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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 19,131     71
GNI per capita
 US $ n/a n/a
Ranking is given out of 208 nations - (data from the World Bank)

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Libyan dinar 

Col Mu'amar al-Qadhafi

Update No: 028 - (28/02/06)

Italy, Libya's Open Wound?
Since the Italian colonization of 1911 -1943 ended, Libya has typically maintained a love-hate relationship with Italy. Many Italians stayed after World War II; in 1969 after the Qadhafi led coup or 'Revolution' of September 1st, Italians (and others) were forced to leave, but many Libyans have retained aspects of their former Italian colonizers from pasta to cappuccino, to the fact that as late as the 1980'sLibya still owned some 15% of Fiat's shares. In 1986, Italy refused to allow US bombers to take off from its air bases to strike Tripoli and Benghazi, as president Reagan used an aerial attack in retaliation for a terror attack attributed to Libyan terrorists. If Libya has benefited from the cosiness that comes from the shared history and geography, so has Italy gained access to strategic oil and gas reserves even at the height of the sanctions in the 1990's. Against this historical and economic background of intertwined interests, the image of an Italian minister, Roberto Calderoli declaring his commitment to 'free speech' by wearing a t-shirt emblazoned with one of the infamous caricatures of Muhammad that had fuelled the anger of Muslims worldwide sparked an unprecedented anti-Italian protest in Benghazi. Foreign Minister Gianfranco Fini was concerned that the protests against Italy would spread and that the country might become the target of an economic boycott in the way that Denmark did - Libya closed its embassy in protest over the cartoons - where the caricatures originated, lost hundreds of millions of dollars in sales to countries in the Middle East.
Calderoli's gesture, was especially insensitive - or plain reckless - as it came well after the world had witnessed the extent of the controversy of the caricatures first published by the Danish newspaper Jyllands-Posten, and then reprinted by mostly right-wing publications elsewhere, as the Danish embassy was attacked in Damascus and Beirut. If Calderoli, had not aimed for Libya specifically, it should not come as a surprise that the reaction came from Libya, whose colonial experience was under Italy. However, contrary to the explanations proffered by several Italian political figures, both in government and in opposition such as Gianfranco Fini or Emma Bonino respectively, the demonstrations in front of the Italian consulate in Benghazi were hardly a Libyan government orchestrated response to signal displeasure with the Italian government. Indeed, even if there is little that resembles an organized opposition, the 'caricatures' protests, represent something more insidious in the long run. At least 11 people were killed by government police and more than 60 others wounded on Friday February 17 - and led to the forced resignations of the Italian minister Calderoli and the Libyan interior minister Nasser al-Mabrouk Abdallah - may have started as a staged protest by the authorities against the blasphemous caricatures, but they soon turned into an unscripted one against Qadhafi's rule. Calderoli's televised t-shirt stunt, merely provided the excuse and the venue (Italian consulate) for a protest that has long been building against the Qadhafi regime itself. There were no protests in Tripoli, and even the Italian consulate staff and other Italian businesspersons taken to safety by Libyan authorities, said that they were never threatened directly. 

A History of Opposition
Benghazi and the region of Cyrenaica have traditionally been a centre of opposition to the rule of the Qadhafi regime. The Sanusi monarchy deposed by Qadhafi's 1969 revolution originated in Cyrenaica. Philip Luther, at London-based Amnesty indicated that the protests might also have spread to the eastern cities of Darnah and Tobruk. Ironically, just last month Human Rights Watch issued a report suggesting human rights in Libya were improving, but this event will surely raise the authorities' controls in the Benghazi area. Surprisingly, however, Qadhafi dismissed his interior minister, Nasr al-Mabrouk, and Benghazi police officials, because he claimed they used 'disproportionate force' to stop the riots. Police launched teargas grenades and opened fire with live ammunition on the 1,000 demonstrators, some of whom had overwhelmed security forces to storm the consulate building and set it on fire. Similar riots have taken place even after something as ordinary as a soccer game. Notably on July 14, 1996 when a riot at a soccer match involving a team controlled by a son of Libyan leader Qadhafi killed or injured up to 50 people. No exact figures were reported in the Libyan-controlled press, but the riot started after some fans started shouting anti-Qadhafi slogans during a summer when the leader faced a series of attempts on his life. Such incidents in the recent past give credibility to reports suggesting the Danish cartoons gave religious fanatics and unorganized opposition elements an excuse to challenge the government. In an interview with the Italian daily newspaper La Stampa, Ambassador Francesco Trupiano said, "the situation can precipitate any minute. "In Benghazi, Islamic radicalism has joined forces with domestic opposition." He based this on accounts from Libyan witnesses, who said the anger over the caricatures developed into general unrest over the political and economic neglect of Benghazi residents.

How Will Italian - Libyan Relations Develop after the Incident?
Nevertheless, it is too early to tell if the promise of continued good relations between Italy and Libya will proceed unharmed by the incident. Berlusconi spoke to Qadhafi on the phone, and the conversation was said to be cordial. However, if the instigator Calderoli, Minister of Reforms, was asked to resign, the speaker of the senate Pera was one of several Italian government leaders, who insisted on portraying the riots in Benghazi against the Italian consulate as a wider problem between Islam and the West. He has made very public comments to this effect, which could potentially unravel the close but delicate relations that Italy and Libya have had since the post World War II period. Thanks to that diplomacy, which always stayed away from the larger international controversies such as the 1986 bombing, allowed Italy to benefit as Libya's main trading partner. There are some 50 Italian companies doing business in Libya from construction to oil exploration. Despite the Libyan government's commemoration of some of the more tragic episodes of the Italian occupation - during which time Libya cuts itself off from the world by shutting down telecommunications and borders - and repeated and unresolved demands for Italy to pay compensation for its occupation, Libya and Italy enjoy good relations at the personal level from business to business. Pera's comments and the current tensions might not produce political damage, but they could harm the interpersonal advantage that many Italians enjoyed in doing business in Libya. Italy also needs good relations with Libya to help reduce the inflow of illegal immigrants, for which Italy promised to sell Libya new vehicles to patrol the desert as well as new coast guard vessels. At a more general level, the riots also indicate that the discontent in Benghazi and northeastern Libya in general, that was more evident in the sanctions burdened nineties and low-oil price eighties, has not gone away and that the Libyan glasnost has not been accompanies by an economic 'perestroika'. The case of the Bulgarian nurses, who are still in jail, has also become clearer in the context of the Benghazi revolt. The Libyan government is clearly stalling the release of the nurses, because it fears a reaction not unlike what was witnessed in front of the Italian consulate in February. However, the fact that the interior minister was suspended over the use of a heavy hand in quelling the riots also suggests that Libya, at least at the leadership level, is serious about changing some of the more draconian aspects of its rule. How Qadhafi deals with the potential for a renewed Islamic challenge in Cyrenaica will be an interesting test to measure the willingness to change in Libya over the next months. 

Oil sector
Repsol YPF has made six other discoveries in the resourceful block in the Murzuq basin, in which it has a 32% stake, in partnership with the Libyan National Oil Company (NOC) and three European companies: OMV (Austria), Total (France) and Hydro (Norway). Production has started at two of these discoveries in the past two years, reaching 48,000 bpd, respectively. In 2005, Repsol YPF operated production in Libya totalled 240,500 bpd, and net production totalled 25,100 bpd. Repsol YPF is the main operator in Libya, second only to the state-owned company, NOC. The Murzuq basin, 800 km south of Tripoli, is one of the most profitable for Repsol YPF. Production began in December 1996 at the El Sharara fields, situated in block NC115. These fields produce some 200,000 bpd of high quality light crude oil per day. Repsol YPF has exploration rights to 15 blocks are for exploration, with a net area of 65,517 square kilometres. 


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