Last Updated: Thursday, 28 August 2014, 16:05 GMT

Libya: The funding dilemma

Publisher Integrated Regional Information Networks (IRIN)
Publication Date 5 December 2011
Cite as Integrated Regional Information Networks (IRIN), Libya: The funding dilemma, 5 December 2011, available at: http://www.refworld.org/docid/4edde2ef2.html [accessed 29 August 2014]
DisclaimerThis is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States.

Residual humanitarian needs in Libya have not been fully funded because of confusion over whether unfrozen Libyan assets are available, donors, aid workers and government officials said.

Donors have been reluctant to hand over more money knowing that the Libyan government has access to millions of dollars in unfrozen funds. But the Libyans say this money has not yet trickled down - and caught in the middle are life-saving activities such as de-mining.

"The Libyan money is not yet liquid and useable. The donors don't want to give more. Are we going to wait three months to deal with these emergencies?" Georg Charpentier, UN Humanitarian Coordinator, posited at a meeting of heads of agencies in Tripoli in November.

"The result is that children are getting their arms blown off picking up unexploded ordnance in Sirte, Bani Walid and other places, because we cannot scale up these operations," he told IRIN in a separate interview.

The UN says it still needs about US$60 million to address acute targeted needs during the rest of this year, including de-mining in towns to which displaced people are returning; repatriating migrants who have been at risk; helping sensitive groups of displaced Libyans, such as the Tawergha minority; and assisting the displaced and returnees to the town of Sirte, which experienced some of the heaviest fighting.

Aid agencies have appealed for a total $334 million since March - when a popular uprising to oust Libyan leader Muammar Qaddafi turned into a civil war - of which 82 percent has been contributed or committed.

But traditional donors - namely the European Commission's Humanitarian Aid department (ECHO), the UK Department for International Development (DfID) and the US Agency for International Development (USAID) - have been reluctant to pay the remaining 18 percent, saying other donors should pick up the slack.

"We're slightly out of breath," one traditional donor said, calling the funding of this operation a complex and unusual "adventure", which left many donors in limbo - wondering if and when the unfrozen Libyan assets would materialize.

"It's a very difficult call for us to make to decide to support emergency humanitarian activities while there is so much money that is just waiting to be allocated, and is not being allocated for political reasons," Bruno Rotival, head of the Libyan office of ECHO, told IRIN.

Unfrozen assets

In late August, the US announced it would release $1.5 billion in assets - formerly belonging to Qaddafi and frozen under sanctions - to Libya's National Transitional Council (NTC). Of this sum, $500 million was earmarked for humanitarian aid. The first instalment was to be $100 million.

Donors operated under that assumption, and agencies planned their programmes accordingly.

But the money never came.

The UN Mine Action Service (UNMAS), for example, was promised $21.6 million to clear unexploded ordnance, mines and unsecured arms depots, according to Sarah Marshall, deputy programme manager for Libya.

Instead, UNMAS was forced to take out a loan from the UN's Central Emergency Response Fund to continue operations. It is barely paying salaries to its staff, and was forced to choose between clearing residential areas in one contaminated city over another, because it could not afford to do both.

It says the demining operation requires $25.6 million over the next six months. UNMAS will cease operating by February if more funds are not allocated, Marshall said.

"The donors see this as a Libyan problem - that the Libyans have to pay for," she told IRIN. "But the longer you leave [these dangerous remnants], the more looting, the more unstable they become over time, the more accidents there will be. If we don't act quickly in these town and cities, more people are going to die."

Is the money available?

There are conflicting explanations as to why the money has not arrived. Some say the Libyan government simply does not have the capacity to quickly disburse the funds it is receiving.

"The structure is not there such that you can turn the key and start again," Emmanuel Gignac, head of the UN Refugee Agency (UNHCR) in Libya, told IRIN.

Others say the NTC was not willing to make a decision on funding, until the new government was established.

"It was a political problem for the Libyan government. No one wanted to make the decision to allocate large amounts of money without having the proper mandate," ECHO's Rotival said.

But the government says it has not received much of the money.

"Numbers have been announced of money flowing into Libya and unfrozen assets, but unfortunately, we have not received them," Abdul Hafiz Ghoga, NTC vice-chairman, said at a press conference in November.

He said the Libyan government was "well aware" that international humanitarian aid would not go on for ever.

"When we are able to obtain our frozen assets and our own resources, we will be able to take care of this on our own."

Confusion

The Libyan Humanitarian Relief Agency, or LibAid, has received just $10 million from the NTC since the conflict began, according to chairman Khaled Ben-Ali.

He said a lack of funds was the agency's major challenge.

"If I ask for $20 million, I usually receive $3 million and a bit late," he told IRIN. "Just the other day, I asked them for more emergency funding, and they said, 'Believe me, we don't have that much to give'."

But some aid workers are sceptical. As one senior UN official put it, "The question is more: has the government made a decision to fund or not fund humanitarian activities?

"The Libyans have access to unfrozen assets," the official continued. "They have paid salaries; they have sent people on the Hajj [pilgrimage]. If they wanted, they could fund these unmet needs. It's a matter of priorities.

"$20 million [for de-mining] is nothing. How many days' oil production is that?"

In September, aid agencies presented their plans to Mazin Ramadan, director of the Temporary Financing Mechanism (TFM), set up to meet the requirements needed to receive unfrozen funds - but he did not agree to many proposals.

"Some of them were fluff," Ramadan told IRIN. "There were a lot of redundancies..."

Asked if funding humanitarian work was a priority for the government, he answered: "We don't have the crisis that everyone predicted." Still, he said some needs were clearly legitimate. The $21.6 million he allocated to the de-mining sector was more money than it had requested and he lobbied the government to make it happen.

But contrary to popular perception, not all money given to the NTC was channelled through the TFM, especially after the fall of Tripoli. About $2.5 billion is sitting in the Central Bank, Ramadan said, and oil revenue is channelled through other avenues.

The TFM did have access to money, unfrozen, lent or contributed by Canada, US, Germany, Qatar, Bahrain and Kuwait. It has spent about $1.662 billion on fuel, treating injured fighters abroad, relief for families in the Western Mountains, office costs, and most of all, salaries. And more than $530 million remains in the TFM's account, according to its website, although that money has now been transferred to the new government.

But the $500 million allocated for international aid agencies was not under the TFM's control, Ramadan said, and it is now sitting in the US Treasury's Federal Reserve, essentially waiting for a signature.

As he walked into a handover meeting with the new finance minister on 4 December, Ramadan blamed the delay on the creation of a new government, which he said needed to approve the allocation of the money.

"I don't make the decision. It's not in my hands. I understand the frustration on the part of the NGOs, but the [delay] is due to confusion because of the new government rather than any intent by someone to drag their feet."

Renewed push

Regardless of the reasons, the reality has forced Charpentier to press donors to remain engaged, and some of his efforts seem to have paid off.

ECHO recently decided to give de-mining operations $500,000 - "we cannot wait for the government to make up its mind" - and is considering more funding for UNHCR to deal with sensitive caseloads of displaced people loyal to Qaddafi.

The Italian Development Cooperation has also stepped in with 1.1 million euro ($1.5 million) for UNMAS.

But DfID and USAID have already decided to stop funding the humanitarian operation in Libya, sources said. They have been under pressure from headquarters to cut back on funding, given the global recession and the competing emergency in the Horn of Africa.

But after all the debate, some - even in the international aid community - are sceptical about the need for more funds.

"We're all still here. Programming is continuing. Where is that money coming from?" the UN official said. "Could the international organizations absorb and spend $60 million in four weeks? Probably not."

They say the Common Humanitarian Action Plan was based on a perception that the needs were greater than they were and a lack of appreciation for Libyans' ability to bounce back. The money already received will probably be spent well into 2012, they say.

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