Political Situation Deteriorating Further

B MI V iew: The recent success by Libya's Eastern federalists to export oil from a rebel-held port reaffirms Tripoli's inability to maintain control of the county. Risks that Libya could descent into full blown civil war in 2014 are on the rise, and we have lowered the country's short-term political rating as a result.

Recent developments in Libya significantly raise risks that the country could descend into full blown civil war in 2014. A North Korean-flagged tanker which had loaded at least 234,000 barrels of crude oil from the rebel-held al-Sidra port in the eastern region of Cyrenaica escaped navy warships and entered international waters on March 11. This represents a major success for the Cyrenaican federalists led by former anti-Qadhafi rebel Ibrahim al-Jathran, which declared self government in June 2013 and have blocked eastern ports since the summer. The event led to the dismissal by Libya's General National Congress (GNC) - the country's legislature - of Prime Minister Ali Zeidan on March 11. Zeidan will be temporarily replaced by Defence Minister Abdallah al-Thinni until parliamentary elections are held in July.

The failure to stop the tanker highlights Tripoli's inability to exert its control over security forces. The central government had threatened armed action, even an air strike, to prevent the tanker from getting away with its cargo. However, reports suggest that the Air Force refused to obey orders to attack the ship on March 8, and the Chief of Staff of the Libyan army had refused to take orders from Zeidan on other occasions over the past few months. Moreover, the federalists' success will significantly strengthen their position vis-a-vis Tripoli. We cannot preclude that a new, more assertive central government could be able to negotiate more autonomy to Cyrenaica in exchange for the opening of eastern ports and the preservation of the current constitutional make-up. However, prospects for successful negotiations between Tripoli and the separatist government are at this stage very low. The government could be faced with the option of seeing a de facto partition of the state or re-igniting a civil war with Cyrenaica. It appears at this stage too weak to swiftly regain control of the eastern oilfields.

Substantive Risks To Stability
Libya - Short-Term Political Risk Rating, Before (LHS) and After Revision

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This article is tagged to:
Sector: Country Risk
Geography: Libya

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