Whenever a new political deadlock paralyzes Libya or localized clashes between powerful rival militias break out on the streets of the capital Tripoli, the global policy establishment dusts off its favourite phrases: “failed state,” “security vacuum,” and “primordial tribalism”. This lexicon serves a very specific purpose. By framing Libya’s fragmentation following the fall of the previous regime of Muammar Qaddafi as an inevitable product of native institutional incapacity and ancient internal feuds, the international community achieves a convenient double victory. It blames the victims of the crisis while completely absolving the outside architects of Libya’s ongoing paralysis.

The reality on the ground is far more calculated. Libya is not a broken state suffering from a spontaneous institutional breakdown. It is a highly functional system of “managed chaos” in an undeclared modern theatre of tutelage where a domestic kleptocratic cartel and foreign powers work in tandem to lock the country in a state of permanent instability. This ensures that Libya’s vast sovereign wealth remains easily extractable and its population permanently disenfranchised. To understand how Libya arrived here, we must dismantle the comfortable myths of the post-2011 era and look directly at the raw mechanics of what has become a highly lucrative “Cartel State”—a governance structure where formal state authority is captured by armed groups and political elites or cliques that treat national resources as their own spoils.

The Myth of the Humanitarian Rescue 

The baseline narrative of modern Libya began in 2011 with the NATO-backed intervention under the United Nations’ “Responsibility to Protect” (R2P) doctrine. Framed as a noble rescue mission to save civilians from the security apparatus of the Qaddafi regime’s reported violent suppression of protesters during the 2011 uprising and his explicit threat to ‘cleanse‘ opposition-held cities (much similar to Srebrenica), the R2P intervention was framed as a triumph of global moral conscience. In practice, it was a geopolitical bait-and-switch. 

Once the regime collapsed, the international coalition did not stick around to help; Libya was in a fragile situation beset by a security vacuum and the mushrooming of armed militias. The coalition here could have shepherded the country toward a viable sovereign transition. Instead, they packed up leaving behind a structural vacuum that was immediately hijacked by regional capitals. Far from safeguarding the Libyan people, this selective intervention turned the country into a testing ground for foreign weapons and proxy ambitions. Regional powers such as Turkey, the UAE, and Russia used Libya as a laboratory for advanced drone warfare and the deployment of mercenaries like the Syrian fighters and the Wagner Group to project influence without the political cost of direct state-on-state confrontation.

Sovereignty was reduced to a conditional luxury dependent entirely on how local well-armed actors aligned with the strategic desires of outside capitals. Today, this manifests in a state of soft occupation where thousands of foreign mercenaries from Russian paramilitary networks to Turkish-backed forces and external intelligence agencies permanently dictate the security landscape. The mechanics of occupation via mercenaries in Libya function as a privatized multi-layered system where foreign patrons outsource their strategic ambitions to local Libyan militias and foreign combatants. This creates a soft occupation where state sovereignty is effectively bypassed by these entrenched networks.

The Mechanics of the Cartel State

This artificial environment of managed instability birthed a predatory domestic model: the Cartel State which capitalized on decoupling the country’s current legislative and executive bodies from popular representation. Libya has experienced a decade-long political impasse where un-elected transition-era leaders entrenched themselves as permanent fixtures prioritizing the protection of their own power and financial interests over the democratic mandate of a populace that has not had the opportunity to vote for its representatives since 2014.

The major political factions locked in a power play are the Tripoli-based internationally-recognized Government of National Unity (GNU) and the eastern-based House of Representatives (HoR) and its Government of National Stability (GNS) in alliance with the Khalifa Haftar-led Libyan Arab Armed Forces (LAAF, a.k.a. Libyan National Army) maintain a loud superficial theatre of ideological warfare. Behind closed doors, however, they share a deep mutual interest in preserving the status quo. By keeping the country divided, these elites can indefinitely postpone national elections while monopolizing the state’s financial pipelines.

This profound lack of democratic legitimacy has incentivized these entrenched factions to treat the state’s finance and monetary institutions as a prize to be seized and the true nature of this arrangement was laid bare during the explosive 2024 political warfare over the Central Bank of Libya (CBL).    

When the Government of National Unity and the Presidential Council, without the approval of the House of Representatives, forcefully removed  the Central Bank governor, Sadiq al-Kabir, who had previously restricted government spending by blocking out-of-budget expenditures, this triggered a retaliatory oil shutdown by eastern factions exposing the fundamental truth of the Libyan crisis: the state is not “failing” but is being actively fought over as a financial prize—a vast, state-managed oil and gas reserves coupled with a highly centralized financial control over these revenues. This makes the Central Bank and the National Oil Corporation (NOC) the ultimate keys to the treasure enabling whoever controls them an almost complete monopoly and control over the nation’s wealth without the need for taxation or popular consent as the case with rentier economy.

The international community working through the United Nations Support Mission in Libya (UNSMIL) swooped in not to implement a democratic resolution but to broker another elite power-sharing deal over bank leadership. UNSMIL mediated a narrow deal between rival political elites to resolve the 2024 CBL crisis, therefore, effectively restarting the broken status quo by allowing competing factions to carve up the bank’s leadership and board positions among themselves. They managed the crisis just enough to get the oil flowing back to international markets while leaving the kleptocratic structure completely intact. 

By treating the CBL crisis as a technical issue that could be managed via board appointments, the international community avoided the difficult work of addressing how Libya’s political economy actually functions. They achieved the immediate objective of oil flowing back into international markets, but they did so by reinforcing the power of the exact same actors who had caused the crisis in the first place. This implied that the next crisis is merely a matter of time.

This systemic reality was formally confirmed in a March 2026 UN Panel of Experts report which explicitly concluded that Libya’s armed groups have entrenched themselves as the dominant drivers of governance exerting a “coercive and cartel-like control” over the nation’s economic institutions.

Nowhere is this explicit exploitation more visible than in the energy sector. 

Libya sits atop Africa’s largest proven oil reserves, yet, there exists an opaque production-sharing agreement bypassing competitive bidding. State-sanctioned fuel smuggling networks and deliberately convoluted central bank letters of credit systematically divert billions in subsidized fuel to foreign markets allowing entrenched political and militia factions to siphon off national wealth while maintaining a veneer of institutional legitimacy enriching an oligarchic elite and their foreign sponsors. 

The Libyan people, meanwhile, are reduced to price-takers in their own land. Following successive central bank devaluations of the dinar, citizens endure runaway inflation, chronic electricity blackouts and critical cash shortages. While billions of dollars in oil revenues (As of June 2026, Libya’s crude oil production has reached approximately 1.49 million barrels per day) flow through a centralized pipeline directly into the hands of the cartel, ordinary Libyans plunge into artificial poverty. 

Following the Central Bank’s 14.7% devaluation of the Libyan dinar in January 2026, inflation has surged into the double digits reaching approximately 14% by mid-year. This economic strain is compounded by a sharp increase in the cost of essential goods with the national Minimum Expenditure Basket (MEB) spiking by over 10% in April 2026 alone further eroding household purchasing power amidst chronic cash shortages at banks and ATMs. This is a highly sophisticated transnational extraction racket operating under a veneer of international diplomatic legitimacy.

De-exoticizing the Social Fabric

When international observers try to explain this breakdown, they invariably fall back on Orientalist tropes, pointing to Libya’s “tribal nature” as the fundamental barrier to a modern democratic state. This analysis fundamentally misreads Libyan society. Traditional kinship structures and local social networks are not primitive relics causing state failure. 

Historically, they have been the literal bedrock of societal resilience. When the centralized state collapsed in 2011, it was these organic local networks functioning through deeply embedded codes of collective liability and conflict mediation that prevented total societal dissolution. The tribe in Libya has historically acted as a conscious civic shield against centralized authoritarian overreach and foreign occupation. These structures, most notably the Wisemen and Elderly and Notables Councils that emerged nationwide, stepped in to act as the primary authorities in the absence of a functioning judiciary and adjudicated everything from property disputes to blood feuds. 

In the Nafusa Mountains, regional councils successfully mediated complex inter-tribal tensions between groups like the Mashahiya and Zintani that the central government could not reach. Meanwhile, in Libya’s neglected south, social councils unified their communities to provide basic services where infrastructure had disintegrated. These grassroots initiatives demonstrated that even as the formal state apparatus failed, Libyans utilized deeply embedded social frameworks to prevent total societal dissolution. 

However, we must draw a sharp line between this authentic socially cohesive fabric and the opportunistic armed groups dominating the current landscape who inverted the state into an upside-down relationship: Whereas the government should command the security forces, the security forces in the new Libya were dictating to the government how it should perform, ensuring that any political arrangement is contingent upon their approval and continued access to state wealth. 

It needs to be highlighted that the militias running rackets in western regions, particularly Tripoli, or controlling smuggling routes in the margins are not “tribal warriors”. They are hyper-modern mercantile appendages of the Cartel State itself. When they wear tribal names, they do that purely as camouflage to mask raw economic predation and racketeering. By labelling these heavily armed state-subcontracted criminal networks as “tribes,” or considering them representatives of regions, ethnicities or cities, the international community perpetuates a harmful narrative that blames indigenous culture for a political crisis that was manufactured by an international security vacuum.

The Strategy of Institutional Bypass

For years, the international community’s approach to fixing Libya has focused on top-down elite-driven deals. UNSMIL, currently under the leadership of Special Representative of the Secretary-General (SRSG) Hanna Tetteh, has effectively transitioned from an objective mediator into a manager of the status quo convening endless dialogues, structured or otherwise, to shuffle the same discredited political cards. These processes are bound to fail because they ask the very members of the cartel to sign their own political death warrants.

The failure of international mediation in Libya stems from a flawed mental image that reduces the nation to a negotiable corporate project. Since 2011, it has been defined by a series of top-down UN-led initiatives that have struggled to gain traction in a landscape of deep political fragmentation and foreign interference. Following the 2011 NATO intervention, UNSMIL was established to guide the transition, but these efforts often suffered from a lack of local ownership and a failure to meaningfully include civil society. Landmark attempts at consolidation such as the 2015 Skhirat Agreement Libyan Political  (LPA) ultimately resulted in elite power-sharing arrangements that failed to achieve public legitimacy or resolve the country’s institutional divides. 

In recent years, diplomacy shifted toward a “three-track” approach to address political, military and economic issues, yet as  analysts observe, these processes have frequently been undermined by the competing geopolitical agendas of external actors and the influence of entrenched armed groups. Consequently, international mediation has often been criticized for prioritizing quick-fix political formulas over the inclusive, Libyan-led reconciliation necessary to build sustainable, long-term stability. 

Rather than treating Libya as a society with deep-rooted needs, mediators frequently operate on a transactional logic viewing the country as a set of power maps to be rearranged by elite deal-making. This approach treats the state as a business to be restructured and its people as secondary details assuming that stability can be achieved simply by dividing power and resources between competing factions. 

Massad Boulos, Senior Advisor to U.S. President Donald Trump on Arab and Middle Eastern Affairs, has proposed an initiative that epitomizes this transactional failure by treating Libya as a corporate puzzle to be solved through elite power-sharing rather than a sovereign nation. The plan proposes a multi-year transition to unify state institutions centred on a deal between the Dbeibah and Haftar families, notably involving Ibrahim Dbeibah and Saddam Haftar. Ibrahim Dbeibah is national security advisor to his uncle, Prime Minister Abdelhamid Dbeibah. He plays a central role in the administration of the western-based Government of National Unity. Saddam Haftar is the Deputy General Commander of the eastern-based Libyan Arab Armed Forces (LAAF. a.k.a. the Libyan National Army (LNA)). His importance and role stems from him being the son of Field Marshal Khalifa Haftar, commander of the LAAF. Saddam is widely viewed as a successor to his father and a key player in U.S.-backed efforts to unify the country’s leadership. 

Against this backdrop of entrenched domestic rivalry, international efforts to ‘fix’ Libya have shifted toward transactional economy-first initiatives such as the so-called unified budget, control over oil revenues and security coordination via AFRICOM that reduces the state to a negotiation between armed and financial stakeholders. 

While Boulos continues to press his framework with considerable vigour, the initiative is encountering firm resistance. Armed and political groups in Misrata and elsewhere as well as radical Islamists and the head of the Presidential Council have denounced the proposal as a ‘forced marriage’ imposed upon Libyans and as a threat to the democratic process. 

Yet, such objections warrant more than just caution. The invocation of democratic principle here functions less as a genuine defence of the public good than as a rhetorical shield deployed by actors who fear that an accommodation between the Dbeibah and Haftar camps would marginalize them and strip away their access to power, position and resources.

Framing the contest as one between military rule and democracy, therefore, oversimplifies the complexity of what is at stake. What is unfolding is not a struggle over the character of the political order but a struggle among entrenched networks over their place within it. These factions are, in effect, signalling that any settlement which does not retain them at the centre of the emerging architecture constitutes a threat to their interests. Consequently, the language of democracy is being appropriated to defend positions of privilege entrenching divisions rather than fostering the reconciliation any durable settlement would require.

More importantly, this top-down corporate-style restructuring bypasses the Libyan people entrenching elite influence while ignoring the fundamental need for institutional legitimacy and grassroots consensus. Through a de-colonial lens, it becomes evident that international initiatives such as those currently attributed to U.S. presidential advisor Massad Boulos are rooted in a structural “mental image” that treats Libya as an object of negotiation rather than a sovereign nation. By operating on the logic of corporate restructuring rather than inclusive national reconciliation as a pre-condition for state-building, these interventions systematically undermine the prospects for sustainable peace.

Libya’s history since 2011 has shown that such top-down deals which ignore the complexities of Libyan society and the necessity of institutional legitimacy—as seen in the power-sharing deals based on the 2015 Libyan Political Agreement (LPA) establishing the Government of National Accord (GNA) as well as the establishment of the current Government of National Unity (GNU) through the UN-led Libyan Political Dialogue Forum (LPDF)—fail to resolve the crisis. 

By prioritizing the interests of factional power brokers over the construction of a sustainable state, these interventions treat sovereignty as a negotiable item and transform political discourse into a competition for government seats rather than a pursuit of justice. Consequently, local elites often succumb to opportunistic justifications shifting their principles to align with whatever external deal promises them a share of influence. 

Ultimately, this “deal-making” mindset ignores the Libyan collective memory; there is a fundamental crisis that exists because of the people’s distrust in the political process and the lack of legitimacy in the militias who cling to power at any cost.

By focusing on balancing armed and financial powers, international mediation risks turning peace efforts into fuel for future conflict. True stability cannot be manufactured through external blueprints but rather through a national project built on institutional authority and societal consensus rather than the temporary and exclusionary distribution of power.

Transformative stability will never be delivered by the current political apparatus. It must be claimed from below through an aggressive strategy of “institutional bypass”: Since the centralized state is thoroughly compromised, a coordinated civic mobilization must bypass the corrupt political centre and systematically activate local governance structures. Currently, elected Libyan municipal councils possess an organic legitimacy that the central cartel can never buy despite some exceptions. By shifting the focus of administrative and financial accountability to the local level and demanding the direct decentralized management of oil revenues to municipalities, the oxygen feeding the proxy system can be cut off. Without centralized funds to distribute to their armed appendages, the cartel’s leverage collapses.

To turn this resistance into a permanent national framework, a strategic alliance between parallel localized networks and emergent non-factional political parties must champion four non-negotiable pillars:

• Convene a Constituent Assembly: A transparent bottom-up process to draft an indigenous social contract that guarantees equitable decentralized wealth distribution.
• Establish a Unified National Democratic Agenda: Political organizing driven by programmatic parties focused on national cohesion explicitly rejecting zero-sum elitist power-sharing deals.
• Enforce the Exit of All Foreign Forces: Unifying civic and political pressure to demand the immediate unconditional expulsion of all foreign troops and mercenary structures.
• Institutionalize Direct Referendums: Returning veto power to the Libyan street by forcing direct public votes on critical macroeconomic and constitutional decisions.

Reclaiming the Future

While some critics dismiss the use of constitutional tools such as representative assemblies and referendums as an uncritical adoption of Western Westphalian state models, this view is misguided. Rather than an ideological surrender, employing these mechanisms is a form of strategic capture allowing for the reclamation and redirection of the state’s machinery toward genuine sovereign objectives. 

By anchoring these tools within local social realities and community consent, the formal legal structure is stripped of its top-down imperialist baggage and repurposed as a defensive shield to protect Libyan sovereignty from external predation. Sovereignty is not an international grant distributed by foreign capitals or UN envoys but a right to be reclaimed. The most urgent task facing the country’s civic forces is to completely strip foreign “guardians” and domestic kleptocrats of their analytical legitimacy. By casting off the myth of the failed state, Libyans can starve the cartel of its financial oxygen, dissolve the architecture of tutelage and finally become the sole architects of their own destiny.