Another episode of political chaos in Libya, this time the dispute over the control of the country’s Central Bank (CBL), proves that Turkey wants to play – and succeeds – in the role of observer of the situation, with the compensation, inside the country due to of her strong presence. Turkey’s policy, which has developed channels with both Western (Tripoli) and Eastern Libyan (Benghazi) governments, may not have been able to stave off a new crisis, but it has once again put Ankara in a role mediator.
The crisis began in February when Central Bank Governor Sadiq Elkabir publicly expressed his differences with Prime Minister Abdelhamid Dbeiba over spending. In a letter he criticized him for promising wage increases and other public spending that would exceed incomes policy. In addition, it demonstrated the continued loss of value of the Libyan dinar against other currencies. For his part, Dbeiba accused Elkabir of dishonesty and corruption, opening Aeolus’ bag for the outbreak of the crisis, with the removal of Elkabir, who was eventually forced along with other senior CBL officials to leave the country and find refuge in… Turkey.
Banking cooperation
For about two years now, the Turkish side – has set the goal of a strong presence in Africa as a whole – had developed close contacts with Elkabir. It was only in April that Elkabir met with his Turkish counterpart Fatih Karahan on the sidelines of the spring meetings of the International Monetary Fund and the World Bank in Washington. They discussed the promotion of banking cooperation and the exchange of expertise in the financial sectors. In this context, unnamed diplomatic sources in earlier leaks about Elkabir had made it clear that the former head of the US National Security Council, John Bolton, but also the governments of France, the United Arab Emirates and Egypt agreed that Elkabir should go. by head since there was evidence against him of corruption.
At the same time, the Turkish president in his attempt to further strengthen the Turkish presence in Libya submitted to the parliament on August 12 a memorandum of understanding (MoU) – different from the arbitrary memorandum on the EEZ of 2019 – regarding the status of the Turkish forces in Libya . The agreement, which underlines the deepening of military cooperation between the two countries, provides Turkish forces with broad legal protection and logistical support while operating on Libyan soil.
The Turkish leadership, after the rapprochement and contacts that Recep Tayyip Erdogan had with Egyptian President Abdel Fattah Al-Sisi, in which the future of Libya was discussed, hastily sent the head of Turkey’s intelligence services, Ibrahim Kalin, to Tripoli for talks with the Dbeiba government.
The oil market
The Central Bank dominates the Libyan economy, owning the two main commercial banks and $27 billion in reserves, most of which comes from oil revenues. Salaries of millions of Libyans are also based on CBL. The ongoing attempt by various factions in Libya to gain control of the Central Bank is a clear danger to the entire country, threatening its security as well as its economy.
Oil production is vital to both the Libyan economy and global energy markets. Already the crisis over control of CBL has resulted in a 60% reduction in Libyan production, leading to an immediate 7% rise in global oil prices. The eastern government of Benghazi ordered a halt to oil loading operations at the ports of Brega, Es Sinder, Ras Lanuf, Zuweitina and Hariga, putting out about 700,000 barrels a day. Foreign media believe that this crisis, as well as the reaction of Khalifa Haftar’s side that controls Eastern Libya, will strengthen the latter’s position in his competition for influence with the internationally recognized government of Dbeiba.
The role of foreign powers
Among the international actors involved in Libya (Turkey, Russia, United Arab Emirates, Egypt) there is essentially no agreement on how to support the country to get out of its quagmire. Although the world’s eyes are on the war conflicts in Gaza and Ukraine, the events in Libya have caused international alarm. The European Union and the United States have expressed “serious concern” about the developments and have supported UN efforts to resolve the crisis (which are already underway). While the U.S. commitment is limited, Europe has had two main goals in Libya: curbing migrant flows from the country through the Mediterranean and seeking more oil contracts in an effort to reduce its dependence on Russian gas.
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