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Libya: Economic and Political Aspects Thesis


Libya was a dominant economy in Africa during the reign of Muammar Gaddafi. However, when he was forced out of power during the Arab Spring in 2011, the country experienced prolonged political instability. The current government has failed to assert its control in various parts of the country. The emergence of insurgencies such as Dabbashi, al-Wadi, and other affiliated militias, which have strong socio-economic ties with political leaders in the country, has made it difficult to manage the national resources appropriately. According to Almnfi and Yang (2015), there is a close relationship between civil war and natural resources within a given region. Greed, grievance, and financing are believed to be the primary cause of the war in regions with important resources such as gold and other minerals. Selfishness pushes rich businesspeople and powerful politicians to create instability in a region to eliminate the rule of law. The anarchy that is created by their actions makes it possible for them to conduct illegal trade without any government interventions (Almohamad & Dittmann, 2016).

Grievances as a reason for the civil war in resource-rich regions occur when the locals feel that they are unfairly denied the opportunity to benefit from these resources. In most of the cases, mining of minerals and extraction of oil often limit the ability of the locals to conduct other meaningful economic activities such as farming. As such, they largely rely on these resources to earn their living. If they are denied the opportunity to benefit from these activities, they are likely to form militia groups to fight for what they believe is rightfully theirs. Financing is another common reason for the emergence of insurgencies in resource-rich regions. The insurgencies need a regular flow of money to finance their activities. They may take over the regions they believe have the resources as a way of securing their source of income. Irrespective of the reasons that one may give, it is clear that there is a relationship between the current wars in Libya and the rich oil reserves in the country. Insurgencies are benefiting from the political instability that is created by these armed conflicts. In this chapter, the focus is to present the results based on the questions of the study.

What are the strategies used by Libyan insurgents to loot oil?

The first question focused on determining the strategies used by Libyan insurgents to loot oil in the region. The various stages of oil looting in the country and the strategies used will be outlined using the data obtained from secondary sources. The table below identifies the various stages in oil production, processing, transportation, and distribution. In each of these stages, the strategy and prevalence of oil extraction are discussed.

Stage Upstream Midstream Downstream
Infrastructure Oil fields/wells Tankers, trucks, pipelines Refineries and retail
Spatiality Concentrated Concentrated Varies
Defensibility High High Varies
Product Crude oil, extortion Crude oil, refined oil, and extortion Refined products and extortion
Price Low High High
Lootability Low High Varies

Stages of oil looting (Ocakli & Scotch, 2017).

Upstream (Exploration and extraction)

Looting of oil starts at a very early stage of exploration and extraction (Ayelazuno, 2014). The first stage of exploring the oil field to determine if there are sufficient oil deposits viable for commercial extraction is very important. Once the exploration confirms the presence of sufficient oil deposits, the next stage is the extraction. These first two activities in the upstream stage are subject to looting in various parts of Libya. The violent protests common in these regions hinder effective exploration and extraction of oil. Issues such as theft of oil, attack on the exploration and extraction infrastructure, and extortion are common at this stage. It is important to analyze how it occurs.


The infrastructure that is often targeted at this stage is the oil fields and wells. The insurgents believe that by controlling the wells, they can take control of the wealth associated with the resource. According to Basedau and Richter (2014), this strategy has worked in various countries experiencing similar challenges such as in Nigeria. When the militia groups take control of the infrastructure at the extraction level, they know that it is impossible for the oil trade to be conducted without their permission. They will allow the highest bidders to become the main oil extraction companies.


It is important to note that most of the oil fields are highly concentrated in specific geographical locations. In Libya, the oil fields are closely located in regions such as Benghazi, Mabruk, Wafa, and El Feel (Asal, Findley, Piazza, & Walsh, 2016). The activities of the insurgents are confined within these locations. Basedau and Pierskalla (2014) say that some of these oil fields are controlled by the current Libyan government while a significant number is under the control of the militia groups. The attack by the insurgents on the transport infrastructure for finished products is dispersed. It is not easy to predict when and where the attack will come because of the long routes which are always taken to deliver the products to the market. Some of these gangs prefer attacking the tankers in the sea because of the quantity of product they will receive and the ease of organizing such attacks. Other insurgents prefer attacking the vessels that pass in the regions that they control. Sometimes the trains are attacked in remote locations that have limited government control.


The fact that these oil fields are confined within specific locations makes it easy for the militias to defend it from government invasion or attack by rival groups. According to Bejesky (2015), most of these criminal gangs often recruit locals who understand the landscape of the region. With heavy military hardware and proper radicalization, it is not easy for the government forces to drive these insurgents out of these regions. In many cases, government military and paramilitary officers are killed in such expeditions. The involvement of powerful politicians, wealthy business persons, and international forces makes it almost impossible for the government to dislodge them from these locations.


The product at this stage is the crude oil. Although most of the militia groups avoid direct involvement in the extraction of oil because of the complexity of the process, expensive equipment needed, and difficulty in marketing their products, some of them have developed systems and structures that can facilitate the entire supply chain. Blanchard (2016) argues that some of the militias in Libya have very close ties with some Italian businesspeople. Such ties make it easy for the product to be moved safely from the oil fields to the international market, especially in Italy.


The price of the product at this initial stage is always relatively low, which is one of the main reasons why the militias prefer charging rent for the oil extraction companies to getting involved directly in the extraction process. The crude oil fetches a relatively lower price in the international market compared with processed products such as petrol and jet fuel (Basedau, Mähler, & Shabafrouz, 2014). The fact that the product has to be sold to organizational buyers with the capacity to process it to final products lowers the demand hence the price is always low.


The ease with which oil is lootable at this stage is relatively low. The activities involved in the extraction of oil, as explained above, are complex, and demand a lot of resources. Most of the militia groups are not organized enough to have systems and structures that can enable them to extract oil sustainably. The instability of the leadership of these insurgencies and interference from other actors limits their ability to be organized and systematic in their activities. It significantly hinders their ability to extract oil without assistance from organized parties such as established local and international companies.

Midstream (Transportation/Storage/Transportation)

The second stage in the supply chain of oil is the midstream. It includes transportation of crude oil from the fields, basic processing, storage, and delivery of processed product to the market. According to Bodea, Higashijima, and Singh (2016), looting of oil in regions that are politically unstable is not limited to extraction or refinement where the militias can control the activities within a specific geographical location. Transportation of the extracted oil from the oil fields to the refineries offers them a perfect opportunity to attack and steal the products. Knowing when and where they will strike is impossible. Managing their activities in regions that lack proper government control is not easy. Most of the oil companies operating in Libya cite transportation of crude oil to the refineries as one of the biggest challenges because of the insurgents. Figure 1 below shows the important oil transport routes, ports, and fields which are currently controlled by the insurgents:

Areas controlled by the insurgents.
Fig. 1. Areas controlled by the insurgents (Ronen, 2017).

According to Ronen (2017), oil looting and extortion is a common problem in the midstream stage of the supply chain. The Petroleum Facilities Guard (PFG) was founded with the principal goal of protecting petroleum facilities and transport routes within Libya from any form of attack (McLauchlin, 2017). However, the political impasse in the country that has compromised legitimate leadership affected their mandate. It became unclear how the security organ was to be coordinated because of the leadership vacuum. When different political groups declared their control over different parts of the country, these guards saw economic and political opportunity to assert their authority in some parts of the country. It was transformed into local fiefs with political and economic interests different from that of the state (Kuperman, 2015).

Instead of acting as the custodians of the ports and oil infrastructure, they have blockaded most of the ports in the country. They take ransom before allowing the transportation of oil products to the foreign market. They also use the strategy to leverage their political position in the country. Their activities have denied the country more than $ 120 billion in revenues (Lei & Michaels, 2014). The situation has been worsened by the presence of the Islamic state that has been attacking important oil facilities, leading to serious damages worth billions of dollars. Lack of legitimate and powerful government in the country since the death of Muammar Gaddafi has made it easy for these insurgents to continue with their criminal activities unabated for the last several years.


In the midstream stage, the targeted infrastructures are tankers, oil storage facilities, and pipelines used in the transportation of the products. The militias would start by identifying a market for the product. Once the market is identified, they would attack tankers and direct them to their identified markets. If their target is a pipeline, they will identify a location along the pipeline that they can easily repel any attackers or places where they can least be identified. They will then drill holes in the pipes and tap the product. In some cases, the insurgents would extort money from the companies responsible for the transportation with the claim of offering them security along the volatile routes (Colgan, 2013). Companies that fail to pay the fee for protection are prone to attack. If these militias realize that they cannot steal the products because of lack of a direct market, they can set the infrastructure on fire to compel these companies to pay the demanded fee. The loss associated with such arson attacks is often greater than the profit loss that the companies incur when they are forced to pay the security fee. Therefore, the insurgents get to loot oil but in an indirect manner. Those who operate in the high seas target tankers used to deliver refined oil to the European market. They divert the routes and deliver the product to their markets, leading to massive loss to the companies and loss of tax to the government.


Looting of transit crude oil is dispersed. The militias always make their activities as unpredictable as possible. They are keen to avoid possible sting operations by government forces or retaliatory attacks by their rival groups. Some of the transit routes are long, so the advantage of having their attack on a specific geographic location is lost (Colgan, 2014). They ensure that their activities are dispersed and unpredictable because of security reasons.


Since the collapse of the Gaddafi government, various armed groups have emerged in the country, especially in the regions which are rich in oil (Colgan, 2015). These militia groups have sophisticated weapons that enabled them to run their criminal activities without interference from the government or other rival groups. However, their defensibility when looting crude oil in transit is low. The long route that is taken by the tankers or the pipelines sometimes forces them to spread their activities when planning to steal the product. Spreading out of the forces, even when they have the most effective offensive weapons, reduces their ability to fight organized attacks. It explains why such attacks are always sporadic, quick, and carefully planned to avoid the obvious consequences.


The product of target at this stage is crude oil, refined oil (petrol, diesel, jet fuel), and extortion. Crude oil becomes their target when they have a ready market for the product. Given that crude oil is not highly valuable before it is processed, these militia groups must have reliable means of selling the product to refinery companies or individuals who can finally sell the product to the refinery companies. The insurgents also get ‘security fee’ from the companies operating in their controlled region in case they cannot take the product. Cotet and Tsui (2013) state that most of these companies consider paying because of their desire to avoid the possible consequences of falling out with these armed groups in their controlled territories.


The price of crude oil, after it is extracted and already in transit is not as low as when it is yet to be extracted. However, it is not as high as the already refined products. In most of the cases, it is determined by the level of demand. If the demand for the product is high (various unscrupulous businesspersons and companies are keen on purchasing the product), the militias will charge relatively high price. However, the price would be low if they are struggling to find the right buyer. On the other hand, the price of refined products is high (Colgan, 2015). The fee that the militias charge is often based on the level of threat that the transportation infrastructures are exposed to within the region. If the militias have to protect the infrastructure from a possible attack by other armed groups, they are likely to increase the fee because of the challenges involved (Etelawi, Blatner, & McCluskey, 2017). However, the fee may be lower if they are the primary source of threat to the infrastructure if the companies fail to pay.


The lootability of oil at this stage is very high. The insurgents do not need state-of-the-art refinery or extraction instruments to facilitate their activities. They only need proper military hardware, which they already have, and proper timing on when and where to launch their attacks. Looting of crude oil during transportation is common in Libya, as Di Lernia and Gallinaro (2014) observes. The most common form of looting transit oil is the sabotage of the pipelines. The ease with which oil can be looted when being transported to the market is one of the biggest challenges that oil companies face in Libya (Colgan, 2015). Even in regions controlled by the government, looting of petroleum products destined to the market is common. Most of the attacks occur when least expected in these regions. The presence of huge market locally motivates the non-state actors to steal the product for financial benefits.

Downstream (Refining and Marketing)

The Libya government heavily subsidizes oil products within the local economy, making them cheap in the country. Since the collapse of the last regime, smugglers have emerged in various parts of the country, selling the subsidized products in North African countries and parts of Europe. Theft of oil at this stage takes different shapes. According to Dizaji, Farzanegan, and Naghavi (2016), General Khalifa Haftar took control of Benghazi with the support of various militia groups. He has rejected the legitimacy of the current regime and won the support of many insurgents, making it possible for him to control the region. The National Oil Corporation, Libya’s largest oil company that has numerous subsidiaries, has its headquarters in this city.

It means that a militia group is in control of a strategic oil refinery company in the country. It can easily dictate the activities of these companies and make relevant demands for financial benefits as a way of financing its activities. It is necessary to look at nature and extent of oil looting at this stage. During the stage of distribution, the oil dealers are not safe from the attackers. It explains why a significant number of petrol stations in Libya are currently owned by the government or established militia groups (Moore, 2015). Private investors that lack proper systems and structures of protecting their premises from constant attacks have pulled out of the retail market because the business is neither profitable not sustainable.


The target at this stage is refineries located in the regions controlled by the insurgents. The National Oil Corporation is currently one of the biggest targets for the insurgents, given that Benghazi is has fallen to the militia groups. Findley and Marineau (2015) note that in most of the cases, these armed groups prefer receiving regular payments from these refineries, which affect their profitability. Instead of paying taxes to the government, they pay specified fee to avoid a possible attack on their facilities. Distributers of petroleum products (petrol, diesel, and jet fuel) are not safe from attack by the insurgents. The militias may take over the operations of the pump for hours, pocketing the loot at the expense of the retailers. They may also come with means of carrying petroleum products that they steal from these stations.


The refinement facilities are concentrated. The companies are often located in specific locations that they consider strategic for the transportation of the finished product. Benghazi is the most strategic location for the country’s biggest oil company to export its products to Europe (Geddes, Wright, & Frantz, 2014). The concentration of oil refineries in these strategic routes to the international markets makes it easy for the militias to concentrate their activities. Retail outlets for petroleum products are widely distributed within the country to ensure that customers can access them easily. It means that an attack on these facilities is widespread. Petrol stations located in regions controlled by the criminals or areas with limited presence of government forces are at the greatest risk. The outlets that are within major cities controlled by the government such as Tripoli are relatively safe.


The defensibility for the militias at this stage varies depending on whether they target the refineries or distribution facilities. At the refineries, the defensibility is high because of the concentrated nature of their activities. For instance, the Libyan government has been pushed away from Benghazi and Tobruk by the forces allied to General Khalifa Hftar (Hansen-Lewis & Shapiro, 2015). Any militia group that is allied to this general is assured of security in the region. They have a proper defense in the city and surrounding regions. The oil companies operating in the region are defenseless against these militias. They have to act as per their directives. The ability of the insurgents to protect themselves from government attacks when stealing petroleum products during the distribution stage various depending on their target. When they attack major cities where their control is weak, their defensibility will be low. However, their level of defense is high when the targeted retailers are located in areas with limited government presence.


At the refineries, refined oil products (petrol, diesel, oil, and jet fuel) are the product of target. The insurgencies may loot refined products based on the demand that they have to meet. They often target finished products which are about to be transported from the refineries to the local and international markets. Sometimes they take hostage the refining facilities or distribution centers and demand for ransom. Findley and Marineau (2015) explain that if the authorities fail to make payment as promptly as demanded, these insurgents may destroy the products and the facilities, causing serious loss.


The price for the processed petroleum products is high because of the wide local and international market. The militia groups can sell the looted petrol, diesel, or other petroleum products either locally or in the international market, a fact that increases the price they charge. Paine (2016) notes that although the price charged by these insurgents is lower than the market price (because they sell them in the black market), it offers them a better deal than when they have to sell unrefined oil.


The rate at which the product is stolen at this final stage in the supply chain varies a great deal based on the target. The lootability of oil in the refineries is very high. During the reign of Gaddafi, most of the oil refineries were in tight control of the government. Security at these refineries was tight and non-state actors could not interfere with their operations. However, that has changed following the collapse of the government. Most of these refineries are currently controlled by the militia groups. According to Saltman and Winter (2014), most of the militia groups that steal oil at the retail level are small in size, less organized, and are less connected to international terror groups. They may have arms, but they lack proper training and have limited access to ammunition and sophisticated weapons. As such, they always target remotely located petrol stations where they know their activities can go undetected. They also target retailers located in regions controlled by their affiliate groups. Petrol stations located in major cities controlled by the government of Libya are safe from these attacks. Figure 2 below is an image that summarizes the three stages within the supply chain where oil looting, extortion, and attack of oil infrastructure are common in Libya.

Stages of oil looting in the supply chain.
Fig. 1. Stages of oil looting in the supply chain (Paine, 2016).

In what ways do Libyan insurgents use the wealth looted from illicit oil trade?

The second question focused on determining ways in which Libyan insurgents use the wealth that is looted from illicit oil trade. According to Ocakli and Scotch (2017), the insurgents get a lot of money by engaging in the oil trade locally and in the international oil. Libya is one of the top global oil producers in the global market. Since the collapse of the Gaddafi government, this resource has been under the control of militia group, with the current government only managing to a section of the rich oil fields. Ronen (2017) notes that oil looted from the fields are used in funding the wars in the region, bribing of the politicians, and expanding of territories, as discussed below.

Funding the War

According to Sousa (2016), waging wars against the government and other insurgencies cost a lot of resources for the militia groups. The military hardware that is needed, from trucks, rockets and rocket propellers, to automated guns and ammunition cost a lot. Most of these weapons are bought on the black market. The military hardware used by the Libyan insurgents comes from Russia, the United States, and France (Wright, Frantz, & Geddes, 2015). The ammunition mainly comes from China and Russia. Heavy weaponry is often sold to governments or licensed companies to ensure that they do not land in the hands of criminals, terrorists, and militia groups. Under normal circumstances, it would be impossible for insurgents in Libya to have access to guns because they lack the legal background needed to purchase them.

However, it is ironical that the Libyan militia has access to some of the most sophisticated weapons and abundant ammunition. The money looted from the oil and gas industry makes it possible for them to purchase these weapons on the black market. Some of these weapons are purchased from the corrupt regional governments. These government officials would purchase the military hardware, including ammunition, from the international market, and then sell them to the militias at inflated prices. Black market traders in arms have also emerged because of the profitability of the industry. They purchase assortments of weapons from Europe, North America, and the Far East and sell them to the insurgents (Tang, Xiong, & Li, 2017). The path that the illicit weapons often take from the manufacturers to the final stage where they reach the insurgents is well known to the international community. However, the business and political interests involved in these fights and on the weapon business has made it almost impossible to eliminate the black market for arms.

The insurgents also need to move from one place to another within their occupied territories or when they are making their attacks. Pick-ups are the favorite among the Libyan insurgents (Wright et al., 2015). They also use large tracks when transporting large quantities of goods or when moving a large number of troops from one location to another. The geographical challenges in the country and the poor transport infrastructure makes it necessary for the insurgents to have top-of-range vehicles that can easily maneuver the terrain to have any chance of protecting the acquired territories and conducting successful offensive on opponents. Some of the insurgents have tanks to facilitate their offensive. Acquiring such sophisticated means of movement is costly. A significant portion of the money earned from the looted oil goes in the purchase of these instruments to facilitate the activities of these non-state armed actors. Tezcür and Gurses (2017) argue that in most of the cases, the insurgent trade oil for the military hardware. Some of the syndicates in Italy have made such arrangements possible (Moore, 2015). Once they receive petroleum products at designated locations, they arrange for the delivery of vehicles and weapons to the insurgents according to the set terms.

The insurgents have families that they have to support even when most of their time is spent in battlefields. Money earned from the looted oil is sent back home to support families of the soldiers. Another section is used by the soldiers to purchase food medicine, clothes, and other necessities that are used in the camps and while in the battlefields. Many lives are always lost on the battlefields when the insurgents have to fight government forces or other militia groups for control of specific territories. After such wars, it becomes necessary for each side to recruit new soldiers to facilitate a continued fight for control. Recruiting new soldiers and training them require significant amount of resources. According to Moore (2015), most of the militia groups often use the money to entice desperate youths to join them. Those who accept to join the military are paid handsomely as a way of convincing them not to run away during training. Their families are also compensated just in case one dies on the battlefields. Once they have been picked, they have to go through thorough training to acquire necessary skills needed to survive and succeed in the battlefields. Funding such processes need a steady flow of income. Illicit oil trade provides the needed resources.

Bribing the Political Class

The activities of the insurgents, according to McLauchlin (2017), can easily be curtailed if there is regional and international political will. However, that has not been possible because of political interests. In Libya, the current political stalemate that has given rise to various insurgencies is partly caused by the interference of the local politics by international players. Blanchard (2016) explains that Italy has enjoyed a long period of close ties with Libya under the regime of its Strongman, Colonel Gaddafi. In 1986, (Ronen, 2017) reports that Bettino Craxi, who was the prime minister of Italy at that time, sent an important tip-off about an impending airstrike by the United States that targeted Gaddafi. The intelligence helped in saving the life of the dictator.

It was a sign of conflict of interest between Italy on one side and the United States and Britain on the other side. In 2011 when the United States, the United Kingdom, and France declared a no-fly zone in Libya, Italy was expected to play a leading role in enforcing the declaration. However, the cabinet rejected the request, and the country did not play any significant role in the ouster of the Gaddafi government (Moore, 2015). It was another significant demonstration that the Italian government’s interests in Libya sharply contrasted that of the United States and its allies. Top Italian officials had a close business (oil) ties with the Gaddafi regime and they were concerned about the relationship in case he is forced out of power.

According to McLauchlin (2017), oil has been the main interest of the international community in the fight that is raging in Libya. China and Russia had contracts with the Gaddafi government involving exporting of oil. The political class in the two countries was strongly opposed to the ouster of Gaddafi from power because of the relationship (Colgan, 2015). It was unfortunate to them that the regime finally collapsed because of the military attack that as planned and executed by the United States, United Kingdom, and France. Currently, the business relationship between Libya and the East is not guaranteed because they now lack a strong link with the current rulers. According to Blanchard (2016), the international community, especially politicians from the west, were acting in the interest of their countries, not on humanitarian grounds when they sent troops and aircraft in Libya.

Some of these politicians have direct business interests in the Libyan oil business. Regionally, the politicians and government of Egypt, Saudi Arabia, and the United Arab Emirates have expressed their support for the House of Representatives based in Tobruk. Jordan, Algeria, Sudan, Turkey, and Qatar have joined the United States, the United Kingdom, Italy, France, the United Nations, and European Union in Supporting the Government of National Accord (Colgan, 2015). The General National Congress has received lukewarm support from Iran. ISIL has gotten the support of al-Qaeda while Shura Council of Benghazi Revolutionaries has the support of Benghazi Defense Brigades and local militia groups in Benghazi (Ronen, 2017). Each of these external players has direct personal interest in the war, and the common factor is oil. The inability of regional countries to come to a common solution to this problem is a clear indicated of the vested economic interest in the region.

Complicity by corporate and state officials can be directly attributed to the money flowing from the illicit oil business. The insurgents use money earned from the illicit oil trade to win political support both locally and internationally. The fact that these politicians are benefitting financially from the war makes them unwilling to crash the insurgencies. The regional and international community has the military capacity to crash the insurgency in Libya and restore democratic leadership in the country with minimal effort. However, that has not been the case because of the economic interests in the country. Each of the major warring groups in the country has made a business agreement with various regional and international powers.

Egypt, one of the neighbors of Libya, supports one of the camps while Sudan and Algeria, which are the other neighbors, support a different camp. It means that military actions taken by Egypt in this country will be a direct violation confrontation with the other two neighbors. The anarchy brought about by these conflicting interests created a perfect platform for oil looting. The inability to have a defined government in the country means that oil looting can prosper. The political backing from the regional and international that each group gets in exchange for oil or oil-related resources makes it easy for them to operate with impunity. The looting of oil in Libya has been facilitated by large multinational corporations such as United Kingdom’s BP; Italy’s Eni, the Spanish Repsol S.A., and French oil giant, Total (Moore, 2015). Some politicians benefit by facilitating the sale of arms, ammunition, and means of transport to the insurgents.

Expand Territories

The financial benefit that the Libyan insurgents get from the illicit trade in the oil industry is playing a critical role in facilitating their territorial expansion (Colgan, 2015). Each group is keen on gaining legitimacy both locally and internationally. Those that have failed to earn regional and international support, their strategy is to expand their territories to gain political relevance. They know that when they control large cities and towns in the country, they will be relevant in the peace processes sponsored by the international community. They will be invited to the peace talks and offered a deal if the country will ever succeed in having a government of national unity. Each of the factions discussed above, supported by various international players, have made attempts to spread out and to win a greater support of the locals within the country.

Fighting for territorial expansion, as McLauchlin (2017) observes, is an expensive undertaking. It not only involves winning military battles against the opposing camps but also getting the support of the locals. Even after defeating the rebel groups, these factions need to convince the locals that they have their interest at heart. The locals must feel comfortable with them because without their support it may not be easy to sustain victory against rival groups. Blanchard (2016) says that some rebel groups are opting to use financial incentives as a way of winning the trust of their locals. Every important tip that they receive from the locals is always rewarded. The intelligence helps them to know about pending attacks from the rival groups. They can plan a counter-attack and protect the already acquired territories. Oil is the only stable source of income that these insurgents have to support such expansion and territorial protection efforts.

What are the fundamental roles played by the Libyan authorities in the illicit oil trade in the country?

The question seeks to unearth the roles that the local politicians play to facilitate the illicit oil trade in Libya. The Libyan civil war that started in 2011 may not come to a conclusive end anytime soon if the current trends do not change. Having a common ground seems to be a major problem at the local and international levels. The local politicians and those trusted with the administrative tasks are in constant disagreement, and McLauchlin (2017) believes it is caused by greed. The instability in the country has created a haven for dubious businesspeople and unscrupulous politicians to trade in oil without any checks and balances of the Libyan government. The failed state status of the country is what they desire most to facilitate their business activities. Although the current problems in the country are fuelled by the conflicting interest of the international players and the direct support they give to their preferred factions, the local Libyan authorities are also to blame because of the current problem of rampant looting of oil. They have accepted to play critical roles in this problem as discussed below:

Funding the Rebels and Providing Other Resources

Most of the rebels have direct connecting with some of the Libyan authorities. According to (Paine, 2016), House of Representatives is one of the major political players in the country, and it is supported by Libyan National Army under the command of General Khalifa Haftar. It has its headquarters in Tobruk. General Hafter’s National Army is supported by numerous other rebel groups that control the larger Eastern Libya (Colgan, 2015). Most of these rebel groups are small in size; less organized, and cannot take oil to the international market. They have to rely on the larger armed groups they are affiliated to in running their daily activities. The top leaders of these insurgencies are currently playing important roles in the country’s national politics. They are keen on ensuring that the activities of the insurgencies do not stop because the political instability legitimizes their involvement in the national politics. As such, they fund these smaller militia groups and provide them with resources needed for their operations. The insurgents source for arms and ammunition from the international market, purchase the vehicles needed to counter other militia groups, and intelligence necessary to ensure that they are successful in their operations. In return, these militia groups facilitate the looting of oil. They are sent to the fields or refineries to steal petroleum products and deliver it to their masters. The mutually beneficial relationship that the Libyan authorities have with the militias makes it impossible to eliminate the problem.


The level of involvement that the local Libyan authorities have with the looting of oil in the country by the insurgencies makes it impossible for them to fight the problem. McLauchlin (2017) notes that the level of complicity by the government of Libya in fighting the problem of oil looting shows that government officials are benefiting from this problem. Some of those in government, as noted above, are there because of the activities of the rebels in the regions that they control. Eliminating the militia groups would be suicidal to their political career and businesses. The complicity is also caused by the genuine fear of possible retaliatory attacks by the opposing armed insurgents. As noted above, the country has about five strong factions, each controlling specific regions within the country. Stopping the rampant oil theft in the country would require the elimination of all the factions and creation of a government of national unity.

However, that has not been possible despite the efforts of the international community over the past seven years. It means that it may require the strongest faction to crush the uprising in the country and assert its control in the country (Colgan, 2015). However, given that each of these groups has the support of the international community complicates the ability to find a lasting solution. The situation is very frustrating to individuals who are genuinely concerned about the current affairs and keen on finding a way of addressing the problem. The complicity of such leaders arises from their frustration that the problem is beyond their ability to resolve. They do very little to address the problem because they know that the international actors are so powerful and deeply entrenched in the current crisis that any erratic decision can cost them their lives (Ronen, 2017). It explains why a lasting solution to the current looting of oil is yet to be found.

What is the relationship between the oil sector and the growing rebellion in the country?

The last question focused on determining if the growing rebellion in the country is in any way related to the oil sector. The analysis of the first three questions points out that there is a clear relationship between the increasing uprising in the country and the oil resources. According to McLauchlin (2017), a section of the society feels that the international community deliberately eliminated Muammar Gaddafi from power to pave the way for the looting of oil. They feel that when Gaddafi was in power, he used the resource to empower his people. He was able to stop outside players from getting deeply involved in the country’s oil reserves. However, when he was killed, the leaders who were installed have been serving the interests of these international players responsible for the elimination of Gaddafi (Ronen, 2017). The growing rebellion is in direct response to the activities of foreigners in the local oil sector.

They feel that they will no longer benefit from the sector as was the case before. They are strongly convinced that the current regime lacks the goodwill to ensure that they benefit from the resource. As such, they have come out to protect what they believe is the only resource that they have. In most of these regions, farming cannot be practiced because they are deserts. Commerce is deeply supported by oil extracted from the region. When money coming from these oil fields end up in the pockets of individuals, most of who do not reside in these local cities, commerce is chocked. The ripple effect is felt by many (Paine, 2016). The locals are getting frustrated, especially given the fact that the current regime is doing very little to address the problem. It is one of the reasons why some of these revolts are getting violent. Greed and financing are the other reasons why rebellion is growing in the country. Some of these uprisings are carefully planned and deliberately executed by individuals who believe that the industry has easy money. They want to create instability in specific oil-rich parts of the country to facilitate their illicit activities in the oil trade. They know that a stable Libyan government would curtail their illegalities in the country.


Libya once had the highest gross domestic product (GDP) per capita in Africa (Ronen, 2017). It ranked highest in human development index in the region. According to Blanchard (2016), the national government offered subsidies almost in every sector of the economy. Education was free from primary to institutions of higher learning. Healthcare services in the country were available and affordable irrespective of the financial capacities of the citizens. The government ensured that its people had decent housing, especially in major cities. The returns from the oil sector were used for the benefits of the locals. McLauchlin (2017) says that people felt government’s presence almost in every part of the country. Insecurity was not a concern in this northern Africa country, and the food was available despite the fact that most parts of the country are dry and cannot support agriculture. However, that is changing rapidly following the elimination of the Gaddafi regime. The country is falling apart as there is lack of proper leadership that can guide it back to economic success. Various leaders that came to power after the elimination of Gaddafi have failed to unite the country. As a result, various insurgencies have emerged in different parts of the country.

The infrastructural development that was spearheaded by Gaddafi has experienced negative development. Most institutions such as schools and hospitals have been bombed during the prolonged civil war. Less than ten years ago, children enjoyed free education in the country, but currently, that is not a possibility in some of the war-torn parts of the country. They have to stay in their houses for fear of possible attacks. The hospitals currently lack proper supplies and medical staff because the country lacks proper political leadership. Oil that was once used to support the locals has now become the primary reason behind the sustained war in Libya. The socio-economic situation in the country is deteriorating fast, and it is clear that solution may not be easily achieved. The vested interest that the local and international players have in the conflict within the country minimizes chances of addressing civil war in the country. However, that does not mean all hope is lost, as Moore (2015) observes. It is possible to address the current problem is the right measures are taken and if the players express goodwill and genuineness if finding a lasting solution. The analysis has presented facts that should be discussed further in this section.

The Relationship between Oil and Political Disorder in Libya

The political instability in Libya is threatening the country’s economic progress. According to Blanchard (2016), following the death of Muammar Gaddafi, warlords started taking strategic positions to control oil-rich parts of the country. A number of criminal gangs also organized their activities as a way of enhancing their efficiency in looting the natural resources. ISIL saw an opportunity to expand its activities to Libya because of the leadership vacuum that was created. All these non-state actors were interested in the oil reserves in the country. Some of the insurgents such as the Libyan National Army became more organized and entrenched their control in specific parts of the country. Ocakli and Scotch (2017) argue that given the opportunity, these rebels can extract, refine, transport, and export oil and related products to the local and international market.

As such, there is a direct relationship between the political disorder in the country and oil reserves. The terror groups such as ISIL, local militias, and criminal gangs know the value of oil both in the regional and international market. They are keen on tapping into this resource that is abundantly available in Libya (Paine, 2016). However, they can only control oil business if the country lacks proper leadership. A strong Libyan government will flush out criminals, militias, and terror groups, just as the government of Gaddafi did when he was in control. A strong organized government will ensure that oil extraction, processing, transportation, and exportation is done in a systematic manner that eliminates any form of looting by non-state actors. Having a stable Libyan government will enhance security at the entire supply chain of oil, from the point of extraction to the stage when the product is delivered to the local, regional, and international market. It means that it would be impossible for the criminals and the insurgents to operate in the country effectively.

Attacking the oil infrastructure at any point within the supply chain will be very risky. Even if they can organize sporadic attacks on these structures, stealing petroleum products will not be possible. In case they have a proper plan on how to loot oil, moving the product to their desired market in a country that has functioning systems and structures are almost impossible. They will be arrested or killed by the government forces in the process. As such, they need unstable state in Libya. They want to have a country that lacks a legitimate leadership. The country is currently has fragmented leadership. About five different politico-military outfits are controlling different parts of the country. It is unfortunate that these five movements have failed to come together and agree on modalities of governing the country. The lack of unity has made it possible for other sections of the country which are outside the control of these five outfits to be governed by criminals and other small rebel groups whose primary interest is to loot oil in the country (Ronen, 2017). The situation that is created ensures that those with the military and business capacity to steal and sell oil in the local and international market become rich at the expense of the local population. Those who are not taking active roles in the armed conflicts in the region such as women and children are the worst affected. If they do not have family members in these criminal gangs, they cannot benefit from the local resources. Without the ability to wage a proper war with the militias, these people are left at the mercy of the insurgents.

Strength of state. According to Ocakli and Scotch (2017), the strength of a state’s regime and its durability defines its ability to restore social and political order. A regime that can last for a considerably long time can identify security loopholes and address them as a way of restoring stability. When looking at the durability of a regime, Moore (2015) argues that it does not necessarily mean dictatorial governments with leaders who stay in power for several decades can enhance security in a better way that democratic regimes that allow for handover of power from one regime to another after a specified period.

The longevity of a regime beyond one decade gives rise to complicity because individuals assigned the strategic responsibility of maintaining law and order to become relaxed and complacent because they know some of their actions cannot be challenged. In this context, the concern is the current scenario in Libya where the authority of national leaders is challenged after a short while. When Muammar Gaddafi was forced out of power in 2011, the National Transition Council took over the governance of the country. The council oversaw an election in 2012 and handed over the country’s leadership to the General National Congress (GNC). However, a serious uprising started in August, in Tripoli and Benghazi, the country’s largest cities, against the current regime. By October 2012, the Prime Minister Mustafa Abushagur was forced out of officer (Ronen, 2017). He was replaced by Ali Zeidan. On March 11, 2014, Prime Minister Zeidan was forced out of office because of his inability to crush the illegal shipment of oil from the country to overseas market. He was replaced by Abdul al-Thani (Blanchard, 2016).

In the same year, a Council of Deputies was elected to office after the failure of the General National Congress to provide leadership. However, when the council tried to assume control of the country, GNC organized its military and forced the council to flee to Tobruk. It created two centers of power in the country, one led by the Council of Deputies at Tobruk and the other led by GNC at Tripoli. In 2015, rebels affiliated to ISIL took over Sirte and Derna because of the leadership vacuum created by the two centers of power (Ronen, 2017). These events have been worsening with time. They demonstrate in clear terms how the strength of the state is increasingly getting compromised. The country’s leadership is falling apart.

The instability is creating a perfect platform for criminals and insurgents to take control of oil resources. The effort made by neighbors to strengthen the country’s leadership has been marred by numerous challenges. Some of the neighbors are supporting the Tripoli government while others are supporting the Tobruk government. Such actions by the international community only create further confusion. The support that each of these factions receives from the international community legitimizes their authority in one way or the other. It is a sign that the international community recognizes them as the legitimate government of Libya. McLauchlin (2017) says that that the current political impasse in the country would have been less severe if the international community was united in finding a lasting solution. However, when each camp is getting support from different countries around the world, they feel that their authorities are legitimate, which complicates the problem further. As the country struggles to achieve stability, criminals and other organized gang groups, including the insurgents, are taking advantage of the business opportunity in the oil business that is created.

Ability of the state to control the flow of rent. According to Blanchard (2016), the ability of the state to control the flow of rent from the rich oil reserves depends on its strength. The strength of the state largely depends on its legitimacy and ability to bring the country together despite the challenges that often arise because of the political differences. The Gaddafi’s regime had a perfect ability to control the flow of rent in Libya for decades. However, the regime was not universally supported by every Libyan. In fact, Gaddafi had survived several coup attempts, a sign that a section of the society was not satisfied with his leadership (Paine, 2016). It is not possible to have a government that will be acceptable to everyone. However, the regime that is in power must find a way of asserting its authority. The rebels, criminal gangs, and terror group must be made to feel that the country has strong leadership that is keen on protecting important resources. McLauchlin (2017) argues that Libya is currently awash with sophisticated weapons which are mainly in the hands of rebels and terror groups controlling important oil reserves. The ability of the state to control the flow of rent will start by having one center of power in Libya.

The politicians in Tripoli and that in Tobruk must agree and drop their hard-line positions. They must bring along other minor players across the country and come to a compromise that will be beneficial to Libyans. The country should then develop a strong army under the leadership of a unified government. The presence of the government should be felt in the entire country by having the military, paramilitary, and police maintaining law and order. The country must have proper intelligence that will help in identifying the routes taken in the trade of oil in the black market and individuals involved in the business. Such individuals should be arrested and the trade routes blocked. Through such mechanisms, the government will gain full control of oil trade in the country. McLauchlin (2017) notes that crashing the illegal oil trade in Libya is one of the best ways of eliminating the insurgencies in the country. Cutting off their regular source of income will incapacitate them. They will have no resources to pay their soldiers, recruit new fighters, purchase supplies, and other necessities that can facilitate their resistance against the government. In such a hostile environment for the insurgents, they will have no alternative but to join government forces or lead normal civilian lives in the country.

Factors That Makes Oil Lootable in Libya

The analysis conducted above shows that Libya is one of the leading oil producers in the global market. However, the resource is currently in the hands of criminal gangs and rebels who use it to meet their selfish needs. It is important to analyze factors that make oil lootable in Libya. The following factors come out clearly from the analysis above:

Available market for the valuable product. Oil is one of the most important minerals in the modern society. It is the energy used in the industrial sector, transport sector, and all other sectors of the economy. Although the international oil prices fell in 2014, the commodity remains in high demand in the regional and global market. Refined oil is in very high demand in North, West, and East African countries. For instance, although Nigeria is one of the leading exporters of crude oil, the country relies on imported refined oil. Moving of the product from Libya to Nigeria does not need sophisticated transport systems. Ethiopia is another major market for the products looted from Libya. Italy is not far from Libya hence it is another ready market. The insurgents and criminal gangs are assured of the market every time they loot oil, which is a reasonable motivation for them to engage in the illicit trade.

Defensibility. In Libya, oil is a lootable product because the criminal gangs and militias can easily defend themselves from attacks by government forces or rival groups. The country is fragmented, and different parts are controlled by different groups of rebels. The current divided leadership of the country is unable to launch an effective offensive attack on the rebels (Paine, 2016). It means that these rebels are assured of their security as they loot these resources with impunity. They can easily repel any forces that may try to dislodge them from these territories. It means that some of them can easily engage in extraction, processing, and transporting the product to their desired markets. The ease of accessing necessary weapons enhances their defensibility.

Corruption and complicity. Lack of goodwill among the political class in the country has also contributed to the increased looting of oil in the country. The current politicians are directly benefitting from the illegal oil trade in the country. They are either directly controlling the operations in these locations because they own the illegal oil companies in the region or are financially rewarded by the businessmen in the region (Blanchard, 2016). The financial benefits that they get make them complicit in the fight against oil looting in the region. They ignore the illegal activities in the oil trade, making the product lootable in the country.


The failed political leadership in Libya since the death of Muammar Gaddafi has made it possible for the country’s national resources to be looted by insurgents and other international players who have infiltrated the country’s leadership system. The Tripoli’s Government of National Accord in and the Tobruk’s Council of Deputies control different parts of the country. These two dominant factions are yet to agree on how to form a unified government and end the civil war that is tearing the country apart. A significant section of the country is outside the control of these two authorities. They are controlled by rebels, Islamist groups, and local tribal militias affiliated with various local and regional armed groups. The study shows that since the collapse of the Gaddafi government, the country has been ungovernable. The analysis and discussion indicate that there is a strong relationship between the rising rebellion and tribal wars in the country and the rich oil reserves.

A section of the society is fighting against what they believe is an injustice by the current regime in redistribution of resources obtained from the oil trade. They believe that they are not benefiting from these resources as they used to when Gaddafi was in power. Another group is fighting because of pure greed. They see a lucrative opportunity of controlling oil resources in the country. Another group fights because they want to fund their militia activities using oil resources. Irrespective of the primary goal of these insurgents, oil is at the center-stage of the current wars in the country. The activities of these insurgents are fuelled by actions taken by the international players. Regional and international actors have interest in the country’s oil reserves. Their conflicting interests make it impossible for them to support one pattern of solving the problem. The military might of these players and their geographic location means that it is not possible to find a quick-fix solution to the problem. All the parties must be adequately involved in finding a compromise that will bring lasting peace in the country.


The study indicates that the current problem in Libya goes beyond the local interest of state and non-state actors. It is undisputed that oil is central to the current uprising in the country. The international actors have found a way of getting deeply entrenched in the current political crisis in the country because of their need to tap into the oil resources in the country. Their conflicting interests have pushed them to support different factions, making the problem more complicated. The implication of the study is that when looking for a solution to this problem, it is necessary to engage both local and international players. Goodwill is needed from these foreign powers because they are directly involved in the funding and supporting some of the insurgencies militarily (Paine, 2016). The scope of the solution should not just be limited to the state and non-state actors in Libya. The United Nation should find a way of convincing these international players to have a common ground that would help in ending the civil war in the country.

Future Research Directions

The study suggests that the current civil war in Libya may last longer than many people had anticipated if the current strategies are not changed. Current studies suggest that the problem is complicated because of the conflicting interests of powers outside Libya. Future studies should focus more on the role of these international players in the conflict than that of the local players. The studies should look at how these international players have deliberately sabotaged the ability to have a solution to the problem. Scholars should look at the interests of each regional and international authorities and how these interest playoff locally in the country. The direction that future research should take is how to address the current problem from the perspective of international players. They provide arms, ammunition, and means of transport to the insurgencies. They provide the market for the militia groups and the political support at the international level. If they can arrive at a common solution, it will be possible to address the current problems in the country.


Libya deserves political stability needed for its people to achieve socio-economic development. The locals should be allowed to define their future without interference from international actors. Oil reserves in Libya should be used for the benefit of Libyans instead of being channeled into the pockets of a few greedy individuals or into courses that only have a negative impact on the locals. The following recommendations should be taken into consideration when addressing the problem in Libya:

  • The international community should find a united approach to addressing the problem without putting their interests first. If the foreign forces have the interest of the locals at heart when addressing the current problems, then it cannot be too difficult to find a common solution that will end the prolonged civil war in the country.
  • The United Nation should identify and eliminate international actors with a vested interest in the current problem in Libya. All countries or corporations that are interested in tapping the country’s rich oil reserves should be eliminated from the current talks to address the problem.
  • The mass flow of weapons and other military hardware into Libya should be curtailed. The insurgencies are motivated to continue with the war because they have unlimited access to arms and ammunition. The international community should encourage disarmament in the country.
  • The United Nations should send troops to maintain peace and order in the country. It is likely that those who are disarmed may become easy targets to groups that still have weapons. Sending troops to these regions will limit the ability of invaders to attack disarmed groups.
  • Peace talks should focus on political and economic justice. Everyone should be represented in the new political leadership in the country. The resources of the country should be fairly distributed, and the locals should feel their benefits.

Researcher’s Reflections

Libya is one of the world’s leading oil producer and exporter. Under the leadership of Colonel Muammar Gaddafi, the country registered impressive economic progress, and it wholly relied on oil to achieve such success. However, that changed when the international actors facilitated the elimination of Gaddafi and disbandment of his government. Since then, the country has known no peace. Based on the findings of this study, I believe that actions of the international actors are deliberate and selfish. Although there are countries genuinely concerned with the problem and keen on finding a lasting solution to the problem, others are mainly interested in the oil reserves. They have put in place systems and structures to ensure that proper peace deal is not achieved because of these interests. During the leadership of Gaddafi, arms and ammunition were in the hands of government officials. However, that is no longer the case. Local militias now have sophisticated weapons to enable them to fight the rival groups. It is insincere for some of these international actors to claim to broker peace in the country while at the same time availing such heavy artillery to the insurgents. A lasting solution to the current political strife in Libya can only be realized if these international actors will put aside selfish interests and focus on helping Libyans restore political stability. They should not have any hidden goals in their diplomatic undertakings.


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