Thursday, April 28, 2011

Gadhafi Girds for Long Survival Battle (Wall Street Journal) - 28 Apr 2011

Courtesy: "Wall Street Journal", 28 April 2011

Gadhafi Girds for Long Survival Battle

TRIPOLI—On a recent morning dozens of trucks filled with bulk food products coming via neighboring Tunisia were offloaded at the country's largest wholesale market outside the Libyan capital here.
The goods, including bags of flour and rice, filled warehouses as well as trucks headed to other centers sympathetic to Col. Moammar Gadhafi such as Sebha in the south.
Most food supplies used to arrive by sea at the ports of Tripoli and Misrata, Libya's commercial hub
farther east. Imports have been rerouted to Tunisia because of fighting in Misrata and Western sanctions against Tripoli. Most Tunisians support the Libyan rebels and are hostile toward Col. Gadhafi but the business is welcome given the uncertain economic times in Tunisia.
The plentiful food supply is one illustration of how Col. Gadhafi's government has been adapting for a long battle.
Libyan authorities also are instructing civilian volunteers, some as young as 11, in the use of automatic rifles and distributing the weapons among households to combat the insurgency.
The extent and quality of the instruction, which the government stage-managed for foreign journalists Wednesday in the Gadhafi stronghold of Tarhouna, are unclear. But the effort, if widely carried out, would appear to raise the risk of widening Libya's 10-week-old conflict. The battle took at least seven more victims Wednesday in Misrata when pro-Gadhafi forces fired artillery and rockets at rebel checkpoints on the city's periphery, said a rebel doctor Ayman Abu Shahma.
"We want every home to have a Kalashnikov in case of necessity to fight against the enemy," Abdel al-Muftah, who oversees the training in Tarhouna, told students in a high-school classroom, binoculars hanging over his desert-camouflage uniform.
The Libyan leader is also hiring foreign consultants to help circumvent sanctions, reorganizing government and rallying international support. He employs a mix of financial incentives, repression and patriotic appeal to retain the loyalty of officials and tribal leaders.
The effectiveness of those efforts will help decide Col. Gadhafi's fate in the face of a fight with rebels—which U.S. Ambassador to Libya Gene Cretz estimated Wednesday has claimed 10,000 to 30,000 lives so far—continued allied airstrikes, economic sanctions and opposition forces' gains of legitimacy.
Mr. Cretz said U.S. officials now feel the opposition's National Transitional Council is "worthy of our support," but stressed the U.S. has not yet decided to formally recognize it. "They're going in the right direction, and continue to say all the right things," he said.
Mr. Cretz highlighted the transformation that has taken place in the opposition stronghold of Benghazi as a harbinger of political liberty in Libya, citing open political debate, the rise of non-governmental organizations, new newspapers, and public poetry readings. Mr. Cretz called it a "foreshadowing" of what could happen in the rest of Libya if rebels prevail and said the positive change in Benghazi since February is "part and parcel of the actions the international community has taken."
Still, many close observers of Gadhafi's government are betting it has sufficient resources to endure the pressure for a considerable time in the areas under its control in the center, west and south of the country, barring a radical change in events. One long-time European consultant to the Gadhafi regime said France, among the most outspoken proponents of regime-change in Libya, "will have money problems with the war before them."
Despite the air and sea embargo imposed on the Libyan government in accordance with the United Nations resolutions passed this year, it can still bring in almost everything it needs via its borders with Algeria, Chad and Niger, observers say.
A travel ban on top Gadhafi cohorts hasn't hindered pro-government businessmen. Among Libyans milling about in the lobby of a luxury hotel in the Tunisian capital Tunis over the weekend was the owner of an aircraft-leasing company seeking to charter flights from Libya to friendly African countries.
Tunisia has trod delicately in dealing with Libya's new realities. A Tunisian government spokesman said his country was committed to complying with the U.N. resolutions against Libya but could not ignore the "solid ties" that bind the two nations.
Tunisia has welcomed tens of thousands of people fleeing the violence while also taking a relaxed attitude toward the travel of pro-regime officials through its territories. It has allowed food and medicine into Libya but its position on other imports like fuel is unclear.
Libya's foreign ministry complained recently about fuel imports being barred from going through Tunisia's port of Skhira.
The E.U., the U.K. and the U.S. have frozen Libyan state assets estimated at $120 billion. But the European consultant and some analysts said that was a small portion of the government's cash holdings inside Libya and assets held in several allied African countries such as Burkina Faso, Mali, Mauritania and Niger.
"He has billions of dollars that he can use for a while; he can outwait the rebels," said Lisa Anderson, a Cairo-based Libya expert.
These resources help pay volunteers fighting the rebels. One resident of Tripoli's impoverished Hadhba Sharqiya neighborhood said some of his neighbors were given cash advances and promised apartments and cars in return for going to the front.
Libyan officials declined comment. But Abdel-Hafidh Zlitni, the finance minister, spoke this month about the country's "huge contingency reserves," which he estimated in the billions of dollars worth of cash, gold and precious metals.
"We have developed different ways and means of tackling problems like this," said Mr. Zlitni, referring to international sanctions. "The time of the shock is gone and the Libyans are now ready and capable of withstanding and resisting."
He said public sector employees were receiving salary increases or bonuses and taxes and customs were being slashed as a way of "releasing pressure" on ordinary Libyans.
Libyans have been feeling the crunch in many other ways. The Libyan dinar has lost nearly half its value against the dollar since mid-March and the price of basic goods like rice and sugar has doubled, wholesale merchants say.
Panic and a disruption in fuel supplies have triggered miles-long lines at gas stations that have even led to scuffles and shootings. In one incident, baton-wielding teenagers were seen confronting security forces last week at a congested station in Tripoli's Souq al-Khamis suburb.
Several government officials have suggested recently that they were seeking ways to bypass restrictions imposed on Libya's National Oil Corp. to sell the country's oil and streamline the import of fuel.
Shokri Ghanem, the oil company's chairman and the effective oil minister, could not be reached for comment.
Messrs. Ghanem and Zlitini, the finance minister, were among five Libyan officials who were sanctioned by the Obama administration in early April to encourage them to defect, as did the former foreign minister Moussa Koussa, in March. So far Mr. Koussa's departure appears to have had the opposite effect, with most officials coalescing around the government.
"The [Gadhafi] family has apparently banded together," Ambassador Cretz said, explaining why the expected rupture of the regime is taking longer than forecast.
Even figures like the senior officers who took part in the 1969 coup that brought Col. Gadhafi to power have made carefully-crafted public appearances recently to reaffirm their loyalty.
"They thought Libya would be finished in a week or two," said Seif el-Islam Gahdafi, one of the leader's sons, in a televised appearance last week mocking Western powers.
He did concede that parts of Libya's economy have ground to a halt, with oil production now at a fraction of its previous level and all infrastructure and housing projects suspended after the exodus of most foreign workers at the start of the crisis.
Rows of deserted construction sites and motionless cranes dot Fallah Street on Tripoli's southwestern side.
In the nearby shopping district of Gargaresh almost 80% of stores are shut despite hard pressure on merchants from Gadhafi backers to reopen.
"We are waiting for the deliverance of God," said Ramadan al-Doufani, a perfume wholesaler. He drove recently from Al-Khums, 75 miles east of the capital, to auction his last remaining stock of incense.
—Benoît Faucon in London, Keith Johnson in Washington and Richard Boudreaux in Tarhouna, Libya contributed to this article.


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