As Libya’s internationally recognized government in Tobruk and its rival self-declared islamist government in Tripoli resumed a new round of UN sponsored dialogue in Morocco that began on March 5, rival armed groups targeted each other with air strikes. Amid the ongoing turmoil, the Islamic State (ISIS or ISIL) continues to expand its activities and control over Libyan territory. In the last few days, ISIS-linked militants attacked vital oil infrastructure in the Libyan desert and beheaded two kidnapped officers in the city of Derna. These are some of the immediate and obvious challenges facing the UN brokered dialogue initiative in Libya. In my previous article titled: Libya’s Geneva Talks and the Search for Peace, I explored the challenges facing the Libyan dialogue, but also highlighted the positive indicators arising from the dialogue initiative.

The UN-brokered Geneva talks were a reaction to the escalating armed dispute resulting from Islamist and their Misratan allies’ rejection of the June 2014 elections after suffering a devastating defeat at the ballot box. UN Special Envoy for Libya Bernardino Leon hopes the talks will lead to the formation of a unity government and agreement on a ceasefire mechanism that would result in armed groups withdrawing from towns and cities. The demobilization would eventually lead to disarmament and the rebuilding of Libya’s military and police forces. Some Western countries have made the formation of unity government a precondition to the lifting of the arms embargo imposed on Libya, which Libya’s internationally recognized government and its regional allies have fought to lift in order to fight terrorism in the country.

This pressure from the international community and the significant threat posed by ISIS in Libya could galvanize Libyan factions to reach a political settlement and pull Libya back from the brink, but it could also backfire. Libya’s international partners must understand that they will have to face up to some difficult choices in Libya if the dialogue fails. They should not promote the calls for unity and consensus to appease anti-democratic forces, but rather ensure the democratic process in Libya is maintained. The suggestion by some that Libya should embrace the dialogue in lieu of the democratic process would set a dangerous precedence in the future.

Despite the positive start to the Geneva talks and the cautious optimism over the new round of dialogue in Morocco, deep distrust between the rival parties and ongoing clashes makes the outcome highly uncertain. Four possible scenarios could sway Libya along vastly different trajectories:

1. Instability and chaos prevail, resulting in the complete disintegration of the remaining Libyan institutions (including the Central Bank, National Oil Corporation, and the Investment Authority). The failure of a negotiated political settlement would threaten an unprecedented economic/financial crisis in Libya—where ordinary citizen would not have access to salaries, subsidized goods, or basic services—prompting a huge scale humanitarian crisis in Libya.
2. Regional or international intervention become more likely. Leading international actors dismiss any new intervention in Libya, insisting the only solution to Libya’s crisis is political, but remarks from Egyptian, French, and Italian officials in recent months indicate that some regional actors may act unilaterally to combat the rising terrorist threat. This action could come in the form of targeted air strikes or ground peacekeeping troops in coordination with some Libyan entities on the ground.
3. Another scenario could see one of the warring sides in Libya makes significant gains that lead to a decisive victory. This scenario has become more likely in recent months due to the significant improvement in capabilities and advances made by the Libyan National Army, led by General Khalifa Haftar, and increased regional support. In this case, insurgency would plague Libya as defeated forces seek to undermine the victors through bombings and attacks on vital installations and institutions, posing particular threat to the country’s oil facilities.

4. The most hopeful scenario for Libya’s current crisis would entail reaching a power-sharing agreement between the main stakeholders and forming a unity government. Such a scenario would lead to vital state institutions such as the Central Bank and National Oil Corporation becoming fully functional, which could in turn minimize the damage and erosion in Libya’s financial and economic sectors, and put the Libyan government in a better position to tackle ISIS more effectively.

It is crucial that the United Nations Support Mission in Libya (UNSMIL) and Libyan powerbrokers capitalize on the positive achievements from the first two rounds of dialogue to ensure sustainability of the peace building process. These actors must:

• Localize security issues. Development of local leadership and ownership of security problems arising from non-state actors linked to particular cities could prove effective. The locally elected municipal council in the city of Misrata would be the best-suited authority to handle disarmament of militias that originate from the city. Meanwhile, a unity government could oversee the wholesale reform of the security sector while working with local authorities to develop a cooperative relationship with local security structures. Democratically elected local municipal councils are best situated to respond to the needs of local communities throughout Libya. Capacity building, technical expertise, and support from international organization should focus on local authorities, thus making them more effective, efficient, and capable.
• Take immediate action to avert or minimize the impending humanitarian crisis. UNSMIL and Libyan parties that have engaged in the dialogue would gain more credibility in the eyes of affected cities and populations through a swift response to the issue of internally and externally displaced populations.
• Encourage and maintain trust-building initiatives. Libyans participating in the dialogue could form a committee to facilitate prisoner swaps, manage support for internally displaced people, and coordinate local dialogues to resolve local concerns.
• Take measures to reduce competition over power and resources. In a co-authored report with Libya Senior Fellow for the Atlantic Council Karim Mezran, titled “The Case for New Federalism in Libya,” we argue for a federalist system in which the executive branch handles foreign affairs and national security issues, while considerable legislative powers are devolved to the regions. Such a set-up would reinforce the previous recommendations, while supporting a vision for a unified Libya. It would require clear communication between the different levels of government to respond more effectively to the distinctive challenges of different segments of Libyan society and mitigate the risk of partitioning the country.

Libyan actors and their international partners must acknowledge that terrorist groups such as ISIS will waste no time in their efforts to expand control over Libyan territory. All of Libya’s stakeholders must show genuine commitment to the fight against ISIS in order to be considered part of the solution to Libya’s current crisis.

Mohamed Eljarh is a Nonresident Fellow with the Atlantic Council’s Rafik Hariri Center for the Middle East and a regular contributor on Foreign Policy’s Transitions blog.

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Image: Special Representative of the Secretary-General for Libya and Head of United Nations Support Mission in Libya (UNSMIL), Bernardino Leon (R), speaks as Algeria's Minister of African and Maghreb Affairs, Abdelkader Messahel, listens as they head talks with Libyan political leaders and rivals in Algiers, March 10, 2015. (Photo: Reuters)