Libya crisis talks held in London with economy 'near collapse'

(The Guardian)- Britain is hosting crisis talks with Libya’s leaders in London on Monday in an attempt to ward off the collapse of the country’s war-torn economy.

Leaders of the embattled UN-backed government are meeting in a US-led initiative, hosted by the UK Foreign Office, as diplomats try to formulate a plan to stave off disaster. Boris Johnson, the UK foreign secretary, and John Kerry, the US secretary of state, will both attend.

With the country’s civil war into its third year and bank reserves plummeting, the World Bank has warned Libya’s economy is “near collapse”.

Six months after the new government, led by the prime minister, Fayez al-Sarraj, installed itself in Tripoli, it has yet to win popular support or get a grip on the chaos engulfing the country.

Lacking a security force of his own, al-Sarraj has been powerless to prevent the capital’s militias indulging in an orgy of violence and kidnappings, while record numbers of migrants are being smuggled to Europe.

Meanwhile, Tripoli is struggling with power cuts, inflation and shortages of petrol and medicines, while currency shortages have provoked riots outside banks.

“Life is getting harder all the time,” said Tripoli resident Nadia Ramadan. “We are literally hearing loud shootings almost every night, there is no money and food inflation.”

Chaos in the capital had been amplified by the capture two weeks ago of al-Sarraj’s parliament building at the Rixos hotel by a rival government that is contesting control of the capital.

The prime minister has failed to persuade the rival elected parliament, which has its own government in the eastern city of Tobruk, to recognise his authority.

Tobruk forces last month seized the country’s key oil ports, and while oil exports have since doubled, that production is now controlled by Tobruk. 

Last week, London defence analyst Jane’s reported that Tobruk’s hand has been strenghened after its key ally, United Arab Emirates, opened an air base to support ground troops in eastern Libya.

America’s Libya envoy Jonathan Winer summoned the spirit of Benjamin Franklin by urging Libyans to unite, tweeting: “Long ago US learned from founding father Ben Franklin we must, indeed, all hang together or, most assuredly, we shall all hang separately.”

But some fear that with power contested by three rival governments and a fast-disintegrating administration, economic reform may prove impossible.

“Several measures must be taken simultanously, a high level of coordination is required, but confidence in the banking system has evaporated,” said Jalel Harchaoui, a Libya analyst at the university of Paris.