Thread by @JMJalel_H

Deciphering the #Serraj vs #Kabir squabble.

1 must go back to May-Oct 2018, when both #UN & #US began exerting a pressure on the #CBL in #Tripoli.

At the time, an #LNA attack on the capital wasn't seen as imminent, nor was a #Hibri-#Kabir reunification considered a hot priority

Following #Haftar's Jun '18 #OilCresc blockade, #US (thru the #UN) helped #CBL devise a measure, which was implemented after the Aug-Sep '18 LoC battle in Tripoli.

An LoC #tax now made the de-facto conversion rate 3.9 dinars to 1 $.

$10k packages were introduced for households.

The #US-designed measure—rolled out by #Kabir in Oct ’18—was effectively a devaluation of the dinar w/ the added benefit of attracting banknotes back into the system.

The measure turned out to be a success.

It also reduced the amount of political controversy surrounding #Kabir

Then, in Apr ’19, the #LNA attacked #Tripoli in order to overthrow the #GNA.

#Kabir’s knee-jerk reaction was to close ranks w/ #Serraj & help #GNA survive.

Also, after toying w/ the idea of punishing Cyrenaica-focused commercial banks, #Kabir chose a rather conciliatory stance

The #Kabir play above was possible largely bcos the #NOC did fantastic throughout 2019, & Brent prices were decent.

In the autumn, as part of the so-called 3M philosophy, the #US began exerting pressure for a more #Haftar-friendly #CBL … but w/out necessarily discarding #Kabir.

One must note the #US push above (aka the “UN’s economic track") is distinct from what the #UAE & #France have been clamoring for.

#UAE & #Fr want #Kabir’s head to roll. They want #Haftar to enjoy total control over the #CBL in #Tripoli.

But the #US has been more ambivalent.

After #Turkey announced its new military intervention in #Libya, pro-#Haftar factions—w/ the blessing of the #UAE & #Fr—imposed a universal blockade on all #oil extraction in Jan.

Goal is to strangle the #CBL in Tripoli & supplant it w/ an alternative 100% controlled by the #LNA

As a result of the #oil blockade, it became clear the #US approach was exceedingly slow & ambivalent. But that policy was not abandoned: the #US carries on thinking it can pressure #Kabir into a more #Haftar-friendly posture w/out jettisoning him altogether.

#Serraj knows that.

Seeing $ revenues go to zero (& crude prices collapse as a result of #Covid19), #CBL governor recommends devaluing the dinar further. #Kabir wants the de-facto conversion to rise from 3.9 to 4.4, an inflationary measure.

#Kabir also interrupted salaries, LoCs & the $10k stipend.

In response, an isolated #Serraj chose a stance that’s to be expected from a politician: #Serraj rejects the devaluation recommended by #Kabir. Instead, he says that the full board of the #CBL should meet & take command.

In many ways, #Serraj's play is inspired by the #US angle.

Bottom line: #Serraj’s move is a risky political wager.

Amid this difficult crisis, if #Kabir manages to hold onto his seat, then it’ll mean the #CBL may end up paralyzed, weakened, on the verge of collapse… when #Libyans need it to take technocratic, pragmatic measures asap.

https://twitter.com/JMJalel_H/status/1246461183672168451?s=20

While Kabir wishes to impose austere measures (a devaluation is inevitably inflationary), Serraj wants more profligacy:

https://twitter.com/Balzawawi_ly/status/1248149683236745221?s=20