There have been sporadic efforts in recent years to develop the economic dimension of peace negotiations, with UNSMIL in particular playing a prominent role. But instability, political opposition and rivalry between Libya’s parallel governments have impeded progress.
International policymakers have long recognized the need to mitigate economic drivers of conflict in Libya, and have taken a number of concrete steps to engage Libyan stakeholders on these topics. Such steps included the announcement of an ‘economic track’ of negotiations in 2018, and subsequent efforts to make state spending more coherent and rein in the diversion of state funds by officials and their associates. The UN also expressed its ongoing commitment to governance reforms in a recently unveiled ‘multi-track’ process. There have also been continuing efforts to facilitate dialogue between Libyan stakeholders – such as on agreeing a budget between the Government of National Unity (GNU) and House of Representatives (HoR) – in the search for consensus on economic governance. But these ad hoc efforts have, until now, remained largely divorced from wider efforts on the political track of negotiations. Critically, too, they have taken the shape of dialogue rather than direct mediation. Thus, the meetings have aimed simply to share views rather than force agreements.
A timeline of economic negotiations
Since 2014, Libya’s economy has been shaped above all by the political and security challenges arising from the emergence of rival governments in the west and east of the country. In response to this split, the international community initially focused on damage limitation: essentially, mitigating the impact of conflict on key economic institutions, and hoping to prevent their division and protect critical sectors like oil.
These efforts had mixed results – for example, they failed to maintain nationally unified governance of the CBL and NOC – but nor were they entirely in vain. Indeed, coherent international action arguably prevented more serious impacts. For example, universal international recognition of the CBL’s Tripoli-based leadership ensured that only the Tripoli-based entity could access international financial markets and foreign exchange. In the case of the NOC, the parallel leadership established in the east was prevented by the international community from selling oil directly on the international market. These measures by no means solved all the problems associated with the governance divide – as noted earlier, the east developed its own financing mechanisms entirely separate from those of its counterparts in Tripoli – but they did sustain a useful degree of national economic interdependence. Broadly, NOC-affiliated entities in the east and south of Libya continued to extract and sell oil and petroleum products, while authorities in the west of the country received the revenues and distributed them nationally.
In 2015, the Libyan Political Agreement (LPA), signed by Libyans invited to a UN-brokered dialogue process, sought to establish a unified government to bring an end to administrative division. While laying a roadmap for elections under a unified government, the LPA simultaneously sought to insulate economic and financial institutions from political instability in what was supposed to be an interim period ahead of elections. The LPA emphasized transparency, anti-corruption policies and adherence to international standards. Under the UN banner, the LPA also aimed to avoid oil blockades and ensure the continued functioning of vital sectors. Yet the government that was formed by the LPA – which became known as the Government of National Accord – was rejected by Khalifa Haftar and the House of Representatives in the east, leading the east to retain its own government. So, the problems remained unsolved.
In November 2017, Ghassan Salamé, at the time the new UN special representative for Libya and head of UNSMIL, told the UN Security Council that ‘politics in Libya is strongly shaped by economic predation’. Salamé and his deputy, Stephanie Williams, recognized that capture of resources had become a major driver of ongoing conflict in Libya, and that addressing this problem meant elevating issues surrounding Libya’s economy to the forefront of the UN’s political engagement with the country. Yet this statement of intent was not matched by actions, in part because of a deterioration of the situation on the ground.
Salamé had hoped to promote a shift from brokering stopgap agreements on specific issues, such as oil blockades, to addressing the underlying causes of conflict in a broader political settlement. His plan was to table economic components of reform at a planned ‘National Conference’ in April 2019; the conference was intended to bring together Libyan constituencies to negotiate an agreement that would end political division and chart a consensus path forward. The exact shape of what was planned on the economic side has never been disclosed, however, not least because the event was cancelled following the attack by Haftar’s Libyan Arab Armed Forces (LAAF) on Tripoli two weeks before the conference was scheduled to take place.
Despite this setback, UNSMIL remained committed to addressing economic drivers of conflict through the creation of both a new Libyan body and a corresponding new international one. On 7 January 2020, UNSMIL established the Libyan Economic Expert Commission (LEEC), which was made up of Libyan officials, experts and academics and tasked with developing essential reforms. The LEEC’s establishment had followed UNSMIL-led engagement over several months, culminating in a meeting in Cairo where those selected to join the LEEC convened to discuss how the body should function. The LEEC was subdivided into three working groups: i) banking and the private sector; ii) revenue distribution and transparency; and iii) reconstruction and development.
UNSMIL remained committed to addressing economic drivers of conflict through the creation of both a new Libyan body and a corresponding new international one.
Meanwhile, on 9 January 2020 representatives from the international community convened at the first Berlin Conference, where Salamé sought to gather support for UN-led peace efforts. The conference was predicated on a belief that without international consensus on the way forward in Libya, agreement among rival Libyan factions would not be possible. The meeting resulted in the Berlin Declaration, which set out seven components for a peace process, including a ceasefire, security sector reform, and economic and financial reform. The declaration announced the formation of an Economic Working Group (EWG) ‘follow-up committee’ to coordinate international support for Libya’s economic stabilization and institutional unification in pursuit of the declaration’s goals.
UN Security Council Resolution 2510 (2020) endorsed the outcomes of the Berlin Conference, as well as confirming the establishment of the LEEC. Critically, however, the resolution did not clarify the relationship between the economic and political processes. It thus remained unclear what the respective roles of the LEEC and the EWG should be. Was the LEEC to be empowered to make decisions that any governing authority would be required to implement? Or was it there merely to advise the Libyan authorities and their international counterparts at the EWG?
What became clear was that the members of the LEEC expected it to be given the power to do the former – bringing them on a par with their counterparts on the political track – while the international community ended up settling on the latter. The LEEC thus effectively became a consultative body that worked with the EWG to put recommendations to the Libyan government. While important, this role was clearly of less significance than the political track.
The EWG was encumbered with a situation where it had four co-chairs – the US, UNSMIL, Egypt and the EU – with their own priorities and interests. Moreover, the priorities set for the EWG were extensive, ranging from pursuit of structural economic reform to supporting the provision of vital public services. To add to the challenge, the EWG had no obvious means of delivering these ambitious goals, beyond the facilitation of dialogue among Libyan officials and institutions.
Simultaneously, UNSMIL’s economic unit formulated a detailed ‘policy reform roadmap’ that would be pursued with support from the EWG and the LEEC. Combined, these developments meant that the economic track centred on agreements among existing holders of office in Libya, targeting measures that would improve economic governance. However, momentum for this agenda faltered as international attention focused on the establishment of a new government via another UN-led selection process, called the Libyan Political Dialogue Forum, in October 2020. Few of the target measures of the policy reform roadmap were achieved.
The Government of National Unity (GNU) became the first unified government since 2014 when it was appointed in March 2021. Its mandate was almost exclusively focused on taking Libya to elections planned for December that year. In this context, the GNU had no clear mandate to engage on any expansive set of economic objectives, beyond the existing day-to-day priorities pursued by the EWG, such as achieving improvements in the electricity grid. While the EWG and LEEC continued their work, the GNU did not prioritize implementing their recommendations, viewing economic decision-making as its responsibility. Moreover, the limited number of LEEC members who subsequently joined the GNU did not appear to act as advocates for the LEEC’s reforms once in government. Thus, Salamé and Williams’ goals of addressing economic drivers of conflict did not materialize.
Libya’s political process stagnated following the failure to hold elections in December 2021. In February 2022, the split between parallel governments – the GNU in the west, and the Government of National Stability (GNS) in the east – re-emerged. To address the executive division, UNSMIL, with the EWG’s support, pursued three main objectives: ensuring transparent and equitable management of state revenue; safeguarding the NOC’s operations; and advancing the reunification of the CBL. Overall, these moves indicated a reversion to the pre-2017 agenda of improving day-to-day governance rather than seeking to reform the Libyan state per se. Importantly, the approach was also based on dialogue rather than active mediation, so any progress depended on the willingness of incumbent Libyan policymakers.
A US-developed proposal, the Mechanism for Transparency and Accountability in Public Finance (known as ‘Mustafeed’), was tabled at the EWG in the spring of 2022. This was a departure from previous efforts in that it sought to impose conditions on Libyan authorities. Specifically, Mustafeed sought to limit state expenditures to essential categories. This was aimed at making it harder for officials associated with vested interests to cling to office, and at incentivizing a move towards elections. Unsurprisingly, the proposal faced stiff resistance from Libyan policymakers, who claimed it was an infringement of Libyan sovereignty. In the face of this resistance, and potential implementation challenges, Mustafeed did not materialize.
A key feature of the political process to date has been the idea that efforts should be ‘Libyan-led’. A genuinely Libyan-led effort on the economic track emerged in the summer of 2023, amid tensions between the rival western and eastern governments over control of state revenues. The Tripoli-based Presidency Council founded the so-called High Financial Committee, designed to mediate in economic disputes between rival powerbrokers. The committee met several times, but eastern-based officials withdrew from it after a political deal was reached between the CBL’s governor, Sadiq al-Kabir, and the speaker of the House of Representatives (HoR), Agila Saleh, over a nominal ‘reunification’ of the CBL in which the bank’s eastern governor, Marei al-Barassi, became deputy governor. With the collapse of the High Financial Committee, negotiations on the economic file withered. Real discussions between rival powerbrokers moved behind closed doors and focused on the tacit agreement in the oil sector to divide access to oil revenues between west and east. Subsequently, the HoR formed a technical committee in December 2023 to prepare a draft unified budget, although this budget was ultimately disregarded. Libya has thus continued to operate without any formal agreement on state spending between west and east, allowing for the uncontrolled increases in expenditure detailed in this paper.
In June 2024, the US re-initiated its own economic dialogue to foster consensus between Libya’s divided state institutions. However, by August 2024 escalating disputes over resource allocation had triggered a leadership crisis within the CBL. Negotiations facilitated by UNSMIL resulted in the appointment of a new CBL governor and the re-establishment of a board of directors in October 2024, after a decade-long absence.
In December 2024, UNSMIL announced the launch of an UNSMIL-facilitated but Libyan-led and -owned ‘multi-track’ political process. The centrepiece of this initiative was the formation of an Advisory Committee of independent Libyan experts who would put forward options for UNSMIL to consider so that the political impasse could be broken.
As part of the process, UNSMIL would formulate an inclusive, structured dialogue among Libyan social constituencies to reach consensus on a collective vision for the country’s future and to address long-term conflict drivers. Notably, the dialogue aimed to build on existing work involving Libyan partners, with the economic consultations focusing on fundamental issues that could ensure a ‘stable, sustainable and prosperous economy’ for the benefit of the Libyan people. Yet, the necessary parameters to define how the structured dialogue would interact with other lines of effort were never fully finalized and agreed.
In the summer of 2025, the Berlin process resumed, with Germany helping the UN to bring international players together in an attempt to forge consensus behind the UN’s developing plans. These plans were announced at the UN Security Council by the current head of UNSMIL and special representative of the secretary-general, Hannah Tetteh. Building on the Advisory Committee’s recommendations – delivered in June 2025 – Tetteh’s proposals focused on navigating the political roadblocks to the holding of national elections, seeking the promulgation of an elections law that would have broad acceptance, and facilitating the establishment of an interim government ahead of polls being organized. Yet, the connection of this process to the previously announced structured dialogue on economic reform remains unclear. As of November 2025, when this paper was being finalized, efforts to reconvene the EWG – which had not met in the previous three years – remained in progress. There is, however, no clear consensus over what the function of a reinstated EWG should be, or how it might interact with the structured dialogue that has already been initiated.
