Libya’s crippling “proxy war” will doom the country to become “a haven for terrorists and extremists” absent support from the U.S., the interior minister for the country’s UN-backed government tells Axios.

Between the lines: The U.S. officially supports the government in Tripoli, but it has played no part in the current civil war beyond calls for a political solution. Meanwhile, Russian mercenaries are bolstering renegade Gen. Khalifa Haftar's offensive and dramatically changing the nature of the war, Interior Minister Fathi Bashagha told Axios this evening in Washington.

The big picture: Libya has seen eight violent and chaotic years since the U.S. and European powers backed the uprising that toppled longtime dictator Moammar Gadhafi.

• The oil-rich country’s sporadic civil war resumed in earnest in April when Haftar — whose forces control sparsely populated eastern Libya — launched a surprise offensive against the feeble government.
• It devolved into a bloody stalemate in the outskirts of Tripoli, the capital, with ongoing fighting fueled by foreign firepower, including armed drones.
• Haftar's supporters include Egypt and the UAE, while Turkey backs the Tripoli government.
• The NY Times reports that roughly 200 Russian mercenaries from the Wagner Group are in Libya, taking Moscow’s backroom support for Haftar onto the battlefield. As the Times notes, it’s "the same playbook that made Moscow a kingmaker in the Syrian civil war."

Bashagha says he began to hear reports of Russian involvement over the summer, including from locals who described groups of light-skinned people “taking the roads through the desert.”

• “By August, they were on the front lines,” he says. "The tactics used by Haftar’s forces drastically changed. The operations were becoming very professional.”
• Suddenly airstrikes were being conducted from higher altitudes and at night, he says. Russian snipers have also been “very effective and very harmful to our forces.”

Bashagha rejects the suggestion that Russia's interventions in Libya and Syria indicate that in a conflict, Moscow is a stronger partner than Washington.

• Russia wants to install authoritarian governments and Libya needs democracy, he says. He makes it clear, though, that Tripoli is desperate for American support.
• “Ironically, the countries that support Haftar while he attacks a government that is internationally recognized are also allied with the United States,” he says. “We are hoping that the U.S. will help push against the UAE and Egypt to stop their meddling in our country.”
• Bashagha says he’s optimistic a summit that Germany is attempting to organize will lead to “some sort of solution” that can guarantee democracy in Libya. But he says Russia can’t offer any such guarantee “while they have Wagner on the front lines.”

Zoom out: Bashagha is adamant that it was not a mistake for the U.S. to intervene in Libya in 2011, but says after Gadhafi’s downfall — and particularly after the death of U.S. Ambassador Chris Stevens in Benghazi — “America left us alone.”

“That American withdrawal made many regional countries have their proxy wars, their wars of interest on Libyan soil. And finally now it’s the Russians.”

The next president of Sri Lanka will be elected on Saturday, and he will take charge of a country still recovering from April terror attacks that left 277 dead.

Driving the news: The front-runner appears to be Gotabaya Rajapaksa, known for crushing the Tamil Tigers a decade ago as defense minister — allegedly committing war crimes in the process. His brother, Mahinda, was president then and would return as prime minister.

• Many minorities fear the election of a president associated with Buddhist hardliners, particularly at a time of intense animosity toward Muslims in the wake of April’s attacks, Deutsche Welle reports.

Zoom out: The U.S. and China are competing for influence in South Asia, particularly in this "strategically located but heavily indebted Indian Ocean island nation," the FT's Amy Kazmin reports from Colombo.

• Relations with the West suffered during Mahinda Rajapaksa’s strongman presidency (2005–2015), and he turned to China. He allegedly profited personally from Chinese-funded projects, the FT notes.
• The current administration repaired relations with the U.S. and India, but it was riven with infighting and was unpopular.

What to watch: The ruling party has nominated Sajith Premadasa, the son of an assassinated former president, the current housing minister and a comparatively fresh face. But the emphasis on security in this election appears to play to the Rajapaksas' strengths.

President Trump and five Republican senators had gathered in the Oval Office yesterday with Recep Tayyip Erdoğan when the Turkish president pulled out his iPad.

Behind the scenes: Erdoğan played a propaganda video depicting Kurdish fighters as terrorists. More, from Axios' Jonathan Swan's wild scoop:

• After the film concluded, Sen. Lindsey Graham asked Erdoğan: "Well, do you want me to go get the Kurds to make one about what you've done?"
• A source in the room said that in a heated exchange, Erdoğan took exception to Graham using the word "invasion" and Graham rebutted Erdoğan's claims that Turkey had fought ISIS.
• The senators in the meeting took turns pushing back on Erdoğan, while Trump sat back and watched, intervening occasionally to play traffic cop.

Between the lines: A senior administration official said they invited these senators because they have voiced concerns about Turkey's purchase of Russian weapons and invasion of Syria. "It shows Erdoğan that they're serious about sanctions, and Trump doesn't have to be the bad guy," the official said.

Go deeper: Highlights from the Trump-Erdoğan press conference.

There were between 3.9 million to 4.8 million unauthorized immigrants living in Europe as of 2017, according to new analysis from Pew.

• Most lived in Germany (1 million–1.2 million), the U.K. (800,000–1.2 million), Italy (500,000–700,000) or France (300,000–400,000).
• Unauthorized immigrants account for no more than 2%, and in most cases less than 1%, of populations in countries across Europe.

In the U.S., meanwhile, Pew's estimate as of 2017 is 10.5 million unauthorized immigrants, or 3.2% of the total population.

• While nearly half in the U.S. hail from Mexico, that's only the case for 20% of those arriving in the last five years, with similar numbers coming from Northern Triangle countries (17%) and countries in Asia (23%).

Regional breakdown across Europe: Asia-Pacific (30%), within Europe (23%), Middle East/North Africa (21%), sub-Saharan Africa (17%), the Americas (8%).

• The numbers skew higher for Middle East/North Africa (30%) in Germany and Asia-Pacific (52%) in the U.K.
• The deaths of 39 Vietnamese people in the back of a truck last month focused attention on migration from that country to the U.K.

Between the lines: The study shows virtually no illegal immigration to countries like Hungary and Poland, where political leaders have seized upon widespread antipathy to immigration.

Americans continue to rely on their credit cards, while the rest of the world rapidly moves toward mobile payments, Axios’ Erica Pandey reports.

The big picture: China is the clear leader, with nearly half of the population paying for goods with their phones. But the fastest growth in the adoption of e-payments is happening in India.

• "Digital transactions in India increased by 55% last year, compared with 48% in China and 23% in Indonesia," per Quartz. And India pulled 86% of its currency out of circulation in 2016.
• By 2022, mobile payments from companies like Alipay, WeChat Pay and others are projected to account for nearly 50% of global e-commerce sales, Axios' Dion Rabouin reports.
• Retail businesses are pouring billions into India, betting that as it moves away from a cash-based economy, it'll be the world's leading market for commerce.

I’m a sucker for a good spy story. Foreign Policy’s new podcast, “I Spy,” promises one per episode, recounted by a spy who took part in the operation.

In the first episode, that spy is Jonna Mendez, who went on to become chief of disguise at the CIA’s Office of Technical Service.

• The setting: 1987 in an unnamed Asian capital.
• The goal: Steal an encryption machine from the Soviet Embassy.
• The plan: Send in a local asset (codename: Tugboat) to scout the location, arrange an invitation for the embassy staff to go on a tiger hunt, then send in a CIA team.
• Mendez’s role: Disguise Tugboat (graying his hair with a can of Dr. Scholl’s foot powder) and the team (using masks designed for Hollywood stunt doubles).
• The payoff: She says the team – wearing gloves and special shoes so as to leave no trace — executed the operation with such precision that it was “kind of pretty” to watch.

The twist (spoiler alert): Word later reaches Mendez that she’d taken part in an elaborate ruse. A CIA source was already providing everything they could get from the machine, but Moscow was onto him. By signaling they needed the machine so badly as to break in and steal it, the CIA hoped to take the heat off their source.

“That’s the old smoke and mirrors, the games within games, the circles within circles. You can get a little lost sometimes.”

Listen

1. Highest tide in 50 years floods Venice
2. Hong Kong protests paralyze city: What you need to know
3. Israel-Gaza ceasefire begins
4. Two cases of plague in China
5. Chile's grim economic outlook
6. CEOs' allergy to geopolitics
7. John Bolton slams Trump's foreign policy in private speech

Quoted:

“For months now, I have been thinking I should sell my home and leave, because the assets I’d leave to my son one day won’t be worth much of anything. Nobody will want a house in Venice, because the situation will be a disaster.”

Closing note: St. Mark's Basilica opened in 1094 and flooded twice over the next nine centuries. It has flooded four times since then, including each of the past two years.