12:01am

Tue April 19, 2011
Conflict In Libya

Libyan Rebels Look For Ways To Fill Coffers

Originally published on Tue April 19, 2011 7:21 am

As the conflict in Libya drags on, economic conditions for Libyans on both sides of the country are growing tenuous.

In the rebel-held east, cash supplies are dwindling, shortages are emerging, and prices are rising as officials scramble to hold the economy together and fund a revolt against a much stronger army.

The Same On The Surface

How does an economy work when the government vanishes? As long as the money holds out, on the surface things can appear much the same.

In the lobby of Benghazi's United Bank, Libyans are still coming to collect their salaries, just as in the old days.

Social studies teacher Najah Khalifa says he is still getting paid, even though the old government is gone and the schools remain closed.

He says he's happy to trade the present uncertainty for the repression that was common under Moammar Gadhafi's regime.

"Everyone is getting their salary as they're supposed to. Personally, there is no impact on me," he says. "I would like to point out that this interview we are having right now, if it had happened before the revolution, we would've been questioned by internal security."

Trouble With Oil

Just a few months ago, Libya was seen as an exciting emerging market. European countries led by Italy jockeyed for investment opportunities. Now, foreign workers have fled, offices and embassies are closed, and uncertainty — pure poison to investor confidence — reigns.

For the rebels, month-to-month survival is the urgent priority.

Before the revolution, eastern Libya produced most of the country's oil. But spokesman Aljalil Mayuf says since the uprising, attacks by pro-government forces on key oil and gas infrastructure at the Sarir and Mesla fields have throttled the flow of crude.

"Since the forces of Gadhafi, they hit our field in Mesla field, so we stopped the production in Mesla and Sarir," he says. "So we produce zero now."

With the assistance of Qatar, the rebels managed to export a single tanker of crude that should eventually bring badly needed revenue into rebel coffers. But Gadhafi loyalists are outraged to see any oil money diverted from the government, and their attacks on facilities deep in the vast Libyan desert are difficult to defend against.

'Our Books Are Open'

Ali Tarhouni, the rebel finance minister, says he has spent more than one sleepless night in meetings trying to deal with oil security.

"We're trying. This is a really challenging issue," he says. "Now I feel security is marginally — the emphasis on marginally — better. But overall, yes, it's something among the other many things that's keeping me awake."

An economics professor in the United States before the revolution, Tarhouni brings a different perspective to the task of unseating Gadhafi. Online commentators have noted that east Libyans may be the first revolutionaries to open both their own oil company and a central bank in the first weeks of their uprising.

Tarhouni says the rebels will present a markedly different financial and economic system to Gadhafi's.

"These are private banks of Gadhafi and his cronies. So even the central bank in the past, for example, the oil companies, we don't even have a record of what Gadhafi did in the last, especially, 30 years," he says. "So I think the rest of the world will find it a lot easier dealing with the central bank in Benghazi. Our books are open."

The Big Picture

At the United Bank, 20-dinar notes slide through a money-counting machine — part of a diminishing supply that will need replenishing soon.

Western and Arab countries say they are working on ways to fund the rebels, but details remain elusive. The German economy minister, for example, doesn't think it is legal for individual countries to redirect the Gadhafi regime's frozen assets to the rebels and is calling on the European Union and the United Nations to work out a mechanism to make that happen.

Bank manager Salid Mohammed tries to keep things in perspective. He says he will be sad if the bank has to close, but that's a minor setback in the larger picture.

"I'm not that worried about the bank," he says. "My concern is mainly for my people and my country. Banks have gains; they have losses. Some close; some reopen again. But if I lose my country ... "

His voice trails off before he adds that what Libyans need right now, even more than money, is a future.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

MARY LOUISE KELLY, host:

This is MORNING EDITION, from NPR News. I'm Mary Louise Kelly, in for Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne.

In Libya, both sides are coming up against the price of rebellion. Moammar Gadhafi is paying plenty to put down the revolt there. In the rebel-controlled areas in the east of the country, cash is running out, and prices are rising as goods become scarce.

NPR's Peter Kenyon reports from Benghazi, where rebel leaders are trying to hold the economy together and fund a revolt.

PETER KENYON: How does an economy work when the government vanishes? As long as the money holds out, on the surface, things can appear much the same.

(Soundbite of crowd chatter)

KENYON: In the lobby of Benghazi's United Bank, Libyans are still coming to collect their salaries, just as in the old days. Social studies teacher Najah Khalifa says he's still getting paid, even though the old government is gone and the schools remain closed. He says he's happy to trade the present uncertainty for the repression that was common under Moammar Gadhafi's regime.

Mr. NAJAH KHALIFA (Teacher): (Through translator) Everyone is getting their salary, as they're supposed to. Personally, there is no impact on me. I would like to point out that this interview we are having right now, if it had taken place before the revolution, we would've been questioned by internal security.

KENYON: Just a few months ago, Libya was seen as an exciting, emerging market. European countries, led by Italy, jockeyed for investment opportunities. Now foreign workers have fled, offices and embassies are closed, and uncertainty -pure poison to investor confidence reigns.

For the rebels, month-to-month survival is the urgent priority. Before the revolution, eastern Libya produced most of the country's oil. But spokesman Aljalil Mayuf says since the uprising, attacks by pro-government forces on key oil and gas infrastructure at the Sarir and Mesla fields have throttled the flow of crude.

Mr. ALJALIL MAYUF (Spokesman, Arabian Gulf Oil Company): Since the forces of Gadhafi, they hit our field in Mesla field, so we stopped the production in Mesla and Sarir. So we produce now zero now.

KENYON: With the assistance of Qatar, the rebels managed to export a single tanker of crude that should eventually bring badly needed revenue into the rebel coffers. But Gadhafi loyalists are outraged to see any oil money diverted from the government, and their attacks on facilities deep in the vast Libyan desert are difficult to defend against.

Rebel Finance Minister Ali Tarhouni says he's spent more than one sleepless night in meetings trying to deal with oil security.

Mr. ALI TARHOUNI (Libyan Rebel Finance Minister): We're trying. This is a really challenging issue. Now I feel that security is marginally - and the emphasis on marginally - better. But overall, yes, it's something among the other many things that's keeping me awake.

KENYON: An economics professor in the U.S. before the revolution, Tarhouni brings a different perspective to the task of unseating Moammar Gadhafi. Online commentators have noted that east Libyans may be the first revolutionaries to open both their own oil company and a central bank in the first weeks of their uprising.

Tarhouni says the rebels will present a markedly different financial and economic system to Gadhafi's.

Mr. TARHOUNI: These are private banks of Gadhafi and his cronies. So even the central bank in the past, for example, the oil companies, we don't even have a record of what Gadhafi did in the last, especially, 30 years. So I think the rest of the world will find it a lot easier dealing with a central bank in Benghazi. Our books are open.

(Soundbite of machinery)

KENYON: At the United Bank, 20 dinar notes slide through a money-counting machine, part of a diminishing supply that will need replenishing soon.

Western and Arab countries say they're working on ways to fund the rebels, but details remain elusive. The German economy minister, for example, doesn't think it's legal for individual countries to redirect the Gadhafi regime's frozen assets to the rebels, and is calling on the E.U. and U.N. to work out a mechanism to make that happen.

Bank manager Salid Mohammed tries to keep things in perspective. He says he will be sad if the bank has to close, but that's a minor setback in the larger picture.

Mr. SALID MOHAMMED (Manager, United Bank): (Foreign language spoken)

KENYON: I'm not that worried about the bank, he says. My concern is mainly for my people and my country. Banks have gains. They have losses. Some close. Some re-open again. But if I lose my country - his voice trails off before he adds that what Libyans need right now, even more than money, is a future.

Peter Kenyon, NPR News, Benghazi. Transcript provided by NPR, Copyright NPR.