “borderline.”

Somalia, Chad and Sudan top the list. Sudan has become divided since almost 99 percent of Southern Sudanese who cast ballots in a Jan. 9-15 referendum voted for the oil-rich region to secede from Sudan, according to the Southern Sudan Referendum Commission.

Unwelcome Option

Still, such a division appears to be an unwelcome option on both sides of the divide in Libya.

Unlike in Somalia, “Libyans on both sides agree that the unity of the country is essential,” said Ronald Bruce St John, an author of three books about Libya, including “Libya: Continuity and Change” published in February. “The Qaddafi regime will continue to try to reunite the country through force of arms, and the rebel side will continue to insist on a unified Libya without Qaddafi and his family.”

Asked about the prospect of a Sudan-like secession, State Department spokesman Mark Toner said it was “premature to talk about any eventuality.”

“It is a difficult situation,” Toner told reporters on April 11 in Washington. “We believe that we can continue to apply political pressure on Qaddafi and his regime so that he gets the message that it’s time for him to go.”

To contact the reporters on this story: Flavia Krause-Jackson in Washington at fjackson@bloomberg.net; Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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