RUSSIA: MAXIM KANTOR’S ‘ SHORT TWENTIETH CENTURY’ – Pages 8 –9

SEPTEMBER 2011  N o 1109

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Hooked on debt by Martine Bulard

China’s leaders, even in their wildest nationalist dreams, could not have imagined a more spectacular reversal of history than that the US should be chastened and no longer top of the (capitalist) class, appealing to China to bail it out and boost world growth.

They can no longer resist the temptation to lecture the US, via the official news agency Xinhua, on the need to “cure its addiction to debt” (6 August 2011), and to assert that Beijing “has every right now to demand that the United States address its structural … problem”. He who pays the piper calls the tune. And China, which already holds $1,170bn in US treasury bonds (almost as much as the annual produced wealth of Russia), is proving most generous. It is paying the West back in its own coin, using its financial power as a political weapon.

China is not alone in this. The region vividly remembers the 1997 crisis and the measures imposed by the International Monetary Fund; Kishore Mahbubani, Singapore’s former ambassador to the UN, says: “Every piece of advice that the Asians received [in 1997-98] has been ignored” in the West (1). So, despite territorial tensions in the China Sea, on 9 August the Association of Southeast Asian Nations stressed that the Asian economies are complementary. China is troublesome, even arrogant, but it has formidable resources in the event of a more serious crisis.

China likes to talk about addiction but it is just as hooked on debt: US debt that enables it to invest its surplus funds without undue risk and to go on exporting at a profit. China holds only 8.1% of the US debt, but it is the prime source of foreign loans, ahead of Japan (6.4%)

and the UK (2.3%) – which confers rights but imposes constraints. If China stopped buying treasury bonds, or if the dollar fell, its vast (dollar) reserves would collapse.

While China is unwilling – and unable – to drop such a financial atom bomb, it is seeking to escape this dependence by internationalising its currency so as to reduce the privileges enjoyed by the dollar. It is speeding up the machinery for buying Chinese treasury bonds, in yuan, on the Hong Kong stock exchange, though this is not the best way of getting the system out of its current mess. But by attracting hot money, it may become more difficult to keep control.

The Chinese government, convinced that its foreign outlets are going to shrink, is also seeking to make an economic shift, in its internal market. A start has already been made – higher wages, a universal minimum pension – but it is too slow, and too unequal.

The idea that revaluing the yuan and increasing Chinese imports would restart the machine is no more than theoretical, anyway, especially to western economies. Consider France, where deindustrialisation is in full swing. A major cause of its external deficit is French cars produced abroad by national carmakers – and then re-imported into France (2). This is the consequence of delocalisation. So in France, too, the priority is to cure the addiction to finance and profit.

Translated by Barbara Wilson

(1) Banyan, “What’s Schadenfreude in Chinese?”, The Economist, London, 20 August 2011. (2) Study of French customs regulations, quoted by Charles Guay, “Il y a dix ans, la France était encore à l’équilibre” [France was still in balance, ten years ago], Les Echos, Paris, 5 August 2011.

inside this issue When the state and the rains have failed, where can Somalis turn? Page 2 Israelis call for social justice, but how big is their society? Page 4 From crisis to crisis: what’s to be done about global finance? Page 4 Poles apart: France’s far right is in the ascendant while the BNP falters Page 6

US politics: money doesn’t talk, it screams, louder than ever Page 10 Panic on the streets of London: and there may be worse to come Page 12 Marrakesh: ordinary Moroccans displaced by French celebs Page 14 We’ll always have Paris? Not if it becomes a global theme park Page 16

Price: £3

How to make Libya work after Gaddafi

Gaddafi was defeated, as he had been sustained, by tribal affiliations and alliances as much as by the impromptu rebel uprising. Now he’s gone, tribal politics will be crucial to establishing a viable state By Patrick Haimzadeh

After the revolutions in Tunisia and Egypt, which toppled two tyrants in the space of a few weeks, many observers wanted to believe that the Libyan uprising of 17 February 2011 would produce the same result. It was hard to remain unmoved by the images on all the satellite channels of the rebels in the eastern province of Cyrenaica heading west on the desert road in their pick-up trucks, by the enthusiasm and courage of these young fighters, who proudly claimed they could “liberate” Tripoli in two days.

And yet, after more than six months of civil war and 8,000 Nato bombing missions, the Brega and Misrata fronts remained little changed. What proved militarily decisive and led to the fall of Tripoli within days were not the actions of Libyans from the east of the country but those of people from western towns, members of a major Arab tribe from the Western Mountains (Jebel Nafusa), the Zintan.

To understand the resilience of Gaddafi’s regime and the huge challenges of the postGaddafi era, we need to know how the system worked. Gaddafi, who was strongly influenced by Nasserism, always cited the Franco-British intervention in Suez in 1956 and the Algerian war of independence as the key events that shaped his political consciousness. But after 1976 the former anti-imperialist turned dictator and, at the head of a system that appropriated oil revenues, based his power on a vote-catching system that embraced the whole of Libyan society (1). Yet he saw himself as a revolutionary fighter.

It is in this context that his speech of 21 February 2011 (2) must be judged – as the first step in regaining control of the situation in Tripoli and surrounding towns where the people had risen up. This speech – in which he declared his determination to fight to the end – reassured the faithful, and persuaded demonstrators to go home and those who were sitting on the fence to stay put. The western military intervention in support of the revolt, which began on 19 March, gave credibility to his rhetoric of a North-South clash (“crusader” forces, colonialists and so on).

The Jamahiriya (“state of the masses”) system of power drew its legitimacy from three sources: revolutionary, military and tribal. Since 1975 these three levers ensured its longevity. And they continued to function, albeit at reduced power, in the six months following the outbreak of the insurrection.

There were the revolutionary committees, which had affinities with the Ba’ath parties of

Saddam’s Iraq and Assad’s Syria. They were represented in all state organisations and large companies and served as guarantors of the Jamahiriya doctrine and of mass mobilisations, similar to the Red Guard in China or the Revolutionary Guard in Iran. Their 30,000 co-opted members received promotions and bonuses. They intervened in Benghazi to repress the first demonstration on 15 February 2011, which led, two days later, to the start of the uprising. The revolutionary committees were supported by militias known as “revolutionary guards” – armed, plain-clothes men who played a dissuasive, repressive role from the start of the insurrection.

There was also the Praetorian Guard, responsible for protecting Gaddafi and his family. Before the uprising, it was reckoned to number 15,000 men, divided into three large “security” battalions (the Benghazi one was disbanded soon after the revolt began, but many of its officers and men withdrew to Tripolitania) and three combined brigades. The members of these units were recruited mainly from the two large tribes from central and southern Libya, Qadadfa and Magariha, which were considered loyal to the regime. They were rewarded with bonuses, in cash or in kind, such as cars or foreign travel. These units fought for nearly six months on three fronts: Marsa Brega, Misrata and Jebel Nafusa, and intervened swiftly in Tripolitanian towns (Zawiya, Sabrata, Zwara) to suppress the first signs of rebellion in February and March. Gaddafi’s youngest son, Khamis, commanded one of the three brigades on the Misrata front; his older brother Mu’tassim led another.

In the early years after the revolution (1969‑75), the regime did not draw power from the tribes in any way. But in 1975 the Green Book (3) devoted a whole chapter to them and they then became an essential component of the vote-catching that was central to the system. Oil income was shared out carefully between tribes and regions, in order not to threaten social peace, and indeed the unity of the country.

Gaddafi knew how to deal with the tribes, by a mixture of duress, threats, payments and negotiation. Far from a monolithic or pyramidal structure, Libyan tribes, in peacetime, are above all a flexible solidarity network that gives access to jobs or resources and enables personal or

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Patrick Haimzadeh was a diplomat at the French embassy in Tripoli from 2001 to 2004. He is the author of Au cœur de la Libye de Kadhafi, (Inside Gaddafi’s Libya), Jean-Claude Lattès, Paris, 2011