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EXCLUSIVE: Libya’s rebels beg West for cash

Tarhouni calls on Europe to open Qadhafi's foreign bank accounts

In the latest of a series of exclusive reports from Benghazi, the capital of rebel-held east Libya, the Transitional National Council's finance minister Ali Tarhouni tells Petroleum Economist's Derek Brower it is vital that Europe gives the rebels access to funds in the Qadhafi regime's foreign accounts

WITH OIL exports still weeks away, eastern Libya's fledgling rebel government is urging the West to release the cash it desperately needs to support its war effort and secure the provision of basic goods.

In an interview with Petroleum Economist in Benghazi, Transitional National Council (TNC) finance minister Ali Tarhouni said he would begin lobbying European governments this week to "inject more urgency" into a process begun last week that could give the TNC access to funds in foreign accounts belonging to the Muammar Qadhafi regime.

"I'm running a war economy and I'm almost running it on empty," Tarhouni said. "This is life and death for a lot of people, so I'm hoping to inject that sense of urgency with our friends in Europe and Doha [Qatar]," he added.

Ali Tarhouni, Transitional National Council finance minister

 

At a meeting in Qatar last week, the contact group of nations supporting air strikes against Qadhafi military forces broached a plan to create a fund from frozen assets to aid the rebels. Qadhafi's government in Tripoli claims the frozen funds amount to $120 billion, and called for the money to be released for "humanitarian" reasons, saying the action to freeze the accounts was illegal.

And other governments have questioned whether a move to grant the TNC access to the funds would break international laws.

"The question is, is it legal?" said Germany's foreign minister, Guido Westerwelle, in Doha last week. "The answer is we don't know. We need to see who the owners of the money are and it's something we have to discuss".

Despite pressure from other Nato nations, Germany refused to support the UN's resolution last month to allow attacks on Qadhafi forces.

But Tarhouni told Petroleum Economist the TNC would do whatever was needed to overcome legal or other obstacles preventing access to the cash. "We're asking for limited access to these funds to cover our basic needs," he said. "We're willing to adjust to whatever mechanisms that satisfy the countries that have these frozen assets, or the [UN] Security Council."

And he said the TNC would also ask for short-term loans backed by the frozen money.

Frustration

Despite Tarhouni's frustration with the slow pace of Western financial assistance, close contact between the TNC and supportive governments continues. Petroleum Economist's meeting with Tarhouni immediately followed a visit to the TNC's headquarters by Christopher Prentice, the UK ambassador to Italy who is acting as the UK's envoy to Libya's rebels. The French ambassador was also in Benghazi last week.

But, beyond the TNC's plush offices in what was once the Egyptian consulate in Benghazi, conditions are deteriorating in rebel-held east of Libya. Misrata, Ras Lanuf, Brega, Zlitan and Ajdabiya have all seen heavy fighting between loyalist and rebel forces, with only partial humanitarian relief arriving from the sea.

In the rebel stronghold of Benghazi, food, fuel and water supplies are under pressure – and some on the streets are directing their anger at the TNC, questioning its legitimacy. Other Benghazi residents have not even heard of the council, Tarhouni, or other senior figures in the putative government.

"Who are these people and why were they allowed to live outside of Libya?" asked one Benghazi resident. "They didn't suffer all these years under Qadhafi like we did."

Death sentence

Many of the TNC's leaders, including Tarhouni, once subject to a death sentence, were dissidents and senior figures in the underground opposition to Qadhafi. But their weak popular presence in Benghazi could yet damage the TNC's efforts to unite the rebel movement.

A speedy resumption of oil exports from the Sarir and Misla fields, both in rebel-controlled territory, but shut in after an attack by Qadhafi forces, would bolster the rebels' finances and be a victory for the TNC.

Assuming full export potential from these fields of about 250,000 barrels a day (b/d), income generated through sales out of Tobruk, the only export terminal under rebel control, would amount to around $825 million a month. But such revenue is, at best, weeks away.

So while securing those oilfields against another attack is critical, Tarhouni said a more pressing need is access to lines of credit. The "overriding" goal of his trips to Europe and Doha this week is to secure credit for merchants to begin trading, he said.

"It's as simple as this. My immediate need is enough foreign reserves to open letters of credit for these persons to import and transact with the world."

Sanctions against Libya also apply to the TNC and continue to hamper its war effort, he added.

"You see my dilemma? I'm running a war economy, but can't access funds that are frozen. The banking system is frozen – cannot transfer funds, cannot do anything."

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