Tunisia economy set to suffer blow from Libya violence
Author: Business News (Tunisia) Posted May 25, 2014
On May 17, 2014, the violent events in Libya took an extremely serious turn as clashes erupted between Islamist militias and paramilitary forces in Benghazi in eastern Libya, killing no less than 24 people and wounding about 150. Helicopters and fighter aircraft were used during these attacks. Describing the situation as serious would be an understatement. Libya, our neighbor and largest trading partner, is showing all the signs of a country heading toward civil war. Will Tunisia suffer the consequences?
Moammar Gadhafi was killed in October 2011, and anarchy has been the name of the game ever since in Libya. Armed militias are colonizing the Libyan soil by imposing their own law, a law baptized by bloodshed. The transitional authorities that took control following Gadhafi's assassination at the hands of rebels are being gradually defeated and led toward a deadlock: control is escaping them as armed militias obviously refuse to retreat. The militias, composed of mainly Islamist rebels, are stifling the state, which is struggling to rebuild its institutions.
On May 19, 2014, the Libyan parliament in Tripoli was attacked by an armed group demanding the highest authority in the country to be suspended. At the same time, BFM TV reported that Khalifa Hifter, the leader of a paramilitary force, declared being engaged in an attack against Islamist groups in Benghazi. Nouri Abousahmein, president of the General National Congress (parliament), has not ruled out the possibility that Hifter, a former general, could be the sponsor of the attack against the parliament. However, the government subsequently published a statement in which it said that there was no connection of any kind between the Benghazi and Tripoli events.
The crisis in Libya, which has a strong security aspect, has had a very distressing impact on the global economy in general and on the Tunisian one in particular. Indeed, this crisis started at a crucial moment, when the bilateral relations between the two neighboring countries were at their peak. Many projects were supposed to be launched, but remained suspended. These include the free zone between the border regions of Ben Guerdane (Tunisia) and Ras-Jedir (Libya), and plans to build a new gas transport canal between Libya and Gabes.
Worse still, trade relations between Tunisia and Libya have significantly fallen as a result of the recent security unrest plaguing our neighbor Libya. The breach of security has also opened the door wide for smuggling and parallel trading, a real scourge that is plaguing the national economy and causing confused Tunisian businessmen to suffer from the devaluation of their business transactions.
Karim Baklouti Barkettalh, a Tunisian businessman, told us that the Libyan crisis had very negatively impacted the functioning of the projects that his company maintained on Libyan soil. “Concerning the infrastructure projects, they have been mostly suspended for several months now. As for the oil sector, the fields located in Libya have been looted by armed militias and have therefore gone beyond the control of the Libyan authorities,” said Barkettalh.
He added that his company’s employees are currently in Tripoli, an area with relatively lower risk, and that they are taking the necessary safety precautions. “We do not intend to repatriate our employees at the moment, but we are on the lookout for news to prevent any potential danger.”
The disorders currently plaguing Libya have further deepened the financial risks in the business world. The president of a company exporting goods to Libya told us that there had been deep concerns about a Libyan client. The latter, based in the center of Tripoli, is struggling to meet his documentary remittances (transfers made in return for purchased goods) and being considerably late to do so.
“We are really concerned about the crisis in Libya, which is forcing our client not to pay us. Therefore, despite the fact that we had agreed to export to him a new quantity of goods, we preferred to suspend the operation in light of the critical situation,” lamented the head of an industrial factory.
Libya is the only true source of oxygen for Tunisia as far as economy is concerned. The fact that there is a security crisis of high importance does not bode well for national growth. It should also give our leaders enough reasons to worry about the situation.
In a press statement on May 19, a former colonel in the national army, Mokhtar Ben Nasr, warned against major repercussions that could result from the Libyan crisis. The former military member referred to the considerable influx of Libyan refugees fleeing what looked like a civil war, the armed intrusion of terrorist groups on Tunisian soil and, in particular, the clashes erupting between Tunisian and Libyans, living in Tunisia and representing various sensitivities.
However, let us return to a major and unprecedented event related to the Libyan crisis that took place more than a month ago, namely the kidnapping of two Tunisian diplomats by a group of armed militias. Mohamed Ben Cheikh and Laaroussi Gantassi have been held hostage for weeks amid absence of significant efforts for their release from the Tunisian authorities. The kidnappers demand the release of Libyan prisoners held in a penitentiary in Tunisia on charges of carrying out terrorist acts. For its part, Algeria did not hesitate to close its embassy and consulate in Tripoli to avoid real and imminent threats facing its diplomats. As for our diplomacy, there is nothing to report. The Tunisian Embassy in Tripoli has not closed its doors.
Info alerts are flowing from all over concerning the evolution of violence in Libya. The reasons are simply politics: two clans are competing for power in the post-Gadhafi Libya; there are those who could be called ex-Gadhafi supporters and the Islamists. The fight is involving heavy weapons and unleashing the passion of those blinded by the lust for power at the expense of democracy. What lies in store for the Tunisian-Libyan cooperation after this "civil war" that seems to be one of the harshest, driven by very obscure motivations?
Read More: http://www.al-monitor.com/pulse/business/2014/05/tunisia-economy-suffer-libya-violence.html