US breaks its Gaddafy duck

On Monday 15 May, 2006 US Secretary of State Condoleezza Rice announced the US was “normalising” relations with Libya. Rice hailed "tangible results that flow from the historic decisions taken by Libya's leadership in 2003 to renounce terrorism and to abandon its weapons of mass destruction programs".

But normalisation began two years earlier. The US lifted its economic embargo in 2004. Six US companies resumed exploration for oil suspended since 1986 when the US bombed Libyan targets in the capital Tripoli and Benghazi, President Ronald Reagan called it self defence due to “terrorism aimed at America" such as the bombing of La Belle discotheque in West Berlin which killed many US soldiers.

100 people were killed in the 1986 Libyan attacks. These including Hanna Gaddafy, the adopted baby daughter of the Libyan leader, Colonel Muamar Gaddafy when his residential compound took a direct hit. Libya has been ruled by Gaddafy (or Gaddafi or Khaddafi or Qaddafi or any one of 32 different ways to spell his name) since he seized power in 1969. His rule set back a county that seemed to be an African standout.

In 1951, Libya was the first country to achieve independence under the auspices of the UN. It formed a constitutional monarchy under the pro-allies wartime leader King Idris. Idris stayed pro-western even after Britain precipitated the 1956 Suez Crisis which enveloped Libya’s powerful neighbour Egypt.

The young army officer Gaddafy took advantage in typical third world style of Idris’s Turkish medical treatment trip in 1969 to seize control. He took inspiration from Nasser’s power grab from an absent King Farouk in Egypt in 1952 and the new regime promoted a Nasser-like interpretation of socialism that integrated Islamic principles with social, economic, and political reform. Gaddafy rejected communism as atheistic. Nonetheless he destroyed the power of the Sanusi, the Islamic movement which was Idris’s power base.

Gaddafy moved quickly to close British and American military bases. In 1972 he convened the first National Congress of Al-Ittihad Al-Ishtiraki Al-Arabi (the Arab Socialist Union) at Tripoli. Later he issued a government decree prescribing the death penalty for belonging to a political party other than the Arab Socialist Union. Libya was formally a one-party state.

Gaddafy began to assert Libya on the world stage and saw himself as a champion of "oppressed peoples". Tensions with America grew through the seventies and exploded in 1981 in the Gulf of Sidra incident. Libya had earlier declared Sidra to be territorial waters and a “line of death” which if crossed would invite a military response. On August 9, two US aircraft flying combat patrol intercepted two Libyan fighters and shot them down after evading a missile strike. The election of Reagan in November exacerbated tensions between the countries due to Libya’s support for Palestine. The US placed a petroleum embargo on Libya in early 1982. Clashes in Sidra continued in 1986 giving Reagan the excuse to authorise the bombing.

In 1990, British investigators announced they found an electronic chip that linked Libya to the Lockerbie bombing. In November 1991, Scotland's chief law enforcement officer issued warrants for the arrest of two Libyans. One was Al-Amin Khalifa Fhimah, a member of the Libyan Intelligence Services and the station officer of Libyan Arab Airlines in Malta. The other was Abdel Baset al-Megrahi a senior officer in the Libyan Intelligence Services and head of Libyan Airlines security. Gaddafy argued for nearly eight years the suspects would not receive a fair trial in a Scottish court. The United Nations imposed sanctions on Libya that cost an estimated $33 billion. In 1998, after UN Secretary General Kofi Annan and South African leader Nelson Mandela intervened, authorities agreed to Gaddafy's condition the trial be conducted in a neutral third country, Netherlands. Al-Megrahi was found guilty though calls remain to convict his superiors. Libya was forced to pay $2.7 billion to the victims' families in 2003.

With sanctions lifted, Libya adopted market reforms and liberalised the socialist-oriented economy. Libya is an oil-based economy which accounts for 90% of its exports. Libya is the largest oil producer in Africa with low production costs and proximity to European markets. Italy, Germany, Spain and France account for 74% of Libya’s exports. Despite 50 years of production, Libya remains largely unexplored with vast oil and gas potential.

The US moves announced by Rice is also aimed at tapping into the Libyan business boom. The black market and petty corruption have shrunk due to custom tariffs reform. Prime Minister Shukri Ghanem said reforms were positive steps towards turning Libya into a regional trading hub like Dubai or Hong Kong. Though Ghanem was replaced in March (possibly for controversial comments he made when he said Libya had ‘bought peace’) there appears to been a smooth transfer of power. As always Gaddafy is there behind the scenes, pulling all the strings.

The American decision to fully resume diplomatic relations see Libya turn full circle from the ‘rogue state’ of the 1980s. Gaddafy is now seen as a humanitarian and a senior African statesman. It is a remarkable makeover for one of the world’s most durable leaders if unpredictable leaders.