What if Gaddafi holds on?

The Atlantic Wire has usefully assembled all the occasions on which Muammar Gaddafi has indicated he will step down.  Obviously that hasn’t happened, and it may not, malgré Juppé.    The question is what do we do if he continues to hold on to power in Tripoli and the rebels are unable to make real headway in taking territory?  What is plan B?

Failure is definitely an option, at least in the near term.  While the rebel National Transitional Council (NTC) in Benghazi has not lost any ground in weeks, it hasn’t gained much either.  It is managing more or less to administer the territory it does control, where street crime is down, local councils have been set up and humanitarian assistance is delivered.  Electricity and water are still ample, but fuel and medicine is reportedly low in some areas.

The NTC is viewed as legitimate outside of Tripolitania (Tripoli and the western portion of the country), not least because it is not claiming to be a government-in-waiting but only a stopgap until a full interim administration with representation from the whole country can be formed after a ceasefire takes effect. Its roots are particularly strong in Cyrenaica (the eastern portion of the country, where Benghazi is located).

If Gaddafi manages to hold on to Tripoli and there is no ceasefire, my guess is the NTC will need to do more than it currently plans.  This creates a great moral hazard:  the more we help the NTC to govern the country separately from Gaddafi, the greater the likelihood Libya will split into two (or more) pieces, something that most in the international community would find highly objectionable.

What would be needed then is a concerted effort to broaden participation in the NTC and keep its governing structure as open as possible to eventual reformulation.  This might mean incorporating more prominent representatives from Tripoli, creating a Tripoli administration-in-exile and maintaining some degree of consistency between how Cyrenaica and Tripolitania are governed.  It would mean maintaining insofar as possible those infrastructure networks that still function across the front lines between Gaddafi’s forces and the rebels.

It will also likely mean finding a way to get at least some of Libya’s oil and gas flowing again.  This will not be easy:  oil company lawyers are rightfully cautious about property rights, which would remain “sketchy,” as my kids say, if Gaddafi is still around.  I gather it is legal to buy from Arab Gulf Oil, which is under rebel control.  A mechanism for depositing revenues into a UN or other fund, with transparent and supervised drawdown by the NTC, might help get the oil and gas moving again.

The question of currency is likely to arise sooner or later.  Libyans seem still to be using Gaddafi-era dinars, but what if they run short in areas outside Gaddafi’s control, or if people lose confidence and want a substitute?  Issuance of a new currency would be a big step in the direction of dividing Libya.  It would likely be better to allow euro-ization or dollarization to proceed according to market forces, something that has worked reasonably well in a number of conflict situations.

The UK-led International Stabilisation and Response Team, which visited Libya May 20-June 30), has prepared an excellent draft report on what to do once a ceasefire is in place.  Is it time to consider more deliberately what happens if there is no ceasefire?