Can Libya ever rid itself of corruption?

Can Libya ever rid itself of corruption?
6 min read
17 May, 2018
Comment: The transitional vacuum after regime collapse creates opportunities for those in power to line their pockets quickly, writes Guma El-Gamaty.
The fall of a corrupt regime does not automatically mean an end to corruption [AFP]
Corruption in Libya has been present for decades now, and  recent revelations and allegations of large embezzlement attempts that allegedly involved ministers, members of parliament and a member of the Presidential Council (PC) have been gripping the country, both on and offline. 

The allegations of corruption were made in a television interview with former Libyan consul in Egypt, Adel al-Hassi, who made serious claims of corruption and fraud against some very well-known figures.

Al-Hassi, claimed in the interview that vice president of the Presidential Council, Ali al-Qatrani falsified documents to claim ownership of land that belonged to the Libyan state in Egypt, worth more than US$850 million, which he intended to hand over to his brother Mohammed al-Qatrani.

Following these revelations, over 30 members of the Libyan Parliament "House of Representatives" (HOR) asked the Attorney General, in a published statement, to set up an investigation into these claims. They also demanded the removal of parliamentary immunity from those members of parliament implicated. 

But these allegations entering into public eye represents just the tip of the iceberg, as endemic corruption is far from a new trend in Libya.

Corrupt practices were certainly 
rampant and widespread under Gaddafi's rule, as had been confirmed year on year by international organisations such as Transparency International (TI).

However, the prevalence of this corruption has worsened significantly in the last seven years post the revolution of 2011. Reasons for this sharp rise can be attributed to political instability, violence and a much weakened institutional framework that could effectively combat corruption.

The judiciary and other law enforcement apparatus have been rendered ineffective

The judiciary and other law enforcement apparatus have been rendered ineffective, allowing those involved in corruption on all levels, to fear no accountability or punishment.

According to the 2017 Corruption Perceptions Index reported by Transparency International, Libya ranks 171st of 180 countries worldwide.

Only nine countries globally, including Yemen and Syria, scored worse than Libya.

The index, which ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and businesspeople, uses a scale of 0 to 100, where 0 is highly corrupt and 100 is least corrupt. By this measure Libya scored 17/100 in 2017.

Transparency International concluded that Libya suffers from weak public institutions, internal conflict and deep instability. These factors will allow corruption to become rife with few to no checks on public sector abuse. Amid ongoing violence, as well as internal wars and conflicts, all forms of good governance have eroded.

This situation is clearly symptomatic of fragile or failed states which have been plagued with violence and deeply polarising conflict.

The UN Panel of Experts on Libya, in a 
recent report, said that "the absence of mechanisms of effective monitoring and the complicity of political figures, in addition to the growing power of armed groups had led to the embezzlement of state funds at unprecedented levels".

Another intrinsic factor that encourages corruption in Libya is the "rentier" nature of the Libyan economy, which is hugely dependent on revenues from natural resources.

Almost 98 percent of Libya's income derives from exporting oil and gas, which the state controls and channels through annual budgets and public expenditure.

All forms of good governance have eroded

Oil is clearly vital to the Libyan economy, but is also a potential source of corruption in government. According to Transparency International, the fact that almost the entire public budget is financed by oil revenues, means that large sums of money are clearly being administered without transparency.

The average government annual budget for the last two years has been around 40 billion Libyan Dinars (US$30 billion, which has been administered almost completely free without any international standard monitoring or internal auditing mechanisms to prevent widespread corruption.

Read more: Haftar's grip is loosening, but what next for Libya?

The Libyan Audit Bureau, in its annual report published last year, concluded that corruption was rooted in the Libyan psyche and culture, and was exercised by an overwhelming majority of society, through common practises such as bribery and favouritism.

The corruption culture eats up most of any allocated budgets, and there is very weak institutional capacity in Libya to implement policies that can prevent it.

The corruption culture eats up most of any allocated budgets

The report details how examples of corruption in the Libyan banking sector were practiced, mainly by smuggling money overseas through the manipulation of Letters of Credit (LC) and overseas bank transfers. It also included fake imports of goods against money that had already been transferred abroad, and the acceptance of money laundering transactions as part of LC manipulation.

The last seven turbulent years of transition in Libya have seen civil war and military infighting plague the country. This in turn has given rise to what is characterised as a war economy which provides an easy environment for networks of armed groups, organised criminals, corrupt businessmen and political elites to sustain their activities through illicit sales and predatory corrupt practices.

The ongoing violence in Libya certainly exacerbated the long-standing corruption problem and made it spiral out of control.

Corruption is usually one of the underlying motives for an uprising to bring about a regime change, as people feel angry and aggrieved about seeing their wealth being abused through misappropriation and mainly concentrated in the hands of a ruling elite and few regime loyalists. However, the fall of a corrupt regime does not automatically mean the practice will suddenly end.

The Libyan Audit Bureau concluded that corruption was rooted in the Libyan psyche and culture

What usually happens instead, is that the institutional and law enforcement vacuum created by the collapse of the old regime and the slow emergence of a new one provides a fertile environment for both public sector corruption and, in many cases, private sector crime, as well.

transition vacuum creates opportunities for those in power to line their pockets quickly, before a new political order with strict governance and anti-corruption mechanisms takes shape and starts to function.

This is exactly what has been happening in Libya over the last seven years.

It is no surprise therefore, that corruption and crime increased sharply during the transition period following a major regime change. The Libyan people have also elected many, in the elections of 2012 and 2014, members of consecutive governments, whose main goal was to enrich themselves through the misuse of position and power and engaging in corrupt practices.

Tens of billions of dollars of public money have been drained away when they could have been spent on vital services and development needs.

Many who have been seeking positions of power in Libya recently are still driven by the same greed to accumulate wealth quickly, mostly through illegal means.

Those who have been holding public positions for long periods have used corruption as a means of buying loyalty and support in order to hold on to their position.

These people are de-incentivised to end the current transition quickly and allow new permanent state institutions to take root. In this context, the current status-quo is maintained and corruption becomes a major obstacle to an efficient and successful transition.

In order to reduce this obstacle and for hopes of corruption to eventually be curtailed, public pressure and collective action through civil society, pressure groups and media campaigns needs to be exerted to demand transparency and accountability.

However, ultimately only a holistic approach of reducing state involvement in economic activity, building strong law enforcement institutions and increasing awareness of the damage endemic corruption inflicts on a country, can seriously bring about a change and begin to significantly reduce corruption in Libya.

Guma El-Gamaty is a Libyan academic and politician who heads the Taghyeer Party in Libya and a member of the UN-backed Libyan political dialogue process.

Follow him on Twitter: @Guma_el_gamaty

Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab.