Libya: Governance and Public Administration

Vito Intini

Michael Schaeffer

 

After more than a year of civil war, almost four years of fraught transition, and months of intensive U.N.-led negotiations, Libyans are poised to form a Government of National Accord (GNA) and begin the process of reunifying the country.  However, without swift and bold action by the GNA the situation in Libya will remain prone to reform reversal and instability due to fragmented state institutions, disrupted oil exports, shrinking government revenues, local political monopolies, and violence from radical groups. Indeed, the GNA and the Libyan institutions will be put to a difficult test as they will have to quickly deliver in a time when demand from Libyans has never been so pressing, against a backdrop of weakened public services, under a global scenario of persistently low oil prices (and hence their revenues) and a regional context of increasing political instability and polarization. The overthrow of the regime in 2011 did not lead to a peaceful transitional process in Libya but to ongoing localized conflict that varied in intensity. As this article is being formulated, Libya is currently still split between two rival governments and their allied coalitions, with significant parts of the country under the control of extremist groups that will continue acting as spoilers to the transition.  Yet there is a glimmer of hope that a government of National Accord may emerge.

 

A Recent History: All Libyan governments since 2011 have been transitional in nature. Their primary mandate has been stabilization and the immediate response to the needs of the Libyan people.  The election of the General National Congress (GNC) took place in July 2012 with a political controversy over when its mandate should end. Opponents of GNC believed it had a mandate until February 2014.  The elections of the House of Representatives (HoR) were held in June 2014, following the protests against GNC for having renewed its mandate beyond February. Only 630,000 Libyans turned out to vote in 2014, a significant reduction of the 1.7 million votes posted during the GNC elections in 2012. Each post-Qaddafi government has failed to build consensus among the Libyan public and its many stakeholders on a common national agenda.  The divisions within Libya are not new, but follow the ‘divide and rule’ politics that was encouraged by the regime.  Several interrelated layers of conflict coexist in Libya today, with the localized groups and militias fighting each other—some due to alignments with the two competing governments, some in support of or against extremist groups, and others over access to resources in specific locations.  The different militias in Libya hold considerable weight that they use to influence political systems or processes, and have a history of getting their demands met through the use of—or threat to use—violence. By the 2011 uprising, Libyan society lacked even weak or partially independent social institutions that could help manage a peaceful transition: Libya had no political parties, regional or local governments, trade unions, independent legislators or judges, independent or robust civil society groups, or even prominent religious or traditional organizations. To their credit, the civil society groups that did exist (or have since emerged) have been quite active, as have the newly independent media. Libya’s 2013 Human Development Index stood at 0.784, against 0.641 in 1980, positioning the country in the 55th out of 187 countries. This is explained by the good performance in terms of education and health (at least from a merely quantitative perspective) and the high GDP per capita income generated from oil. Between 1980 and 2013, the mean years of schooling increased by 5.3 years. Over the same period, life expectancy increased by 11.1 years. Libya has one of the highest literacy rates in the Arab region (90 percent of people aged 15 and over in 2012, 96 percent for males and 83.7 percent for women). In 2008, the net enrollment ratio in primary education was 98.2 percent, while the infant mortality rate was 17.6 deaths per 1000 live births.  The poverty rate was estimated at 11.8 percent in 2003 (the latest year for which official data are available) and, according to the 2009 MDG report, Libya was well on track to achieve the MDGs by 2015 before the conflict erupted. The economy, traditionally dependent on oil, has suffered greatly from ongoing conflict and state fragmentation.  The sabotage of port terminals and production facilities has caused significant fluctuations in oil exports, and hence government revenues, throughout the transitional period.  Smuggling economies have developed.  Economic growth is negative, as the fighting has damaged infrastructure, and foreign investing has stopped. Strong economic, social, and security ties between Libya and its neighbors Tunisia and Egypt mean that instability in Benghazi and Tripoli are felt in Tunis and Cairo as well. The violence and economic instability in Libya has been increasingly correlated.  Indeed, one of the key drivers of the fragmentation of the Libyan transition was the issue of control over oil revenues (See Figure 1). Political groups in Libya are understandably hesitant to allow their rivals to control these large revenue streams. Even if all the factions committed to the fair distribution and non-military use of oil revenues, there are few mechanisms to enforce such a deal. As a result, macroeconomic health has worsened as the fighting damaged infrastructure, and business and consumer confidence declined. The collapse in international oil prices since June 2014 has cut the country’s foreign exchange revenues and the outlook based on protracted low prices is not encouraging for the country’s economy.

 

Measures of Governance Have Declined: The initial upheaval that swept Libya and gave civil society a stronger voice which has been demanding transparency and accountability from the government.  However, the post-Gaddafi governments were unable to end armed conflict, stop the deterioration of the security situation and impose authority which resulted in the worsening of the governance situation. Indicators in the figure below show governance performance between 2009 and 2013. All indicators recorded significant drops except for voice and accountability which showed improvement. Libya’s government performance is deficient (See Figures 3-8, below).  Compared to other countries with an average GNI per capita higher than $10,000, Libya scored lowest for all governance categories by at least two points for each of them.  Transparency International’s Corruption Perception Index (CPI), which ranks how corrupt a country’s public sector is, also confirmed that Libya is relatively more corrupt. In 2014, it ranked Libya 166/175 with a score of just 18 (on a scale 0-100, where 0 is very corrupt, 100 is very clean). The two primary elements of states i.e. 1) the monopoly on the use of force; and 2) the collection of taxes; are currently absent in the Libyan context. The over-reliance on budget revenues proceeding from oil reserves was induced due to the absence of wide taxation base.  As a result, the paramount task of any future transition government is to build rather than rebuild public administration, starting perhaps from a clearly articulated vision and policy that defines nature, mandates and roles of the country’s governance system at central and local levels.

 

Public Administration Lacks Transparency and Accountability: In the Libyan public administration apparatus, there is absence of transparency and accountability mechanisms. Policy processes remain confusing and arbitrary.  In recent times there has been an intense discussion involving government agencies, international organizations, and others about the alternatives for improving the current system.  Summarizing some of the primary issues that have been identified in the debate as slowing down the consolidation of subnational local autonomy and the decentralization process as follows: 1) the lack of an integrated vision on decentralization in policy formulation; 2) the influence of the central public authorities’ representatives on the activity of local public authorities; 3) the lack of clarity with respect to the administration of services; 4) the lack of transfer of some competences to a local administrative authority; and, 5) the absence of an equitable transfer system. Lack of vertical and horizontal coordination is paramount.  As a result, the level of interaction between deconcentrated government offices and municipalities is characterized by lack of clarity on roles and responsibilities.

 

[1] The World Bank and UN (ESCWA) finalized “LIBYA’S SOCIO-ECONOMIC AND PFM CHALLENGES AN OPPORTUNITIES” by Vito Intini UN (ESCWA) and Michael Schaeffer (WB); December 2015. The Joint World Bank and UN (ESCWA) paper is intended to stimulate discussion and debate as to the future prospects of Libya.  The paper aims to show how developmental and humanitarian aspects can be closely related to the institutional and governance ones, including public finance issues.

[1] Libya HDR data, HDR 2014

[1] CIA World Fact book

[1] The Millennium Development Goals In the Great Socialist People’s Libyan Arab Jamahiriya: Towards 2015: Achievements and Potentials (2009)