However, the power vacuum left by the fall of Gaddafi's regime, along with vast stockpiles of unguarded weapons free for the taking, created a security nightmare that not only continues to threaten the region to this day but also has broader implications for the long-term global struggle against violent extremism. Life in Libya under Gaddafi was bad; life in Libya today may arguably be worse. As we have seen in Syria, Iraq, Afghanistan, Yemen and elsewhere, the fracturing of Libya and the absence of the rule of law has allowed violent Islamist extremist groups, particularly the Islamic State of Iraq and the Levant group (ISIL) to thrive there.
Ongoing conflict
Nine years after the fall of Muammar Gadhafi, Libya remains in a chaotic state. The United Nations-backed government struggles to exert control over territory held by rival factions, intensifying geographical and political divisions. This let the terrorist groups and armed militias exploit the turmoil, using the nation as a base for radicalization and organized crime, thus posing a threat to the region and beyond. The security realities on the ground in Libya are growing increasingly complex and unpredictable. The oil-rich country, which has been in turmoil since 2011, has at least two rival administrations: the United Nations backed government based in Tripoli; and another in the eastern city of Tobruk, which is allied with Haftar. In May 2014, General Khalifa Haftar, a military defector from Gaddafi's era, launched his campaign, Operation Dignity, claiming to protect Libya from "terrorists". Forces loyal to Haftar fought against armed groups in Benghazi, and took over the strategic Libyan city. Haftar garnered support from local tribes, businessmen, former soldiers of the Libyan army to beef up his armed forces, Libyan National Army (LNA). He appealed to foreign support presenting himself as a key to Libya's stability, according to the International Center for Counter-Terrorism (ICCT). Haftar has sought out regional and international allies since he entered Libya's main political stage. Relying on Russia, Egypt, the UAE and France, Haftar succeeded in creating a stalemate that has gradually eroded the UN-backed government's chances of controlling the country.
NATO intervention under UN Security Council approval provided air strikes, weapons, and military training to rebel forces. Arms trade and mercenaries from regional allies such as Qatar and transnational businesses created has mass militarization that mushroomed into armed civil war. Militia formation and exploitation of tribal arms access allowed forces united by grievances to functionally achieve violence rather than being immediately subdued by loyalist military and security troops. The Libyan economy is heavily dependent on revenues from oil and gas. High oil prices before 2014 and foreign exchange reserves have kept public finances in a relatively good position and prevented a humanitarian crisis despite the conflict. However, an extended period of instability and plummeting oil prices have had a heavy toll on Libya’s financial resources and weakened the Libyan government in their role of maintaining internal peace and social stability.
Libya suffers from interlinked political, security and economic crises that are weakening state institutions, damaging its economy and facilitating the continued existence of non-state armed groups. As rival authorities continue to compete for power, the resulting fragmentation and dysfunction have provided a fertile environment for the development of a pervasive war economy dependent on violence. Libya’s war economy is damaging for the future of the state for three reasons. First, it provides an enabling environment in which networks of armed groups, criminal networks, corrupt businesses and political elites are able to sustain their activities through illicit sales and predatory activities that spur conflict. Second, through the conduct of these activities, the war economy perpetuates negative incentives for those who profit from the state’s dysfunction. Neither a return to functioning central governance nor the development of a security sector that is fit for purpose is in the interests of those who benefit from the status quo. Third, the political contestation and resource predation practiced by those engaged in the war economy are having a disastrous impact on Libya’s formal economy and undermining what remains of its institutions.
Regional impact of Libyan Crisis
Civil war mushrooming in any given country will cause negative consequences on its neighboring countries. Conflicts of any sort, both minor and extended ones, significantly impact the development of neighboring countries. An armed conflict in a country reduces economic growth in bordering countries by 85% in the short run and 31% in the long run. Unsurprisingly, these effects are more important when these neighboring countries themselves are facing political, security and economic instability. When the countries share economic and trade relations as well as financial linkages with each other then it further amplifies the negative impacts. Tunisia has been immensely affected by the security and economic crisis in Libya. Because of the strong ties the two countries share, a poor performance of the Libyan economy has echoes in the Tunisian economy through various channels. Worsening of business environment and a fall in private sector investments in Tunisia has been observed in the light of Libyan conflict. Secondly the deteriorating security situation and increased government security and defense spending lead to a cut down in social development spending. Thirdly the Libyan conflict has had adverse impacts on Tunisian tourism, one of the Tunisian economy’s most important sectors. Indeed, the conflict in Libya has tainted tourists’ perception of the overall security in the region, leading to a fall in demand for tourism in Tunisia. Since tourism is a significant source of foreign currency, the challenges it faces resonate throughout the whole economy.
The Libyan economy has been immobilized since 2011 by a slowdown in the oil and gas industry; political instability that allowed an inflow of arms and militants and most importantly by a surge of armed groups and their training camps in the country. The past experiences have revealed that there is no military solution to the Libya conflict. Now is the time for the international community to make sincere efforts for resolving the Libyan conflict by somehow bringing the two Libyan governments on common grounds for collaboration.