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Al Ahram Weekly – Egypt
After military clashes erupted again in Libya late last week with the advance of the Libyan National Army towards Tripoli, Egypt’s Foreign Ministry immediately issued a statement voicing “deep concern” over the consequences of the fighting.
Over the past eight years, Egypt has stressed the importance of restoring stability in Libya and the need for Libyan state institutions, including the Libyan National Army and security authorities, to do their duties in safeguarding the interests of the Libyan people.
In its statement, the Egyptian Foreign Ministry also reiterated the need for Libyan national institutions to protect Libya from the chaos caused by militias, in order to allow the Libyan people to reclaim control over their country’s wealth and build a unified and stable Libyan state.
Egypt also confirmed its stance on backing UN efforts, led by envoy Ghassan Salame, and commitment to reaching a political solution as the only option to protect the integrity and unity of Libyan territory and the Libyan people.
At the same time, Egypt underlined the need to combat the growing threat of terrorist groups in Libya that have benefited from the absence of a strong Libyan central state to expand their presence. Both Egypt and Tunisia have paid a very heavy price due to the smuggling of weapons from Libya, along with terrorist elements who carried out criminal attacks in the two countries.
Egyptians will never forget the horrendous terrorist crime committed by the Islamic State group (IS) against 21 Egyptian Christians who were brutally slaughtered in front of cameras in early 2015 only because of their religion. Due to the absence of a strong Libyan army at that time, the Egyptian army had no option but to respond directly to the killings by targeting IS camps in Libya.
To protect its borders with Libya that stretch over more than 1,000 kilometres, and to help the Libyan people combat terrorist groups, such as IS and Al-Qaeda, Egypt has repeatedly called for international support to back the Libyan National Army in its fight against terrorists. In that framework, Egypt has appealed for a partial lifting of the arms embargo against Libya to enable the Libyan National Army to confront terrorist organisations.
However, terrorist groups are not Libya’s only threat. Militias in the Western parts, backed by Qatar and Turkey, have also turned the lives of citizens in key cities into havoc and endless suffering. Only a few months ago, and despite the presence of the internationally recognised government of Prime Minister Fayez Al-Sarraj in Tripoli, warring militias were involved in weeks of infighting over benefits for militia leaders, and certainly not over serving the interests of the Libyan people.
Prime Minister Al-Sarraj had no option but to appeal to the sponsors of those militias in Doha and Ankara to convince them to stop the fighting. Certainly, the Libyan people should not be left hostage to militias paid by countries that have no direct interest in Libya, except for serving their failed ideology in support of political Islamic groups, namely the Muslim Brotherhood.
The militias that control vast parts in western Libya have no interest in reuniting the Libyan state and restoring the country’s territorial integrity as long as oil money keeps pouring into their pockets. That’s why they rejected the outcome of the parliamentary elections held in 2012, which resulted in a clear defeat for the Muslim Brotherhood.
However, there remains room for hope that Libyan suffering and chaos could come to an end if Libya’s neighbours and the international community support the political process led by Salame. The ongoing fighting should not postpone the national conference that Salame was aiming to hold later this month in order to set a timetable to hold elections and reunite the institutions of the Libyan state, including the army and control over oil income.
Libya, a very dear country for Egyptians, should not be left hostage to the interests of militias and warlords. The first step in that direction is to support the Libyan National Army in its fight against terrorist organisations and militias that do not serve the interests of the Libyan people, but rather those of regional powers who have repeatedly tried, and failed, to expand their influence in several Arab countries.
The New Times – Zimbabwe
By: José Antonio Ocampo
This year, the world commemorates the anniversaries of two key events in the development of the global monetary system. The first is the creation of the International Monetary Fund at the Bretton Woods conference 75 years ago. The second is the advent, 50 years ago, of the Special Drawing Right (SDR), the IMF’s global reserve asset.
When it introduced the SDR, the Fund hoped to make it “the principal reserve asset in the international monetary system.” This remains an unfulfilled ambition; indeed, the SDR is one of the most underused instruments of international cooperation. Nonetheless, better late than never: turning the SDR into a true global currency would yield several benefits for the world’s economy and monetary system.
The idea of a global currency is not new. Prior to the Bretton Woods negotiations, John Maynard Keynes suggested the “bancor” as the unit of account of his proposed International Clearing Union. In the 1960s, under the leadership of the Belgian-American economist Robert Triffin, other proposals emerged to address the growing problems created by the dual dollar-gold system that had been established at Bretton Woods. The system finally collapsed in 1971. As a result of those discussions, the IMF approved the SDR in 1967, and included it in its Articles of Agreement two years later.
Although the IMF’s issuance of SDRs resembles the creation of national money by central banks, the SDR fulfills only some of the functions of money. True, SDRs are a reserve asset, and thus a store of value. They are also the IMF’s unit of account. But only central banks – mainly in developing countries, though also in developed economies – and a few international institutions use SDRs as a means of exchange to pay each other.
The SDR has a number of basic advantages, not least that the IMF can use it as an instrument of international monetary policy in a global economic crisis. In 2009, for example, the IMF issued $250 billion in SDRs to help combat the downturn, following a proposal by the G20.
Most importantly, SDRs could also become the basic instrument to finance IMF programs. Until now, the Fund has relied mainly on quota (capital) increases and borrowing from member countries. But quotas have tended to lag behind global economic growth; the last increase was approved in 2010, but the US Congress agreed to it only in 2015. And loans from member countries, the IMF’s main source of new funds (particularly during crises), are not true multilateral instruments.
The best alternative would be to turn the IMF into an institution fully financed and managed in its own global currency – a proposal made several decades ago by Jacques Polak, then the Fund’s leading economist. One simple option would be to consider the SDRs that countries hold but have not used as “deposits” at the IMF, which the Fund can use to finance its lending to countries. This would require a change in the Articles of Agreement, because SDRs currently are not held in regular IMF accounts.
The Fund could then issue SDRs regularly or, better still, during crises, as in 2009. In the long term, the amount issued must be related to the demand for foreign-exchange reserves. Various economists and the IMF itself have estimated that the Fund could issue $200-300 billion in SDRs per year. Moreover, this would spread the financial benefits (seigniorage) of issuing the global currency across all countries. At present, these benefits accrue only to issuers of national or regional currencies that are used internationally – particularly the US dollar and the euro.
More active use of SDRs would also make the international monetary system more independent of US monetary policy. One of the major problems of the global monetary system is that the policy objectives of the US, as the issuer of the world’s main reserve currency, are not always consistent with overall stability in the system.
In any case, different national and regional currencies could continue to circulate alongside growing SDR reserves. And a new IMF “substitution account” would allow central banks to exchange their reserves for SDRs, as the US first proposed back in the 1970s.
SDRs could also potentially be used in private transactions and to denominate national bonds. But, as the IMF pointed out in its report to the Board in 2018, these “market SDRs,” which would turn the unit into fully-fledged money, are not essential for the reforms proposed here. Nor would SDRs need to be used as a unit of account outside the Fund.
The anniversaries of the IMF and the SDR in 2019 are causes for celebration. But they also represent an ideal opportunity to transform the SDR into a true global currency that would strengthen the international monetary system. Policymakers should seize it.