Situation brief: The Libyan conflict and its impact on Egypt and Tunisia

          Since the 2011 uprisings, the Libyan Government has been struggling to build State institutions, draft a new constitution and provide essential services to the population in the midst of protracted financial, political and security crises, notably the integration of numerous armed militias into the armed forces.

          Parliamentary elections were held on 20 June 2014, but the Government was unable to extend its authority beyond Tripoli. Local councils are currently managing civilian and administrative affairs, and local military councils and militias are overseeing security, in view of the absence or weakness of public institutions. Significantly, local militias, in particular those that formed the rebel army, continue to retain power on the ground and have been the most influential players on the Libyan scene.

          It is therefore vital that the central Government include the various tribes, local councils and militias in the State-building exercise to guarantee viability. The challenge is to negotiate the restoration of core Government functions and mandates to the central authority. The Government, which has adopted a decentralized system of governance, needs to develop an integrated programme to convince the numerous councils and militias to give up the prerogatives they acquired during the uprisings. However, towns and cities have been running themselves since the collapse of the former regime and retain an inherited mistrust of the central Government, which has been unable to guarantee citizen security and offer financial and social incentives, such as integrated development programmes. Instead, security remains in the hands of various militias that vie for control of national assets and resources, especially oil. These factors, along with external considerations, have led to the outbreak of the most recent armed conflict between rival factions in Libya.

          Since July 2014, political instability and armed violence have intensified around the capital city of Tripoli and the second largest city of Bengazi. The evacuation of foreign nationals, including United Nations staff and diplomatic corps, is under way.  Since 30 July 2014, there has been no political thrust to resolve the conflict, despite a recent agreement between the Government and opposition militias to resume crude oil production and export.

          The present brief provides a snapshot of the economic situation in Libya and reviews the main challenges the Libyan economy is facing. It also highlights the impact of the Libyan conflict on two neighbouring countries, namely Egypt and Tunisia.