Turtle Bay

Is a Libyan oil-for-food program on the way?

Is a Libyan oil-for-food program on the way?

Lost in the debate over the U.N.-backed air war against Muammar Qaddafi is the little-noticed fact that the Security Council resolution that authorized the use of force also imposed the most far-reaching economic sanctions on any country since those applied to Iraq before the 1991 Persian Gulf War.

In addition to giving legal backing to the military intervention, Resolution 1973 placed an asset freeze on the Libyan Central Bank, the Libyan Investment Authority, Libya’s sovereign wealth fund, and the Libyan National Oil Corporation. The resolution also grounded all Libyan commercial air carriers.

Like similar sanctions imposed on Iran, the move to cut off Qaddafi’s chief sources of revenue has the potential to inflict collateral economic harm on ordinary people. It marks a shift from the U.N. Security Council’s efforts over the past decade to develop highly targeted sanctions that punish a rogue government’s elite while shielding ordinary people from harsh economic pain.

"If a stalemate continues and there is no regime change, these measures will starve the economy," David Cortright, a scholar at the Kroc Institute for International Peace Studies at Notre Dame University and one of the country’s leading experts on U.N. sanctions, told Turtle Bay. "Sooner or later, and probably sooner, Libya will begin to face internal economic difficulties, and therefore, humanitarian difficulties."

The imposition of sanctions are not a rare occurrence at the U.N. The Security Council has imposed stringent sanctions on many countries’ key industries, targeting diamonds, timber and other commodities in Liberia, the Democratic Republic of the Congo, and Ivory Coast. But "in Libya, they have used more of a ‘blunderbuss’ approach to curtailing the countries economy," Colin Keating, the executive director of the Security Council Report, told Turtle Bay.

"I must say it seems to me that this is more than anything I’ve seen before," said Keating. "It gave scope for broader constraints that we normally see with targeted sanctions. In a way it doesn’t purport to be a total ban on all trade, but it does give cover for anybody who does want individually to have wider sanctions."

The U.N. Security Council imposed comprehensive oil and trade embargos on Saddam Hussein‘s government in 1990 and 1991 in an effort to compel him to reverse his military invasion of Kuwait and to destroy programs for chemical, biological and nuclear weapons.

The sanctions largely succeeded in those goals but they also inflicted enormous hardship on individuals — with some estimates that hundreds of thousands of children may have died from malnutrition because of a lack of food imports. In response, the U.N. Security Council established a massive humanitarian aid program in 1996, which allowed Iraq to sell oil, under U.N. control, to purchase food, humanitarian goods, and other supplies. The program was disbanded in 2003 after the invasion of Iraq, and subsequent investigations have shown that its management was riddled with corruption.

The political backlash against the Iraq sanctions prompted the council to develop a more surgical approach to sanctions, targeting individual elites with travel bans and asset freezes while allowing broader international trade to continue. The recent round of sanctions, which includes Resolutions 1970 and 1973, against Libya does not constitute a formal trade embargo, targeting a small number of companies and individuals linked to Col. Qaddafi. But in a state-controlled economy like Libya, targeting the regime’s inner-circle is enough to bring the entire economy to a halt.

"In effect, we are looking at an oil embargo," Carne Ross, a former British diplomat who oversaw British policy on the U.N. oil-for-food program in Iraq, wrote in an analysis of the resolution. "This seems to me to make any purchases of oil from Libya highly problematic, to say the least."

Libya normally produces 1.6 million barrels a day of oil, making it the 12th largest oil exporter in the world. But exports have crashed to a halt since sanctions were imposed. The U.S., British and French led military coalition is exploring ways to meet the humanitarian needs of the Libyan people, including the prospect of seizing control of key ports, including one in the rebel-held city of Benghazi, to ensure the delivery of food medicines and other supplies.

If history is a guide, the international community will likely tap Libya’s own oil wealth to cover the costs. Resolution 1973 already provides the U.N. Security Council with the legal authority to redirect Libya’s frozen assets and oil wealth to ensure it is used "for the benefit of the people of the Libyan Arab Jamahiriya." Can it be long before the U.N. Security Council sets up a new bureaucracy and escrow account to determine how Libya’s money is spent?

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