By Sami Zaptia
Over the last few days, evidence of tension, if there was ever a need for any, surfaced between . . .[restrict]the Central Bank of Libya, the Prime Minister and the National Transitional Council (NTC) in a series of press statements.
It has arisen over Law No.10,2012 that was passed by the NTC to implement their decision to distribute LD 2,000 (about $1,500) to every Libyan family and LD 200 to every unmarried Libyan. This was announced by the NTC on the first anniversary of the 17 February Revolution.
TThe move by the NTC to disburse any amount of money was surprising for many Libyans in view of the state of the economy – as reflected in statements by the government, the NTC and the IMF.
Indeed, it was only a few weeks ago that NTC head Mustafa Abdul Jalil declared that Libya would have a budget deficit of LD 10 billion. The country, we are informed, is struggling to pay outstanding public wages, struggling to maintain essential services, struggling to meet the cost of (subsidized) energy — and has only received a fraction ($6 billion) of the $100 billion in assets frozen abroad.
“The production of oil has brought in $4 billion in the last five months while the salaries of civil servants are $22 billion a year and spending on electricity and fuel $14 billion. The budget being prepared would see a deficit of $10 billion,” Abdul Jalil was quoted as saying by Reuters.
The International Monetary Fund, on the other hand, said that Libya’s finances were “precarious”.
Abdul Jalil’s $10 billion contrasts with CBL governor Saddeq Elkaber’s statement in January that the 2012 budget would have an LD 7 billion deficit and that the lifting of UN sanctions on the CBL assets had unfrozen 95 percent of its $100 billion in assets.
It is odd when the person put in charge of the nation’s money gives a different figure to that of the nation’s head. Is this just poor communications and a poor administration still not fully recovered from the war effort? Or is there more to it? Had the NTC and Abdul Jalil already added the total sum of the LD 2000 per family handout to the projected deficit figure?
It is unsual too for a bank governor and his top management team to release a press statement saying “numerous important facts became clear which must be taken into consideration when implementing this law in realization of the ideals of transparency and enlightening public opinion with this regard.’ What does he mean by ‘transparency and enlightening public opinion’? What is not transparent and what does he want to reveal to us?
This is not how a central bank governor usually speaks. They are usually guarded with their words and there is usually unity amongst the government and its executive arms. If Libya were a full democracy, there would have been a huge political uproar about this and somebody would have either resigned or been sacked.
Nevertheless, putting all of the above tensions and contradictions aside, the decision to provide to all the Libyan public this untargeted handout is all the more surprising when you consider the issue of security in Libya and what Abdel Jalil had to say about it himself.
All experts and commentators agree that the most pressing issue that is restraining Libya’s normalization and progress is the perception of a lack of security in the country – at least by the rest of the world.
No two Libyans disagree that once the puzzle of the Libyan authorities gaining control and oversight on the various armed groups across Libya is resolved, Libya will be able to speed ahead on its road to full progress and prosperity.
And Abdul Jalil admitted as much when he told Reuters that “it would be easier to amalgamate militias into the police and national army once more revenues entered the state coffers”.
“Once more revenues entered the state coffers”? The very revenues that Mr Abdul Jalil and the NTC have decided to relieve the state coffers of to scatter to all Libyans — rich and poor, the in-needy as well as the comfortable?
If Libya’s oil revenue and the recovered amounts from frozen assets abroad are unable to pay overdue wages — including monies promised to the freedom fighters, unable to pay for energy costs, health and education costs and all basic services, as well as reduce the forecasted deficit — then what is the justification for the distribution of this ‘gift’ at this critical moment in time?
Put bluntly: was this a political bribe on a par with the LD 500 that Gaddafi distributed during the revolution in an effort to calm the public down? Are the NTC under pressure from either internal political or military forces or, worse still, outside forces to calm the populous down?
If incumbents of both the current government and the NTC truly plan on giving up their positions both at the June Constitutional Assembly elections or the 2013 general elections, then why do they feel that they need to soften the electorate with a political bribe?
Am I being too cynical? Was this just a generous gift by Libya’s leaders who recognize the hard times their people had been through over the last year – or even 43 years?
A more targeted distribution of aid to the many who truly suffered as a result of the war might have been acceptable at a later time – when the nation’s security was no longer at stake. Moreover, as the CBL Governor had alluded to, some of this handout and the political effort behind it would have been better off invested in creating a national electoral register for forthcoming elections. This is a huge problem that may have a decisive effect on elections awaiting resolution that does not seem to attract that much political debate.
Equally, Libyans in the new Libya had hoped that the new Libya was going to be all about enterprise, self-reliance and the hard-earned honest crust based on meritocracy and ability.
Libyans were looking to the authorities to engrain a new culture and wean the general public away from the old mentality set by the previous regime of subsidies and handouts. That old system had led to a stale, inward looking corrupt regime dictated by a perverse relationship between the ruled and the ruling elite. It is a relationship Libya had hoped it had left behind.
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