Libya: New phase of nationalism gaining ground

There are signs of a new phase of nationalism gaining ground; an enhanced mood of pro-Arab and anti-foreign sentiment. It appears to spring from Colonel Qadhafi's old ideas on the role of the State and the ownership of the factors of production by the people. Such views are, as expected, welcome to the Old Guard and to the revolutionary committee movement. In essence, the ambition of the conservative right is the salvation of the Jamahiriya and with it, the concentration of economic power in the hands of the State.

Among the current sectors feeling some of the cold draught of growing nationalism is the banking quarter, where the regime appears to be caught in two minds about its future expansion. Saif al-Islam and his colleagues see the banking sector as an important backstop for the provision of credit to the private sector and want this task accomplished by private banking operations. Despite this, the banking privatisation programme has been considerably reduced in recent months.

The allocation of banking licences permitting the opening of new joint ventures has been distorted by the acquisition of a large stake in Italy's UniCredit on grounds of private interest by the Leader and Italy's Prime Minister Silvio Berlusconi.

The delay in granting a banking license to a second foreign bank, which was promised and forecast by the government earlier in the year, gives some credence to the belief among the banking community that the gains in efficiency and honesty in the banking system are not the regime's principal aims. Foreign companies operating in Libya will benefit from some of the banking reforms that have been recently achieved but a dramatic dedication to any continuing improvement cannot be guaranteed.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2010 Menas Associates

Libya's elite under attack

Political change is once again a bone of contention in the Qadhafi family. Reports from Tripoli suggest there is a move on hand to disgrace rich and influential members of society for their illegal acquisition of wealth at the expense of the state.

It is alleged that the élite have been involved in arranging lucrative deals in a way that is possible only in the unique circumstances of the Qadhafi regime. It is believed that a rough assessment is being made of the funds controlled by a number of both the Old Guard and some of the more recent administrators/technocrats to enable action to follow against those who are suspected of gross involvement in bribery and corruption.

The mood is said to replicate a similar situation in 2000-01, and could be the motivation for a new assault on the cabinet in general and those ministers who are now in charge of corrupt institutions whose personnel have sold out the interests of the nation for individual gain.

The key to the change of atmosphere in Tripoli is the widely published recent criticism of the Libyan pavilion at the Expo 2010 in Shanghai by Saif al-Islam at the end of September. This rapidly escalated into a thoroughgoing attack on the incompetence and ineptitude of the government's management of national affairs.

Opposition sources have suggested that this opening is being manipulated to set the scene for a change in personnel and structures during the next General People's Congress (GPC). It is seen as a means of creating a role for Saif al-Islam within the formal institutions of state as a saviour of the country and as the president in waiting.

There are inevitable hazards associated with an attempt to disgrace the ministers and the cabinet together with some of the Old Guard, as well as longstanding members of the Revolutionary Committees and luminaries who are attached to the Leader's extended entourage. Many of these groups have a strong interest in retaining the status quo because they could lose out badly from change, and even face severe retribution from their enemies if the regime is altered to become a more legally-controlled and ethically-based system such as that which could prevail under Saif al-Islam.

For more news and expert analysis about Libya, please see Libya Focus and Libya Politics & Security.

© 2010 Menas Associates