Transitions

Why Libya's Militants Are Kidnapping Diplomats – And Why We Can't Give In

At least nine Libyan soldiers were killed in the early hours of Friday morning, and dozens injured, after clashes broke out between Ansar al Sharia militants and other Islamist militants. In addition, three Libyan soldiers were killed Tuesday morning, and two others injured, after a suicide bomber blew up his car at the entrance of an army brigade headquarters in the city of Benghazi. Meanwhile, the Jordanian ambassador to Libya and a senior Tunisian diplomat are still being held by extremist groups weeks after being abducted from the capital Tripoli. The wave of kidnappings targeting diplomatic missions is yet another extremely worrying development in post-revolution Libya. The incident involving the Jordanian ambassador started two weeks ago, when gunmen ambushed his vehicle, wounded his driver, and abducted him. A few days later, a senior Tunisian diplomat was also taken from his residence in Tripoli.

In return for releasing the diplomats, the kidnappers demanded the release of Libyan extremists held in Jordan and Tunisia. The authorities seem unable to cope with the situation at hand, despite earlier promises to upgrade security arrangements for diplomatic missions in Libya. The problem may well have something to do with a tendency within the government to downplay the threat from jihadist groups linked to the local al Qaeda franchise. After attacks on various diplomatic missions in Libya over the last two years, including those of countries such as the United States, France, Egypt, Sweden, and Tunisia, these latest incidents show a new trend in the tactics used by jihadist groups in Libya. The influence of extremist groups in Libya is likely to increase significantly over the coming years if the current state of insecurity and political turmoil continues unresolved.

Over the last few weeks, the government has stated repeatedly that the diplomats are alive and in good health -- conclusions apparently based on contacts with the kidnappers. However, remarks from former government officials, including former Minister of Interior Fawzi Abdulaal, seem to highlight a very worrying reality in post-revolution Libya. Abdulaal said that the country has been infiltrated by al Qaeda-linked groups, and that many sympathizers with extremists groups now hold prominent government offices, especially in the defense and security sectors. Infiltration of the government could help explain its manifest inability to address the issue of rebuilding the national army and police forces. This is raising fears among Libya's friends in the West who have pledged to train thousands of soldiers and security personnel to help the country establish a strong and modern army and police force.

Over the past two years, extremist groups have conducted an assassination campaign that has targeted army and security officers, activists, judges, journalists, and even children. Now the militants are targeting countries that helped the Libyan people during their struggle to overthrow the Gaddafi regime. The tactics used by these groups are evolving rapidly, and the fragmented authorities seem to be unable to face up to these groups alone. This appears unlikely to change in the near future, given the current reports.

The international community must step up their efforts and rethink their strategy of engagement with Libyan partners. On Tuesday, Giovanni Pinto, the Italian border police chief, warned that help provided to Libya could potentially have negative effects. It is crucial that western help and assistance to the Libyan government should be carefully considered to ensure that it does not end up in the wrong hands. In addition, the international community should develop realistic strategies to counter the activities of the groups, which are attempting to derail Libya's democratic transition and oppose democratic values in the country.

But there's another point that needs to be made here: Libyan authorities and their international partners must start working on political solutions to many of the country's woes rather than relying solely on technical assistance, as has been the case in the last two years. Extremist groups are exploiting the political turmoil in the country to further their extremist ideology. It is this political uncertainty that allows the militants to execute their plans in Libya. 

The Libyan militant group Ansar al Sharia issued a statement this week stating that democracy is kufr, or "disbelief," and thus contradicts Islamic teachings. Ansar al Sharia prevented the Constituent Assembly elections from taking place in the city of Derna earlier this year by bombing some polling places, thus shutting all of them down. It is crucial to prevent terrorists using these kidnappings to obtain concessions or the satisfaction of their demands. It is also the future of Libya's democracy that is being held hostage here.

Mohamed Eljarh is the Libya blogger for Transitions. Read the rest of his blog posts here. 

ABDULLAH DOMA/AFP/Getty Images

Transitions

Venezuela's Catastrophic Cash Crunch

Although Venezuela's protests continue, their intensity has diminished. As Venezuelans shift the attention back to the nation's limp economy, many are asking themselves why the country is in such bad shape.

Venezuelans suffer high scarcity, rampant inflation (in March of this year alone, prices jumped 4.1 percent), and the IMF is forecasting the economy will shrink by 0.5 percent this year. The economic forecast is so gloomy that even the chavista president of the Central Bank had a difficult time sounding upbeat a few days ago.

But at first brush, this dreary outlook seems strange. After all, the price of oil is near historic levels, and in Venezuela crises usually blow up when the price of oil dips. Even if Venezuela basically produces just one thing, its sole export is treasured by markets and consumers the world over.

The answer is simple: Venezuelans are now paying for years of mismanagement that not even a high oil price can hide.

Before breaking down the numbers, it is worth noting that a sizeable portion of Venezuelan oil sales are not paid in cash. Thanks to a generous subsidy program known as Petrocaribe, Venezuela heavily subsidizes oil imports from several countries in the Caribbean, including (notably) Cuba, Jamaica, Nicaragua, the Dominican Republic, as well as many of the smaller islands in the basin. (In the photo above, state officials visit the late Hugo Chávez's tomb before the opening of a Petrocaribe Summit in May 2013.)

Another significant caveat is that many of Venezuela's oil sales to China also generate little in the way of funds. These shipments are part of a cash-for-oil deal signed by the late Hugo Chávez and extended by his hand-picked successor, Nicolás Maduro. The deal means that the money used to pay for these shipments has already been disbursed -- and it has for the most part been spent in the form of Chinese-made appliances handed out to voters at bargain-basement prices in order to ensure Chávez's victory at the polls in 2012.

Venezuela's government is famously guarded about its economic numbers. Not even the country's budget deficit is known for a fact, although most people consider it to be extremely high. In the absence of real numbers, a number of private actors have offered up estimates.

One of these is BBO, a local consulting firm. Citing internal government documents, BBO concludes that Venezuela produces roughly 2.8 million barrels of oil per month. When one subtracts the amount earmarked for the internal market (which generates practically no cash, since gasoline and other refined products are heavily subsidized), as well as shipments to Petrocaribe and China, the remaining amount -- the only part that actually generates revenues at market prices -- is a relatively paltry 1.3 million barrels per day. This amounts to income of some $130 million (assuming a generous price of $100 per barrel), which translates into around $910 million per week. Assuming a cost of production of $10 per barrel, this leaves the country with an optimistic estimate of roughly $800 million in weekly oil export earnings.

That would seem like a generous amount of money for a poor country, but it's not enough when one compares it to Venezuela's outlays. Venezuela has to pay a high interest rate for the loans it has taken out to cover its massive budget deficit; the rate Venezuelan loans pay is, in fact, among the highest in the world, as is the budget deficit. And since Chávez crippled local industry, Venezuelans have to import pretty much everything they consume.

According to Bloomberg, debt service for Venezuela this year will reach $13.3 billion, or roughly $255 million per week. This amounts to 32 percent of export earnings. Imports in 2012, the last year for which shortages were not considered severe, amounted to $60 billion. This is roughly $1.1 billion per week, 40 percent more than what the country earns in exports. When one factors in that Venezuela also has to use dollars to pay for capital transactions, firms wishing to repatriate profits, and so forth, it becomes clear that the government cannot afford the path it has chosen.

This is what risk agencies are looking at when they grade Venezuela's ability to service its obligations. The country faces a scarcity of goods because the government cannot make ends meet. The reported backlog in approving foreign currency for multinationals is yet another symptom of a model that has run its course. The question that remains is what would happen to Venezuela if the price of oil were to dip below, say, $80 per barrel.

The inherent problems in Venezuela's finances point to an economic model that has run its course. Venezuelans instinctively know this, and that is one of the main reasons why they remain in the streets, against most odds, hoping for a change.

Juan Nagel is the Venezuela blogger for Transitions, editor of Caracas Chronicles, and author of Blogging the Revolution. Read the rest of his posts here.

JUAN BARRETO/AFP/Getty Images