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Update No: 039 - (25/01/07)

Will The Bulgarian Nurses Hold Libya's Relations with the West in Check? 
As expected, also in part to Bulgaria's accession as a full member of the European Union, the West has been exercising pressure on Libya to ensure a favorable outcome to the trial of the five Bulgarian nurses and Palestinian doctor. Their death sentence was confirmed by the Libyan Supreme Court last December 20 to the dismay of the 'international community'. The western (indeed the world) reaction to the upholding of the death sentence was widely expected, given the barrage of reports and scientific evidence presented by leading HIV/AIDS experts on the impossibility of the six medics' involvement in infecting over 400 children at Benghazi's Fatah hospital in 1998, citing improper conditions at the hospital as the culprit. What many have described as a travesty trial now threatens to undermine the diplomatic successes between Libya and the West since the former announced it would renounce its - alleged - weapons of mass destruction development program in 2003. The outcome of the trial in the face of overwhelming evidence of the innocence of the six medics has inevitably wasted any possible confidence that foreign companies may have had about the Libyan legal system, discouraging investment efforts in all sectors but oil, the importance of which to the very survival of the Libyan regime ensures that matters related to it are handled better. 

Oddly, while the Libyan judiciary has effectively discouraged foreign investment with its medics trial verdict, the Libyan government said it would cut state sector jobs to stimulate private sector reforms and promote the creation of small businesses. The Libyan prime minister al-Mahmoudi said it wants cut 400,000 jobs, more than a third of its workforce as part of a reform to ease budget pressures and stimulate the private sector, Al-Mahmoudi told the General People's Congress, on January 20 that those who lost their jobs would receive assistance: "Each released public employee will be given his full salary for three years or will be granted up to 50,000 Dinars in loans for each one who wants to start his own business". He added that "the objectives of this budget are to increase Libyans' standard of living by the rate of 5 per cent during this year and to promote productive activities." The job cuts are part of a series of reforms that also include improvements in health and education and that also encourage the private sector to make manufactured goods of sufficient quality to compete with imports. Col. Qadhafi repeated his usual tirade, scolding the country for its over-reliance on oil, which generates some 90% of Libya's hard currency earnings. Whether, the reforms - or the compensations - take place is another matter. While, talks of promoting the private sector are frequent, the legal, economic and physical infrastructure to support this process has not progressed enough, as the medics trial has shown. 

It was hoped after the pronouncement of the sentence that Mu'ammar al-Qadhafi would pardon the medics on December 31, but he refused. According to the Bulgarian press, a European Union commissioner, Benita Ferrero-Waldner, said that Brussels was trying to persuade Libya to release five Bulgarian nurses from death row. She noted that the European Union also hired advisers to arrange assistance needed by families and children infected with HIV in Libya while the EU will continues to discuss with Libya to secure a release of the Bulgarian women and a Palestinian doctor from a Tripoli prison. The case is being handled as matter of highest priority. The European Parliament (EP) urged the EU on Thursday (January 18th) to review its relations with Libya unless Tripoli releases five Bulgarian nurses and a Palestinian doctor, jailed and sentenced to death in a controversial HIV infection case. If Tripoli fails to take steps towards a positive resolution, the EU should consider "a revision of the common policy of engagement with Libya in all relevant fields as the Union would deem appropriate," said members of the EP (MEP) in a joint resolution, adopted by a 567-1 vote with seven abstentions. 

Careful EU! Don't Mess Up Oil with Politics
However, Saad Djebbar, London-based Algerian lawyer, said during an interview with CNN that the EU's pressure on Libya to release the nurses would be useless. The European Parliament last week called on the EU to consider 'a revision of the common policy of engagement with Libya in all relevant fields' because of the death sentence against the Bulgarian and Palestinian medics. Mr. Djebbar suggested that the better way to influence a favorable outcome of the medics' case would be to finance the fund, which was set up for aiding the infected Libyan children. After the initial death sentence issued in 2004, Libya made it clear that the death sentences were negotiable. In a similar vein, Saif ul-Islam al-Qadhafi, who has often acted as the more reasonable voice of the Libyan regime, warned that European pressures would "hinder efforts exerted in several directions to reach a just solution and complete settlement for this issue." He did not elaborate. Ramadan al-Fitouri, head of a group representing the families and likely delivering a government message, demanded that the infected children be treated in Europe, an HIV clinic be opened in Benghazi and compensation paid for each child. The compensation figure eventually settled at around US$10 million per child, in total more than US$4 billion (a sum remarkably similar to what Libya has paid in compensation for the Lockerbie crash in 1988, in which two of its agents were implicated). This remains the Libyan position, and the medical workers are hostages until such time as the government is paid. 

Meanwhile, in view of the growing importance of Libyan oil supplies and the growing number of investments, no specific actions have been threatened - and US secretary of state Condoleeza Rice limited her comments to a statement suggesting she was 'disappointed' by the verdict - The EU should also refrain from provocative statements or radical policy shifts toward Libya, given that the December 19 sentence has been appealed and that the legal process is in a very delicate phase now. As for the Libyan government, it has challenged EU criticisms - as muted as they were - of the medics' trial. Libyan foreign affairs minister Abdel Rahman Shalqam asked the EU not to "interfere with the Libyan judiciary system", adding that "No one in Libya can interfere in the work of the judicial system, not even the Leader of the Revolution himself," speaking to the General Peoples Congress (i.e. how the parliament is referred to in Jamahiriya).

The context in which the six medics were charged is also important in understanding what is actually at stake in the trial, as far as the Libyan regime is concerned. In the late 1990's (though in the late 1980's also) Benghazi, Libya's second city with a population of over one million, endured a period of intense opposition to the Qadhafi regime. In the summer of 1996, there was even an attempt on the life of Col. Qadhafi as he was traveling to Benghazi. In their most intense period of action of the recent past, Libyan radical Islamic groups launched attacks on government posts in the Benghazi area just as news of the HIV outbreak at the al-Fatah hospital in the city was spreading. To diffuse public anger about the actual state of healthcare (one of the promises of the 'revolution' and Jamahiriya) and social conditions, the Libyan regime arrested Philippine, Hungarian, Bulgarian, Libyan and Palestinian health workers, launching and promoting one of the sporadic anti-foreigner witch-hunts, for which his regime has been noted. Most of those arrested were eventually released. But the six remaining in custody were accused of working for an external power, charged with indiscriminate killing for the purposes of subversion and conspiring to infect hundreds of children at the hospital with HIV. They were tortured and held incommunicado for months, and a "confession" was extracted under torture from one of the nurses that she had injected children with contaminated products. The confession was retracted in 2001. Qadhafi also fired the health minister, Dr Solaiman al-Ghemari, suggesting that the CIA was responsible for the infection. The Benghazi HIV case is still being presented, indirectly, as a foreign plot to the people, accounting for the nationalist fervor with which some demonstrators demanded the death sentences against the medics to be upheld outside the Tripoli courthouse last December 19. 

The Libyan government's reaction to Saddam Hussein's execution may also be seen in this light. While the Qadhafi regime has gotten closer to the West, it also needs to uphold its trademark revolutionary values. Tripoli said it would erect a statue of Saddam, capturing his last moments, standing on the gallows. Saddam shall clearly be portrayed as a hero of Arab nationalism, as his statue would join that of the Libyan freedom fighter Omar al-Mukhtar, who was executed in 1931 after fighting against the Italian occupation. Col. Qadhafi also declared three days of mourning and flags on government buildings were flown at half mast. 

In light of Libya's rehabilitation, it may be said that western powers could have applied more pressure before Libya's rehabilitation, having less to lose. The December 19 sentence was issued, not coincidentally perhaps, the day before the bidding process in Libya's latest Exploration and Production Sharing Agreements (EPSA) round, leaving the unpleasant sensation that the six medics are hostages not only of Libya, but of the efforts to improve Libyan relations with the West because of the North African country's immense oil production potential. One need look no further than the current competition for Libyan oil rights, as well as arms and infrastructure contracts to se why the EU and other world leaders have offered muted criticisms over the plight of the six medics. Indeed, while the EU was considering how to handle the medics' death sentences, the French aerospace group Dassault Aviation has been allegedly involved in a potential deal to sell Rafale fighter jets to Libya. Dassault has denied the rumors, however French sources suggested in mid-January that Libya wanted to buy between 12 and 18 Rafale jets. 

OIL
Chinese Petroleum Corp (CPC) was one of the big winners of the EPSA 3 round, the results of which were announced last December. CPC won license for an oil exploration project with state-run Libya National Oil Co to search for oil and gas in the 4,300 sq km exploration zone in the Murzuq basin in south-western Libya. The company expects to invest a total of NT$ 1.27 bn ($ 39 mm) over a three-year period and plans to drill three oil wells in that area estimating that it may contain 500 mm barrels of oil. Russia's Tatneft was one of the big winners, having secured three contracts. Russia's Gazprom, Canadian PetroCanada and German Wintershall also won contracts. US firms Occidental Petroleum, Chevron and ExxonMobil were outbid, though they won 11 of the 15 contracts in Libya's first open competition for oil contracts in 2005. Shukri Ghanem, chairman of NOC said that the contracts, which spread some 90,000 square km. of territory for exploration under 14 separate contracts, netted Libya $ 58 mn in signing bonuses. During the first quarter of 2007, Libya intends to offer tender contracts for gas exploration and product-sharing.   

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