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  2003 2002 2001 Ranking(2003)
Millions of US $ 19,131     71
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Books on Libya

Update No: 049 - (21/12/07)

The Path of Respectability
With few exceptions, 2007 has been a remarkable year for Libya. If 1969 is remembered for the 'revolution' that brought a young group of military officers led by Mu'ammar al-Qadhafi, then a captain to power, then 2007 shall be remembered as the year that Qadhafi's revolution became truly legitimate in the eyes of the West. During the first decades of Qadhafi's rule, before and after the adoption of the Green Book and the Third Universal Theory, the Libyan leader spent rapidly increasing oil revenues on fomenting political movements abroad and on social engineering experiments, while making conditions unfavorable for foreign investment. In the 1980's Libya's leader was mocked as the 'mad dog of the Middle east' by president Ronald Reagan, and Libya earned a reputation of being one of the world's most active sponsors of terrorism and groups involved in armed struggles everywhere, including the Basque separatists of ETA and the Irish IRA. That reputation solidified with the downing of Pan Am 103 at Lockerbie leading to international sanctions for most of the 1990's. Since 2004, when Libya declared its intentions to abandon its ostensible weapons of mass destruction program, Libya started to gain international and diplomatic stature.

The last obstacle for full integration was cleared last July after Libya released in July six foreign medics accused of infecting Libyan children with HIV. Their final release was brokered by France. President Nicolas Sarkozy visited Tripoli very shortly after the release, signaling a full normalization of Franco-Libyan and European relations. In fact, the release of the Bulgarian nurses also removed the last obstacle for a full normalization of relations with the United States; secretary of state Condoleezza Rice had placed the release as a condition for this to happen. Ms. Rice has not visited Tripoli yet. She has been busy organizing the Annapolis peace conference in the past few weeks, but she might well visit Tripoli in 2008 to reaffirm the new friendship between Libya and the United States. Such a visit is important, as Libya has been cozying up to Europe and France in particular lately. As expected at the time of the Bulgarian nurses' release, France has gained significant business from having brokered the deal such that Col. Qadhafi visited Paris, making it the first stop of a European tour and stayed there for five days. 

Reactors and Jets
France and Libya signed contracts with a total value of USD 14.7 billion, including a civilian nuclear energy deal involving the sale of nuclear reactors. The United States approved the sale, saying it expected its former foe to respect its decision to renounce weapons of mass destruction. France announced plans to sell nuclear reactors to Libya as well as 10 billion euros of trade deals, as President Sarkozy's arms deal framework agreement is worth USD 6.6 billion. Libya's military has traditionally been Soviet and partly French supplied and Libya's military capability has stagnated in the wake of its international isolation and inability to buy desirable equipment in the years of cheap oil. Libya's new political direction and the rise in oil prices have changed this. The Franco-Libyan memorandum of understanding covering arms deals worth up to EUR 4.5 billion; also include the first foreign sale of the Rafale fighter. While the sale has not been concluded yet, it is evident that Libya is very interested in shopping around for modern military hardware. Libya is interested in French equipment, but other countries - perhaps not yet the United States - such as the UK and Russia might also be in the market. Buying from the West gives Libya a veneer of greater 'international respectability' than if it was to buy from Russia. MiG aircraft, which however good they may be, are overly linked to Libya's infamous air battles with the United States in the Gulf of Sirte during the 1980's. 

The Colonel also visited Spain, where he signed deals promising mutual investment opportunities and defense cooperation agreements. The Libyan leader held talks with King Juan Carlos and prime minister Jose Luis Zapatero. The visit highlights the current relationship of mutual interests that exists between Libya and Europe: Libya needs European technology and investment to help it increase its oil production to the projected 3 million bpd by 2010, and (and not only) Europe wants Libyan oil. Nevertheless, Qadhafi has also enhanced his positioning in Africa itself, sponsoring and hosting highly publicized peace talks between the Chadian government and internal rebel factions and negotiations over a settlement for Darfur. During his visit to Europe, Qadhafi did not fail to remind Europe of its colonial legacy and responsibility for Africa. He also hinted at another subject of concern for Europe; illegal migration. Qadhafi attended an EU-Africa summit on Dec. 8, calling for an equal partnership between the two continents. He blamed the migration phenomenon on Europe's imperial plundering; however, much of the security cooperation and arms deals Libya has signed with Europe have included Libya's commitment to help curb the flow of illegal migrants. That commitment is also necessary as Libya becomes integrated in the Mediterranean Union.

Qadhafi's European visit was not without its challenges; the Libyan leader endured protests over Libya's record on human rights in France and Spain. Indeed, an interesting aspect of the growing business ties between Libya and the West is that human rights have not 'interfered' in the process. President Sarkozy argued that since Gaddafi has abandoned the sponsorship of terrorism and the development of illegal weapons, France and Europe should encourage him further down the path of international respectability. Qadhafi's son Seif ul Islam has been an important guide on that path. In 2007, his role as the reasonable voice of Libya - often serving as an interpreter of Libyan idiosyncrasies for the West - became increasingly evident during the past year. Speculation has risen concerning Seif ul-Islam's future and his potential role as successor. Libya has yet to formalize any Constitutional arrangement for the succession to Mu'ammar al-Qadhafi; this remains one of the main risks in Libya. While Libya's revenues have grown thanks to unprecedented interest in its resources over the past four years, it has made no political progress. Some privatization measures have been adopted and foreign banks, such as France's BNP, have set up branches in Libya to help build confidence from foreign investors, but politically there is a sense that apart from oil and security, anarchy prevails. 

The debacle involving foreign tourists being denied entry at ports of entry because they did not have an Arabic translation of their passports is a clear example of the institutional failure in the 'Jamahiriya'. Libya wants to increase tourism. It has formally expressed interest in doing this and Seif ul-Islam delivered a much publicized speech last summer in Cyrene to attract a cultivated and adventurous type of traveler to Libya. Instead of facilitating the task, some Libyan authorities decided to enforce the translation rule, a requirement which had been removed not two years earlier to facilitate tourism. Should oil prices continue to remain high in 2008, Libya should have another prosperous year allowing for the status quo to prevail with few noticing the problems. Should oil prices fall considerably, Libya could start paying a higher price for its failure to address important questions of political organization. 

The apparent resurgence of Islamist terrorism in neighboring Algeria serves as a warning. After an attack in early December a group calling itself the Salafite Group for the Predication and Combat (GSPC) has also issue a warning against Libya. The elusive Al-Qaida issued a warning against Col. Qadhafi, suggesting that the organization has members in Libya ready to strike.    

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