Libyans swap jewelry for medical treatment as crisis bites

A man displays Libyan Dinar banknotes in a jewelry store in the old city of Tripoli, Libya October 26, 2017. Picture taken October 26, 2017. (Reuters/Ismail Zitouny)
Updated 16 November 2017

Libyans swap jewelry for medical treatment as crisis bites

TRIPOLI: In a square behind Libya’s central bank, black market dealers, some of them armed, carry small plastic bags filled with dollars and larger ones with dinars in and out of one of many informal exchanges.
Traders buy food and other goods from abroad at the official rate and sell them at the unofficial one, pocketing vast profits; others make equally large sums by smuggling out heavily subsidised fuel.
In the back streets of the old city meanwhile, ordinary people have resorted to selling jewelry or dollars hidden at home as six years of post-dictatorship chaos take their toll.
“I haven’t been paid for four months,” said Fatima, 40, from the southern city of Sabha as she sold three small gold charms to pay for diabetes treatment for her sister, Hasina, who added: “We’re helpless, there’s nothing else we can do.”
In other signs of rising poverty, elderly women beg motorists for cash on Tripoli’s streets and families queue for charity food handouts. The UN estimated that about 1.3 million people in Libya need humanitarian assistance this year.
Their situation took another turn for the worse in the past two weeks after the black market rate of the dinar, which has long languished at record lows, slid again, fueling inflation that is already around 25-30 percent.
The central bank blamed the audit bureau and the UN-backed government for restricting letters of credit that fund basic supplies to a divided country where a security vacuum and smuggling networks have destabilized the wider region.
Officials had come across suspect requests — one to import tuna worth $120,000, more than the country consumes in a year, according to a Libyan entrepreneur who declined to be named, fearing retribution from Libya’s powerful armed groups.
Just $2.5 billion of an expected $7.4 billion of credit has been allocated, the trader said, helping knock the dinar from around 8.5 to 9.25 against the dollar on the black market. Its value has fallen by more than 600 percent since early 2014.
The economy ministry was not immediately available for comment on a complex credit system that passes through commercial banks and where the audit bureau had documented earlier abuses and lack of oversight.
“We’re talking about an extremely bad economic and financial situation,” Central Bank Governor Sadiq Al-Kabir said in a rare news conference on Tuesday. “Everyone, whether legislative or executive, holds responsibility equally.”

Elusive peace
Traders and economists say political uncertainty is a major factor weakening the currency, with UN talks to broker a deal between rival factions currently suspended.
Libya is struggling to fund food imports and defend its foreign reserves, which the World Bank estimates will stand at $67.5 billion at the end of this year, compared to $123.5 billion in 2012.
International experts say the only way to resolve the issue is to devalue the dinar from the official exchange rate of 1.37 to the dollar, but agreeing an economic strategy in a country dominated by armed factions with rival governments and no budgets is no simple task.
A powerful or well-connected minority who are profiting from a flourishing shadow economy have little interest in change.
The central bank did not comment on devaluation, but economists and diplomats say the bank is reluctant to devalue without a policy plan in place to deal with the resulting shock.
Libya managed this year to lift oil production to about 1 million barrels a day, but output is stuck well below the levels before the 2011 uprising that toppled Muammar Qaddafi.
Revenues that normally account for about 80 percent of gross domestic product are largely used to pay salaries, including those of armed factions added to the state payroll for their role in the uprising. Subsidies include a $4 billion-plus annual fuel subsidy that is among the most generous in the world.
Premiums on the official exchange rate and subsidised fuel make Libya “a criminal and terrorist cross-border funding paradise,” said Husni Bey, chairman of HB Group, one of Libya’s biggest private firms.
“Most instability in Libya today is of a criminal nature... due to the lack of equitable exchange rate for the Libyan dinar and the subsidies that must be changed from goods to direct cash contributions.”
Last year Libya spent around $26 billion, but earned just $6 billion. “This year we estimate that revenues should increase to around $14 billion, but spending will likely be more than double this,” said Mark Griffiths, Libya Mission Chief for the International Monetary Fund. “This is not sustainable.”
The government has sought to reduce the public salary bill by 5 billion dinars annually, clamping down on abuse by removing some 100,000 people who had been claiming several salaries, according to a finance ministry report.
Libyans became used to plentiful public jobs and state handouts as Qaddafi sought to buy loyalty like other Middle Eastern oil producers. Migrant workers used to do the manual work, now Libyans without contacts have taken their place.
Salman Rashid, a public servant, said he had received just three months-worth of pay in the past year. “It’s not enough for basic needs,” he said. “Now I work on construction sites and in buildings maintenance.”
Entrepreneurs have withdrawn deposits from banks for fear of employees leaking word of them to kidnappers and others also prefer to keep money at home.
In a second shop in the old city, a woman who gave her name as Karima was changing 500 euros. “I need to go to Tunis for surgery and am selling my foreign currency holdings,” she said. “Times are very difficult now.”
Shop owner Salahedin Zarti, 52, said up to 10 people come in daily to sell necklaces, bracelets and rings.
“In the beginning it was every day, but now I think people are starting to run out of jewelry,” he said.


Anger in Lebanon over botched Israeli drone strike on Beirut

Updated 26 August 2019

Anger in Lebanon over botched Israeli drone strike on Beirut

  • Prime Minister Hariri says Israel drone crash was violation against Lebanon
  • Hezbollah leader Hassan Nasrallah said the incident was 'very dangerous'

BEIRUT:  Anger erupted in Lebanon on Sunday after two Israeli drones crashed in south Beirut in a botched raid that was the most serious military escalation since 2006.

The first device, thought to be a surveillance drone, fell to ground between residential buildings in the Mouawad area after children threw stones at it. Israel is thought to have launched a second armed drone to destroy the first one, but it exploded near the Hezbollah media center in the southern Dahiyeh suburbs.

Lebanese Prime Minister Saad Hariri has described the crash of two Israeli reconnaissance drones over Beirut as a violation and “aggression” against Lebanese sovereignty.

“The new aggression ... constitutes a threat to regional stability and an attempt to push the situation toward further tension,” he said. 

Hezbollah leader Sayyed Hassan Nasrallah said Sunday the incident was "very, very, very dangerous." He vowed to confront and shoot down Israeli drones in Lebanese skies from now on.
 

Damage is seen inside the media office of the Lebanese Hezbollah group in a southern suburb of Beirut, Lebanon, Sunday, Aug. 25, 2019. (AP)

Earlier on Sunday the Lebanese army confirmed that the drones were Israeli, while the Shiite group said one of the aircraft damaged its media centre.
“Two drones belonging to the Israeli enemy violated Lebanese airspace (at dawn)... over the southern suburbs of Beirut. The first fell while the second exploded in the air causing material damage,” an army statement said.
The early morning incident came hours after Israel launched air strikes in neighboring Syria.

The Arab League Secretary-General, Ahmed Aboul Gheit, telephoned Hariri and stressed the country’s rejection and condemnation of the repeated Israeli violations against Lebanese sovereignty.

FAST FACTS

  • The first drone fell to ground between residential building in the Mouawad area.
  • The second device exploded near Hezbollah media center in the Dahiyeh suburbs.
  • Lebanon will file a complaint with the Security Council to condemn the attack.

The Arab League said in a statement that “Aboul Gheit affirmed the Arab League’s full solidarity with Lebanon in this delicate situation and its readiness to play its role in maintaining security, stability and civil peace in Lebanon.”
The statement added that the organization strongly condemns the repeated Israeli violations of Lebanese sovereignty, especially in its airspace, as a flagrant violation of Security Council resolution 1701.
The statement stressed that the Arab League hopes to all concerned parties would not escalate and restrain in order to prevent threatening the security and stability of Lebanon and the region.

Lebanese security stand at the site where an Israeli drone was said to have crashed in a stronghold of the Lebanese Hezbollah group, in Beirut, Lebanon, Sunday, Aug. 25, 2019. (AP Photo/Bilal Hussein)

Lebanon has made frequent complaints to the UN about Israeli planes regularly violating its airspace.
In an apparent admission that the drone attack on Lebanon was an error, Amos Yadlin, a former head of Israeli military intelligence, said neither Iran nor Israel were interested in all-out war. “We’re not there yet,” he said. “But sometimes, someone makes a mistake.”
The Lebanese Army said on Sunday it had cordoned off the drone crash site and military police were investigating the incident under the supervision of the judiciary.
A military source told Arab News: “The Lebanese army did not receive the remnants of the two drones immediately, but is in the process of receiving them from Hezbollah.
“The military investigation will focus on the purpose of the flight of the drones, and their route. It is clear that something went wrong during their flight.”
Hariri received a telephone call from US Secretary of State Mike Pompeo after the incidents. The prime minister’s office said: “Pompeo stressed the need to avoid any escalation and to work with all parties to prevent any form of deterioration.”
Hezbollah spokesman, Mohamed Afif, said one of the two drones was rigged with explosives.
He said a second drone which appeared to have been sent by Israel to search for the first drone less than 45 minutes later exploded in the air and crashed nearby — an explosion heard by residents of the area.

Afif told The Associated Press Sunday: “We did not shoot down or explode any of the drones.”

Hassan Nasrallah will respond in a televised speach later Sunday. (File/AFP)

The drones struck overnight in Beirut where residents reported one large explosion that shook the area, triggering a fire.

Initially they said the nature of the blast in the Moawwad neighborhood was not immediately clear, but said it might have been caused by an Israeli drone that went down in the area amid Israeli air activity in neighboring Syria.
The late-night airstrike, which triggered Syrian anti-aircraft fire, appeared to be one of the most intense attacks by Israeli forces in several years of hits on Iranian targets in Syria.
Lt. Col. Jonathan Conricus, a military spokesman, said Iran’s Revolutionary Guards’ Al Quds force, working with allied Shiite militias, had been planning to send a number of explosives-laden attack drones into Israel.
On Twitter, Israeli Prime Minister Benjamin Netanyahu called the attack by Israeli warplanes a “major operational effort.”
Syrian state TV said the country’s air defenses had responded to “hostile” targets over Damascus and shot down incoming missiles before they reached their targets.
In recent days, US officials have said that Israeli strikes have also hit Iranian targets in Iraq.