Schemes and Dreams Confront Libya's Sobering Realities

The Freedom House

September 22, 2008

The Financial Times recently carried an extensive article on Libyan leader Muammar Qadhafi’s plans to radically alter the structure of Libya’s government. The longtime dictator’s plan would eliminate the majority of Libya’s ministries and substitute direct payment of oil wealth to Libya’s citizens in lieu of channeling it through the country’s bloated and wasteful bureaucracies. This is hardly the first time that the enigmatic leader has announced grand transformative plans, but given Libya’s recent re-entry into the “community of nations,” it is worth taking a look at the country’s major governance issues and what Qadhafi’s plan might change.

The international perception of Libya has undergone one of the most dramatic transformations of any country in recent memory. For years a pariah state due to its involvement in the bombing of Pan Am Flight 103, Libya began to see its fortunes turn when it reached an agreement to end its nuclear weapons program in late 2003. Since then it has gradually strengthened its diplomatic ties to the rest of the world, with the crowning moment being a meeting between Qadhafi and Condoleeza Rice earlier this month. Some facets of the economy have been liberalized, and Libya’s potential to increase the volume of its energy production has made it an attractive destination for foreign capital investment.

Yet in many other respects little has changed. As the Countries at the Crossroads report describes in detail, Libya remains very much a one-man regime. Policymaking decisions in Libya remain arbitrary, and patronage networks serve as the base of hiring and contracting choices. The judiciary has little independence, and the government as a whole is utterly lacking in transparency. While Qadhafi’s son Saif al-Islam has served as the modernizing face of the regime, the extent of his power is unknown and the difficult work of institution-building remains all but untouched.

And that is just on the investment-attractiveness side of the governance ledger. On political rights and civil liberties, Libya is still one of the world's more repressive countries. Political rights simply do not exist in any meaningful way for the average citizen. Human rights are not violated on as massive a scale as in some places, but this owes more to Libya’s small population and lack of political ferment than any inclination on the part of the regime to respect human rights. As Human Rights Watch made clear in a report released to accompany Sec. Rice’s visit, political dissent of any kind is still liable to expose citizens to an indefinite prison stay under harsh conditions, including torture.

Thus, Libya adds its unique system to the list of formerly state-run economies whose regimes keep politics closed but are slowly reforming their economic models, alongside China, Vietnam, Kazakhstan, and others. Qadhafi’s new ministry-elimination-oil-wealth-distribution scheme, however, has few precedents. The idea of giving oil wealth directly to citizens has been proposed or implemented in other places with significant oil wealth, from Venezuela to Alaska to Iraq, but the idea of the radical slimming down of the bureaucracy is a new twist. Perhaps the FT article’s key line comes at the end, from the Dartmouth professor who notes that the plan is “a sign of the regime’s inability to create a modern state responsive to the needs of its citizens.” Basically, the whole plan represents a clear acknowledgment of Libya’s governance failures. Unfortunately, it is unlikely to prove so easy to remedy. The likelihood that a radical fix can make up for decades of neglect and active efforts to restrict institutional development is extremely far-fetched. Until Libya’s opening extends beyond the mantra of “end our pariah status” to something involving more ambitious governance improvements, its citizens will likely continue to find Qadhafi’s schemes wanting.