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The two Libyan governments reunited

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What the Enlightenment political philosopher Montesquieu wrote: “There are three types of government ….” does not apply to the Maghreb region where there are one or two political authorities.

If we want the agreement just signed in Rome between the two Libyan factions to work – apart from the difficulty of having, in forty days, the consent of all participants – we have to think about money, namely the huge amount of money that the two Libyan factions should share out.

Hassan Bouhadi is the President of the Libyan Investment Authority (LIA) appointed by the internationally recognized government of Tobruk.

Coincidentally, the government supported by Turkey and Qatar, the same States which operate in favour of Isis/Daesh between Syria and Iraq.

The Sunni project for Mesopotamia is incompatible with NATO’s current stance, while Iran is managing its P5+1 nuclear deal in an ambiguous way, as demonstrated by the recent results of IAEA inspections.

The Atlantic Alliance shall rethink its presence in the Middle East and link it to the “long arm” required to control the Asian regional seas and the land routes of the new “Silk Road” planned by Chinese President Xi Jinping.

This is the political stance of LIA, which has begun legal actions in London, in relation to the faction of the Libyan Investment Authority linked to the rival government of Tripoli.

As often happened to the best young Libyans, Bouhadi studied with excellent results at the University College of London and was a manager of the Stabilization Team for the National Transitional Council, the interim government which prepared the first post-Gaddafi elections of July 7, 2012. Beforehand, Bouhadi had worked for the North American Bechtel, as well as for BASF and General Electric.

He shall wait until January 2016 for the British Court to decide, but the political negotiations between both factions could be faster, after the Rome Conference of December 13, 2015.

The other director of LIA, for the rival government, is Abdlulmagid Breish, operating from his headquarters in Malta.

It is worth recalling that, before the “revolution”, the reserves of the Central Bank of Libya amounted to 240 billion US dollars while today, according to the LIA sources in Malta, they are an “operational reserve” of less than 70 billion US dollars.

The transactions and operations of the National Oil Corporation, the Central Bank of Libya and LIA overlap and create unnecessary duplication and management costs. With great effrontery, the Rome Conference has spoken of “new leaders for the Central Bank of Libya,” but not for LIA, and this would be a problem.

These costs – reduced to rents and unproductive income – will go to support some local armed forces.

The LIA has two pending legal actions: the former against Goldman Sachs, to the tune of 3.3 billion US dollars, and the latter against Societé Générale, which, according to the pre-revolutionary Libyans, is worth additional 3.3 billions.

The Libyan managers think that Goldman Sachs has gained an illegal profit of 350 millions from the funds managed by LIA but, for some analysts, the financial institution could be liable only for losses amounting to 128 millions for Gaddafi and post-Gaddafi investors.

Basically the Libyan managers accuse the two financial institutions of having lost several billion US dollars from Libyan State funds due to misjudgements and misinterpretations. In fact, as we will see later, many people “recommended” bad investment operations to Colonel Gaddafi, including former UK Prime Minister Tony Blair, acting as broker with Gaddafi on behalf of JP Morgan.

One is reminded of the self-deprecating old saying of Swiss bankers: “Do you want little capital to manage? Give a large amount of money to a Swiss banker”.

Moreover, it was precisely the decision to distribute money to all the Libyans who were or believed to have been damaged by Gaddafi’s regime or by civil war to destroy it and arm the countless militias.

Said militias, inter alia, wage and fight wars or threaten to do so according to the governments being sensitive or not to their economic demands.

In this case, it would have sufficed to read Niccolò Machiavelli’s book The Art of War, but now nobody reads the classics any longer and the results are before us to be seen.

Today, the Libyan economy is on the verge of collapse and there is a real risk of national bankruptcy. This applies to both governments, which are therefore looking for an agreement enabling them to grab the remaining treasures of LIA and the other financial structures of the old Gaddafi’s regime.

According to the analyses made by the LIA based in Malta, the reserves of the issuing bank decreased from 240 billion dollars immediately before the “revolution” to only 70 billions.

Furthermore the two governments duplicate their actions against the National Bank and the Libyan Investment Authority itself, by often issuing diverging directives for which no funds are available – funds which, however, can no longer come from oil since the British and French oil companies have now decided to invest no longer in their terminals and wells in Libya.

The Maltese LIA has addressed to the London-based law firm Stephenson Harwood and Enyo, while Bouhadi, the Head of the financial Authority in Libya, has chosen another London-based law firm, Keystone Law Firm.

In 2014, Deloitte certified that the active funds of the Libyan Investment Authority amounted to 67 billion US dollars, with properties abroad intact.

The LIA portfolio, however, is divided into two parts: shares and equity shareholdings in 550 companies, scattered throughout Africa, the Middle East and Europe, which hold – fully or partially – hotels, real estate, non-oil commodities, agriculture and, obviously, the distribution of natural gas and oil for motor vehicle transport.

The other 50% of the active assets of the Libyan Investment Authority is purely financial: fixed income securities, hedge fund shareholdings and all the other types of financial investment.

The LIA owns part of Oilinvest, a company with other Libyan shareholders, incorporated and registered in the Netherlands, owning two refineries, one in Collombey, Switzerland and the other in Holborn, Germany.

Oilinvest has a warehouse in Cremona, capable of storing 90,000 barrels/day, as well as over 3,000 Tamoil petrol stations; real estate linked to oil distribution; approximately 34% of direct investment in Tamoil itself, which has a turnover of 19 billion Swiss francs, equivalent to about 20 billion US dollars.

With specific reference to Italy’s national security, it is also worth recalling that over 20% of hydrocarbons come from Genoa via the pipeline between the Rhine Valley and the Canton of Valais.

The project of Breish, the Head of the Maltese “faction” of LIA, is to divide the assets into three funds: the Future Generation Fund, fuelled by the sales of many of the 550 companies in the current LIA – companies to be liquidated over a two-three year period; a Budget Stabilization Fund, fuelled by 20-30% of the Libyan oil sales; a third Fund which – again fuelled by oil revenues – will invest in local companies in Libya and especially in real estate and in the reconstruction after the post-Gaddafi civil war.

Possibly, it would be positive for the central Authority, now reunited after the Rome Agreement, to avoid oil smuggling – however, heavily subsidized by governments – which is the main funding source of Libya Dawn.

It will be also necessary to see how to solve the issue of Libyan properties in Italy, as well as of the ENI shares up to the land of Pantelleria, which are not secondary for the efficacy of both governments’ reunification, which could last less than hoped for if there were no possibility of reuniting LIA and getting back Libya’s immense wealth.

The new government will have legitimacy if it can use its huge resources to solve the economic crisis affecting at least half of the Libyan population, amounting to 6.3 million people; give a home to the over 100,000 displaced people, as well as support humanitarian assistance for 2.44 million Libyans, including 1.35 million women and children.

Little time is left: the Central Bank is selling its reserves and the planned welfare spending has been halved.

And here the high-mindedness of the new “united” government’s will be tested, and we will see whether the extraordinary Libyan financial network abroad will be skilful enough to soon supply liquidity to the new government created by the Rome Agreement.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Middle East

Iranians Will Boycott Iran Election Farce

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Iran and elections have not been two synonymous terms. A regime whose constitution is based on absolute rule of someone who is considered to be God’s representative on earth, highest religious authority, morality guide, absolute ruler, and in one word Big Brother (or Vali Faqih), would hardly qualify for a democracy or a place where free or fair elections are held. But when you are God’s rep on earth you are free to invent your own meanings for words such as democracy, elections, justice, and human rights. It comes with the title. And everyone knows the fallacy of “presidential elections” in Iran. Most of all, the Iranian public know it as they have come to call for an almost unanimous boycott of the sham elections.

The boycott movement in Iran is widespread, encompassing almost all social and political strata of Iranian society, even some factions of the regime who have now decided it is time to jump ship. Most notably, remnants of what was euphemistically called the Reformist camp in Iran, have now decided to stay away from the phony polls. Even “hardline” former president Mahmoud Ahmadinejad realizes the extent of the regime’s woes and has promised that he will not be voting after being duly disqualified again from participating by supreme leader’s Guardian Council.

So after 42 years of launching a reformist-hardliner charade to play on the West’s naivety, Khamenei’s regime is now forced to present its one and true face to the world: Ebrahim Raisi, son of the Khomeinist ideology, prosecutor, interrogator, torturer, death commission judge, perpetrator of the 1988 massacre of political prisoners, chief inquisitionist, and favorite of Ali Khamenei.

What is historic and different about this presidential “election” in Iran is precisely what is not different about it. It took the world 42 years to cajole Iran’s medieval regime to step into modernity, change its behavior, embrace universal human rights and democratic governance, and treat its people and its neighbors with respect. What is shocking is that this whole process is now back at square one with Ebrahim Raisi, a proven mass murderer who boasts of his murder spree in 1988, potentially being appointed as president.

With Iran’s regime pushing the envelope in launching proxy wars on the United States in Iraq, on Saudi Arabia in Yemen, and on Israel in Gaza and Lebanon, and with a horrendous human rights record that is increasingly getting worse domestically, what is the international community, especially the West, going to do? What is Norway’s role in dealing with this crisis and simmering crises to come out of this situation?

Europe has for decades based its foreign policy on international cooperation and the peaceful settlement of disputes, and the promotion of human rights and democratic principles. The International community must take the lead in bringing Ebrahim Raisi to an international court to account for the massacre he so boastfully participated in 1988 and all his other crimes he has committed to this day.

There are many Iranian refugees who have escaped the hell that the mullahs have created in their beautiful homeland and who yearn to one day remake Iran in the image of a democratic country that honors human rights. These members of the millions-strong Iranian Diaspora overwhelmingly support the boycott of the sham election in Iran, and support ordinary Iranians who today post on social media platforms videos of the Mothers of Aban (mothers of protesters killed by regime security forces during the November 2019 uprising) saying, “Our vote is for this regime’s overthrow.” Finally, after 42 years, the forbidden word of overthrow is ubiquitous on Iranian streets with slogans adorning walls calling for a new era and the fall of this regime.

Europe should stand with the Iranian Resistance and people to call for democracy and human rights in Iran and it should lead calls for accountability for all regime leaders, including Ebrahim Raisi, and an end to a culture of impunity for Iran’s criminal rulers.

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Middle East

Powershift in Knesset: A Paradigm of Israel’s Political Instability

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The dynamics of the Middle East are changing faster than anyone ever expected. For instance, no sage mind ever expected Iran to undergo a series of talks with the US and European nations to negotiate sanctions and curb its nuclear potential. And certainly, no political pundit could have predicted a normalization of diplomacy between Israel and a handful of Arab countries. The shocker apparently doesn’t end there. The recent shift in Israeli politics is a historic turnaround; a peculiar outcome of the 11-day clash. To probe, early June, a pack of eight opposition parties reached a coalition agreement to establish Israel’s 36th government and oust Benjamin Netanyahu, Israel’s longest-serving prime minister. While the political impasse has partly subsided, neither the 12-year prime minister is feeble nor is the fragile opposition strong enough to uphold an equilibrium.

Mr. Netanyahu currently serves as the caretaker prime minister of Israel. While the charges of corruption inhibited his drive in the office, he was responsible to bring notable achievements for Israel in the global diplomatic missions. Mr. Netanyahu, since assuming office in 2009, has bagged several diplomatic victories; primarily in reference to the long-standing conflict with Palestine and by extension, the Arab world. He managed to persuade former US President Donald J. Trump to shift the American embassy from Tel Aviv to the contentious city of Jerusalem. Furthermore, he managed to strike off the Palestinian mission in Washington whilst gaining success in severing US from the nuclear agreement with Iran. To the right-wing political gurus, Mr. Netanyahu stood as a symbolic figure to project the aspirations of the entire rightest fraction.

However, the pegs turned when Mr. Netanyahu refused to leave the office while facing a corruption trial. What he deemed as a ‘Backdoor Coup Attempt’ was rather criticized by his own base as a ruse of denial. By denying the charges and desecrating the judges hearing his case, Mr. Netanyahu started to undercut the supremacy of law. While he still had enough support to float above water, he lost the whelming support of the rightest faction which resulted in the most unstable government and four inconclusive elections in the past two years.

While Mr. Netanyahu was given the baton earlier by President Reuven Rivlin, he failed to convince his bedfellow politicians to join the rightest agenda. Moreover, Mr. Netanyahu probably hoped to regain support by inciting a head-on collision with the Palestinians. The scheme backfired as along with the collapse of the Israeli-Palestinian peace process, the tremors overtook Israel’s own Arab-Jewish cities resulting in mass chaos. The burning of Mosques and local Synagogues was hardly the expectation. Thus, both the raucous sentiment pervading the streets of Israel as well as the unstable nature of the Netanyahu-government led the rightest parties to switch sides.

As Mr. Netanyahu failed to convince a coalition government, the task was handed to Mr. Yair Lapid, a centrist politician. While the ideologies conflicted in the coalition he tried to forge, his counterparts, much like him, preferred to sideline the disputes in favor of dethroning Netanyahu. Mr. Lapid joined hands with a pool of political ideologies, the odd one being the conservative Yamina party led by the veteran politician, Mr. Naftali Bennett. While Mr. Lapid has been a standard-bearer for secular Israelis, Mr. Bennett has been a stout nationalist, being the standard-bearer for the rightest strata. To add oil to the fire, the 8-party coalition also includes an Arab Islamist party, Raam. A major conflict of beliefs and motivations.

Although the coalition has agreed to focus on technocratic issues and compromise on the ideological facets, for the time being, both the rightest and the leftish parties would be under scrutiny to justify the actions of the coalition as a whole. Mr. Bennett would be enquired about his take on the annexation of occupied West Bank, an agenda vocalized by him during his alliance with Mr. Netanyahu. However, as much as he opposes the legitimacy of the Palestinian state, he would have to dim his narrative to avoid a fissure in the already fragile coalition. Similarly, while the first independent Arab group is likely to assume decision-making in the government for the first time, the mere idea of infuriating Mr. Bennett strikes off any hope of representation and voice of the Arabs in Israel.

Now Mr. Netanyahu faces a choice to defer the imminent vote of confidence in Knesset whilst actively persuading the rightest politicians to abandon the coalition camp. His drive has already picked momentum as he recently deemed the election as the ‘Biggest Fraud in the History of Israeli Politics’. Furthermore, he warned the conservatives of a forthcoming leftist regime, taking a hit on Naftali colluding with a wide array of leftist ideologies. The coalition is indeed fragile, yet survival of coalition would put an end to Netanyahu and his legacy while putting Naftali and then Lapid in the office. However, the irony of the situation is quite obvious – a move from one rightest to the other. A move from one unstable government to a lasting political instability in Israel.

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Middle East

The Gaza War

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Destruction in Gaza following an Israeli strike in May 2021. UNOCHA/Mohammad Libed

On May 22, 2021, Iran’s Supreme Leader, Ali Khamenei’s website, posted a congratulatory message from one of the Hamas group’s leaders, Ziad Nakhaleh. In his message, Ziad Nakhaleh addresses Khamenei and says, “Qasem Soleimani’s friends and brothers, especially Ismail Ghani (Iran’s IRGC commander) and his colleagues, led this battle and were present with us during our recent conflict with Israel. … We pray for the preservation of the Islamic Republic of Iran and its brave soldiers.”

Since the regime’s establishment 42 years ago, Iran has been instrumental in inflicting war and chaos regionally. When Iran finds itself cornered and entangled with its internal problems or facing an impasse, a war or bloody conflict gets ignited by the regime to divert the Iranian people’s attention. This undeclared policy of the Iranian regime frees itself from the most pressing internal issues, even temporarily.

Today’s Iranian society is like a barrel of gunpowder ready to ignite. Last year, the Iranian parliament declared that more than 60 percent of Iranians live below the poverty line. According to the media close to the regime, close to 80% of the population below the poverty line this year. It is worth mentioning that Iran is one of the top 10 wealthiest countries globally, despite the challenges of the current sanctions.

This poverty is mainly the result of rampant institutionalized government corruption. According to Qalibaf, the current speaker of Iran’s parliament, only 4 percent of the population is prosperous, and the rest are poor and hungry. The two uprisings of 2017 and mid-November 2019 that surprised the regime were caused mainly by extreme poverty and high inflation. The regime survived the above widespread uprisings by opening direct fire at the innocent protestors, killing more than 1500 people. There is no longer any legitimacy for the regime domestically and internationally.

The explosive barrel of the Iranian discontent is about to burst at any given moment. To delay such social eruption, Khamenei banned the import of COVID-19 vaccines from the US, Britain, and France, hoping the people will be occupied with the virus and forget about their miserable living conditions.

On the other hand, the Iranian regime is in the midst of new negotiations with the western countries regarding its nuclear program. These negotiations may force the regime to abandon its nuclear plans that have cost billions of dollars, its terrorist activities in the region, and its ballistic missiles stockpile. This retreat will inevitably facilitate the growth and spread of the uprisings and social unrest across Iran.

The Deadlock of the Regime

The regime is facing an election that could ignite the barrel of gunpowder of the Iranian society. In 1988, when Khamenei wanted to announce Ahmadinejad as the winner of the presidential ballot boxes but faced opposition from former Prime Minister Mousavi. Widespread demonstrations were ignited. The same scenario is repeating itself in this year’s presidential election, where Khamenei intends to announce Raisi as the next president of Iran. There is a legitimate fear that demonstrations will ignite once again.

To avoid the happening of the same experience, Khamenei is forced to make an important decision. Like any other dictator, he pursues a policy of contraction during these challenging and crucial times, deciding to favor those loyal to him and his policies. Khamenei needs a uniform and decisive government to exert maximum repression on the Iranian people.

By disqualifying the former president (Ahmadinejad), the current vice president (Jahangiri), and most importantly, his current adviser and speaker of the two parliaments (Larijani), he has cut loose a large part of his regime. One way or another, Khamenei’s contraction policy is going to weaken his grip on power.

On the other hand, the Iranian regime must comply with the West’s demand for nuclear talks. In 2021, the political landscape is entirely different from 2015 in the balance of regional and global forces. The regime’s regional influence in Iraq, Lebanon, and Syria has been severely weakened.

There is an explosive situation inside Iran. The resistance units spread throughout Iran after the 2019 uprising and have rapidly increased in recent months. They are spreading the message of separation of religion from the government, plus equality between men and women in a society where women do not have the right to be elected as president or a minister. The resistance units call themselves supporters of Maryam Rajavi, the Iranian regime’s sworn enemy. These units can direct a massive flood of people’s anger towards the Supreme Leader’s establishments with every spark and explosion.

Khamenei wanted to force the West to lift all sanctions and demonstrate a show of force within Iran and the region by initiating the Gaza war. The Gaza war was intended to divert the attention from Khamenei’s decisions on Iran’s presidential election. In this situation, the regime wanted to break its presidential deadlock by firing rockets through Hamas and carrying out a massacre in Israel and Palestine.

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