Libyan Economist Rejects US Oil Management Proposal

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A Libyan economist called for the formation of a national committee consisting of auditing authorities, the Libyan Parliament, the High Council of State (HCS), and the Central Bank of Libya (CBL), to be headed by a judge chosen by the Supreme Court to manage public spending.

Dr. Suleiman Al-Shahoumi said public spending “should be limited to the basic aspects during the transitional period, until the country holds elections.”

He urged for the restructuring of the Board of Directors of the CBL, “or the completion of the unification process between the two rival branches of the CBL.”

He also called for the resumption of oil exports by agreeing on a national initiative that would “criminalize compromising the capabilities of the Libyan people.”

The economist warned of the dangers of the Libyan oil revenues management project called for by the US Ambassador to Libya, Richard Norland.

He denied that the US project would achieve justice in the distribution of income from oil. “Justice is not about managing revenues from oil, but rather managing spending, whether it comes from oil or something else,” he explained.

Al-Shahoumi revealed that he had seen a leaked document for the project, which would manage revenues through a joint Libyan committee, under international supervision and foreign control.

He added that according to Libyan law, auditing and oversight of the accounts of the Libyan state is restricted to the responsible supervisory authorities. This includes the Audit Bureau, Administrative Oversight, and the Judicial Authority.

“No international company has the right to review the sovereign oil revenues of the Libyan state,” Al-Shahoumi said.

“Norland’s project calls for the formation of a committee to manage Libyan funds and to keep oil revenues with the Libyan Foreign Bank, in violation of the law. This is very dangerous because it is not deposited with the Libyan Central Bank,” Al-Shahoumi said.

“The proposed committee will be the one to decide when to transfer the amounts to the Libyan state’s account at the Central Bank, by allocating the available revenue to meet specific expenses. But the CBL will, of course, be unable to manage the reserves in accordance with the Banking Law, and there will be another party not authorized by the law or the people to manage the reserves,” he added.

“The Central Bank will not be able to provide foreign currency for foreign trade, and it will inevitably be reflected in the exchange rate in the black market and prices will rise. Then, the CBL will pursue a contractionary policy because of the lack of foreign currency revenues in the Libyan state’s account,” he warned.

“The Norland project aims to provide funds for basic needs of health, education, food and salaries, with some of the oil resource funds allocated for these purposes. This will be done under the supervision of a committee to monitor the flow of these funds and the way they are spent, in an effort not to use oil wealth for political purposes in the power struggle,” Al-Shahoumi explained.