Libya Snapshot: Going Broke in Benghazi? (Faul)
Sunday, June 5, 2011 at 8:01
Michelle Faul, writing for The Associated Press, portrays the economic challenge for Libya's opposition Government, based in Benghazi:
Abdalgader Albagrmi's office sits above a vault piled high with gold. It's the dwindling pile of cash next to the bullion, however, that keeps the Libyan rebels' deputy Central Bank chief up at night.
As that pile shrinks, so too does the chance of funding and sustaining a revolution to oust one of the world's longest-serving dictators.
If the cash-flow problem "isn't solved in the next few days, there's going to be a problem here," Albagrmi said, speaking from his office in Benghazi, the northeast Mediterranean port that has become the rebels' de facto capital.
On Tuesday, Italy pledged hundreds of millions of euros in funds and fuel to the rebels – the latest aid to be promised by a foreign government. But three months into the fight against Libyan leader Moammar Gadhafi, the rebels complain they have yet to see a penny of the hundreds of millions of dollars on offer.
Meanwhile, Libya's more than $70 billion in assets are unreachable -- frozen by United Nations sanctions. Their only export revenue source --- oil sales --- is at a standstill because of the fighting and, rounding off the problems, Albagrmi says businessmen are hoarding cash instead of depositing it into banks.
"Two weeks, if things continue as they are ... and there could be a liquidity crisis," he said.
The prediction is a troubling one for the rebels, who are locked in a battle against a better-equipped Libyan military, as a shortage of cash has the potential to translate into a crisis of confidence in the civilian National Transitional Council.
The rebel government, from the start, pledged a measure of transparency in its dealings that contrasts sharply with the Gadhafi regime's opaque policies over the past four decades. Albagrmi was careful from the start of the uprising against Gadhafi on Feb. 15 to make sure that he and others at the Benghazi branch of the Central Bank stayed true to that promise.
"After the revolution, everybody on the street had weapons and I was afraid there could be looting. We prevented that," he said.
To ensure that life went on normally for Libyans, the central and commercial banks reopened within four days of the start of the uprising and organizers of the revolt, acting on the advice of bank managers, deposited 200 dinars ($160) into every bank account held in the rebel-controlled region.
The cash came from one of two underground vaults encased in double walls and sealed off by a steel door that required three keys to open. Two of the keys were in Benghazi while the third was in Tripoli, the Libyan capital still under Gadhafi's control.
It took three days to get into the vault, with officials finally forming an eight-man committee to oversee the operation.
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