The fact that the Arab spring did not produce a sudden transformation of the Middle East and north Africa into fully functioning pluralist secular democracies is hardly surprising. Expectations on that front were very naive. But the wave of change is beginning to transform something else – the border lines which were drawn a hundred years ago as the spoils of the Ottoman Empire were divided among the allies. The process will be long and painful but out of it will come new countries. Outsiders including investors may not be able to determine the outcome but they cannot ignore what is happening or simply cling to the past. New realities have to be recognised and Libya is as good a place to start as any.
Libya’s eastern province is now semi-autonomous. The government in Tripoli has lost control. It would be an exaggeration to say that there is a fully functioning administration in Benghazi but power has shifted. This is important for the oil industry and the oil market. Much of Libya’s oil wealth lies in the southeast of the country and the pipeline routes along with some of the main ports on the Mediterranean coast are no longer under Tripoli’s control.
The self-proclaimed autonomous government of Cyrenaica – the name of what was once first a Greek and then a Roman province – hold effective power. Cyrenaica has a long unhappy history as a colony – most recently under brutal Italian rule from 1912 to 1942 and then British military administration until 1951. After that it was in effect ruled as a colony from Tripoli which collected the resources and the wealth and left the region impoverished and marginalised.
During the 2011 conflict which ousted Muammer Gaddafi western oil companies, led by Geneva-based Vitol, supplied the rebels as part of the engagement led by France and Britain to force regime change. Out of the messy process which followed has come a divided country and continuing conflict. One option is just to allow the fighting to continue – on the grounds that no one in Europe let alone the US has the stomach for another conflict in the region. That attitude is understandable but dangerous because apart from the human misery involved circumstances could produce another breeding ground for extremists. North Africa is hardly stable anyway and many companies with investments across the region from Morocco through Algeria and Tunisia to Egypt are acutely aware of the risks. Friday’s bombings in Egypt confirm that the conflicts opened up over the past three years are far from resolved.
Of course Cyrenaica, in common with the rest of Libya, is hardly a model state. Those in power in Benghazi and in Tripoli are there because they have survived in conditions close to civil war. Some are extremists by any rational standard but if you look across the region there are many regimes which do not meet western standards on human rights. Of necessity we manage to do business with them.
Recognising and dealing with the government of Cyrenaica could help to produce an effective administration. The region can probably produce and export, depending on the state of the fields and infrastructure, 1.5m of barrels of oil most of which has been off the market since the conflict began. That would help to keep world oil prices stable and provide revenue to rebuild the country. There is surely a better chance of containing the risks of extremism through engagement rather than through indifference and neglect. Access to the resource base of south and the ports of the north would make Cyrenaica more viable economically than many states across Africa. The leader of the rebels, Ibrahim Jadran, claims to want only autonomy within a new Libyan confederation. That might not be the end of the story but if the only alternative is a long-running civil war it is surely worth testing.
So far the external world, led by the EU, has declined to recognise the reality on the ground. Most countries continue to assert that borders cannot be changed. In historical terms that is nonsense. Borders are a reflection of power, and as history has shown both in the Middle East and in Europe over the last century the distribution of power is never rigid or fixed for all time. In Libya and elsewhere in the region it is time to recognise just how much is changing.