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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)

Books on Libya

Update No: 060 - (03/11/08)

Hedging Bets
While Libya has made remarkable improvements with the United States, it still feels the relationship has something missing; it is not yet willing to let down its guard, perhaps waiting for the outcome of the US presidential elections to develop more meaningful ties. Libya does not want to appear too eager to please the United States, after years of maintaining a 'revolutionary' stance and it also knows that the United States wants Libyan oil to diversify its supplies. 

There is behind the scenes activity re-examining the Lockerbie trial, whereby the Scottish Criminal Cases Review Commission has decided to refer the case against Abdelbaset Megrahi back to court. 'The October 22, 2008 edition of 'The Scotsman' newspaper asks "if Megrahi was not involved, or even if only a minor part of the conspiracy, then who is guilty? 

One (revived) theory that remains is that Iran commissioned the attack, perhaps employing Palestinians, in retaliation for the shooting down of an Iranian airliner by the US navy. Whatever the truth, it must be exposed." Access to that truth, however, may be getting more difficult, as Megrahi has been diagnosed with terminal prostate cancer, which has spread to other parts of his body according to his lawyer Tony Kelly. The Scottish courts are, therefore under pressure to speed up the re-trial of Megrahi, which could be pursued even if Megrahi should die before or during the re-trial. 

Failure to pursue the re-trial at this point could be harmful for relations between the US and UK with Libya let alone an injustice to a dying man, if he indeed were to be cleared in a re-trial . Tam Dalyell, a former Labor MP in the House of Commons has been a strong proponent of the notion that the Lockerbie trial as it stands resulted in an enormous miscarriage of justice: 

"If I thought there was any scintilla of possibility that he was guilty of mass murder, I might agree with Ruth Cohen, the intransigent American relative, who says she has no pity. But the American relatives, intent on vengeance, should understand that the United States scapegoated Libya, a country which had nothing whatever to do with the Lockerbie crime, at a time when they wanted to blame someone, small and unpopular, in order not to have trouble with Iran and Syria, who harbored the real perpetrators, before the planned invasion of Iraq," wrote Dalyell. 

That opinion does not establish that if Megrahi were to be acquitted it does not in itself, let Libya off the hook.. The two defendants (one was acquitted) from the Libyan secret service may neither of them have been the directing intelligence in the sabotage plot, but perhaps those prepared by their agency by whatever means, to travel out of Libya to stand trial. The 'fall guys,' in the jargon. 

One cannot get away from the reality that in the same period Libya did sabotage two French airliners by explosives in the baggage compartment - a trial was held in 'neutral' Germany, guilt was established and compensation paid, so no one should believe that Libya was not fully capable of the Locherbie outrage. So clearing Meghrahi, were that to be the outcome, does not in itself clear Libya.

Libya, may have reason to fear that the US families of the Lockerbie victims are not at all interested in a re-trial of the case. Should Megrahi be acquitted, the matter has the potential to damage relations with the United States once more, as the US has an interest in maintaining the status-quo, rather than opening a potentially dangerous can of worms. Therefore, Libya is keeping all its foreign policy options open. Apart from the decidedly good relations with the EU, Russia has regained an appeal last seen during the Cold War period. Col. Mu'ammar al-Qadhafi will visit Moscow for the first time in 23 years. Apart from discussions over oil and gas deals, Qadhafi is expected to discuss his willingness to allow Russia to set up a naval military base in Libya, according top the Russian daily Kommersant. The base is slated to be built in Benghazi. Interestingly, the source explained Libya's motivations for permitting the establishment of the base as a "guarantee against possible US military aggression against Libya". Russian warships, heading to Venezuela to participate in military maneuvers stopped in Tripoli for refueling last October 11. Russia is also in a position to obtain further concessions, because Libya failed to abide to the letter of the deals it made with Russia, after the cancellation of its debt to the Soviet Union valued at USD 4.5 billion, last April. 

Therefore, Qadhafi is also expected to sign contracts to buy new Russian armament such as T-90 battle tanks, Sukhoi 30 jets and SAM missiles. The arms deals were part of the conditions for the Russian debt cancellation, but until now, Libya did not buy a single piece of Russian equipment - perhaps it was waiting to see what the United States would offer first. For similar reasons, Libya has not yet shown support to the notion of a gas cartel, or 'gas OPEC' with Russia, Qatar and Iran, although they must be interested in this development over time. Russia is also interested in boosting the scope of its commercial interactions with Libya, wanting to go beyond the export of ferrous metals, wheat or machinery to civilian nuclear projects, through the Russian AtomStroiExport, a Russian contractor that has activities in 15 countries. It remains to be seen how Washington will interpret this collaboration. In the event Sen. John McCain were to win the presidency, it is difficult to envisage that such collaboration would pass unchallenged in Washington. What is certain, nonetheless, is that Libya is still not feeling entirely welcome in the US sphere and that it is using Russia as a convenient buffer. Since April, there has been a gradual intensification of bilateral relations between Moscow and Tripoli. 

The chairman of Gazprom visited Libya in July to discuss the vast potential for cooperation in the gas exploration and delivery field; Gazprom and Tatneft have also secured the rights to develop six oil and gas deposits in Libya. Gazprom had already secured the rights to explore potentially rich oil fields in the Ghadames Basin, from which, one site alone (no. 64) is expected to yield 20 million tons. Gazprom is also slated to complete an asset swap with the Italian, Eni, for the Elephant Field, before the end of the year. The Elephant field, located onshore in Libya's Murzuq Basin, was discovered in 1997 and produced 124000 bpd in 2006. Gazprom would take over half of Eni's stake in the Elephant in exchange for Eni taking part in Russia's Arctic Gas. According to Eni, the Libyan government had already approved the project. Libya also needs infrastructure, and the Russian railway company RZD appears to be the most likely winner of a bid to build a USD 3 billion railway line between Sirte and Benghazi. The series of deals are all part of a greater bilateral inter-governmental cooperation agreement governing trade and financial relations that was signed in Tripoli during Putin's visit last spring.

Libya, which rules over the largest oil reserves in Africa, is one of the oil price 'hawks' within OPEC, though perhaps less vociferous than Iran or Venezuela. Libya has advocated cutting production at the October OPEC summit, which addressed the flailing oil prices caused by the specter of a worldwide economic recession and higher US dollar values. The chairman of Libya's National Oil Company, Shukry Ghanem, advocated OPEC to cut production by one million barrels per day. The Libyan Central Bank governor, Governor Farhat O. Bengdara had set its planning budget based on oil being priced at USD 65/barrel. He observed that, should oil fall below USD 50/barrel, Libya would still be able to pursue its development goals, projecting a 6.5% economic growth. 


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