Economic expert \u201cMohammed Al-Safi\u201d writes: the Central Bank\u2026 unified spending\u2026 and economic reconciliation.<\/p>\n\n\n\n
Many have long viewed Libya\u2019s problems in a linear way, where there is a sequence of reforms that begins with solving the political problem first, followed by social reconciliation, and only later comes economic reform.<\/p>\n\n\n\n
This linear approach to pulling Libya out of its current quagmire has persisted for a long time (and still does), but without any tangible results. Political division has actually increased; on the contrary, it has become a reality with its own institutions, and the state has found a certain balance to coexist with it (despite its lack of sustainability). Meanwhile, social reconciliation\u2014which the Presidential Council was established for\u2014has seen no real progress.<\/p>\n\n\n\n
Here, for the first time, the linear image of reform is being reversed after the failure of the 2021 elections, and the emergence of a \u201clet bygones be bygones\u201d culture that has dampened or frozen the urgent need for national reconciliation, at least for now\u2026<\/p>\n\n\n\n
Under these circumstances, the Central Bank seized the opportunity\u2014with American support\u2014to play the role of mediator and to advance \u201ceconomic reconciliation\u201d ahead of political and social reconciliation (after both stalled), successfully convincing political actors to sit at the negotiating table and discuss the budget.<\/p>\n\n\n\n
I firmly believe the Central Bank succeeded in convincing different parties that there is an urgent need to control public finances; otherwise, inflation and poverty will become the greatest threat to their political ambitions.<\/p>\n\n\n\n
A change in leadership at the Central Bank, and its operation as an institution with a full board after a long period of a \u201cone-man show,\u201d gave it the ability to act as a mediator among all parties. It has effectively become something like a presidential council for economic affairs.<\/p>\n\n\n\n
But will the Central Bank succeed in achieving economic reconciliation?
Here I present 3 reasons for optimism and 3 reasons for caution:<\/p>\n\n\n\n
The financial \u201ctime bomb\u201d is growing over time, and its explosion is increasingly unpredictable, but the fuse is short and political actors are aware of it. Economic reconciliation is an important step to defuse this bomb, but it must be protected from the following risks:<\/p>\n\n\n\n
Unifying spending without controlling it is not economic reform\u2026 true economic reconciliation lies in unifying and rationalizing expenditure.<\/p>\n","protected":false},"excerpt":{"rendered":"
Economic expert \u201cMohammed Al-Safi\u201d writes: the Central Bank\u2026 unified spending\u2026 and economic reconciliation. Many have long viewed Libya\u2019s problems in a linear way, where there is a sequence of reforms that begins with solving the political problem first, followed by social reconciliation, and only later comes economic reform. This linear approach to pulling Libya out […]<\/p>\n","protected":false},"author":13,"featured_media":257054,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"iawp_total_views":0,"footnotes":""},"categories":[683],"tags":[636,613],"class_list":["post-257053","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-articles","tag-economy","tag-libya"],"acf":[],"yoast_head":"\n