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ICG says Al Sarraj’s corruption and Tripoli’s militias are main obstacles facing economic reforms

The Address | Benghazi – Libya

TRIPOLI – The International Crisis Group (ICG), a transnational non-profit, non-governmental organization that carries out field research on violent conflict, has criticized the economic reforms imposed by the Presidential Council in September.

According to ICG, one of the main obstacles facing these reforms is the presence of militias and its political backers  in the capital whom “have taken advantage of their ability – often through coercion – to use the official exchange rate for personal gain and to consolidate power.”

“The first concern is that interest groups, including militias and political actors, will circumvent the fee-based rate and use the official rate, thus continuing to profit from a de facto double exchange rate system.”, ICG said.

Another obstacle is abuse of power by the Presidential Council itself. The funds that service fee generates are supposed to be used to repay public debt and finance development projects; Yet the decree announcing the reforms states that only the Presidency Council will determine how to allocate the funds.

“Some government officials are worried that [Fayez] Al Sarraj [chairman of the Presidential Council] and his entourage could use these funds to buy loyalty rather than finance sound development projects.”, ICG stated in its report.

“Another question is whether these funds will go into the regular government budget, which auditors review, or will remain outside the budget line, which allows for less financial scrutiny.”, ICG added.

Thus, the ICG called upon the European Union to “press the Government of National Accord and the Central Bank of Libya to limit the allocation of funds on a preferential exchange rate, and prevent fraudulent letters of credit”.


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