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The Dead Hand of Socialism: State Ownership in the Arab World

September 12, 2014 Comments off

The Dead Hand of Socialism: State Ownership in the Arab World
Source: Cato Institute

Extensive government ownership in the economy is a source of inefficiency and a barrier to economic development. Although precise measures of government ownership across the Middle East and North Africa (MENA) are hard to come by, the governments of Algeria, Egypt, Libya, Syria, and Yemen all operate sizeable segments of their economies—in some cases accounting for more than two-thirds of the GDP.

International experience suggests that private ownership tends to outperform public ownership. Yet MENA countries have made only modest progress toward reducing the share of government ownership in their economies and are seen as unlikely candidates for wholesale privatization in the near future.

MENA countries need to implement privatization in order to sustain their transitions toward more representative political systems and inclusive economic institutions. Three main lessons emerge from the experience of countries that have undergone large privatization programs in the past. First, the form of privatization matters for its economic outcomes and for popular acceptance of the reform. Transparent privatization, using open and competitive bidding, produces significantly better results than privatization by insiders, without public scrutiny. Second, private ownership and governance of the financial sector is crucial to the success of restructuring. Third, privatization needs to be a part of a broader reform package that would liberalize and open MENA economies to competition.

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Middle East Transitions: A Long, Hard Road

August 11, 2014 Comments off

Middle East Transitions: A Long, Hard Road
Source: International Monetary Fund

Since the onset of the Arab Spring, economic uncertainty in Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen (Arab Countries in Transition, ACTs) has slowed already sluggish growth; worsened unemployment, particularly of youth; undermined business confidence, affected tourist arrivals, and depressed domestic and foreign direct investment. Furthermore, political and social tensions have constrained reform efforts. Assessing policy options as presented in the voluminous literature on the Arab Spring and based on cross-country experience, this paper concludes that sustainable and inclusive growth calls for a two pronged approach: short term measures that revive growth momentum and partially allay popular concerns; complemented with efforts to adjust the public’s expectations and prepare the ground for structural reforms that will deliver the desired longer tem performance.

Responding to Libya’s Political and Security Crises: Policy Choices for the United States – CRS Insights

August 6, 2014 Comments off

Responding to Libya’s Political and Security Crises: Policy Choices for the United States – CRS Insights
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

Deepening conflict and political tension in Libya are threatening civilians and may drag the country off the path of transition and toward civil war. (Read the CRS background report here.) Intense clashes near Tripoli between militias have closed the capital’s international airport and further strained relations among political factions. On July 26, the State Department suspended operations at the U.S. Embassy (located near the Tripoli airport) and evacuated personnel under U.S. military escort. Fighting also continues around Benghazi between armed Islamist groups and forces allied with an anti-Islamist former military commander, Khalifa Haftar.

The fragmentation of political and military power in Libya since the end of the 2011 anti-Qadhafi conflict and the absence of capable state institutions compound the difficulty of restoring order. In late July 2014, Libya’s acting cabinet issued a vague call for international assistance, but some Libyan legislators responded by rejecting the prospect of any foreign military intervention. On July 23, acting Interim Prime Minister Abdullah al Thinni clarified his government’s call for international support and pleaded with combatants to pull back “before our country reaches a point of no-return and becomes involved in an unjustifiable, full-blown war.”

Some observers have warned that fighting among militias and mutual suspicions among political factions could derail the work of the recently-elected Council of Representatives (COR) and delay that legislative body’s selection of a new cabinet. Meanwhile, Members of Congress and Administration officials may consider new options for encouraging Libyans to end the fighting and agree to security and political arrangements to bring the transition period to a close.

CRS — Libya: Transition and U.S. Policy

May 23, 2014 Comments off

Libya: Transition and U.S. Policy (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Libya’s post-conflict transition has been disrupted by armed non-state groups and threatened by the indecision and infighting of interim leaders. To date, the elected General National Congress (GNC) and the interim executive authorities that it has endorsed have failed to address pressing security issues, reshape the country’s public finances, or create a viable framework for postconflict justice and reconciliation. The insecurity that was prevalent in Libya in the wake of the 2011 conflict has deepened, and armed militia groups and locally organized political leaders remain the most powerful arbiters of public affairs.

At present, potentially divisive political, economic, and social issues are being debated by rival groups in the absence of credible state security guarantees. These issues include the proposed decentralization of some national administrative authority, competing fiscal priorities, the provision of local and national security, the proper role for Islam in political and social life, and concerns about the ongoing exploitation of Libyan territory by terrorists, arms traffickers, and criminal networks. The U.S. State Department now describes Libya as a “terrorist safe haven,” and U.S. military and intelligence officials have warned about threats to U.S. interests emanating from Libya in recent statements and congressional testimony.

CRS — Libya: Transition and U.S. Policy

May 14, 2014 Comments off

Libya: Transition and U.S. Policy (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Libya’s post-conflict transition has been disrupted by armed non-state groups and threatened by the indecision and infighting of interim leaders. To date, the elected General National Congress (GNC) and the interim executive authorities that it has endorsed have failed to address pressing security issues, reshape the country’s public finances, or create a viable framework for postconflict justice and reconciliation. The insecurity that was prevalent in Libya in the wake of the 2011 conflict has deepened, and armed militia groups and locally organized political leaders remain the most powerful arbiters of public affairs.

Just Released — Review of the Terrorist Attacks on U.S. Facilities in Benghazi, Libya, September 11-12, 2012, together with Additional Views

January 15, 2014 Comments off

Review of the Terrorist Attacks on U.S. Facilities in Benghazi, Libya, September 11-12, 2012, together with Additional Views (PDF)
Source: U.S. Senate Select Committee on Intelligence

The purpose of this report is to review the September 11-12, 2012, terrorist attacks against two U.S. facilities in Benghazi, Libya. This review by the Senate Select Committee on Intelligence (hereinafter “SSCI” or “the Committee”) focuses primarily on the analysis by and actions of the Intelligence Community (IC) leading up to, during, and immediately following the attacks. The report also addresses, as appropriate, other issues about the attacks as they relate to the Department of Defense (DoD) and Department of State (State or State Department). It is important to acknowledge at the outset that diplomacy and intelligence
collection are inherently risky, and that all risk cannot be eliminated. Diplomatic and intelligence personnel work in high-risk locations all over the world to collect information necessary to prevent future attacks against the United States and our allies. Between 1998 (the year of the terrorist attacks against the U.S. Embassies in Kenya and Tanzania) and 2012, 273 significant attacks were carried out against U.S. diplomatic facilities and personnel. 1 The need to place personnel in high-risk locations carries significant vulnerabilities for the United States. The Committee intends for this report to help increase security and reduce the risks to our personnel serving overseas and to better explain what happened before, during, and after the attacks.

Fostering Synergies for Advancing Women’s Rights in Post-Conflict Islamic States: A Focus on Afghanistan, Egypt, and Libya

December 9, 2013 Comments off

Fostering Synergies for Advancing Women’s Rights in Post-Conflict Islamic States: A Focus on Afghanistan, Egypt, and Libya
Source: Brookings Institution

Finding common ground among diverse stakeholders on women’s rights in Muslim-majority states is critical to advancing democracy and human development. This paper examines ways to champion and sustain progress on women’s rights amid renewed Islamic constitutionalism by searching for common approaches among Muslim women activists, members of the ulama, and legal advocates.

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