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Books on Libya
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Update No: 045 - (28/08/07)
The Libyan Reform Paradox
One month ago, in a French accented diplomatic maneuver - though some would
say grandstanding - the complicated negotiations involving Bulgaria, the EU and
Libya over the release of the six Bulgarian medics (the Palestinian doctor was
naturalized a Bulgarian during the ordeal) culminated in a 'Hollywoodesque'
ending. The medics were freed and France's president Sarkozy and his wife
Cecilia stole the show. However, while the French leadership basks in the
limelight, Libya itself has managed to turn what was increasingly becoming the
embarrassing problem of the death sentences faced by the medics and the related
internal political pitfalls, into a strategic exploit no less important than the
formal renunciation of 'weapons of mass destruction' in December 2003. Col. Al-Qadhafi
made that move, launching the rehabilitation process, having realized that his
own political survival depended on establishing better relations with the West.
Sarkozy's exploit aside, the medics' release is more of a Libyan strategic
victory than it is French or 'western'. Regardless of whether the entire affair
of the Bulgarian nurses is interpreted as blackmail or internal political
scheming, its resolution suggest that Qadhafi is now prepared to take greater
risks in order to turn his country around, or at least to achieve some change.
The release of the nurses no doubt comported some risks in the Benghazi region,
which has typically been the epicenter of opposition to the Qadhafi regime, as
noted by the riots there in 2006 - which were masked by the 'Jyllands-Posten'
cartoons of Muhammad controversy. Ironically, the eight year period of the
Bulgarian nurses ordeal also marked Qadhafi's slow, but steady effort to
relinquish a socialistic approach to the economy, advocating reforms in the
banking industry and promoting more investment-friendly policies (even if these
still largely concern the oil sector). Even here, Col. Qadhafi has taken risks,
rattling embedded interests among a small circle of tribal and business elites,
while raising the ire of the remaining loyal 'revolutionary' institutions such
as the Revolutionary Committees. Having opposed representative central
government in what has served as Libya's unofficial constitution since 1977, The
Green Book, Qadhafi has also promoted more authoritative and competent public
officials, such as Shukry Ghanem - now prime minister after an important stint
as oil minister - and to manage Libya's growing ties to the 'global system'.
Qadhafi the Risk Taker
In doing this, Qadhafi has taken the risks that have been, by all accounts,
flexible and pragmatic. In this sense, in the past eight years, or since Libya
started cooperating with international judicial authorities in the Pan Am 103
crash over Lockerbie case, Qadhafi has embarked on the most sustained reform
process ever undertaken in modern Libya. On the more strictly political front,
his son, Saif ul-Islam al-Qadhafi, consistently seen as a modernizer, called for
Libya to adopt a proper constitution, to guarantee a free press and an
independent central bank in a televised speech. While, Col. Qadhafi would remain
as the unchallenged leader of the 'Revolution', Saif ul-Islam insisted that
Libya "would not turn into a dynasty or monarchy" in which he would
succeed to power. While, the details are still very sketchy, it is unlikely such
a move would come swiftly and without challenge from embedded interests. Such
talk of a constitution is the first of its kind in Libya and suggests that it
future laws would gradually aim to create a constitution or something like it,
which will be veiled in Green Book rhetoric. It could be the biggest political
development in Libya since the launch of Qadhafi's 'Third Universal Theory' in
1977. Often described as a 'glasnost perestroika', in the Arab world such
reforms are usually described as 'infitah' (opening) and they are risky. Sadat
in neighboring Egypt was murdered largely because of some religious group's
negative perceptions of his infitah, which was seen to have been exceedingly
western-influenced in character, culminating in the Camp David peace accords
with Israel in 1979. In contrast, Libya's reform process under Qadhafi is being
attempted with less overt Western intervention.
International and Domestic Pragmatism
Paradoxically, even while Colonel Qadhafi has kept some distance from the
West, maintaining a critical and aloof stance on many issues, Libya also poses
one of the smallest fundamentalist or militant risks to the West - Libya is
neither Wahhabist, salafist nor Shiite - and has no western military presence
whatsoever to keep it that way. While the United States, and a few other powers,
have engaged in military actions in the Middle East, fueled by neo-conservative
ideology in pursuit of regional interests, it is the recent Libyan experience
that has pointed out the better and more realistic approach to achieve this.
For its part, the US administration is now in a position to send its highest
ranking official yet to Libya, as could be expected after the obstacle of the
jailed Bulgarian nurses was removed. Condoleezza Rice will make the first visit
to Libya by a U.S. secretary of state in half a century, next October. John
Foster Dulles, who served President Dwight Eisenhower, was the last secretary of
state to visit Libya, in 1953. The visit is clearly being interpreted, and
wanted as a way to further improve bilateral relations. US envoy David Welch
visited Tripoli in August, most probably to set the stage for Rice's visit. Last
April, it should be noted, John Negroponte, the deputy secretary of foreign
affairs, visited Tripoli but Qadhafi refused to meet him. The United States has
much to gain in better ties with Libya as it tries to reduce dependence on
Persian Gulf hydrocarbon resources in favor of African ones. US oil majors
Irving, Exxon Mobil Corp. and Chevron Corp. returned to Libya in 2005 after the
U.S. lifted economic sanctions.
In August, Libya showed further signs of 'realpolitik' coming to terms with a
longstanding source of internal risks. Having always denied the existence of a
Berber minority, the Libyan allowed Berber activists to hold a congress in a
Tripoli hotel for the first time. More importantly, Seif ul-Islam al-Qadhafi
(ever more prominent in delicate international and domestic matters) and Prime
Minister Baghdadi Mahmoudi visited the Berber heartland in the Jebel Nefusa
Mountains about 50 km from Tripoli, to launch major projects to boost the local
economy. The World Amazigh (name for the Berbers of North Africa) Congress
president Belkacem Lounes praised the move. Just six months ago, Lounes wrote to
Qadhafi to complain about a speech in which the Libyan leader once again denied
that a Berber minority does exist. The turnaround may well be a tactic to
further ingratiate Libya within the African Union, but it is no doubt encouraged
in the context of the continuing reform system. Berber activists want government
recognition for the Berber language, which they already have in Morocco and even
Algeria. The 'recognition' was accompanied by the inauguration, by Seif ul-Islam,
of a new power station and a large reservoir fed by Great Man-made River.
More Confidence in Banking Sector
Surely, France has already secured some interesting deals out of their
involvement including the sale of military and civilian aircraft, and even a
rumored civilian nuclear reactor deal, which was considered the actual clincher
for the release 'deal'. However, overshadowed by the media attention on Madame
Sarkozy's blitz in Tripoli and the understandable joy at the medics' homecoming,
was the fact that at the end of last July the French bank BNP Paribas was chosen
by the Central Bank of Libya to act as the strategic partner of Sahara Bank. BNP
is the first foreign bank to develop full service banking activities in Libya.
BNP acquired 19% of the Sahara Bank's capital, immediately taking over
operational control in a EUR 145 million deal. The BNP partnership is the first
of its kind in Libya and falls within the Central Bank of Libya's restructuring
program for the banking industry. BNP is expected to play an important
technology and knowledge transfer role not just to Sahara Bank but ultimately to
the whole Libyan banking sector, which emerges from decades of political and
economic isolation. The program involves the liberalization of regulations on
banking activities, the modernization of payment systems, and the creation of a
credit bureau.
These reforms should facilitate the development of the Libyan financial sector,
bringing it up to the level of banking systems in neighboring countries such as
Tunisia, where banking services are among the most advanced in Africa. The BNP
investment could herald a renewed interest in non-oil sector related investment
from the West, suggesting that there is some substance behind the often
discussed plans to stimulate other sectors of the economy, such as tourism and
small industry. Direct investment efforts would be supported by a likely free
trade arrangement with the EU already enjoyed by other countries in the
Euro-Mediterranean sphere such as Tunisia or Morocco, through the so-called
association agreements that it has with other North African countries. Moreover,
the BNP deal could spur more interest in the Libyan financial services sector.
Other western banks will also be looking to secure deals filling the role of
facilitating foreign investment in non-oil related business, and spur the
development of more practical financial products. Libya's non-oil economy has
notoriously been held back by a level of bureaucracy, and unreliability, that
can drive even the most stubborn investors away.
Meanwhile, in August, several new projects were announced. Hill International
said it won a 28-month, $56 million contract to be a project manager for the
expansion of Tripoli's al-Fatah university. SNC Lavalin Nexacor of Canada won a
400-million euro (541-million dollar) bid to build an airport in Libya's
Mediterranean city of Benghazi (another likely 'payback' for the resolution of
the Bulgarian nurses' affair). The new airport will be able to handle five
million passengers a year and 45 aircraft an hour, said Libya's official news
agency JANA. Tripoli's airport will also be revamped, which should make it
better able to sustain the projected growth of air traffic to the country and
the deployment of a fleet of new Airbus airliners. TAV Construction, a
subsidiary of TAV Airports Holdings won a tender as part of an international
consortium for Tripoli International Airport, in which the Libyan government
plans to invest $3 billion. The consortium includes the Turkish TAV
Construction, Brazilian Odebrecht and Lebanese Consolidated Contractors Company
(CCC). The French company Aeroports de Paris (ADP) designed the project to serve
100 aircraft simultaneously.
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