Economic crises in Libya, suspension of oil production, and human rights claims in Algeria

A Libyan woman - who called herself “Fatima” - complained of the difficulties of living, in light of her fear of the rise in the exchange rate of the dollar, which is close to crossing the 10 dinar barrier. This woman, a widow and mother of four children, told Asharq Al-Awsat, without wanting to mention her name, that she had greatly reduced her consumption of foodstuffs, and was now forced to borrow again to buy what she needed for the rest of the month.

Fatima's situation is reflected by other citizens who spoke to Asharq Al-Awsat, including "Sami" who said that he works in two jobs, government and private, to cover his expenses, noting that "we have no choice but to adapt and dispense with goods that were considered essential."

Sami explained in his interview with Asharq Al-Awsat that every head of a family “is forced to make a complex monthly calculation to live with a fixed salary, in exchange for an inflated living bill, amid fears of any emergency, such as a home appliance or car malfunction, in the absence of a public transportation network, and then the cost of repair may eat up perhaps half of the month’s budget.”

Although the country enjoys great oil wealth, its revenues are the main source of income, but Libya has recently been suffering from a number of economic crises, most notably the decline of the dinar and the rise of the parallel market, where the dollar is sold for about 9.5 dinars, compared to the official price of 6.33 dinars.

The head of the Benghazi Forum for Economic and Development, Khaled Bouzakouk, observed “an increase in the prices of basic commodities between 10 percent and 15 percent, coinciding with the gradual rise of the dollar from 8 dinars last month to its current price, due to the market’s dependence on imports.”

Bouzakouk told Asharq Al-Awsat that the increases “included meat, rice, oil, eggs, mineral water, and other commodities, which burdens heads of household, especially those working in the government sector, which includes more than two million citizens, most of whom are in job grades whose salaries range between 1,000 and 2,500 dinars per month,” pointing out “these people’s living burdens have increased due to their incurring the burden of purchasing supplies for the new school year, the prices of which have also jumped due to the dollar.”

Bouzakouk believes that “limiting imports to necessary goods will contribute to combating fictitious credits, as some merchants obtain dollars at a low price without importing actual goods, but rather sell them on the black market.” Believing that “the two conflicting governments’ expansion in spending, especially on reconstruction projects with huge contracts, the escalating levels of corruption, and the weakness of oversight and legal prosecution as a result of the division, weakens the impact of any official action.”

Bou Zakouk warned that “the continued rise of the dollar, with families directing 70 percent of their budget to food and medicine, will hit the clothing and appliance markets with a severe recession,” and pointed to “unusual phenomena resulting from the high prices, such as some families requesting assistance for treatment via social media platforms.”

According to the latest statement of the Central Bank of Libya, covering the period from the beginning of this year until the end of last August, the budget recorded an apparent surplus in local currency, with revenues amounting to 98.9 billion dinars, compared to spending amounting to 68.6 billion dinars, the largest share of which was consumed by the salaries chapter, at about 47 billion dinars.

In turn, Saqr Al-Jibani, professor of economics at the University of Derna, attributed “the street’s fear of the dollar’s ​​arrival in the market parallel to the ten-dinar barrier to its repercussions on the prices of basic commodities, especially since the continuation of inflation has exhausted the incomes of the broader segment of the population.”

In a statement to Asharq Al-Awsat, Al-Jibani questioned the official data on inflation rates “because they do not match the prices observed in the markets,” expressing his understanding of the questions of many Libyans about the lack of impact of the global oil boom on their lives, describing the matter as “the great irony.”

He explained the matter in the context of what the supervisory reports monitored about the depletion of the subsidized fuel file and its smuggling of a large percentage of oil revenues in foreign currency. He also pointed out the Central Bank’s complaints about not transferring all of the oil revenues to it, which limits its ability to defend the dinar.

The economics professor believes that the solution lies in “ending the division and creating a unified government with a unified budget, subject to oversight, which may gradually end the parallel market.”

He warned of “the social repercussions of inflation as a result of the continued rise in the price of the dollar,” and of “the increase in families below the poverty line, the accumulation of debts on them, and the emergence of strikes in vital sectors.”

Despite his understanding of the legitimacy of these demands “due to insufficient incomes in the face of rising prices, which has eroded purchasing power,” Al-Jibani pointed out that “any increase in salaries will be eaten up by inflation as long as the root of the problem remains.”

He also warned of the repercussions of the entire situation on “the increasing class disparity, which is a new phenomenon in Libyan society, between a few who own billions and a majority who struggle daily to secure bread.”

On Tuesday, Amnesty International called on Algeria not to expand the use of the death penalty, after the authorities pledged to impose this punishment on the arsonists of deadly forest fires. The Algerian judiciary has issued death sentences, including in cases related to terrorism and premeditated murder, without carrying out the sentence since 1993.

A month ago, President Abdelmadjid Tebboune, Minister of Justice, ordered the amendment of the Penal Code to impose the death penalty on people who start forest fires.

The decision came after Algeria faced a wave of deadly fires that swept the northeast of the country, claiming the lives of 12 people, according to an official toll, while witnesses spoke of dozens of deaths.

According to Agence France-Presse, Amnesty International said in a statement: “The Algerian authorities must immediately abandon any plans to expand the scope of the death penalty, or resume executions, more than three decades after they stopped.”

President Tebboune added that people sentenced to death must be executed as soon as they have exhausted their right to appeal “so that society can take what is due from them.”

The Algerian government began studying draft amendments to the penal code earlier this month, when the president said that “kidnappers and those who abuse them” would also face the death penalty.

Amnesty International called on Algeria to “adopt an official moratorium on the implementation of death sentences, as a first step towards the complete abolition of the death penalty.”

Northern Algeria witnessed forest fires on a regular basis during the summer, but climate change has exacerbated their effects by causing frequent droughts and extreme heat. However, President Tebboune said that there was “something criminal” in the recent fires.

Amnesty International also said that “reliable sources have reported, since then, that a much greater number of victims have fallen,” compared to the official toll in the most recent wave of fires, “including more than 70 deaths in one municipality.”

More than 30 people died in July 2023, when fires swept through thousands of hectares of forests and agricultural lands, as well as hundreds of homes, in the Bejaia region and its environs.

In 2023, Algeria issued death sentences to more than 50 people from the Tizi Ouzou region, some of them in absentia, in connection with the killing of a 38-year-old activist and the mutilation of his body, after residents of the region wrongly accused him of starting forest fires.

The National Oil Corporation in Libya said today (Tuesday) that production and operations have been suspended in 3 oil fields, after a group of oil facilities guards “illegally” closed the valve of the main Hamada-Zawiya oil shipping line, this morning (Tuesday), according to Reuters.

The corporation added that it “may have to declare a state of force majeure if this valve continues to be closed, or if any of the other fields are subjected to a similar forced closure.”

Libyan oil production has been repeatedly halted for various political and technical reasons, since the 2011 uprising against Muammar Gaddafi. The corporation said in a statement published on its website that a group of oil facilities guards, in what it described as “illegal,” closed the valve of the main oil shipping line between Hamada and Al-Zawiya on Tuesday morning. Noting that closing the valve caused a sudden rise in pressure at the Tahara Field point in the production lines, which led to the complete cessation of production and operation operations in the Hamada Field, the Tahara Field, and the station.

The corporation considered that these developments were causing “serious damage” to the national economy and to the operations of oil fields, warning of their repercussions on the Libyan oil sector, at a time when the global crude market is witnessing a noticeable rise in prices.

At the same time, the Corporation rejected threats that it said were issued by parties in the movement to close the North Hamada field, which belongs to the Nafusa Company, or any other fields and wells in different regions of the country, in protest against demands, the nature of which the Corporation did not specify in its statement.

The corporation called on the protesters to abandon the closures and resort to legal means to demand their rights, warning that the continuation of these movements may exacerbate the turmoil plaguing the oil sector, which is the main source of Libyan state revenues.

The corporation said that it “may have to declare a state of force majeure” if the valve of the Hamada-Zawiya line continues to be closed, or if other fields are subjected to similar forced closures, calling on the Libyan authorities to assume their responsibilities and intervene to address the crisis and end its causes.

The warning comes in light of the continued dependence of Libyan public finances to a large degree on oil revenues, which makes any long-term disruption in production or crude exports have direct repercussions on the state’s revenues and its ability to meet its financial obligations, including paying the salaries of public sector employees. According to the institution. The corporation warned that the continued closure of oil fields and facilities may harm Libya's reputation as a stable supplier of energy in global markets, at a time when the country seeks to maintain its levels of oil production and exports.

Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), has been suffering for years from political and security divisions, which have repeatedly affected the oil sector, with the recording of closures of oil fields and ports, in protest against political or economic demands.

The National Oil Corporation stressed that protecting oil installations and continuing production operations requires avoiding forced closures, and urged members of the Oil Facilities Guard to “use the language of reason and self-control,” and to follow legal means to demand their rights.