3. Eastern Libya: The Libyan Arab Armed Forces
A series of assassinations and violent local power struggles beset eastern Libya following the overthrow of the Gaddafi regime. During 2012–14, police and military officers, judges, politicians, journalists and activists in the cities of Benghazi and Derna were targeted. Hundreds of killings occurred. Few, if any, suspects have been arrested. Many residents of Benghazi as well as authorities in the eastern region blamed the assassinations on extremist Islamist groups – including Ansar al-Sharia – that dominated both cities. On the back of this insecurity and campaign of assassinations, then-General Khalifa Haftar launched ‘Operation Dignity’ against Islamist and Islamist-leaning militias in the city of Benghazi in May 2014. Underlining the country’s political fragmentation, in March 2015 the House of Representatives41 appointed Haftar as general commander of Libya’s armed forces and promoted him to the rank of field marshal.42 Since that point, Haftar has referred to his forces as the ‘Libyan Arab Armed Forces’ (LAAF).43
Haftar secured the support of disgruntled former army officers and soldiers, as well as key eastern tribes, in using Operation Dignity to consolidate his control of the eastern region through the development of the LAAF under his leadership.44 What followed, though, was a brutal campaign for control of Benghazi between May 2014 and July 2017, which displaced hundreds of thousands of residents and destroyed significant parts of the city. Video footage of an LAAF officer summarily executing combatants has led to the issue of an arrest warrant by the International Criminal Court (ICC) for the officer concerned. The LAAF officer’s actions appear to divide opinion locally, with some believing that such acts are justified against extremist groups while others denounce the behaviour.
Following the establishment of control in Benghazi, an empowered LAAF moved on to Derna, where it launched another bloody campaign against Islamist forces, including groups linked to ISIS and Al-Qaeda. The campaign concluded in June 2018. The LAAF has since sought to expand its influence in the south of the country (as discussed later in this paper), and in April 2019 launched an offensive on Tripoli in the west.
Community relations
The LAAF’s status is a matter of contestation. To its supporters, it constitutes a formal national army and is referred to simply as al-jaysh – i.e. ‘the army’. To sceptics, the LAAF is no different to other armed groups. While the LAAF has the distinction of seeking to operate as a national force (which few, if any, rival actors are able to do), in reality it remains an amalgam of formal units of mixed tribal composition – such as Brigade 106 – and some local auxiliary forces.45
The tribal influence of some armed and military figures has also represented a threat and a challenge to Haftar’s project and ambitions in eastern Libya. Relying on their tribes and tribal support bases, some armed group and/or military figures – such as Col. Faraj al-Barasi, Col. al-Mahdi al-Barghathi, Col. Muftah Hamza, Faraj Egaim, Salah Boulaghib and Ibrahim Jadhran – have sought on various occasions to challenge Haftar’s authority and growing control over eastern Libya’s military and security forces. However, using a combination of a wait-and-see approach and a demonstrated ability to navigate tribal relations, Haftar has successfully thwarted those challenges to his authority, sometimes by playing elements of tribes off against one another to reach an accommodation.
At the beginning of Operation Dignity in 2014, the LAAF’s general command had limited control over some of the armed groups under its structures in Benghazi. An illustration of this can be found in its fluctuating relations with factions of the Awagir tribe in Benghazi. Benghazi is the stronghold of the Awagir tribe and its sub-clans. The city and its environs are considered to be their homeland (watan). The involvement of Awagir fighters in Operation Dignity in 2014 formally began when the Interim Government46 appointed Faraj Egaim, an Awagir figure, as the head of a special operations and counterterrorism force.47 However, growing disenfranchisement and dissatisfaction among certain Awagir factions with Haftar and his leadership style prompted a rapprochement between Egaim and the GNA in 2016, as the GNA saw Egaim as a figure through which Haftar could be challenged.
In order to head off Egaim’s challenge without causing Awagir factions to break away from the LAAF, Haftar placed Egaim under house arrest. After the launch of the LAAF offensive on Tripoli on 4 April 2019,48 however, Haftar released Egaim following intervention and mediation from some key Awagir figures. Egaim was given command of a newly formed armed unit of his own, with a vague mandate to ‘counter negative occurrences’ (which the unit does not appear equipped to fulfil). These events illustrate the challenges facing the LAAF general command in terms of accommodating and navigating local interests, yet also indicate its flexibility and resourcefulness.
Tribal issues are not the only factor complicating relations within the alliance. In Benghazi tensions can also be observed between the LAAF general command and elements of the Saiqa Special Forces, led by Mahmoud al-Werfalli (the officer subject to the aforementioned ICC arrest warrant). The unit has a unique composition, amalgamating local young people, former Gaddafi-era commanders and a significant Salafist ideological element. As with Tripoli’s armed groups, members of both the Awagir tribe and the Saiqa Special Forces’ network have assumed a formal security role, with a degree of autonomy from the LAAF general command. But that space for autonomy is steadily shrinking as formal LAAF and government institutions continue to consolidate their control. Since 2014, Awagir leaders have leveraged their positions and personal connections to capture elements of Benghazi’s economy (particularly private businesses and the real estate sector), which they consider compensation for their support of the LAAF in 2014.
These tensions highlight the mismatch between, on the one hand, the strategic view of the LAAF’s general command – which is ostensibly nationalist in positioning and directly loyal to Haftar’s national political project – and, on the other, the agendas of localist elements of the alliance less committed to the field marshal’s goals. The LAAF has proved relatively effective to date at balancing coercion and patronage to manage the tensions between these priorities. For local groups, such as the Awagir and elements of the Saiqa Special Forces, the LAAF has become a vehicle for the pursuit of local goals, with incorporation into LAAF structures ensuring a degree of stability in the areas under the alliance’s control. The LAAF general command has also pursued its own narrow interests at times, particularly in terms of increasing its engagement with the private sector.
Conflict has had a significant negative impact on the social fabric in the east, where the relationship between armed groups and local communities broadly mirrors tribal and ideological divides.
The LAAF is ultimately subservient to Haftar himself. A narrow coterie of actors – including, notably, his sons and commanders from Haftar’s own tribe, the Ferjan – undermine the formal chain of command. For those who support the LAAF as a formal institution of the state, the personalistic rule of Haftar creates an inherent conflict of loyalties. Such considerations must be factored into any analysis of the LAAF’s relationship with communities in the east, where the alliance has co-opted social organizations and used coercion to dominate political and economic decision-making.
Conflict has had a significant negative impact on the social fabric in the east, where the relationship between armed groups and local communities broadly mirrors tribal and ideological divides. For example, in 2014, when the local community in Benghazi suffered serious fissures along clan and tribal lines, armed groups in the city sought to exploit these fault lines in their power struggle against each other. Some of the key leaders in the city’s Islamist-leaning armed groups belonged to clans and tribes originating in western Libya, especially Misrata. For example, Ansar al-Sharia and the Benghazi Revolutionaries Shura Council (BRSC) – both of which included brigades that at least initially self-identified as anti-Gaddafi, rather than as Islamist – received consistent military support from Misrata.49 The support base for Operation Dignity and the LAAF in Benghazi, on the other hand, originated primarily among the eastern tribes, including the powerful Saadi group of tribes (the Awagir, Magharba, Obaidat and Barasa) and the Murabitin tribes (consisting of the Mnifa, Qahtan and Ferjan); later on, support also came from the Higher Council for the Murabitin and Ashraf. Nonetheless, the LAAF’s general command takes inclusion of all tribes and regions across Libya in its structures seriously and considers it key to the success of its nationalist positioning.
Armed groups have consequently been viewed as part of local society, albeit with varying degrees of legitimacy. For example, the BRSC and Derna Mujahidin Shura Council would not have been able to secure footholds in Benghazi and Derna respectively, and hold out for years against Operation Dignity, without close links to local communities in their neighbourhoods. Equally, the LAAF would not have been able to sustain its advances on Benghazi and Derna and consolidate its position without the support of tribes throughout the eastern region.
Extensive militarization has occurred in eastern Libya. On 19 June 2016, Agila Saleh, the speaker of the House of Representatives, declared a state of emergency in the east. Through his position as speaker, Saleh appointed the LAAF’s chief of staff, Abdulrazaq al-Nadhouri, as military governor overseeing territory from Bin Jawad in the central ‘oil crescent’ to Derna in the northeast. Nadhouri subsequently abolished 10 democratically elected municipal councils and controversially replaced them with military governors. Nadhouri also attempted to take over the functions of civilian authorities and influence state institutions in eastern Libya. His appointment led to the emergency imposition of military law, and a range of temporary decrees affecting civilian/technical institutions in that region.
Operation Dignity steadily gained popular support, allowing the LAAF to consolidate its position as a legitimate and representative security actor in the eyes of a significant proportion of communities in eastern Libya. For some, the LAAF is seen as a vehicle for circumventing tribal divides. Interviewees from the city referred to the ‘Awagirization of Benghazi’ to describe how members of the tribe are taking key jobs in the public sector. One interviewee from Benghazi emphasized her hope that the LAAF would prevent the dominance of tribal politics in the city.50 Regardless of one’s view of the LAAF, residents of Benghazi and Derna (and to a lesser extent Ajdabyia and Kufra) interviewed for this paper view the LAAF as the key power broker and local actor.
The LAAF’s dominance in the east has brought a degree of stability to the region, allowing for a semblance of normality to return in cities such as Benghazi. This has prompted some business leaders to call for a ‘strongman’ mode of rule in Libya and offer support for the LAAF’s campaign.51 When asked about the LAAF’s growing role and the lack of transparency over its actions, one prominent pro-LAAF activist in Tobruk remarked that the LAAF is at war, and that this was no time to ask for civilian oversight or transparency.52
For those who oppose the LAAF’s activities, or who do not benefit from them, the cost is high. This has particularly been the case since the launch of the April 2019 offensive on Tripoli. For example, hours after giving an interview criticizing the offensive, Seham Sergiwa, a legislator in the House of Representatives, was abducted, allegedly by the Awliya al-Dam armed group (even though the group had supposedly been disbanded by the LAAF). ‘The army is a red line,’ was reported to have been graffitied on the wall of her property. Sergiwa remained missing at the time of writing.
Nonetheless, there is now an ongoing conversation in eastern Libya about the role that the LAAF should play in public life and politics. Some politicians, activists and civil society groups are trying to push back against the expansion of the LAAF into the public sector and economic sphere. According to one source in the Interim Government in al-Bayda, the Council of Ministers and the Ministry of Finance are currently engaged in an administrative tribunal against the LAAF’s Military Authority for Investment and Public Works (MAIPW).53 The dispute is over the collection of labour migrants’ fees and the management of agricultural mega-projects in the Sarir and Kufra regions in the southeast.54
In addition, democratically elected mayors and municipal councils have challenged the status of military personnel appointed by Nadhouri during his term as military governor. For example, in a court case in al-Bayda in 2017, the mayor of al-Marj challenged Nadhouri’s decision to replace him with a military-appointed mayor,55 while in the same year a group of seven mayors also affected by Nadhouri’s appointments issued a joint statement calling for the reinstatement of democratically elected municipal councils.56 After Nadhouri’s post of military governor was abolished by the speaker of the House of Representatives in July 2018, the Interim Government in al-Bayda assumed oversight of the issue and appointed its own civilian caretaker municipal councils.
The LAAF’s increasing dominance leaves communities in the east unable to hold it accountable in any meaningful sense, despite nominal oversight by civilian authorities. In April 2015, the House of Representatives summoned Haftar for a hearing on military and security developments.57 Haftar did not show up, his excuse being a lack of time due to ongoing military operations in Benghazi and Derna.58
At the same time, there have been instances when public pressure on the LAAF, its leadership or security forces aligned with it has been effective. In February 2017, Nadhouri, at that time still military governor of the eastern region, issued a directive banning women from travelling without a guardian and security clearance.59 The decision, ostensibly made on national security grounds, immediately prompted protests by activists and civil society organizations. Female leaders from Benghazi met with Nadhouri to convince him that the decision was discriminatory, prompting him to suspend the directive for few days – albeit, only until he came up with a new one that banned both women and men from travelling without security clearance from the relevant authorities.60
Since the LAAF’s consolidation of control in Benghazi and Derna, the role of independent civil society has remained weak. Interviews with some residents of Benghazi have indicated that the legitimacy accorded by some members of the community to the LAAF has made it more difficult for civil society to hold the group accountable.61 The limited presence in the eastern region of international NGOs, the UN Support Mission in Libya (UNSMIL) and affiliated UN agencies is also likely to have contributed to the diminishing power of civil society. Indeed, only civil groups specifically linked to the LAAF enjoy relative freedom, access to funding and influence. When Abir Emneina, the head of the independent Civil Society Commission in Benghazi, challenged the increased surveillance and oversight by the LAAF and security services of civil society groups in Benghazi, she was removed from her post and replaced with someone considered more pliant.
The limited presence in the eastern region of international NGOs, the UN Support Mission in Libya (UNSMIL) and affiliated UN agencies is also likely to have contributed to the diminishing power of civil society.
From 2017, the internal and external security agencies in eastern Libya resumed their activities. They started to conduct surveillance of civil society. They also placed restrictions on civil society groups, such as requiring security clearance for foreign travel. The security agencies also instituted various administrative measures: for example, producing files on the details of activists, the names of employees and contacts, and financial and bank account data.62 On some occasions, activists were banned from travelling or had their passports confiscated when applying for security clearance to travel abroad. Female activists have sometimes been harassed at airports when travelling without a chaperone.63 Since the launch of the Tripoli offensive in 2019, the space for opposition has been further reduced.
Revenue generation and resource mobilization
The ability to fund the LAAF’s operations has ensured the sustainability of Field Marshal Haftar’s efforts to establish security and a military governing authority across territories under LAAF control. The LAAF accesses a significant amount of its financial resources from (or via) rival state institutions in both the east and west of the country. By 2016, the LAAF’s revenue generation from these sources had become significantly more robust and sustainable, and was established to some degree within a legal framework. Achieving the latter was part of a strategy to protect the LAAF and its leadership from any future legal implications arising from its revenue-generating activities.64
LAAF revenue-generation mechanisms and modalities have gradually evolved, going through three broad phases. In the first phase (2014–15), the LAAF depended on local support and donations from businessmen. The second phase (2016–19) saw the enactment of legislation operationalizing the support of civilian authorities and establishing private sector interests. The third phase (2019 onwards), still apparently in progress at the time of writing, involves seeking overt control over civilian authorities to consolidate the LAAF’s instruments for directing the economy, on the basis that this is required for the war effort in Tripoli. In addition, various forms of external support have become increasingly important for the LAAF to prosecute its war effort and maintain its finances.
In the early phases of the LAAF’s development, Haftar’s forces relied heavily on support from local tribes, which ran convoys carrying food supplies. Additionally, businessmen in Libya’s eastern region supported the LAAF with cash, or provided supplies such as water or military clothing, to help sustain Operation Dignity. Haftar reciprocated these efforts by providing political support for key power brokers, such as Ali al-Qatrani – who would later be nominated by Haftar to the Presidency Council65 of the GNA, headed by Prime Minister Fayez al-Serraj – and General Mohamed al-Madani al-Fakhri – who would become head of the LAAF’s Military Authority for Investment and Public Works (MAIPW).
The development of quasi-legal means of allocating funds to the LAAF
While the LAAF is unaffiliated with the GNA and thus lacks formal access to state institutions in Tripoli, its alignment with the eastern-based elements of the House of Representatives – still theoretically the internationally recognized legislature, despite the expiry of its mandate, chronic divisions and a failure to follow due process – has provided means to pass legislation in support of LAAF military operations.66 Key pieces of legislation have included the establishment of the post of general commander of the Libyan Army (which Haftar’s alliance refers to as the LAAF), to which Haftar was appointed in 2015, and the introduction of an anti-terrorism law in the same year. This provided legal and political cover for various operations and activities. It gave Haftar more legitimacy, which he used to secure political and financial support from the Interim Government, the eastern CBL, and regional and international powers. The introduction in 2016 of the military investment law (which was eventually adopted by the House of Representatives in November 2018)67 expanded the ability of the LAAF to generate revenue without legal challenges from other parts of the Interim Government, including the Ministry of Finance.
While the LAAF is unaffiliated with the GNA and thus lacks formal access to state institutions in Tripoli, its alignment with the eastern-based elements of the House of Representatives has provided means to pass legislation in support of LAAF military operations.
The creation of the Defence Committee by the Interim Government in al-Bayda in the first quarter of 2016 established a significant funding mechanism for the LAAF. The committee was formed as a result of an agreement between Haftar and the prime minister of the Interim Government, Abdullah al-Thinni. It was headed by the LAAF’s chief of staff, Abdulrazaq al-Nadhouri, with the members also including the prime minister, the eastern CBL governor, the minister of finance and the head of the House of Representatives’ national security and defence committee. The sole purpose of the new Defence Committee was to secure and allocate funds for the LAAF and its activities. In 2016–17, the committee obtained more than LYD2 billion for the LAAF.
Through the Ministry of Finance, the Interim Government in al-Bayda has provided limited budget and funding for the Defence Committee. Via these means, the Interim Government secured LYD666 million68 for the LAAF through legal allocations by the Council of Ministers in 2018. The Interim Government taxes fuel and petroleum products sold by the Brega Petroleum Marketing Company (BPMC) – a subsidiary of the National Oil Corporation (NOC) – in eastern Libya. The taxes are then paid into the Ministry of Finance’s account with the eastern CBL in al-Bayda. As the BPMC is obliged by the eastern CBL to pay the taxes in cash, this provides significant liquidity to be channelled to the LAAF to pay foreign contacts and suppliers. Other sources of revenue for the Defence Committee have included the telecoms sector, which in 2018 provided around LYD600 million through the accounts of the Libyan Telecommunication and Technology Company (LTT)69 in eastern Libya.70
The eastern CBL has provided significant funds to the LAAF. In a 2019 interview, the head of the eastern CBL, Ali al-Hibri, noted that around a third of the eastern CBL’s spending had gone to the LAAF in 2016–18 (such spending accounted for 43 per cent of the budget in 2016, 27 per cent in 2017 and 20 per cent in 2018). All told, this amounted to approximately LYD9.5 billion over three years.71 These funds have been raised through a combination of loans from local commercial banks and the sale of government bonds, in addition to the printing of banknotes. In a March 2019 interview, Hibri asserted that LYD29 billion in bonds and loans had been sold by the Interim Government at an interest rate of 3 per cent per annum.72 For example, in 2017 the Defence Committee was able to secure a LYD1.1 billion loan from the Commercial National Bank and a LYD500 million loan from the Commerce and Development Bank. Al-Wahda Bank is also believed to be a source of loans for the LAAF. These banks have in common the fact that their headquarters are in eastern Libya. Since 2016, the eastern CBL’s finances have also been significantly aided by the printing of approximately LYD14.5 billion in banknotes by Russian company Goznak.73
The LAAF combines these sources of revenue with payments from the Tripoli-based authorities to pay salaries. Members of the LAAF who registered prior to 2014 are being paid through CBL Tripoli’s payroll via the LAAF’s own military accounts department in the east. The department also finances LAAF members who joined after 2014, using monies secured in eastern Libya.
Economic expansion in the public and private sectors
The LAAF has developed into a sprawling network that spans governance, the private sector and the security sector. The backbone of this network, in terms of supporting independent economic activity, is the MAIPW. The introduction of the military investment law in 2016, which preceded the creation of the MAIPW, represented a clear shift in the LAAF’s vision of its role. The LAAF is not hiding its intention to model itself on the army in neighbouring Egypt (i.e. emphasizing a prominent role in the economy). In keeping with the Egyptian experience, this has generated concern that the LAAF will seek monopolistic control of the economy, and also that the LAAF could use its position to bypass other administrative and governance functions fulfilled by civilian authorities. The MAIPW was restructured on 11 June 2017, with Haftar appointing General Fakhri as its chairman.74
The MAIPW is generating limited but steadily growing income for the LAAF. It embodies the LAAF’s long-term strategy for achieving financial independence. The MAIPW has engaged in a wide range of economic activities. One example is the export of scrap metal, which has been ongoing since 2016. This business picked up in 2017, and has become an important revenue stream. The rationale is that the LAAF can collect metal scrap in war zones where its forces are active, although it should be noted that the MAIPW has not limited its activities specifically to conflict areas. There are thriving markets for scrap metal in the southern and western regions, and the MAIPW has also shipped numerous scrap metal consignments through the ports of Tobruk, Benghazi and Brega. The prime overseas destination for such shipments is Turkey.75
In October 2017, Haftar issued Directive No. 335, putting three major agriculture and industrial projects in the Sarir and Kufra basins under the management and oversight of the MAIPW.76 So far, 19 sites and projects in the southern region are under the MAIPW’s authority, three of which are agricultural mega-projects. The MAIPW has sought to rehabilitate and operate various abandoned factories (under partial or full ownership), including dairy, food, cement and textile factories. The MAIPW has also signed contracts with the municipalities of Benghazi and Ajdabiya to take over waste management and recycling services in those cities.77 These are significant contracts: waste management in Benghazi is charged at a weekly rate of LYD700,000.78 Moreover, the MAIPW is in charge of fuelling and issuing clearances for ships and tankers docking at ports under LAAF control.
There are also areas where the MAIPW is clearly overstepping its legal mandate. It is charging migrant workers (principally Egyptians) LYD500 for permits allowing them to work in LAAF-controlled areas, which it has no mandate to do. This applies not only to new arrivals, but also to migrants already working within the country. Given the high number of migrant workers in LAAF-controlled areas, this represents a lucrative revenue stream.
Other areas of activity have no veneer of legality. The LAAF has supported armed groups with known involvement in human smuggling and fuel smuggling. The Subul al-Salam Brigade in Kufra and Martyr Ahmed al-Sharif Battalion in the Sarir area are believed to have links to human- and drug-smuggling networks. Both groups purportedly earn a cut of the smugglers’ profits in return for allowing passage through their territory or providing protection against bandits in remote areas. Subul al-Salam, in particular, is thought to have benefited from its association with the LAAF by establishing itself as the dominant armed group in Kufra since 2015, not only bringing other factions under its banner but using its connections to oust rival smuggling operations.79 Elsewhere, some members of the Omar al-Mukhtar Brigade – ostensibly responsible for border patrols and combating illegal migration near the Egyptian border – engage in smuggling. The extent to which the profits from such activities fund the LAAF is unclear, however, as payments are likely to be made to individuals for permitting illegal practices or are likely to be retained by the relevant local group.
Effective oversight of the LAAF’s financial activities is impossible in the present circumstances. One illustration of the problem is the fact that Abdulsalam al-Hassi, the head of the Administrative Control Authority80 in eastern Libya, was briefly detained at the LAAF’s headquarters in al-Rajma following the release of his organization’s 2019 annual report, which was critical of LAAF practices, especially concerning financial matters.
The LAAF’s growing business interests and commercial assertiveness threaten the economic interdependence of warring factions, as the LAAF effectively seeks to create its own self-contained economy if it cannot capture the capital, where the key economic institutions are based. At present, the LAAF – broadly defined – controls most of Libya’s oil and gas infrastructure while the GNA controls the means of distribution. To date, this has incentivized both sides to accept the need for a certain degree of cooperation. The imposition of an oil blockade in January 2020 illustrates that this understanding has broken down. The LAAF claims that the blockade is driven by local outrage in the east at the GNA’s military partnership with Turkey. However, the timing of the blockade, coming only two days before an international summit on Libya, added to the fact that it was the LAAF that implemented it, invites suspicions of a political power play. The NOC has warned that production could drop as low as 72,000 barrels a day (b/d), from approximately 1.2 million b/d prior to the blockade.81 This is set to cost Libya over $50 million in lost revenues per day and will have major implications for the economic interdependence of rival political camps, and of course for the civilian population.
The LAAF’s growing business interests and commercial assertiveness threaten the economic interdependence of warring factions, as the LAAF de facto moves to create its own self-contained economy.
The current move towards mobilizing the entire economy in the east in support of the LAAF’s war effort will apply further pressure to the fragile status quo. It will make it increasingly difficult for state institutions to avoid being dragged into the war. The blockade was presaged by a dispute between the LAAF and the NOC. In early September 2019, the NOC announced that it would restrict the distribution of kerosene (used for aviation fuel) in the east ‘until such time that assurances can be met that fuel is only being used for domestic and civilian aviation purposes’. The NOC has reported that consumption of aviation fuel increased by 80 per cent in 2019 compared with 2018. Such an increase cannot be explained by civilian consumption alone; the outbreak of conflict in Tripoli is a much likelier reason. In response, authorities in the east of the country have accused the NOC of being partisan, and of failing to supply the east with adequate quantities of fuel, a charge that the NOC denies. On 19 September 2019, the eastern authorities announced the formation of a rival eastern BPMC breaking away from the Tripoli-based entity, further exacerbating governance and accountability challenges in the fuel sector (particularly given that the LAAF controls a significant amount of the oil and gas production and export infrastructure).82
In fact the beginnings of the weaponization of the economy can be traced back to June 2019, two months after the launch of the Tripoli offensive, when House of Representatives speaker Saleh declared a ‘state of mobilization’. This designation triggered the activation of additional procedures for resourcing the LAAF’s war effort.83 The LAAF’s general command immediately sought to put the announcement into effect.84 The LAAF’s rejection of the 2015 Libyan Political Agreement – designed to serve as a political roadmap for the unification of the country’s political and governing institutions after the split that occurred in 2014 – means that Saleh is, in its view, the supreme commander of the country’s armed forces (in theory, this means that Saleh provides civilian oversight of the general commander, Haftar). In October 2019, Saleh authorized the LAAF general command to move ahead with implementation of the plan, which was announced by Aoun al-Ferjani – head of the LAAF’s Control Authority85 and one of Haftar’s closest confidants – on Libyan television. Subsequently, a communiqué attributed to the LAAF announced that all taxes and customs duties collected by state institutions and state-owned companies would come under the control of a newly created LAAF Mobilization Authority.86 However, opposition from the Interim Government seems to have led to the plan being shelved – though not before some funds were raised: LYD200 million is believed to have been obtained by the Mobilization Authority from LTT companies. It is not clear what has happened to these funds, and the Interim Government claims to be investigating.87 Nonetheless, these events illustrate the LAAF’s desire for direct control of the economy in the east of the country without the need to operate through civilian authorities.
The problems with the east’s economic model are mounting, however. The loans from banks in the east to the LAAF are not secured,88 which means that these funds – along with currency printed in Russia (see below) – are not part of the figures reported by the officially recognized western CBL, based in Tripoli. Experts estimate that the value of these unsecured loans may be in excess of LYD45 billion.
External sources of revenue
As previously noted, the eastern CBL’s finances have been significantly aided by the printing of approximately LYD14.5 billion in banknotes since 2016 by Goznak, a company 100 per cent owned by the Russian state. The banknotes have been produced despite their lack of recognition by the CBL in Tripoli, which has refused to accept the notes (maintaining that it has the sole right to carry out monetary policy).
The LAAF also continues to benefit from significant external support from the UAE and Saudi Arabia. In its 2017 report, the UN Panel of Experts on Libya documented the ‘material’ and ‘direct’ assistance provided by the UAE to the LAAF in support of the latter’s attempts to develop its air force.89 Such support has increased over the course of the Tripoli war. There are also reports of direct financial assistance. A report citing anonymous Saudi officials has circulated claiming that, shortly before the Tripoli offensive, Saudi Arabia promised to provide ‘tens of millions’ of dollars to help pay for Haftar’s military operation, while a report has also circulated alleging that Saudi Arabia has been paying the Wagner Group for the provision of mercenaries to support the LAAF.90
Engagement in economic activity at different levels within the group
Given the LAAF’s highly centralized command structure, a limited number of elite figures control the group’s finances and revenue-generation mechanisms – legal, quasi-legal and illegal – and manage the income from them. These elite figures have rapidly accumulated assets and business interests. For example, there are reports that the MAIPW has acquired land and property in Benghazi91 belonging to figures and families allegedly linked to the Islamist-leaning BRSC and Ansar al-Sharia groups.92 Senior LAAF officers such as Chief of Staff Nadhouri and Mohamed al-Madani al-Fakhri, the former head of the MAIPW, as well as the chief of the Criminal Investigation Department in Benghazi, Colonel Salah Hwaidi, are known for dominating Benghazi’s real estate market and have bought property worth tens of millions of Libyan dinars.93 There are also a number of allegations that LAAF-aligned groups, such as the Saiqa Special Forces and Awliya al-Dam, have seized property outright.94
The LAAF’s general command has tried to distance itself from such practices by issuing statements and decrees prohibiting the seizure of private property by those without the legal mandate to do so. Seemingly as part of such efforts, in December 2019 it reassigned Fakhri to the command of the LAAF’s Sebha Military Zone, a move that – according to informed sources – was effectively a demotion. Ramadan Aboaisha, the new head of the MAIPW, was reportedly selected due to his reputation for integrity. The MAIPW’s activities have become the increasing focus of internal and external reporting, including via the aforementioned report of the Administrative Control Authority.
Proximity to Haftar and his relatives and membership of the Ferjan tribe are key determinants of an individual’s access to – and ability to participate in – the conflict economy. For instance, Fakhri is a business associate of Saddam Haftar, one of Khalifa Haftar’s sons.95 Collectively, Fakhri and Saddam Haftar have used their links with the field marshal and the LAAF leadership to make deals with businessmen and establish companies involved in real estate, import and export, and foreign currency trading. Top LAAF commanders have also been accused of abusing their authority by granting military contracts to friendly companies, usually ones personally linked to them in some way.96 For example, LCs are easier to obtain with a recommendation from a high-ranking LAAF officer, despite the nominal control exercised by the western CBL in Tripoli over their issue.97
The spoils of activity undertaken through such connections typically do not reach rank-and-file members of the LAAF. The LAAF’s military accounts department oversees and processes salary and bonus payments and the distribution of benefits (such as those relating to medical treatment) to ordinary members. On occasions, disputes have emerged over the distribution of funds to cover the overseas medical treatment of injured fighters, and payments to their families. In July 2018, wounded soldiers headed to the headquarters of the LAAF’s general command in al-Rajma, south of Benghazi, to protest about corruption and the lack of care provided to them. This resulted in their arrest by the military police.98 One day after the incident, the MAIPW’s headquarters in Benghazi were attacked by Saiqa Special Forces soldiers led by Mahmoud al-Werfalli.99 In a leaked phone call, Werfalli threatened the then head of the MAIPW, accusing Fakhri of corruption and embezzlement at the expense of the LAAF’s wounded soldiers and the families of those killed in the war.100
The LAAF’s rank-and-file members also engage in illicit or illegal activities, particularly in areas situated on Libya’s borders. In these as well as other regions, loyalty to the LAAF is repaid with acceptance that the groups in question can continue to engage in the smuggling of people, fuel and drugs. The groups include those operating in cities and towns such as Tobruk, Jaghbub, Imsaad and Kufra.
41 The House of Representatives relocated from Tripoli, citing security concerns following the dispute over the 2014 elections. It took up residence in the eastern city of Tobruk, although not all of its members chose to relocate. The House of Representatives did not ratify the Libyan Political Agreement of 2015, which provided the basis for the GNA’s formation (the House of Representatives was to be the GNA’s legislative body). The House of Representatives’ procedures came to be dominated by Agila Saleh, its speaker, leading to widespread violations of its official procedures. The term of the House of Representatives has since expired, although its members have voted to renew it. Following the outbreak of violence in 2019, the House of Representatives split once again into Tripoli-based (GNA-aligned) and Benghazi-based (Interim Government-aligned) factions. The House of Representatives continues to be recognized as the country’s legislature.
42 Al-Werfalli, A. (2015), ‘Libya’s Haftar appointed army chief for recognized government’, Reuters, 2 March 2015, https://www.reuters.com/
article/us-libya-security-army/libyas-haftar-appointed-army-chief-for-recognized-government-idUSKBN0LY1AB20150302 (accessed 10 Jan. 2020).
43 This paper refers to Haftar’s forces as the ‘Libyan Arab Armed Forces’, rather than opting for the commonly used English term ‘Libyan National Army’, for three reasons: first, because this is a close translation of the name used by the group in Arabic; second, because it helps to distinguish between the title of Libyan Army also claimed by military authorities aligned with the GNA in the west of the country; and third, because it is used as a tool in the narrative war for legitimacy.
44 For an overview of Haftar’s interactions with the rebels during the 2011 Libyan uprisings, his rise to national prominence, the LAAF’s formation, its relations with other armed groups and tribes in eastern Libya, and its ongoing participation in the assault on Tripoli, see Pack, J. (2019), Kingdom of Militias: Libya’s Second War of Post-Qadhafi Succession, ISPI Analysis, https://www.ispionline.it/sites/default/files/pubblicazioni/ispi_analysis_libya_pack_may_2019_0.pdf (accessed 17 Dec. 2019).
45 For more on the composition and development of LAAF elements such as Brigade 106, see Harchaoui, J. and Lazib, M. (2019), ‘Proxy War Dynamics in Libya’, https://vtechworks.lib.vt.edu/handle/10919/91990 (accessed 9 Mar. 2020).
46 The Interim Government, located in al-Bayda in the east of the country, is not recognized internationally but continues to operate in some areas, under the oversight of the House of Representatives. The House of Representatives formed the Interim Government after relocating from Tripoli. The Interim Government is led by Abdullah al-Thinni.
47 This particular unit stood out as one whose rank-and-file fighters came, in large part, from members of the Awagir tribe originating in Bersess, a geographic area that represents a locus of influence for the tribe.
48 These localist and tribal dimensions explain the decreasing role played by the Saiqa Special Forces, Awliya al-Dam and Awagir in LAAF operations in Derna, and in the 4 April 2019 offensive on Tripoli. The tensions between the localist/tribal-based anchors and Haftar’s nationalist aspirations also had to be compensated for: this explains why Haftar has had to ally himself with and/or mobilize forces that he has not traditionally relied on for coercive expansion (e.g. Gaddafists, Magharba from Ajdabiya, Tarhuna’s Kani Brigade). In particular, the Magharba tribe, which de facto handed over the ‘oil crescent’ to Haftar in 2017, expected more prestige, economic opportunities and a higher status within the LAAF (much like the Awagir). This ‘status upgrade’ did not materialize, however, and the disillusionment of the Magharba was actually one of the factors that Ibrahim Jadhran, the former commander of the Petroleum Facilities Guard (PFG), sought to manipulate in his June 2018 attack on the ‘oil crescent’ (though his efforts backfired).
49 Kaldec, A. and Morajea, H. (2015), ‘The Dawn Divides: The Islamic State and Libya’s Inter-Islamist War’, War on the Rocks, 11 February 2015, https://warontherocks.com/2015/02/the-dawn-divides-the-islamic-state-and-libyas-inter-islamist-war/ (accessed 9 Jan. 2020).
50 Interview with local lawyer, Benghazi, March 2019.
51 Laessing, U. (2019), ‘INSIGHT-Where Libya’s revolution began, many now yearn for a strong hand’, Reuters, 21 February 2019, https://af.reuters.com/article/libyaNews/idAFL5N20A4KM?feedType=RSS&feedName=libyaNews (accessed 11 Dec. 2019).
52 Interview with local activist, Tobruk, March 2019.
53 Interview with Interim Government source, al-Bayda, January 2019.
54 Ibid.
55 Akhbar Libya (2017), ‘The Administrative Court in al-Bayda deals a blow to the post of Military Governor’ (Arabic), 25 May 2017, https://www.libyaakhbar.com/libya-news/341661.html (accessed 11 Dec. 2019).
56 Munah, F. (2017), ‘The mayors of seven municipalities demand the reinstatement of democratically elected municipal councils’ (Arabic), Alwasat, 22 August 2017, http://alwasat.ly/news/libya/141530 (accessed 11 Dec. 2019).
58 Al Jazeera (2015), ‘Haftar refuses to appear in front of the House of Representatives that appointed him’ (Arabic), 21 May 2015 (accessed 11 Dec. 2019).
59 Bin Hamel, A. (2017), ‘Nadhouri: The decision to ban women from travelling without a guardian was taken to maintain national security’ (Arabic), Africa Gate News, 19 February 2017, httpsالناظوريمنعسفرالمرأةالليبيةبدونمحرمللحفاظالأمنالقومي (accessed 11 Dec. 2019).
60 Alwasat (2017), ‘The Military Governor bans Libyans aged 18–45 from travelling without security clearance’ (Arabic), 23 February 2017, http://alwasat.ly/news/libya/125426 (accessed 11 Dec. 2019).
61 Interviews with civil society activist, Benghazi, August and September 2019.
62 Interview with civil society activist, Benghazi, May 2019.
63 Interview with civil society activist, Benghazi, May 2019.
64 Interview with senior adviser to Ali al-Hibri, governor of eastern CBL, Benghazi, January 2019.
65 The Presidency Council is the executive body of the GNA, headed by Prime Minister Fayez al-Serraj. The Council was intended to comprise nine members, yet soon after the establishment of the GNA, its members from the east – including Qatrani – boycotted it.
66 Eaton, T. and Eljarh, M. (2019), ‘Will Economic Instability Undermine Khalifa Haftar’s Offensive in Libya?’, Chatham House Expert Comment, 16 April 2019, https://www.chathamhouse.org/expert/comment/will-economic-instability-undermine-khalifa-haftar-s-offensive-libya (accessed 11 Dec. 2019).
67 Interview with spokesperson for House of Representatives, Tobruk, December 2018.
68 Internal government documents reviewed by one of the authors, January 2019.
69 A subsidiary of the Libyan Post, Telecommunication and Information Technology Company (LPTIC).
70 Eaton and Eljarh (2019), ‘Will Economic Instability Undermine Khalifa Haftar’s Offensive in Libya?’.
71 Alwasat (2019), ‘Al-Hibri: One third of the budget over the last three years has been allocated to the army’ (Arabic), 19 February 2019, http://alwasat.ly/news/libya/236465 (accessed 11 Dec. 2019).
72 Laessing, U. (2019), ‘Debts pile up as rival Libyan governments struggle for power’, Reuters, 6 March 2019, https://uk.reuters.com/article/uk-libya-economy-insight/debts-pile-up-as-rival-libyan-governments-struggle-for-power-idUKKCN1QN1W3 (accessed 11 Dec. 2019).
73 Sagdiev, R. and Lewis, A. (2019), ‘UPDATE 1-EXCLUSIVE-Supplies of banknotes from Russia to east Libya accelerated this year-data’, Reuters, 29 October 2019, https://uk.reuters.com/article/libya-economy/update-1-exclusive-supplies-of-banknotes-from-russia-to-east-libya-accelerated-this-year-data-idUKL8N27E3HN (accessed 27 Feb. 2020).
74 Fakhri was previously the minister of interior in the Interim Government before being sacked on 31 October 2016, after a dispute with Prime Minister Abdullah al-Thinni over the mismanagement of the ministry and the budget allocated to it.
75 Alwasat (2018), ‘Four tons of metal scrap exported by the Military Investment Authority to Turkey’ (Arabic), 26 September 2018, http://alwasat.ly/news/libya/221124 (accessed 11 Dec. 2019). It is important to note that exporting metal scrap is prohibited by law in Libya. This was the case under the Gaddafi regime, and it was reinforced by the Ministry of Economy in Directive 199 for 2012. The directive prohibits the sale of copper, aluminium and all types of metal scrap, citing the negative impact on the economy given that the Libya Iron and Steel Company, which operates the biggest iron and steel manufacturing plant in North Africa, is state-owned.
76 It has not been possible to ascertain the value of these projects.
77 The waste management operation is run by a company that is part of the MAIPW, in line with the military investment law adopted by the House of Representatives in November 2018.
78 Interview with Interim Government official, al-Bayda, January 2019.
79 Noria Research (2019), Predatory economies in eastern Libya: The dominant role of the Libyan National Army, Geneva: The Global Initiative against Transnational Organised Crime, https://globalinitiative.net/wp-content/uploads/2019/06/GITOC-Predatory-Economies-Eastern-Libya-WEB.pdf (accessed 13 Feb. 2020). Also corroborated by interview with civil society activist from Kufra, December 2019.
80 The Libyan Administrative Control Authority (LACA) was a national body established in 2013 to monitor irregularities in the operation of government bodies (in their official business), in order to hold officials to account. The Authority is mandated to report to the Libyan parliament. Rival leaderships have emerged within LACA, however, mirroring the national governance split.
81 Sheppard, D. and Saleh, H. (2020), ‘Libya oil output set to collapse to lowest level since fall of Gadhafi’, Financial Times, 22 January 2020, https://www.ft.com/content/bf045b36-3c4b-11ea-b232-000f4477fbca (accessed 13 Feb. 2020).
82 For more on dynamics in Libya’s fuel sector, see Eaton, T. (2019), ‘Libya: Rich in Oil, Leaking Fuel’, Chatham House Long-read, https://chathamhouse.shorthandstories.com/libya-rich-in-oil-leaking-fuel/index.html (accessed 11 Dec. 2019).
83 The Thinni-led Interim Government sought to limit the impact of this declaration by restricting the state of mobilization to certain geographic areas, but no agreement was reached.
84 These include Law No. 21 (1991) Military Mobilization and State of War; Law No. 22 (2007); and Executive Directive No. 86 (2005) concerning the bylaws for implementation of Law 21.
85 The role of the Authority is to manage LAAF-affiliated military intelligence, military police and prisons.
86 Lacher, W. (@W_Lacher) (2019), ‘Haftar places all taxes & customs from state-owned enterprises & institutions under the control of his self-styled army, establishing a “mobilization authority” (as in: mobilization for the war effort) for that purpose. Think Brega, Benghazi port, mobile phone operators…’, tweet, 14 October 2019, https://twitter.com/W_Lacher/status/1183768152041250816 (accessed 12 Dec. 2019).
87 Phone interview with Interim Government source, September 2019.
88 For a detailed analysis of the impact of the governance split on the banking sector, see International Crisis Group (2018), Of Tanks and Banks: Stopping a Dangerous Escalation in Libya, Middle East and North Africa Report No. 201, https://www.crisisgroup.org/middle-east-north-africa/north-africa/libya/201-tanks-and-banks-stopping-dangerous-escalation-libya (accessed 11 Dec. 2019).
90 Malsin, J. and Said, S. (2020), ‘Saudi Arabia Promised Support to Libyan Warlord in Push to Seize Tripoli’, Wall Street Journal, 12 April 2019, https://www.wsj.com/articles/saudi-arabia-promised-support-to-libyan-warlord-in-push-to-seize-tripoli-11555077600 (accessed 12 Feb. 2020). Regarding allegations that Saudi Arabia is financing the Wagner Group, see Jégo, Vitkine and Bobin (2020), ‘En Libye, le grand marchandage entre Moscou et Ankara’.
91 Fees have been paid, but the previous owners are unlikely to have had much say in the price or much scope to reject the offer.
92 Interview with former adviser to Mohamed al-Madani al-Fakhri, Benghazi, August 2019. For example, an entire block of flats in the Hadaeeq area of Benghazi belonging to an individual named Ali al-Shaikhi was seized. Shaikhi was accused of links to the Muslim Brotherhood and had to sell the block of flats belonging to him to the MAIPW. The block is located next to the MAIPW’s headquarters in Benghazi.
93 Confirmed by a number of confidential interviews with local businessmen, Benghazi, August 2019.
94 Human Rights Watch (2018), ‘Libya: Displaced Benghazi Families Prevented From Return’, 1 February 2018, https://www.hrw.org/news/2018/02/01/libya-displaced-benghazi-families-prevented-return (accessed 25 Feb. 2020). See also footage on social media apparently displaying proceedings at a tribal court around the recovery of land allegedly seized by Mahmoud al-Werfalli: https://twitter.com/BkMuad/status/1232623767161057287.
95 Interview with former adviser to Mohamed al-Madani al-Fakhri, Benghazi, August 2019.
96 Interview with Benghazi-based researcher/analyst, Benghazi, August 2019.
97 The LAAF officers’ involvement can be direct, i.e. they set up the companies that win the military or government contracts; or indirect, i.e. they receive a cut of the profits on LCs issued to businessmen and traders whom they recommend. It should be noted that this is exactly the same modus operandi used by armed groups in Tripoli. In other cases, companies that get LCs are subsidiaries of, or jointly owned by, the MAIPW.
98 Akhbar Libya (2018), ‘Dignity’s wounded in Benghazi condemn widespread corruption and mistreatment’ (Arabic), 9 July 2018, https://www.libyaakhbar.com/libya-news/699385.html (accessed 17 Dec. 2019).
99 Akhbar Libya (2018), ‘Mahmoud al-Werfalli yesterday broke into MAIPW headquarters in Benghazi’, 10 July 2018, https://www.libyaakhbar.com/libya-news/700138.html (accessed 17 Dec. 2019).
100 Leaked phone call, Alnabaa Shows (2018), ‘The internationally wanted Mahmoud al-Werfalli threatens to pursue Mohamed al-Fakhri’, YouTube, 10 July 2018, https://www.youtube.com/watch?v=mCSZVX9qY7k (accessed 17 Dec. 2019).