For current reports go to EASY FINDER

LIBYA

 

In-depth Business Intelligence

Books on Libya

REPUBLICAN REFERENCE

Area (sq.km)
1,759,540

Population
5,499,074

Capital
Tripoli

Currency
Libyan dinar 

Leader 
Col Mu'amar al-Qadhafi

Update No: 014 - (01/01/05)

2004, Libya's Gamble From Ideology to Pragmatism
There is no doubt that 2004 will be remembered as a milestone year in Libya; a year to be remembered alongside 1969 when the short lived Sanusi dynasty was deposed by a young officer named Mo'ammar Al-Qadhafi and a small group of 'free officers'' inspired by the Arab nationalism of Gamal Abdel Nasser then president of Egypt. It will also be remembered as the antithesis of 1986 and 1992 when US sanctions and a full-scale UN embargo respectively were imposed. The first was a response to Libyan support for anti-American terrorism in Europe. The second was imposed to force to trial two Libyan intelligence officers Abdelbaset Ali Mohamed al-Megrahi and Lamine Fehima identified as the prime suspects in the bombing of a Pan Am Boeing 747 over Lockerbie Scotland in December 1988. In 2004 not only did Libya regain its place in the international establishment, it has been courted by some the world's most influential nations including the United States. Libya's 2004 equivalent of Glasnost and Perestroika comes at a most unusual period in relations between the West and the Arab world. It is truly a remarkable process, as it has been developing ever more actively at a time when relations between the rest of the Arab world and the West have worsened over the US led war in Iraq. Not long ago, a fiery Qadhafi would have adamantly defended Arab nationalism and supported verbally - if not more directly - the Iraqi resistance against the occupation. Today, not only is America directly involved in a conflict against no less than one of the most historically and symbolically significant Arab states, but prospects for peace between Israelis and Arabs have never seemed worse (though there may be an opening - see Syria).

Indeed, the current crisis in relations between the West and the Islamic World would once have provided plenty of fodder for the firebrand rhetoric of vintage Qadhafi. It is, nonetheless typical of Gadhafi's contrarian attitude, that while the rest of the Arab world tries to minimize its relations with the United States - or at least hide them from public opinion - the Libyan Jamahiriya has not had better relations with the superpower in decades. Earlier in the year, King Abdallah of Jordan cancelled a visit to Washington in protest over Bush's wholesale backing of Sharon's unilateral plan for withdrawing from Gaza while formalizing Israeli settlements in the West Bank. Meanwhile, businessmen and US diplomats were in Tripoli signing contracts and deals for a big piece of Libyan oil. Ordinarily, Arab governments fear reprisals from their populations when they make too many concessions to the West, Saudi Arabia having perhaps provided the most striking example during the nineties. Therefore, it is fair to wonder about the wisdom of Qadhafi's opening or 'infitah' in terms of stability - do these reforms not change the image of Qadhafi as someone who stands up to the West? In fact, the Libyan reforms announced by Prime Minister Shukry Ghanem, which emphasized the re-establishment of relations with the West, have not yet involved the economic re-structuring of the Libyan Jamahiriya, which would ostensibly transform it into a free market economy. However, last month, Ghanem announced that subsidies for basic staple foods and household goods would be repealed. The subsidies issue is in fact very sensitive and could be the first real test of Ghadafi's reforms in the next year. Typically, Libyans are less likely to protest and challenge Qadhafi over ideological matters than practical issues and the Libyan regime's legitimacy rests on its distributive capacity. The most serious challenges to the regime have, not surprisingly, developed during crucial economic downturns and as a response to attempts to lift subsidies as happened in 1988-89. The Libyan economy is still very heavily dependent on oil exploration, and the free market is not sufficiently diversified to make a significant contribution to the overall economy. Despite the reformist rhetoric, Libya needs more oil. Years of sanctions, meant that the crucial resource was becoming more difficult to extract from a technical standpoint. Fresh exploration needed to find new sources and set up new wells for exploitation, needing the investment and equipment of foreign companies. It was therefore necessary for Col. Qadhafi to do everything possible to his country's international standing. 

It is remarkable that the change has occurred so quickly and efficiently. Col. Qadhafi, was visited by no less than Prime Minister Blair, prime Minister Berlusconi of Italy, President Jacques Chirac of France, Chancellor Gerhard Schroeder of Germany and high officials from the US state Department, who have been actively working to re-establish full diplomatic relations. A few days later on April 26th, Qadhafi visited the European Union Headquarters culminating the diplomatic manoeuvring to put Libya in the good graces of the West, which began with the acceptance of responsibility for the crash of Pan Am 103 at Lockerbie, Scotland in December 1988. In November, it was announced that the US has chosen the site upon which to build its diplomatic mission in Tripoli. There remain few official and bureaucratic obstacles to prevent American companies from pursuing regular and profitable business in Libya now. In December, the United States released Libya's funds frozen in the United States since 1986 amounting to about $1 billion. There was only one snag in the positive chain of events that have even enabled President Bush to hail Libya and its leader as examples of responsible leadership in the Arab world. There have been repeated stories of a Libyan attempt to assassinate the Saudi Crown Prince Abdullah. The rumours reached their peak in July and threatened to undo all the diplomatic breakthroughs that had taken place in 2004. Some critics suggested that it was premature to lift the US sanctions, on April 23rd, imposed under the ILSA (Iran Libya Sanctions Act) allowing US oil firms to sign exploration deals in Libya. Nevertheless, while the story persisted throughout the fall, it has faded into the background and the Halliburton employees can continue to arrive in Tripoli airport with the full confidence that their company is now legally sanctioned to facilitate a new wave of oil exploration in Libya.

Remaining challenges - Human Rights 
The fading of the Saudi murder plot story has certainly enabled the diplomatic restoration of Libya to continue, but there are pending diplomatic issues that need resolution in 2005. One of the more important one involves the fate of five Bulgarian nurses and a Palestinian doctor sentenced to death because a Libyan court found them guilty of having deliberately infected 400 children with the HIV virus in 1997 at a Benghazi hospital. The evidence against the Bulgarian medical staff and some questionable confessions to the crime are widely believed to have been extracted through torture. The sentence demands the doctor and the nurses be put to death by firing squad. Human rights organizations have widely condemned it suggesting that Libya has not changed its ways and that it remains a repressive society. Most observers believe that Libyan authorities have been scapegoating the nurses rather than admit their own negligence. Nevertheless, the Libyan government has perhaps not neglected the potential public relations disaster the sentence could produce if it were carried out. The foreign minister Abdul-Rahman Shalgam announced that Libya was ready to reconsider the sentence if Bulgaria offered compensation to the families and financed the construction of a hospital. The offer itself may yet present unworkable elements, as the offer of compensation would still imply an admission of guilt and excludes the Palestinian doctor. Nevertheless, the offer has come directly from the foreign affairs minister and has transformed it into a political issue, whose outcome no longer rests with the court. Another issue of contention with human rights groups has been the condition and treatment of African migrants in Libya. Libya's wide-open desert borders have allowed migrants from countries such as Ghana, Sierra Leone, Ethiopia, Somalia, Niger, Chad, Sudan and beyond to come to Libya in search of what the migrants hoped would be better paying jobs. The problem was encouraged by the fact that Colonel Qadhafi had shifted focus from a pan-Arab perspective to a Pan-African one in the late 90's. Libya presented itself as an African country and Qadhafi had promoted Tripoli as a spiritual capital of an unrealised United States of Africa. Libya itself has been under pressure from Europe, notably Italy, to control its borders because many of the African migrants are finding conditions too tough in Libya and often can't return to their home countries because, ironically, they need to pay for an exit visa from Libya to leave - the exit visa is yet another source of contention for human rights groups. Many migrants then choose to risk their life crossing the Mediterranean in precarious boats to reach the Italian island of Lampedusa. Many do not make it and often drown. Italy's conservative government lead by Prime Minister Berlusconi is under pressure from xenophobic elements in his government to curb illegal immigration. In the late summer, Berlusconi offered to help Libya build detention centres in the Libyan desert to stop the migrants from reaching the shores in the first place. While Libya has neither agreed nor declined, the European Union will continue to apply pressure on Libya to curb African immigration and policies to this end will no doubt remain a key issue in Libya's relations with Europe in 2005.

« Top