Unfreezing funds for the new Libya

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News from the frontlines in Libya is gradually giving way to news about who is releasing frozen Libyan assets, who will get them, and how they will be used. Britain will unfreeze one billion pounds and the UN, $1.5 billion.

News from the frontlines in Libya is gradually giving way to news about who is releasing frozen Libyan assets, who will get them, and how they will be used. Britain will unfreeze one billion pounds and the UN, $1.5 billion. A global diplomatic game over these funds has begun, and the point at issue is not only Libya but the principle at stake.

"What's your take on that?"

The latest news is that Russia will attend the Friends of Libya conference in Paris on September 1. Many people doubted it would take part in a meeting that looks too much like a grim victory celebration of the the European NATO countries, who now must help the National Transitional Council (NTC) financially in order to bring stability to Libya. It is not surprising therefore that the issue of money will be at the top of the agenda in Paris.

According to the Guardian, the UN agreed on Monday "to release about ?1bn worth of Libyan banknotes held in Britain since the start of the conflict." Foreign Secretary William Hague said "the currency, printed in the UK for the Gaddafi government but never delivered, would be used to fund basic necessities, pay civil service salaries, and bolster confidence in Libyan banks."

Last week, the UN Security Council unfroze $1.5 billion of Libyan assets.

This is where the story becomes really interesting. A journalist at the UN Secretary-General Ban Ki-moon's news conference on Libya on August 26 asked: "We are talking about $500 million for distribution for salaries among the rebels. So what do you understand from that and what's your take on that?"

"I understand that part of this $1.5 billion (...) will be given to United Nations humanitarian agencies and we will try to use those funds to provide urgently needed humanitarian assistance in a transparent and accountable manner," Ban Ki-moon replied. "Those issues will be further discussed on coming occasions in Paris and during the General Assembly in September."

He also said he would go to Paris to meet with the National Transitional Council leadership.

This exchange clearly highlights the most pressing questions regarding Libya. Should the money seized from Gaddafi be given to the rebels, a heterogeneous group without a clear, uniform agenda? Who will monitor how it is spent?

All roads lead to the UN

This is not the first such war in recent memory, nor is it the first time that a period of growing chaos and lawlessness has given way to diplomatic efforts to restore law and order.

NATO's operation in Libya is a result of a loose interpretation of UN Security Council Resolution 1973, which was adopted in March to authorize a no-fly zone over Libya and the freezing of Libyan assets. Instead, NATO fought on the side of the rebels in a civil war that started in February, not unlike the wars in Yugoslavia (1999) and Iraq (2003). But even though NATO or the U.S. have not always followed UN resolutions to the letter (or acted without them), when a war ends they still must hand the matter over to the UN, because international law is, at the end of the day, a useful convention for all countries. Even the saber-rattling Bush administration ultimately calmed down and opted for close cooperation with the UN.

Cooperation with the UN is logical because only the UN can unfreeze the Libyan assets that it froze, and this requires the consent not only of those countries who supported the Libyan rebels, but also of Russia, China, India and many other states that did not.

Ban Ki-moon was asked many questions to this effect. For example, he was asked if the National Transitional Council is the legitimate government of Libya and about the African Union's stance toward the NTC. A pro-Western politician, Ban Ki-moon found it hard to answer honestly, saying that everything would be decided in Paris.

Non-NATO players

Russia's stance on Libya is widely seen as an example of its complicated relations with NATO and the United States. Both sides want to avoid a dispute that is, in fact, unavoidable. The Libyan affair is simply too nasty, as NATO knows only too well.

But Russia's position is more complicated than may appear at first glance. Russia, China and many other countries are torn between Arabs and Africans. The African Union has refused to recognize the National Transitional Council, even though many of its member countries have recognized it. The Arab countries, which had been mulling ways to get rid of the troublesome colonel for years, let NATO to do their dirty work, thinking they would have ample time to settle on a position later. Russia and China mainly tried not to offend these two groups of countries and so had no time for a showdown with NATO.

Furthermore, talks in the UN and the Security Council have been tense. Clearly, Russia and many other countries will do their best to prevent a repeat of Libya in Syria. Russia believes that abstaining from voting on a Syrian resolution, as it did in the case of Libya, would inspire the Syrian opposition to follow the example of the Libyan rebels instead of seeking a compromise with the government. And this, in fact, what is happening.

Overall, the events in Libya have left no one unscathed, above all the NATO countries. Its negative effects are not over yet, because the international community will have to become deeply involved in Libya's affairs in order to stabilize the country. This means that the Security Council and the UN General Assembly, scheduled to meet in late September, will have to try to reach a consensus.

The views expressed in this article are the author's and may not necessarily represent those of RIA Novosti.

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