Without Security, Libya’s Oil Cash Can’t Buy Progress

A failed petro-state in Libya remains a possible outcome of the revolution that began two years ago this week, and its potential consequences are already on display in Mali.

Compared with the Arab Spring revolutions in Tunisia and Egypt, Libya’s attempt to build a working, pluralistic society from the rubble left behind by the late Muammar Qaddafi has both huge advantages and even bigger handicaps.

Libya’s upside makes short reading. Thanks to oil, the country has money, and plenty of it. And thanks largely to the North Atlantic Treaty Organization-led intervention against Qaddafi in 2011, Libya lacks the widespread popular hostility to the U.S. and Europe that complicates efforts to help Egypt.

What also differentiates Libya, however, is its lack of institutions from which to build, enforce security, or control the country’s borders. And without basic security, real progress is impossible.

Revolving governments in Tripoli and a reluctance of those in power to take decisions have allowed insecurity to fester. In the streets of the capital, the absence of the state -- especially uniformed police, municipal trash collectors and other providers of core services -- is striking. Benghazi has become a security vacuum, as demonstrated by the killing of U.S. Ambassador Christopher Stevens last September and Italy’s decision this week to its consul, after an unsuccessful attack on his car.

Lawless Democracy

These and other failures create a popular impression that under democracy, a world without laws or security is normal. If basic security returns, then the cranes that have hung idle over tens of billions of dollars’ worth of Turkish, Chinese, Russian and other building projects interrupted by the revolution -- from hospitals to housing developments, railways to a new Tripoli airport -- will start to work again. Foreign investors will flood in, attracted by Libya’s bottomless need for construction and ability to pay for it. The alternative would mean a growing belief that a unified Libya run by elected moderates cannot succeed.

There are recent signs of improvement. Oil production is almost at prewar levels, meaning that Libya can expect a current account surplus similar to what it had in 2010, about 20 percent of gross domestic product. The country also has $168 billion in repatriated, once-frozen assets to draw from. Given Libya’s small population of about 6.4 million, that makes for an awful lot of development aid.

Prime Minister Ali Zaidan, a Geneva-based human-rights lawyer before the revolution, is showing more sense of purpose. Since taking office in November, Zaidan has appointed respected career officers to head the key interior and defense ministries. The new interior minister, Ashour Shuwail, moved quickly to announce militarized zones along the country’s lawless southern borders and a crackdown in Benghazi. He also began recruiting a new security force to protect embassies and set out plans to induct armed militias into the police force and retrieve heavier weapons from the general population. These would be huge steps, if implemented.

The government is also allowing some state companies to sign major contracts. In December, Libya’s General Electricity Company signed a 250 million-euro ($334 million) deal with Alstom SA of France to service 11 gas turbines, to bring them back online before Libya’s peak summer season. Mohammed Magariaf, president of the General National Congress, said Libya would compensate foreign companies for work done before the revolution, an issue that has held up the resumption of building projects. And this month, Zaidan said that, if necessary, he would ask foreign companies to bid for contracts to collect the trash that is piling up in Libya’s cities.

Libya doesn’t need outside money, but it needs technology, expertise and training. Significant programs to train the police force, national army, and a true border guard would be invaluable. Libyan officials recently toured border facilities in the U.S., but much more can be done for a country able to pay for what it needs.

Securing Libya’s borders, as we argued in the opening editorial of this series on the ailing Arab Spring, should be a top priority for the U.S. and Europe. Tuareg rebels in northern Mali got from southern Libya the arms and fresh blood they needed to jump-start their insurgency, when fellow tribesmen fled across the region’s ineffectual borders during the revolution. More than a year after the Qaddafi regime’s collapse, swathes of territory along its 4,300-kilometer (2,672-mile) frontier remain ungovernable -- witness the demands by the militants who this week seized hostages at a natural-gas plant in Algeria for safe passage across the border to Libya.

As a recent paper by Peter Cole for the Carnegie Endowment for International Peace makes clear, for the Tuareg and other tribes in southern Libya, neither the state nor the frontiers have signified much since colonial rulers drew straight lines on a map, dividing tribesmen from their kin. Securing the frontiers now will be hard.

Last weekend, the prime ministers of Libya, Tunisia and Algeria met and agreed to set up joint checkpoints and border patrols. It was an important signal, but for that effort to bear fruit, Libya must build an effective, centrally controlled border guard. When that happens -- when Libya enjoys the security that will once more set its cranes twirling across city skylines -- then the country will have a better shot at rebirth.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.