Libya has scarcely known peace or stability since rebels overthrew its longtime dictator during the 2011 Arab Spring uprisings. After a civil war that ended in 2020, Libya remains split between rival, mutually hostile governments, one in the west and one in the east.
That uneasy stalemate appears headed for a destabilizing shake-up after a series of moves by political players, including a fight for control of the central bank, the conduit for Libya’s vast oil wealth and therefore a key prize in political factions’ infighting.
On Monday, the country’s presidential council tried to fire the bank head, Sadik al-Kabir, by decree. He refused to go, and analysts said the decree was legally toothless, but the leader of Libya’s western government endorsed the move and the presidential council announced that it would install a new central bank board of directors, beginning Wednesday.
Here’s what to know about how the country’s shaky peace and power-sharing might be unraveling.
What is the state of affairs in Libya?
The U.N.-recognized government headed by Prime Minister Abdul Hamid Dbeiba controls only western Libya. The eastern part of the country houses the country’s Parliament and has its own prime minister, but it is ruled by Gen. Khalifa Hifter, a warlord.
Since Mr. Hifter’s attempt to seize the capital, Tripoli, ended in a cease-fire in 2020, conflict has not erupted again because powerful players on both sides have struck deals to benefit themselves, analysts say, splitting up Libya’s oil revenues. Though the arrangement tamped down outbreaks of violence between rival militias, it did little to help regular Libyans.
The United Nations brokered a deal that put Mr. Dbeiba in office and created the three-member presidential council, which ensured Libya’s various regions were represented in leadership. They were supposed to step down after nationwide elections and unification of the country, but the elections never took place.
Political authority is now scattered among a jumble of political institutions, including the presidential council, led by officials who were either never elected or whose terms expired years ago.
The central bank is one of the few institutions that has bridged east and west, making its chief, Mr. al-Kabir, a key player. Though the bank is based in Tripoli, along with Mr. Dbeiba’s government, both administrations have worked with Mr. al-Kabir to keep oil funds flowing and government salaries paid.
What happened at the central bank?
Mr. Dbeiba and Mr. al-Kabir, once allies, had a falling out last year, as the central bank governor began accusing the prime minister of corruption and overspending.
Analysts say Mr. al-Kabir may have also worried for his own political survival as it became clearer that Mr. Dbeiba wished to replace him. The banker, needing new allies, now appears to be aligned with factions in eastern Libya.
In recent weeks, armed groups associated with rival political factions deployed around the central bank’s headquarters, generating suspicions that Mr. Dbeiba and his allies would attempt to seize it by force.
On Sunday, the central bank announced it was shutting down its operations, paralyzing the country’s banking system, to protest the kidnapping of its information technology director, Musab Muslam. It was unclear who had taken him.
On Monday, the presidential council, which usually wields little power, issued its decree dismissing Mr. al-Kabir, apparently exceeding its authority.
Hours later, the bank announced that Mr. Muslam had been freed and the bank had resumed operations. Its statement ignored the presidential council’s decree.
On Tuesday, the presidential council sent a delegation of officials, including a militia member, to the bank to tell Mr. al-Kabir to step aside. He replied in a statement that he was answerable not to his old allies in western Libya, but to the Parliament in eastern Libya.
Mr. Deiba, endorsing the firing, instructed Libyan embassies worldwide to inform foreign officials that Mr. al-Kabir’s term had expired.
What does it mean for instability in Libya?
The central bank is not the only arena where tensions between east and west have spiked again. Last week, Mr. Hifter, the eastern ruler, blockaded Libya’s largest oil field and moved some of his forces westward. The eastern Parliament declared Mr. Dbeiba’s government illegitimate.
Libya could be headed for more violence, analysts say, as political factions and militias compete for power and oil riches. They say it is unlikely that eastern and western Libyan forces will soon return to all-out war, but the fragile political setup that has prevented conflict is eroding.
Jeopardizing that system could send Libya careening toward more upheaval and conflict, putting political and economic progress even further out of reach.
Driving the central bank governor from his post, would put Libya in uncharted territory. International financial institutions would not be likely to recognize a new governor installed by force. All Libyan oil revenue goes through the central bank, which also pays the government employee salaries that many Libyans, under both rival governments, depend on.
The militia deployments outside the central bank prompted the United States special envoy to Libya, Richard Norland, to issue a statement calling threats to the bank’s staff and operations “unacceptable.” He warned that trying to topple the bank’s leadership could cut off Libya’s access to international financial markets.
Mr. al-Kabir, the central banker, has blocked spending by Mr. Dbeiba’s western government, plunging it into financial trouble.
Will it change the status quo?
The lack of large-scale fighting over the last few years did not mean Libya was doing well. The failure to hold elections left power in the hands of people who are widely viewed as corrupt and have little incentive to change things. Armed groups and foreign fighters, including from Russia, are deeply entrenched. Libya’s infrastructure and economy have rotted or stagnated.
There is little consensus among the international players involved in Libya — including Turkey, Russia, the United Arab Emirates and Egypt — about how to extract Libya from its quagmire.
“The arrangements have been fraying, they’re increasingly dysfunctional,” said Wolfram Lacher, a Libya expert at the German Institute for International and Security Affairs in Berlin. “Because some are getting too greedy, the arrangements are breaking down. But I think this is more like a process of renegotiating arrangements in a very tense manner, and not a prelude to renewed war.”