It’s hard for the West to understand the full scope of the disaster that’s befallen Libya. It’s happened, in part, because no one in or outside Libya bothered to figure out what the country might really look like after the dictator was gone.
BusinessWeek, August 7, 2014
Early this year, the Libyan Investment Authority filed suit against Goldman Sachs. LIA claims that, “Goldman Sachs abused the relationship of trust and confidence with the then newly-formed LIA…The fund suffered significant losses.”
How significant? In 2008, the LIA made a $1.3 billion investment with Goldman. The money evaporated. For their formidable investment advice, Goldman also received $350 million in fees.
Just Goldman doing what Goldman does, perhaps.
The LIA was formed in 2006. After the Qaddafi regime made a clean breast of its chemical and nuclear weapons programs, and paid reparations to the families of Lockerbie victims, Libya was removed from the State Department’s list of states sponsoring terrorism. Moammar Qaddafi’s son Seif drove the establishment of the largest sovereign wealth fund in Africa, seeing it as a way to diversify the Libyan economy away from its dependence on oil. (Although under the table payments from western investment banks may have helped him see the light.)
The Libyans, now able to engage western financial institutions, but not terribly sophisticated, seem to have become the targets of every sharp operator from Société Générale to Goldman Sachs. Which I suppose is just investment banks doing what investment banks do – that is, exploit every asymmetry available to them.
The story might have ended there, with only a slow bleed into the shark pool while Libya learned to swim. But then came Libya’s version of the Arab Spring, only this time with an opposition armed and supported by NATO.
When protesters clashed with Libyan security, western powers decided to take the moral high ground. Libyan government forces had fired on civilians. The Libyan government was therefore evil. The opposition was therefore good. Q.E.D.
With NATO money, weapons, and 26,000 airstrikes, the opposition was, not too surprisingly, victorious. Although you have to stick to a pretty narrow definition of “victory” to appreciate it.
Thousands of heavily armed gangsters daily roaming the streets, kicking down doors and breaking into government ministries, extorting millions on a whim, torturing or killing anyone who crosses them or maybe just looks funny – the victors make Latin American drug cartels look like buttoned-down businessmen doing lunch at the rotary club. You’d rather work for the cartels.
Three years after Qaddafi was killed and nearly everyone involved in running the government either sent packing or summarily executed, virtually nothing in Libya works, except the oil terminals. The one thing the gangsters seem to agree on is to keep the cash coming.
As BusinessWeek put it, “…Libyans who opposed Qaddafi and fought for a more equal and democratic future, have been murdered. Their deaths have passed without any demonstrations…a measure of how irrelevant the causes for which Libyans fought three years ago have become. Libya’s economic future, once touted as the brightest in Africa, looks equally bleak.”
This morass of anarchy is a direct result of “moral clarity” in the west – truly a form of negligence. Focus on one particular ‘evil’, trumpet it long enough and loudly enough, and we can all forget the messy, inconvenient details.
And that is exactly what we have done.