Libya Regime Change, Panic After The Picnic
Politics / Middle East Sep 02, 2011 - 11:39 AM GMTREGIME CHANGE : Presented by mainstream media as a kind of high-tech "turkey shoot", the military intervention in Libya to overthrow the Gaddafi regime threatens serious blowback. Through a fatal combination of analytic and judgemental errors, the Libyan regime-change experiment will deliver unwanted results, and a possible long delay before oil export supply recovers pre-war levels. Other unwanted effects could include added confidence and determination for what is loosely called "Political Islam", but in fact is an ethnic, religious and community-based Arab and Muslim identity quest that is basically hostile to and replaces the nation state concept, as well as western democracy the way it is preached and practised.
Regarding the Libyan oil prize, most analysts presently suggest as long as 1 year is needed for ramping up production from the present near-zero output level, around 50 000 barrels/day, to the pre-war output level of 1.6 million-per-day (Mbd). For some while Libya, which consumed about 300 000 barrels/day before the regime change war will be a net oil importer, but the NTC's access to funding through seized Gaddafi era holdings being unfrozen may shorten the time frame for rebuilding export capacity, simply through throwing money at the problem. Libya's prewar oil export capacity of around 1.3 Mbd, at current oil price levels, would have a total turnover value of more than $ 100 million-a-day.
Likely much more important however, Libyan regime change sows the seeds for Maghreb regional dispute, rivalry and conflict between what are now fundamentally destabilized and nervous ruling elites in place - and the absent or virtual, emerging and new ruling elites. Nearly all the remaining, and recently overthrown regimes including Gaddafi's regime, the Algerian military junta, the Ben Ali and Mubarak regimes, and the power system of Syria's Bashr al Assad were or are essentially modern, non-religious or "technocratic" state power systems. They were or are liberal market oriented, despite running police states and were or are structurally similar to western democracies, down to the detail of being economically incompetent and in several cases, like Egypt, very heavily indebted.
What we can call the Old Regimes, and the new regimes will certainly be in conflict. The present and early diplomatic spat between Libya's NTC, and the Algerian regime on its decision to shelter some members of the Gaddafi family is just one outlyer example of the type of disputes that can arise.
DISPROPORTIONATE MEANS - AND HASTE
The regime change method used against the Gaddafi regime - bombing - was disproportionate to the real level of military threat and capability of the Gaddafi regime, which were vastly lower than Syria's capabilities still are. On August 27, NATO acknowledged the conduct of 20 633 Libyan sorties since March 31st, and 7 768 strike sorties, not including the intensive bombing and missile raids conducted in the two weeks prior to March 31st. Multiply the number of strike sorties by the average number of military payloads, missiles or bombs launched by each plane, and we have a rough idea of the size and magnitude, and costs of this military operation. Damage due to the bombing campaign was likely higher than officially admitted and reported, indicated by water supply and sewage treatment infrastructure damage, implying long or costly reconstruction effort.
For European and US "minders" of the Libyan regime change experiment, however, the overwhelming interest is oil. Reconstruction and economic recovery imply spending - not revenues - which only in the Libyan case can draw on seized Gaddafi petrodollar holdings, estimated at up to $ 150 - $ 170 billion, the war dividend that is already the prime focus for recycling effort by the western liberators, to offset their military costs.
The reasons why the military action against Libya quickly became so massive are more important for gauging the likely near-term sequels. These reasons are both evident and in the public domain, and also unavowed. This second category especially includes the pressing need to get the job done as fast as possible - not only with a view to rapidly rebuilding oil production and export capacity.
Since January 2011, the pipeline of regime change right across the Middle East and North Africa (MENA) has gone into overload, and looks like staying there. For conspiracy theorists however, there is no such thing as spontaneous public and popular overthrow of existing political powers, regimes and entities but it remains easy to suggest the Tunisian, Egyptian, Bahraini and Yemenite uprisings - and the start of anti-Gaddafi activity - had a large spontaneous component.
Likewise, the start of Syrian popular unrest and anti-regime protest against the Bashr al Assad power elite was probably spontaneous, simply because all these regimes, whether pro-western or anti-western were or are inefficient, corrupt, kleptocratic and despotic.
All of these regimes tried - and failed - in their liberal-economic attempts to create "export platform" light industrial and service sector growth poles. Even though these quick fix economic development silver bullets are received wisdom for official development finance institutions, like the World Bank, their real world staying power outside the Asian model of export led growth is low. In the Arab world, the attempt to pursue liberal-economic notions of "good growth" included outright neglect of their basic industries like agriculture, infrastructure development, and all heavier industrial activity (with certain exceptions like petrochemicals and aluminium). Light manufacturing goals were shrunk to kit-based final assembly operations, resulting in little or nothing to stem the tide of unemployment for their growing younger populations. The end result of social conflict and rebellion is far from surprising.
THE OIL OBSESSION
Most analysts and commentators stop at the single word "oil" to explain the western hurry to oust Gaddafi. Their rationale extends to arguing that if the Arab democracy movement was allowed to notch up new successes, without western minders, this could be a major threat to the petromonarchy ruling elites of the Gulf.
With Gaddafi out of the way, democracy protest in the Gulf countries could or might taper down, as they are, already, on primetime media in western democracies. Lengthy and bitter regime change in the GCC petromonarchy autocracies could result in total loss of oil exports, triggering global economic collapse. The Crash of 79 zeitgeist or intellectual hysteria of western elites at the time of Iran's 1979 Islamic revolution is wheeled out to argue that saving western oil supply is the ultimate strategic goal.
This however ignores a fundamental basic of virtually all Arab countries, oil exporters or not: they are totally dependent on imported food. Partly due to their liberal-democratic policy path, and fast (or uncontrolled) population growth through 1970-2000, their ability to feed their populations is very low. If the Arab oil exporters stop exchanging oil-for-food, their regime change will turn to civil war even more certainly than in Libya or Syria, guaranteeing real petro-chaos.
The world's three-largest importers of wheat are Egypt, Saudi Arabia and Algeria. MENA regional dependence on rice, vegetable oils, fruits, fish, meat and vegetables imports is very high.
Although oil obsession is a rational driver for massive military intervention by western oil importer countries, in chosen target countries but obviously not for the moment in the autocratic and repressive GCC petromonarchies, oil price explosions no longer need actual and real physical supply cutoff. In 2008, with no serious or credible geopolitical threats to supply, world oil prices hit $ 147 a barrel on the back of massive financial speculation. Oil prices, today, are tight linked to equity prices and stock market sentiment, shown by a fall of about 15 percent in prices in August simply due to falling equity values, a slight slowing of the dollar's loss of world value and fear of global economic recession.
THE AL QAIDA OBSESSION
Other commentators start with the "al Qaida" threat, to explain the haste. Perhaps the greatest irony, here, is that Gaddafi's rehabilitation by western political leaderships, partly driven of course by rising oil prices since 2001, was also driven by Gaddafi's extreme and hostile stance towards al Qaida.
The current argument is that Arab democracy movements will soon be sidetracked by Political Islam, which will create Iran-style anti-western theocracies or, even worse, generate Afghan-style civil war ruining economic and trade development across the MENA, attacking oil installations, and reheat the War on Terror on Europe's doorstep. One thing is however sure: the type of regime change - involving external military intervention or not - will likely influence the outcome. Massive foreign military action almost surely favours the growth of Political Islam, as in Afghanistan, Pakistan, Iraq and Libya.
Arab nationalistic fighters, whether or not they are aided by western players only interested in oil, will tend to focus on their origins and traditions, which in the Arab world means Islam. From a very early period (the 12th century) this also includes Political Islam. The original version was light years away from being a terror doctrine, and was originally only a philosophical stance, making it interesting to know why Political Islam is communicated and interpreted with so much fear by western editorialists, politicians and opinion manipulators.
Other strands can be added to the al Qaida obsession. Many European political deciders took Gaddafi's repeated threat to flood Europe with economic migrants from Black Africa as serious. Obviously, to propagandists, the flood of migrants would include a fifth column of Islamic terrorists.
The European leadership reaction was first to cosy up to Gaddafi, building prisons and detention centres with European money to stem the tide - but one of the first actions of Libya's NTC is the near total expulsion of all foreign workers and jobseekers, including non-Libyan Arab nationals. It could be imagined that expatriate workers can filter back into Libya over the coming years but whatever the speed of regime change, national preference and priority for Libyan jobseekers will slow this trend. In the case of Syria this argument does not even apply: the al Assad regime was so inefficient that massive out-migration of jobseekers was a basic fact of life in the father-and-son al Assad days.
After regime collapse in Syria, outward migration might rise for a while but Syrians will also move back home when they have less fear of the corrupt and economically inefficient, but highly repressive police state of the al Assad years.
NO ANSWERS ARE BAD ANSWERS
Apart from oil, gas, petrochemicals and aluminium, the economic significance of the MENA region is vastly smaller than its geopolitical and military strategic importance.
The region's economic dependance on the rest of the world - both for food and manufactured products, from medecines to cars - is high or in many cases nearly total. There is no basic and intrinsic regional urge to isolationism and autarky, meaning that whatever regimes emerge in any country, that country will participate in global economic activity simply because they have no choice.
Conversely, if ruined by civil war and disproportionate military action by the west, like Afghanistan has been ruined, the country will basically be lost to the global economy - for decades ahead. Where the regime changed country has oil and a low population, like Libya, the recovery and reconstruction phase can of course be relatively short, but not in the opposite case, like Egypt. To be sure, other rationales can be advanced for why western players are rushing the regime change process in the region, in some cases, and preventing or slowing regime change in others, but the fundamental error of giving too much strategic weight to the region crops up, time after time.
We could argue that confusing preventive regime change with hoped-for curative democratic change is one of the most basic errors of judgement. Enough bad examples of the first exist in the MENA region, especially Afghanistan and Iraq, where one rationale used to defend massive military action was that inaction facing Iran's internal and domestic-generate regime change in 1979 was the cause of Iran's islamic flavoured aggressive geopolitical stance, today. Also today, the potential for Libya becoming a small-sized new Iran is certainly impossible to discount, because the TNC has won power through outright and massive western military support, and following this can deny it, or may be obliged to deny it and stress its islamic identity, seeking regional and wider-level influence using its oil power.
The TNC can and likely will accept China's open hand for reconstruction and relaunch of the economy despite China's very cautious stance on recognizing the TNC as the legitimate power of Libya. Already heavily installed in Libya, operating more than 50 major infrastructure and development projects, often with its own financing, China plays for long-term gains and is at least theoretically uninterested in the political flavour of the regime in power. For India exactly the same applies, and with the collapse of the Gaddafi regime, India may now push forward into Libya far more than previous.
More seriously, the vanguard role of the Libyan insurgents will likely soon lever up domestic insurrections in neighboring Algeria and Morocco, rather than calm them, again suggesting that western deciders intensified their military action to overthrow Gaddafi, as fast as possible, without looking at the likely sequels. Their evident hope is that despite all the rational arguments to the contrary, Libya can be forced into achieving a transition to both the modern nation state, and its democratic trappings. The complete opposite scenario is at least as probable, extending to an Iran-style, or Saudi-style islamic theocracy using the threat of oil supply cuts or price rises to prevent any external interference.
By Andrew McKillop
Contact: xtran9@gmail.com
Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights
Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.
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