State of Libya: Geopolitical Assessment (2025)

Introduction and Overview

Libya, geographically situated at a strategic crossroads in North Africa, shares borders with the Mediterranean Sea, Egypt, Sudan, Chad, Niger, Algeria, and Tunisia, influencing its unique geopolitical context. This diverse terrain, encompassing the vast Sahara Desert, coastal plains, and mountainous regions, shapes settlement patterns, resource distribution, and economic activity. The predominantly hot desert climate, though moderated along the Mediterranean coast, poses challenges such as water scarcity, agricultural limitations, and vulnerability to climate change. However, it also presents opportunities for renewable energy development and coastal tourism. Libya's estimated 7.2 million population (2025), over 82% urbanized and relatively young (median age around 30), faces persistent high youth unemployment, exacerbated by decades of Gaddafi's economic policies focusing on state control and resource extraction. 

Libya’s modern political landscape is deeply shaped by its colonial past (Italian colony, 1911-1943) and Muammar Gaddafi's subsequent 42-year authoritarian rule (1969-2011). Italian colonialism, with its focus on coastal settlements and neglect of the interior, sowed the seeds of marginalization that continue to fuel regional and tribal grievances. Gaddafi's regime, while modernizing aspects of Libyan society through oil wealth, exacerbated these divisions through patronage, repression, and a highly centralized state, leaving a legacy of weak institutions, limited civic space, and a fragmented national identity (Vandewalle, 2016; Streatfield, 2014). These intertwined historical and socio-economic factors are crucial to understanding Libya's ongoing struggles with political instability, economic dependence on oil, and external interference, as it navigates a complex transition in a rapidly changing global environment.

Geopolitical Risk Landscape

• Political Instability and Conflict: Libya faces persistent political instability marked by recurring cycles of violence, fueled by weak state institutions, a power vacuum after Gaddafi's fall, and the proliferation of armed groups with varying agendas. These groups range from local militias to tribal forces and foreign mercenaries, further fragmenting the political landscape and hindering efforts at national reconciliation and economic recovery. This ongoing instability deters foreign investment and impedes efforts to diversify the economy, trapping Libya in a cycle of fragility. (UN DESA, 2025)

• Economic Dependence on Hydrocarbons: Libya's economy remains overwhelmingly reliant on oil and gas revenues, accounting for over 95% of its export earnings and 60% of its GDP (World Bank, 2025). This dependence has created a rentier state, where political power has historically been tied to control over these lucrative resource rents and distribution of patronage, hindering sustainable development and diversification efforts. The volatility of global oil prices makes Libya's economy vulnerable to external shocks, further exacerbating its economic instability. (World Bank, 2025)

• Foreign Interference and Proxy Wars: Libya's strategic location and vast oil and gas reserves have made it a proxy battleground for regional and international powers, each seeking to advance its own geopolitical and economic interests. This external involvement has exacerbated internal conflicts, fueled arms proliferation, undermined state-building efforts, and impeded efforts at establishing a unified and sovereign government. The involvement of foreign fighters and mercenaries, often aligned with different external actors, further complicates the conflict dynamics and diminishes prospects for a peaceful resolution. (Soufan Center, 2024).

• Climate Change Vulnerabilities: Libya's arid and semi-arid climate, coupled with its dependence on scarce water resources, makes it highly vulnerable to climate change impacts, such as droughts, desertification, and sea-level rise. These vulnerabilities threaten food security, agricultural production, livelihoods, exacerbate existing social and economic inequalities, and could trigger further internal displacement and migration, increasing competition for scarce resources and adding to social and political instability. (World Bank, 2025)

• Terrorism: The presence of extremist groups, including affiliates of ISIS and al-Qaeda, poses a persistent security threat, exploiting the country’s vast, ungoverned spaces to establish safe havens and training camps. These groups have been involved in attacks on civilians, government facilities, and oil infrastructure, undermining stability and disrupting economic activity. The flow of foreign fighters and arms into and through Libya, often linked to regional conflicts, further complicates the security dynamics and poses a challenge for regional counterterrorism efforts. (UNSCR, 2024).

Data Synthesis and Organization

I. Post-Colonial Legacies and Political Fragmentation

• Centralized Power Structures: Gaddafi's four-decade rule centralized power, creating a system of patronage, repression, and a highly securitized state. This legacy has left a void in terms of strong, independent institutions capable of managing a decentralized state and fostering democratic governance. The absence of robust, accountable institutions is a major obstacle to building a cohesive national identity, promoting national reconciliation, and establishing a stable, legitimate government. (Vandewalle, 2016; Streatfield, 2014).

• Uneven Regional Development: The historical neglect of Libya's interior during Italian colonial rule and Gaddafi's focus on developing specific regions created deep disparities in economic development, access to basic services, and infrastructure. These regional imbalances continue to fuel grievances, exacerbate social and political tensions, and undermine efforts at national unity and equitable distribution of resources. (World Bank, 2024a)

• Tribalism and Factionalism: Libya’s social fabric is deeply fragmented along tribal and regional lines, and these divisions have been historically exploited by political actors seeking to mobilize support, maintain power, and control resources. This dynamic hinders the development of a shared national identity, fuels political competition and conflict, and makes it difficult to build consensus on key political issues and to establish a unified government. (Lacher, 2018)

II. Political Instability and Conflict

• Civil War and Proliferation of Armed Groups: Since the fall of Gaddafi in 2011, Libya has been mired in a complex and protracted civil war involving multiple armed actors, including rival governments, militias, tribal forces, and foreign mercenaries (CFR, 2024). This conflict has resulted in widespread violence, displacement, human rights abuses, and a humanitarian crisis. The proliferation of arms, fueled by external actors and regional conflicts, poses a significant challenge to stabilizing the security situation and restoring peace. (CFR, 2024)

• Failed Political Transitions and Stalemates: Repeated attempts at establishing a unified government through political dialogue and negotiations have largely failed, reflecting deep divisions among Libya's political elite and their inability to compromise on key issues such as power-sharing, resource management, and the organization of elections. These repeated failures have deepened mistrust and cynicism among Libyans and have resulted in the persistent politicization of state institutions, hindering efforts at national reconciliation and sustainable development. (Streatfield, 2014)

• External Interference and Proxy Warfare: Libya's strategic location and abundant natural resources have made it a theater for proxy wars involving regional and international actors. The involvement of foreign fighters, mercenaries, and private military companies (PMCs) often affiliated with different external powers, has fueled the conflict, prolonged instability, and exacerbated human rights abuses. (FP, Sept. 2023). This interference has also complicated efforts at achieving a peaceful resolution and has hindered Libya's ability to chart its own course and build a sovereign state. (FP, Sept. 2023)

III. Weak Institutions and Governance Deficits

• Fragmented and Dysfunctional State Institutions: Libya's state institutions remain weak, fragmented, and dysfunctional, lacking the capacity to effectively deliver basic services, enforce the rule of law, and manage public resources. This institutional weakness is a major obstacle to sustainable development and undermines public trust in government. The judiciary, in particular, faces challenges of independence, impartiality, and capacity, hindering access to justice and due process for Libyans. (Libya Human Rights Report, 2024)

• Widespread Corruption and Lack of Accountability: Corruption is endemic in Libya, undermining public trust in government institutions, hindering economic development, and exacerbating social inequalities. This "cancer of corruption” has become deeply rooted in Libyan society, reflecting a lack of transparency, weak rule of law, and ineffective mechanisms for accountability. The lack of accountability for past human rights abuses and corruption further erodes public trust and perpetuates a culture of impunity. (Libya Economic Monitor, Fall 2024).

• Restricted Civic Space and Media Freedom: Civic space in Libya remains restricted, with civil society organizations (CSOs), journalists, human rights defenders, and political activists facing intimidation, harassment, and violence (FP, Sept. 2023). This limits freedom of expression, assembly, and association, hindering the development of a vibrant civil society and undermining democratic accountability. Media freedom faces similar challenges, with journalists and media outlets often subjected to censorship, harassment, and attacks, hindering the free flow of information and the public’s access to diverse perspectives. (FP, Sept. 2023).

IV. Economic Stagnation, Dependence, and Inequality

• Oil and Gas Sector Dominance: Libya’s economy remains heavily reliant on oil and gas revenues, which account for over 95% of its export earnings. This dependence has created a “rentier economy,” where economic activity and political power have been tied to the extraction and export of hydrocarbons, hindering efforts at economic diversification and creating vulnerability to fluctuations in global oil prices. This dependence has also led to limited private sector development, high unemployment, and a lack of economic opportunity for many Libyans, particularly outside the oil and gas sector. (Libya Economic Monitor, Fall 2024).

• Uneven Distribution of Wealth and Resources: Decades of Gaddafi's policies have created a highly unequal distribution of wealth and resources in Libya, with a small elite capturing a disproportionate share of the country's oil revenues. This economic inequality has fueled social and political tensions, exacerbated regional grievances, and created a sense of marginalization and exclusion among many Libyans, particularly those in historically underdeveloped regions. (Heydemann, 2024).

• Economic Hardship and Declining Living Standards: The combination of conflict, economic mismanagement, declining oil revenues, and the impact of global shocks such as the COVID-19 pandemic and the war in Ukraine has resulted in severe economic hardship for many Libyans. High unemployment, rising poverty, and inflation have eroded purchasing power, reduced living standards, and fueled public discontent, potentially contributing to social and political unrest. (Brookings, 2024).

V. Security Dynamics and Terrorism

• Proliferation of Arms and Militias: Libya is awash in weapons, a legacy of the 2011 uprising, subsequent conflicts, and the involvement of foreign actors. This proliferation of arms has empowered various militias and armed groups, making it difficult for any central authority to establish control over territory and security, fueling violence and insecurity. (Brookings, 2024) The continued flow of arms into and through Libya, often linked to regional conflicts, exacerbates this challenge and poses a threat to regional stability.

• Extremism and Terrorism: The presence of extremist groups, including ISIS and al-Qaeda affiliates, poses a persistent security threat to Libya and the wider region (US Dept. of State, 2024). These groups exploit the country's vast, ungoverned spaces to establish safe havens, training camps, and launch attacks on civilians, government facilities, and infrastructure, undermining stability and disrupting economic activity. The flow of foreign fighters and arms across Libya's porous borders further complicates the security challenges and requires a coordinated regional counterterrorism strategy. (US Dept. of State, 2024)

VI. Foreign Policy and International Relations

• Shifting Sands and Great Power Competition: Libya's foreign policy is navigating a complex web of shifting alliances and great power competition, impacting its stability and hindering its ability to chart a sovereign course. Historically, Gaddafi's Pan-Africanist/Pan-Arabist stance contrasted sharply with Western interests. Post-2011, however, Libya has become a stage for proxy conflicts involving regional rivals (Egypt, UAE, Türkiye) and global powers (U.S., Russia, China) vying for influence, resources (especially oil and gas), and strategic partnerships. This external involvement fuels conflict, undermines state-building, and exacerbates human rights concerns. Russia's support for Haftar's LNA (through the Wagner Group and military aid) disrupts efforts at a unified government, while Türkiye's backing of the UN-recognized GNA in Tripoli fuels regional tensions (FP, Sept. 2023; Arab Center, 2023). The U.S. walks a tightrope, promoting democracy while navigating security interests, raising concerns about Russian influence but also facing criticism for past interventions. European countries like Italy and France, driven by a mix of historical ties, economic interests (especially in energy), and Sahel security concerns, struggle to balance their engagement with Libya's fragile stability (Carnegie, 2024).

• Regional Organizations and Limited Influence: Libya's membership in the African Union (AU), Arab Maghreb Union (AMU), and Community of Sahel-Saharan States (CEN-SAD) presents opportunities for regional cooperation on issues like counterterrorism and economic integration. However, these organizations face limitations in resources, capacity, and political will among member states, hindering their ability to effectively mediate the conflict and promote stability. The AU's calls for a ceasefire and political solution, while important, have not yet achieved the desired results, highlighting the need for stronger regional mechanisms and greater international support. (ISS, Feb. 2024)

• Missed Opportunities and the Path Forward: Despite the challenges, Libya has untapped potential for transformation through strategic partnerships. Its youthful population presents a significant opportunity for human capital development, while its renewable energy resources offer a path towards economic diversification and addressing climate change. Libya's strategic location also has the potential to facilitate trade and regional integration. However, realizing this potential hinges on overcoming political instability, strengthening institutions, promoting good governance, and creating a more conducive environment for foreign investment and private sector development. A renewed focus on local ownership, empowerment of marginalized communities, and leveraging Libya's unique strengths, such as its history and cultural heritage, are essential for building a more sustainable and prosperous future.

VII. Unique to Libya: Obstacles and Opportunities for Transformation

• Untapped Potential of Youth Bulge and Human Capital: Libya's young and growing population (median age around 30) represents a significant opportunity for human capital development, though unemployment remains very high, especially among youth. Investing in education, skills training, and entrepreneurship is essential to unlock Libya’s demographic dividend and transform it into a driver of economic growth and social progress. (Foresight Africa, 2024). However, this potential remains largely untapped due to persistent political instability, a weak education system, and a lack of economic opportunity.

• Abundant Renewable Energy Resources and Potential for Diversification: Libya's abundant solar and wind resources offer significant potential for renewable energy development, which could help the country diversify its economy away from its overreliance on oil and gas. Developing this potential requires investing in infrastructure, technology, and human capital, as well as establishing a stable and predictable regulatory environment to attract foreign investment. (Foresight Africa, 2024). Libya's strategic location on the Mediterranean coast also presents opportunities for developing a "blue economy," focused on sustainable use of marine resources and tourism. However, realizing this potential requires addressing climate change challenges and protecting Libya's fragile coastal ecosystems.

• Potential for Trade and Regional Integration: Libya's strategic location on the Mediterranean coast and its membership in regional economic organizations, such as the AMU and COMESA, offer opportunities for trade and regional integration. However, realizing these opportunities requires addressing political instability, improving infrastructure, and enhancing the business environment to attract foreign investment and facilitate trade. The ongoing implementation of the African Continental Free Trade Area (AfCFTA) presents an opportunity for Libya to deepen its regional integration and leverage the benefits of a larger African market, though realizing these gains requires addressing trade-offs between short-term economic interests and long-term developmental goals.

Sources Cited

• Glinski, Stefanie. ‘Eastern Libya's Rulers Crack Down on Protests—Not Shoddy Infrastructure.’ Foreign Policy, 2023.

• Detsch, Jack. ‘Wagner's African Hosts Regret Letting Them In.’ Foreign Policy, 2023.

• Lechner, John A., and Sergey Eledinov. ‘Is Africa Corps a Rebranded Wagner Group?’ Foreign Policy, 2024.

• Crocker, Chester. ‘Democracies Aren’t the Peacemakers Anymore.’ Foreign Policy, 2024.

• ‘Libya.’ Freedom House, 2024.

• ‘The Geopolitical Implications of Libya's Intractable Crisis.’ The Soufan Center, 2024.

• Heydemann, Steven. ‘Economic development, governance, and human security after the Arab uprisings.’ Brookings Institution, 2025.

• Williams, Stephanie T. ‘Anatomy of a flood: The Derna tragedy's lessons for Libyan governance.’ Brookings Institution, 2025.

• ‘Libya Economic Monitor - Stabilizing Growth and Boosting Productivity.’ The World Bank, 2024.

• Cilliers, Jakkie. ‘Libya.’ ISS African Futures, 2025.

• ‘Civil Conflict in Libya.’ Council on Foreign Relations, 2024.

• Gurbuz, Mustafa. ‘Turkey Faces a Dilemma in its Foreign Policy Toward Libya.’ Arab Center Washington DC, 2023.

• Fabricius, Peter. ‘The fall of Syria's Assad regime is bad news for Libya.’ Institute for Security Studies, 2025.

• Watkins, Skylar. ‘The Libyan Political Crisis: Implication for Human Trafficking.’ Foreign Policy Research Institute, 2024.