Report

It’s Not Benghazi, It’s Everything

While Republicans played politics, Libya was imploding. Now the Pentagon is readying an embassy evacuation, and the country may be beyond salvation.

This week, scandal-hungry Republicans worked to establish the ninth congressional committee investigation into the deadly attack on the American consulate in Benghazi on September 11, 2012. But the real scandal in Libya may be the one playing out in real-time as the country descends into the bloodiest bout of chaos since the civil war that led to the ouster of strongman Muammar Gaddafi.

Libyan authorities, to put it bluntly, have lost control of their country. A revolt by a rogue general against Libya's Islamist groups has pitted the nation's vast constellation of militias against one another, with civilians increasingly caught in the crossfire. The country's neighbors and partners are frantic: Over the weekend, Algerian forces dropped into the capital city Tripoli to exfiltrate their ambassador and later closed all border crossings with Libya; Tunisia amassed 5,000 troops at the Libyan border; and the U.S. Defense Department doubled the number of aircraft on standby in Italy and deployed hundreds of Marines to Sicily in case they needed to abruptly evacuate the embassy, a decision that could come at literally any moment.

For the Obama administration and its NATO allies, the chaos raises troubling questions. Shortly after the alliance intervened to help overthrow the brutal dictator in 2011, the U.S. -- which had consistently promised that no American ground troops would be deployed to Libya -- left the country quickly without a comprehensive effort to build a workable governance system or internal security apparatus. The beehive of radical militias that operate freely in Libya now pose a security threat to both American personnel in the region and Libya's neighbors.

Lawmakers could have used their oversight powers to ask administration officials tough questions about current U.S. policy towards Libya and press for a more aggressive effort to prevent the country from imploding. Republicans, though, instead remain focused on the night the U.S. ambassador and four other Americans died in Benghazi and the administration's bungled communications efforts in the following days. A broader examination of the White House's handling of Libya would reveal a country mired in internal dysfunction and violence, and a U.S. administration largely powerless to change the course of events on the ground. 

On Friday, Major General Khalifa Haftar, a retired general who lived in exile in Virginia before returning to Libya in 2011, launched an unauthorized campaign against Islamist groups in the country in a campaign that he says is designed to prevent the country from descending into the hands of radical groups. Haftar, the leader of what he calls the "National Army," ordered his paramilitary force of armed fighters, jets and helicopters to root out Islamist fighters in Benghazi in an attack authorities say killed 70 people and injured more than a hundred. The general's critics say he's trying to establish a secular dictatorship in Libya, which threatens to trample any chance of democracy in the North African nation. Haftar advertises himself as nationalist who is protecting Libya from an Islamist takeover.

On Saturday, Haftar's men ransacked parliament in Tripoli and declared the legislature suspended. In response to his vigilante campaign, interim Prime Minister Abdullah al-Thinni denounced the forces as "outlaws" and imposed a no-fly zone over Benghazi to rein in the general's air power. As a concession, the interim government offered to nominate a new prime minister, but Haftar has pledged to continue fighting. Now, towns and militias are beginning to take sides in response to Haftar's insurrection against Libya's Islamists.

The Obama administration has reiterated that only Libya can solve its own internal problems. "Libya has many challenges, and we're aware of that," State Department spokeswoman Jen Psaki said Monday. "We believe they cannot be overcome if its leaders don't settle differences through dialogue and work together."

Last week, in London, Secretary of State John Kerry pledged to do "all we can to help the Libyans" solve their political problems.

"We need to try to accelerate the effort to bring about stability and security and the governance that is necessary to provide the time and the space for Libyan authorities to be able to confront the threat from extremism and the challenges that their country faces of just providing governance to their people," he said at a meeting of the London 11, a gathering of world powers that support the Syrian opposition.

While everyone knows what Libya needs, making it actually happen is a much more perplexing problem. It's the type of dilemma that deserves the attention of congressional hearings. But while some efforts have been made to examine the woes of post-Qaddafi Libya, particularly by the House Foreign Affairs Committee, the vast majority of GOP attention to Libya has focused exclusively on the administration's response to the 2012 attack in Benghazi, not the underlying causes of the attack.

Don't expect that focus to change anytime soon. In his announcement about the creation of a subcommittee on Benghazi, House Speaker John Boehner made no reference to the problem of roving militias or a desire to explore Libya's problems in general.  "The House will vote to establish a new select committee to investigate the attack, provide the necessary accountability, and ensure justice is finally served," Boehner said earlier this month.

While the various allegations surrounding a Benghazi "cover-up" can seem unwieldy, the problems facing Libya are no less daunting.

Since the fall of Gaddafi, Libya has remained an unruly mess. The military and police, which were dismantled during the revolution, are disorganized and weak. The central government commands little respect and wields almost no authority. Filling this power vacuum is a disparate and diverse universe of militias that play off a variety of allegiances ranging from religiosity to ethnicity to locality (such as neighborhoods).

Despite numerous elections in the years since Gaddafi's overthrow, successive administrations have never been able to govern in a way that satisfies the competing interests of the country's Islamist parties, which are backed by independent militias.

Marc Jacquand, the United Nation's former strategic planning advisor at the organization's support mission in Libya before the revolution and following Gaddafi's overthrow, says one of the biggest failures in the aftermath of the conflict was not getting the militias to disarm.

"At its core, this was a political problem," said Jacquand. "When we started talking about disarmament of the militias, there was a huge fight within the ministries on who would manage this project. We were never able to get any traction on this project."

With the specter of Iraq hanging over the heads of NATO, and in particular the Obama administration, the West had no appetite for using ground troops to help oversee the disarmament of rebels, Jacquand said. But even if that were different, the Libyans were resistant to the idea of a heavy foreign footprint inside the country.

The White House seems to have understood that problem, and the administration instead unveiled a program late last year that would have brought roughly 8,000 Libyan soldiers outside the country for military training designed to turn them into the core of a new Libyan army. The program has struggled to get off the ground, however. A former U.S. official involved in the creation of the program said the administration seemed to quickly lose interest in the program and was never willing to devote the resources necessary to train enough troops to actually help pacify Libya.

"You don't need 8,000 soldiers; you need 15,000 or 20,000," the official said. "And you needed to get them trained and deployed quickly. These guys didn't need to be remotely up to our standards. They had to be loyal to the central government and willing to get into the fight quickly. That never happened." 

Another way the U.S. could have potentially stemmed the influence of the militias was by launching a concerted economic recovery and employment creation program. Libya is marred by high rates of unemployment, especially among young men. That presents an opportunity for the country's network of militias. "There's a very large population of unemployed youth just sitting around who are very vulnerable to the call to arms or being recruited by militias or armed forces," Jacquand said. "These militias are feasting on these unemployed youth."

However, the U.S. preferred to leave many issues related to the economy to the Libyans and other international institutions. "They really did not seek to play a major visible role," said Jacquand.

One area where the U.S. did play a big role was efforts to round up the alarmingly large supply of man-portable air-defense systems (MANPADs) that found their way into the hands of militias. After Gaddafi's fall, the State Department led a multilateral campaign to hunt down and destroy the leftover shoulder-fired anti-aircraft missiles from Gaddafi's huge stockpiles. It was estimated that Gaddafi had 20,000 MANPADs before his regime collapsed, sparking security concerns given the weapon's ability to take down civilian airlines. "The U.S. was very involved in the MANPAD issue," said Jacquand. 

With the hours upon hours of hearings dedicated to Benghazi, very little of that time focused on how Congress could help provide the resources the administration might need to improve the situation in Libya. The fact that this isn't likely to change bodes poorly for the country's future.

MAHMUD TURKIA/AFP/Getty Images

Report

The Deal That Wasn't

Vladimir Putin went to Shanghai to sign an energy pact worth billions of dollars. Too bad China wasn't ready to play ball.

Everybody from financial analysts to the Russian government expected Moscow and Beijing to finally ink a massive, $400 billion energy pact Tuesday that's been in the works for nearly two decades. But it didn't happen, with the first day of Russian President Vladimir Putin's much-touted trip to China ending not with a bang but a whimper.

After weeks of Russian insistence that the landmark energy deal was virtually in hand, including Putin's own comments just before jetting off to Shanghai, the two sides failed to clinch the deal Tuesday. That was a shock, a blow to Putin's objectives, and a reminder of how much China has the upper hand when it comes to gas deals with Europe's biggest gas supplier.

Indeed, the failure of Russian and Chinese negotiators to strike the deal on the first day of a two-day trip stems from the issue that has bedeviled them for years: price.

Russia still wants to charge roughly the same, high rates it charges customers in Europe, which average about $12 per million British Thermal Units, a standard measurement of gas volumes. But China only wants to pay what it already pays for gas piped in from Central Asia, which costs about $10 per million Btus. Over the expected, 30-year life of the contract, such a difference translates into at least a $60 billion difference between what the seller wants and what the buyer is willing to pay.

Gazprom executives said just before Putin's trip that the two sides were just "one digit" away from an agreement -- and apparently still are. Russian spokesmen told reporters in Shanghai that disagreements over the price kept the two sides from finalizing the big gas deal on the first day of the summit.

"There really was an expectation that things were going to be different this time. There was a widespread sense that the Ukraine crisis would change the political calculation" for Putin and make a deal more likely, said Erica Downs, an expert on Chinese energy at the Brookings Institution.

That doesn't mean the long-awaited deal is dead, of course. There are still opportunities to finally close the gap still separating both sides, starting as soon as Wednesday in Shanghai. Later this week, global business leaders will descend on St. Petersburg for a big international economic forum that offers another chance to cement an agreement.

But the surprising delay during Putin's high-profile visit makes clear that China can afford to keep playing hardball on the energy deal. There are a host of reasons for that. The European blowback in the wake of the Ukraine crisis has made Russia more eager to tap into a big new market in Asia. Russia's still-undeveloped Siberian gas fields don't have many potential big customers other than China. And global gas supplies are set to spike in years to come, giving China even more options than it has today.

"The Chinese have many alternatives while Russia has none," said Mikhail Korchemkin, the director of energy consultancy East European Gas Analysis. "Putin needs the contract with China to show the European Union he has a choice" about where to ship Russian energy, he said.

The Ukraine imbroglio has given Russia added reason to sign a deal with China, but it is not the driving force behind Russia's own pivot to Asia. Russia has been looking to the east for new markets since at least 1997, when Gazprom first started talks with prospective Chinese customers. And in 2010, when Moscow laid out its energy strategy for the next two decades, it stressed the role that the Asian shift would play in Russia's energy-export strategy.

More broadly, years of delay in signing the deal with China have coincided with a revolution in global gas markets. The boom in U.S. domestic production of natural gas means the United States doesn't need to import natural gas, which has freed up global supplies, giving Europe and Asia more options right now. Further, the United States will itself likely be a significant gas exporter by the end of the decade, further adding to growing global supplies.

At the same time, traditional gas sellers such as Australia and Qatar are ramping up export plans. New entrants, such as east African countries like Mozambique and perhaps even countries in the eastern Mediterranean, including Israel, Lebanon, and Cyprus, also have big plans to become natural gas exporters in years to come.

All that adds up to a potential glut of natural gas on the market starting as soon as the end of the decade that makes China less willing to make any concessions to sign a 30-year contract for Russian supplies.

Today, importing liquefied natural gas, or LNG, is much more expensive than getting it by pipeline. But all that future gas-export capacity could help push down LNG prices. That's especially true in Asia, where prices have been sky high in recent years due to Japan's reliance on imported natural gas in the wake of the shutdown of all its nuclear plants after the 2011 Fukushima accident.

What's more, on paper, China is sitting on top of the world's most abundant reserves of shale gas. While Chinese development of its shale resources so far has been very slow, that could give Beijing a way to greatly boost domestic energy production and help meet a good part of its expected surge in demand for natural gas. As big as the potential deal with Russia is, it would provide in a first phase only 30 billion cubic meters of gas per year starting in about 2020, or roughly 10% of forecast Chinese gas demand at that time.

So what's next? Moscow has apparently made some concessions in the hopes of securing the contract with China: Putin reportedly floated the idea Tuesday of a tax break for gas fields producing for the Chinese market, which would effectively lower the sales price for China.

But two other areas will be key barometers of Russian willingness to meet Chinese demands: whether Russia allows Chinese energy firms a stake in gas production, and whether Russia lets China build the necessary pipelines. Both would make it easier to solve the impasse over pricing -- but both would require a fundamental shift in Moscow's approach to energy development.

For years, when looking at potential suppliers, China has sought to get a piece of the action in energy production, rather than just buying up gas and oil. Such equity stakes give Chinese firms both experience in developing new gas and oil fields, but also a financial bulwark that helps offset domestically-controlled natural gas prices. Gas deals between China and Central Asia, for example, weren't signed at bargain basement prices. But by having a stake in production operations, such as in Turkmenistan, Chinese energy firms like China National Petroleum Corporation can still make money despite domestic market headaches.

Russia hasn't been willing to go that far yet with Siberian fields earmarked for the Chinese market. But the Ukraine crisis and the need to lock up Chinese contracts for the long term could push Putin to make exactly that kind of concession, said Keun Wook-Paik, an expert on Sino-Russian energy cooperation.

Another way to give Gazprom more negotiating room when it comes to the final price with China -- and to ensure that the China contract is actually profitable for the company -- would be to use Chinese builders for the pipeline itself from eastern Siberia to northeastern China. Russian pipeline projects cost more than comparable projects built elsewhere, not unlike Russian Olympics, and for many of the same reasons, notes Korchemkin, the gas analyst.

Gazprom's main pipeline contractor, Arkady Rotenberg, also reportedly landed billions of dollars worth of government contracts related to Sochi. He was recently placed on a U.S. sanctions list in the wake of Moscow's annexation of Crimea.

Korchemkin estimates that Gazprom's pipeline construction costs could be cut by about 60% by using Chinese firms. That, in turn, would make it more profitable for Gazprom to ship gas to China. But such a move would require Putin to jettison longtime business allies. Whether Moscow's desire to secure the China contract outweighs traditional, political considerations remains to be seen.

Alexey Druzhinin - AFP - Getty