Skip to main content

Author: LS

A message from the United States to Libya’s leadership

Yesterday, the Ambassador of the United States to Libya, Richard Norland, wrote a public letter to Libya’s political and military leadership and the people of Libya.

“I am writing out of deep concern regarding a lethal threat to Libya that looms on the horizon. Without a robust, unified response, COVID-19 could rapidly provoke a widespread public health emergency, spreading sickness and death among the ranks of soldiers and civilians alike.”

Richard Norland strongly urged Libyans to Stop the Fighting, Pay the Salaries, and to Treat the Sick in advance of the expected outbreak.

He also stressed that Libyans need a steady source of income to cope with this crisis, and that many Libyans depend on public sector wages. Unfortunately, since January, public salaries have not been paid regularly. Whatever the justifications for withholding disbursement, salary payments must resume immediately without conditions, prioritizing in particular health sector workers who are on the frontlines against COVID-19.

Additionally, restarting Libya’s oil production is critical to ensure Libyan authorities have access to sufficient revenue to pay salaries and foreign currency to procure much-needed medical equipment such as personal protective equipment, testing kits, oxygen, and ventilators.

 “If Libya has any hope of securing international help after this virus strikes, there must be improvements made to institutions. Allowing an external audit of the Central Bank would be an easy move that would show the world that Libyan leaders are committed to transparency and fighting corruption; such an audit is ready to begin but for some reason it remains stuck. This can only hurt Libyans.” He stated.

In partnership with the Ministry of Health, IPTIC launches a mobile medical service

During a press conference held yesterday, the Chairman of the Libyan Post, Telecommunication and Information Technoligy Holding Company Mr. Faisel Gergab stressed that  the company made a partnership with the Ministry of Health of the Presidential Council through which a Mobile Medical Service was launched.

This doctor’s electronic service, called ” Mobile Doctor” gives doctors access to any patient within the municipalities.

Mr. Gergab stressed that this application will be launched within 48 hours, and will be approved by The World Health Organization.

The Libyan Post, Telecommunication and Information Technoligy Holding Company will launch new centers for communication services in order to ensure the service’s continuity, the chairman said.

Through communications services, IPTIC did not only supply banks with liquidity, but it also provided Libya’s National Centre for Disease Control with material support, Mr. Faisel Gergab added.

IRC warns: COVID-19 could decimate Libya

With the first case of COVID-19 now confirmed in Libya, the International Rescue Committee is warning that an outbreak of the disease could have a devastating impact on the country, where conflict continues to tear people’s lives apart.

In a statement, IRC stressed that despite the disease having been declared a global pandemic, there is no sign of a ceasefire in sight and hostilities escalated dramatically in recent days. 

As a result of the ongoing conflict, Libya’s health system is severely challenged to meet the needs of all within Libya’s borders. 1.7 million people are already in extreme need of health assistance.

Nine coronavirus tests in Libya prove negative

Nine samples that were tested in the centers’ laboratories have come back negative,” the National Center for Disease Control stated today, confirming that the patients are free from the disease.

The Centre noted that four of them belongd to those who Libya’s first confirmed case had interacted with since his return to Libya from his trip to Saudi.

The National Center for Disease Control has received reports from different hospitals regarding the nine suspected cases of coronavirus.

Oil plunges posting fifth straight weekly loss despite stimulus efforts

Oil prices plunged 5% on Friday and posted a fifth straight weekly loss as demand destruction caused by the coronavirus outweighed stimulus efforts by policymakers around the world.

Brent crude settled down $1.41, or 5.35% at $24.93 a barrel. The contract fell about 8% on the week. U.S. crude settled down $1.09, or 4.82% at $21.51 a barrel. During the week, U.S. crude fell more than 3%.

“We ran out of ammunition to support the market,” said Bob Yawger, director of energy futures at Mizuho in New York. “The government used up all their bullets this week – next week the market is on its own.”

IMF’s Georgieva urges countries to ‘go big’ with coronavirus rescue spending

International Monetary Fund chief Kristalina Georgieva said Friday that the global economy is now in a recession thanks to COVID-19, but that she’s heartened to see world leaders finally realizing that only a coordinated effort will be able to stem the spread of the novel coronavirus.

Kristalina Georgieva said she was particularly concerned about emerging markets and developing countries which had seen $83 billion in capital outflows and predicted they would need upwards of $2.5 trillion (2 trillion pounds) in financial resources to recover from virus-related disruptions.

IMF member countries had encouraged the Fund to focus its efforts on steps that could be done quickly, including a doubling of emergency financing to $100 billion and creation of a new short-term liquidity facility, she said in an interview.

Asked whether the global economy needs more than the $5 trillion in new rescue spending pledged by G20 countries on Thursday, Georgieva said: “Our advice is go big.”

Central Banks Are Purchasing Gold at Record Highs. Why?

As reported by Dion Rabouin at Axios, an unprecedented shift toward gold has been led by the financial authorities of the world in what appears to be a move away from the US dollar.

The World Gold Council reported that central banks bought a historic high of 374.1 tons of gold this year. While this move accounts for only 16 percent of total gold demand, it offers an inside look into the minds of the central bankers.

It was only seven years ago that a survey of economists revealed significant disagreement with regard to the potential benefits of a gold standard. Do central bankers not agree with leading academic economists or is a different motive at play?

The history of money has featured coins made from precious metals, privately issued IOUs that could be redeemed for precious metals, and government-issued IOUs that could similarly be redeemed for precious metals. It was only relatively recently that fiat money came into use.

Many have speculated that cryptocurrencies are the next step in this evolution, but could it be gold that is looming over the horizon? Although the history of money has trended toward greater degrees of government control, this new trend of gold accumulation raises many questions.

Many have speculated that cryptocurrencies are the next step in this evolution, but could it be gold that is looming over the horizon?

In the Cato Journal, Lawrence White explores how the world might transition to a new gold standard. He notes two possible paths. First, a parallel gold standard could be allowed to grow alongside the current fiat currency. Alternatively, there could be a transition date in which a currency is then defined as some amount of gold.

While network effects require a painful inflation to occur for fiat currencies to lose their incumbency advantage, White explains that the second path offers an opportunity for a smooth transition.
For the switch to be effective (i.e. not cause inflation or deflation), the new parity will need to be based on the current price of gold. In one case, the Russian currency is the ruble. The ruble currently trades at 100,826.22 rubles per ounce of gold. With the Russian money supply around 9,339 billion rubles, the country would need to purchase 92,624,716.07 ounces of gold.

That number looks menacing, but a quick conversion cleans it up. With 32,000 ounces in a ton, that number becomes 2,894.52 tons. And this is a maximum amount that would be required with a 100 percent reserve ratio, not the historical ratios observed under both private and government banking. At a 20 percent reserve ratio, the requirement drops to only 578.9 tons! In terms of feasibility, that is less than 1 percent of the world supply of gold.

Rather than implementing a gold standard, it is also possible these countries are looking to insulate themselves from the US economy—a difficult prospect. When Adam Smith wrote The Wealth of Nations in 1776, one could get their investments out of a country with a few days’ horse ride. Unlike the majority of tasks over time, this has become much more difficult.

The global economy is more integrated than ever, and this integration hit center stage when the Great Recession rippled across the globe. With the US dollar on one side of most trade and utilized as a base in the majority of currency exchanges, there is little escape from the US economy.

Russian President Vladimir Putin called for an increase in gold purchases as part of a “fiscal fortress” policy.

For this reason, China has made calls for an IMF currency to replace the dollar as a global reserve currency. It is possible, due to the lack of traction this policy recommendation has received, that they simply decided to enact safeguards by investing in the original global reserve currency. In addition, Russian President Vladimir Putin called for an increase in gold purchases as part of a “fiscal fortress” policy of high reserves and low external debt.

One last consideration lies in the state of modern international trade. Whether gold is being accumulated as a currency or an asset, the movements have not gone unnoticed. With hostility growing in the US-China trade war, it is possible the purchases are being made for leverage.

In game theory, opponents can make threats and promises, but this is mostly considered cheap talk. There’s no cost to say it and there is no cost to receive it. So, why not do it? It is for this reason that no player will change what their strategy is in response to cheap talk. However, signaling is a different matter. A credible signal is costly and separates the aces from the jokers.

Accumulating gold is a costly, credible signal.

In the case of the US-China trade war, China could use gold holdings to dump the dollar. If so, the US would incur a cost much higher than the revenue from tariffs levied on Chinese businesses and American citizens. By accumulating these holdings, China signals that coordination is a better long-term policy.

The classical gold era featured lower mean inflation, smaller price level uncertainty, global network benefits, and fiscal discipline. These benefits are undeniable and enough to warrant a monetary authority’s attention. However, this is not to say it is the only thing worth their attention. The danger in leaving economic theory and entering practice is that there is an entire world full of complex dynamics to account for. Whether recent gold accumulation is merely a demonstration of political weight to leverage trade policy, a hedge against market turbulence, or a move toward a new gold standard is yet to be seen.

This article was written by Nicholas Anthony ( M.A. student at George Mason University)

Taken from Foundation For Economic Education (FEE)


Faiez Al Sarraj: we will get through this

Despite registering Libya’s first Coronavirus confirmed case, the Chairman of the Presidential Council Faiez Al Sarraj called on Libyan citizens not to panic and fear from this pandemic, noting that 26 samples for relatives of the first Coronavirus confirmed case in Libya tested negative, according to the National Centre for Disease Control .

Moreover, Al Sarraj called on authorities in Libya not to take unilateral actions contrary to the instructions approved by the Presidential Council in facing Coronavirus, emphasizing that the state of emergency is only to be declared upon instructions issued by the Presidential Council head, and pursuant to this resolution, the relevant bodies are to implement the specific orders issued for this purpose.

Al sarraj also stressed that citizens must comply with the precautionary measures taken to prevent this epidemic. “Commitment to the instructions issued by the health and security authorities is a national duty.” He added.

“All sectors as well as state organs and capabilities are on alert and devoted to ensure the safety of citizens and foreign residents.” the chairman added.

Nevertheless, as the Libyan Government of National Accord announced the closure of all the country’s land and air ports for three weeks as a preventive measure against the coronavirus, Faiez al Serraj expressed his concern about  seeking urgent solutions to  the Libyan citizens stranded abroad, such as providing all their needs (accommodation, subsistence, and health care) through Libyan Embassies and Consulates abroad.

In order to confront this pandemic and deal with its consequences, Al Sarraj also declared an agreement to reinforce a joint cooperation with the Tunisian president Qais Said.

The Chairman of the Presidential Council called on the legislative, regulatory and economic institutions to assume their historical responsibilities in order to solve every crisis caused by the epidemic as the effects of pandemic went beyond the health aspect to harshly affect the economy.

Libyan Red Crescent carries out a sterilization campaign

Youth involved in the Libyan Red Crescent carried out a sterilization and cleaning campaign targeting the building of Libya’s General Authority of Tourism. The campaign included the building’s offices, corridors, reception offices and other facilities.

These initiatives are part of the Red Crescent voluntary campaign, which aims not only at preventing the spread of Coronavirus, but also at providing employees with a safe and a healthy environment.