1. EXTERNAL AFFAIRS
Foreign Policy Overview
Multilateral Relations
African Union (AU)
Arab League
Arab-Maghreb Union (AMU)
Community of Sahel-Saharan States (CEN-SAD)
European Union (EU)
Relations with Algeria
Relations with Chad
Relations with Egypt
Relations with Israel
Relations with Italy
Relations with Malta
Relations with Niger
Relations with Sudan
Relations with Tunisia
Relations with the US
Relations with Zimbabwe
Trade and External Assistance
Exports
Imports
External Assistance
Historical Background
Independence and the royalist period
The rise of Ghadaffi
Support for Terrorism and international isolation
Ghadaffi in Africa
Rehabilitating Libya's international relations
Weapons of Mass Destruction
Foreign Policy Overview TOP
Europe: Regardless of Ghadaffi's anti-Western rhetoric, Libya's proximity to Europe and
southern Europe's reliance on Libyan oil supplies has meant that Tripoli has generally been
able to maintain stable relations with a number of European countries, such as Italy and
Malta, which stood by Libya even during the period that it was under international embargo.
Indeed, Libya has traditionally viewed Italy and Malta as its closest neighbours and as its
gateways into Europe. Following the suspension of UN sanctions in April 1999, many other
European countries, including France, the UK and Germany moved to consolidate their
relations with Tripoli and to take advantage of the new opportunities on offer in Libya's
energy sector in particular. Ghadaffi has welcomed them with open arms and, since the lifting
of sanctions, has taken advantage of the new climate to host a number of European heads of
state in Tripoli. While the Libyan leader remains somewhat wary of possible European
attempts to pressurise Libya to reform, improving relations between Libya and Europe looks
set to continue. However, these relations continue to be hampered somewhat by the case of
the Bulgarian and Palestinian medics who were sentenced to death for deliberately infecting

2. over 400 children in a Benghazi hospital with the HIV virus, although this is having a greater
impact on Libyan-European Union relations rather than on bilateral relationships.
United States: For Libya the most important goal at the moment is to repair fully its relations
with the US, as this will enable it to reintegrate completely into the international community
and will also provide the necessary investment and technical know-how to enable Libya to
upgrade its energy sector. There remains a deep suspicion on both sides as a result of the
years of antagonism between Ghadaffi and successive US administrations. The US continues
to have concerns about Libya's support for terrorism and the recent allegations that Ghadaffi
was behind a plot to assassinate the Crown Prince of Saudi Arabia and that he has been
supporting rebels in Mauritania have done little to ease these anxieties, although both cases
appear to have been smoothed over. It seems to be in the interests of both sides to make the
resumption of relations a success and although Ghadaffi, largely for a domestic or Arab
audience, is likely to continue to lambast the US publicly, he will do his utmost to keep on
improving relations.
Arab World: Libya's warming of ties with the West and its decision to abandon WMD at the
end of 2003 did further damage to its already deteriorating relations with the rest of the Arab
world. Frustrated by the lack of support he was given by Arab governments while Libya was
under sanctions, Ghadaffi has increasingly come to express his anger with the Arabs and with
the Arab League and certain pro-Western Arab states, such as Saudi Arabia, in particular.
Ironically, it was Ghadaffi's abandoning of WMD that brought him open condemnation from
some of the Arab world's less confrontational regimes, which accused him of selling out to the
West. While Ghadaffi may be furious at what he sees as a betrayal of the Arab nationalist
cause, the Arab world is too important for Libya to simply abandon and as such Tripoli is
likely to continue to build bridges where it can. It is strengthening ties with Qatar and the
United Arab Emirates, for example, and for the most part Ghadaffi retains good relations with
the other countries of North Africa, and with Tunisia and Egypt in particular.
Africa: Ghadaffi's frustration with the Arab world since the end of the 1990s has led him to
emphasise the African dimensions of his foreign policy. Africa has always been an important
continent for Libya, which shares its southern borders with two non-Arab states and has
pursued sporadic "revolutionary" expansionism in West Africa for a quarter century. Ghadaffi
has thus shifted to promoting a pan-African rather than pan-Arab vision since the late 1990s.
He has championed the African Union (AU) and various other regional African bodies, such
as the Community of Sahel-Saharan States (CEN-SAD) and has promoted himself as conflict
mediator on the continent. Despite the high ideals, however, Ghadaffi has basically used his
country's wealth to buy political influence in a number of African countries as well as
diplomatic support in the UN. One result of this policy has been that scores of Sahelian and
West African immigrants have moved into urban Libya, something that has proved extremely
unpopular with the Libyan population. Ghadaffi's radical plans for the AU have also been
increasingly frustrated as South Africa has re-engaged with the whole continent and played a
more consistent and pragmatic role in shaping the Union's fledgling institutions.
While Libya is likely to continue to maintain good relations with African states and to try to
mend fences with the Arab world, the resumption of relations with the West, and with the US
in particular, will remain top of Libya's foreign policy agenda for the foreseeable future.
Multilateral Relations TOP
African Union (AU) TOP

3. Although Ghadaffi originally saw Libya as an integral part of the Arab world, the other Arab
states did little to help lift the sanctions imposed on Libya during the 1990s. Ghadaffi
consequently eschewed the Arab world in favour of closer relations with other African states.
Although such states have little international weight individually, between 1998 and 2002,
Libya quickly gained significant influence in many countries with the intention of developing
a bloc vote of African states supportive of Libya in international fora in order to lessen its
isolation.
The culmination of this policy was the founding of the African Union in mid-2002. Based on
the EU, this body superseded the Organisation of African Unity (OAU) and aimed to unify
the continent's economic and security policies. In Ghadaffi's anti-imperialist vision, the AU
should go further and engender a unified continental polity and a single African army,
preferably based in Libya. While not strictly a Ghadaffi initiative, the AU relied on the Libyan
leader's determination and financial support to become a reality. Much of the initial and
subsequent planning made use of the diplomatic facilities in Sirte, as was the case for the
latest AU summit in July 2005, although the Union remains based in the old OAU facilities in
Addis Ababa and has resisted inducements to relocate institutions to Libya. South Africa, a
Libyan ally and the other driving force behind the AU, has tended to eclipse more radical
Libyan initiatives with its more moderate position.
Ghadaffi has thus positioned himself as one of the principal statesmen of Africa - certainly the
leading Arab proponent of pan-Africanism - and is frequently consulted by many other
African leaders. While he has used this prestige to broker peace agreements for some of the
continent's civil wars, there have all too often been allegations that his regime had a hand in
spurring on such conflicts in order to broker a settlement dependent on or favourable to
Tripoli. Ghadaffi's support for Tuareg and Toubou rebels in northern Mali, Niger and Chad,
and the subsequent Libyan mediation to help end the insurgencies, increased his influence in
these Saharan states. Military and/or economic support for the governments of the Central
African Republic (CAR), Democratic Republic of Congo (DRC), Uganda, Liberia, Togo,
Comoros and Burkina Faso. Significant financial support for President Mugabe's regime in
Zimbabwe has also established another Libyan ally in southern Africa, although it has not
been without strings attached.
Arab League TOP
Despite Ghadaffi's shift of focus from an Arab to African orientation in the late 1990s,
Ghadaffi toured the Middle East in 2000. Although probably on cordial terms with many Arab
leaders, it no longer appears that Ghadaffi believes in the pan-Arab cause and his boycotting
of an emergency Arab League summit in October 2000 suggested he has little faith in the
organisation's ability to make a difference. He even suggested that Libya should withdraw
from the Arab League, which he described as a joke, in his March 2002 speech marking the
25th anniversary of the establishment of the Libyan Jamahiriya. In the same speech he also
condemned plans for a separate Palestinian state, which he said would be like "two men
sharing the same pair of trousers". Instead, he has proposed the establishment of a unified
Israeli-Palestinian state.
In May 2004, Ghadaffi staged a melodramatic walk out of the Arab League summit held in
Tunis, condemning it as worthless. He took the opportunity to lambaste the Arabs for their
inability to solve the Palestinian issue, as well as their failure to act to help Yasser Arafat and
Saddam Hussein. Despite asserting in September 2004 that the Arab League was "finished",
the Libyan leader is likely to maintain a presence within the organisation as it is too important
to withdraw from completely. Moreover, as a result of the gradual improvement in Libyan-

4. Saudi relations that has followed the coming to the throne of King Abdullah, Ghadaffi appears
more willing to become actively engaged with the Arab League once again. However the
organisation reportedly threatened to expel Libya in 2005 as it has not been paying its fees
and is believed to have debts in the region of USD40 million.
Arab-Maghreb Union (AMU) TOP
The AMU (Union du Maghreb Arabe) was formed in Marrakech by the five Northwest
African states (Algeria, Libya, Mauritania, Morocco and Tunisia) in February 1989 during a
rare period of rapprochement between regional rivals Algeria and Morocco. Its original intent
was to promote political unity and an economic common position from which to approach the
consolidating states of the European Community/Union. However, the increasing isolation of
the Libyan leadership and the re-emergence of antagonism between Algeria and Morocco
over the Western Sahara effectively froze the fledgling institutions from 1995.
In May 1999, officials from the five countries met in Algiers to try and revive the
organisation. Discussions covered the possibility of a single common market embracing the
region and even a common currency. However, with tensions remaining high over Western
Sahara and a range of trade issues having been negotiated with Europe during the 1990s, the
Rabat-based AMU has yet to establish any significant degree of unity among the Maghrebian
states, let alone the envisaged political union.
While Libya has at times been more committed to the Union than other regional states, its
commitment is typically erratic and has been sidelined by wider events, as in December 2003,
when Tripoli deferred initiating its planned presidency of the AMU until after it had launched
its weapons decommissioning programme. Despite Foreign Minister Abd el-Rahman Shalgam
calling for a more pro-active AMU in July 2004 and February 2005, in September 2004
Ghadaffi treated the institution to language similar to that normally directed at the Arab
League. He commented, "We currently head the Arab Maghreb Union and I can tell you, as
its President, that it is nothing. It has nothing economic, political, social, diplomatic, or any
procedures - not even minimum co-ordination on anything. It's mere ink on paper."
Despite this outburst, in May 2005 Ghadaffi tried once again to kick start the organisation by
holding the first AMU summit in 11 years in Tripoli. However, the summit was cancelled at
the last moment due to ongoing differences between the Moroccan and Algerian parties,
dashing the Libyan leader's hopes of successfully bringing all the nations of the Maghreb
together.
Community of Sahel-Saharan States (CEN-SAD) TOP
Representatives from eight Sahelian and Saharan African states met in Algiers in August 1995
to formulate a common policy to improve economic co-operation and improve security in the
region. Apart from Libya, delegates also came from Algeria, Burkina Faso, Chad, Libya,
Mali, Mauritania, Niger and Senegal. This Community of Sahel-Saharan States (known as
CEN-SAD) was subsequently founded by Libya, Burkina Faso, Mali, Niger, Chad and Sudan.
It has since expanded to take in most states of North Africa (excluding Algeria and
Mauritania) and Muslim West Africa (Benin, The Gambia, Nigeria, Senegal and Togo) as
well as the Horn (Djibouti, Eritrea and Somalia) and the CAR. It has to a considerable extent
been guided by Ghadaffi's own priorities and funding allocations and, despite developing
formal institutions in Tripoli, has few clear objectives or achievements. The organisation was,
for example, temporarily used as the mandated cover for Libyan troops remaining in the CAR
through 2002 as a peace support force with Sudanese and Djiboutian assistance. In May 2004,

5. Ghadaffi suggested that CEN-SAD be used to resolve the conflict in western Sudan, and made
it clear that Africa should be left to resolve its own internal problems.
At the CEN-SAD summit of May 2005 Ghadaffi reiterated his warning that foreign
intervention in Africa's conflicts would be like "adding fuel to the fire." He also defended the
idea of Presidency for life commenting that once a President is chosen by the people he
should hold office forever.
European Union (EU) TOP
Sanctions and Arms Embargo
Libya has had its own particular problems with various European states. In the 1970s and
1980s Libya was a major supplier of arms and funds to terrorist organisations in Spain (ETA),
Germany (RAF) and the UK (Irish Republicans). Following the murder of an unarmed British
policewoman by members of the People's Bureau in London in 1984, the UK severed all
diplomatic relations with Libya. Unclaimed attacks on airliners flying to and from France and
the UK in 1988-89 by Libyan agents heightened the fear of Ghadaffi.
However, several core European states - especially France, Germany and Italy - have long
depended heavily on Libyan oil and gas exports and powerful economic interest groups
lobbied their governments to argue against the UN sanctions of the 1990s. The EU duly
announced in September 1999 that, in line with the decision taken by the UN in April, it
would lift sanctions against Libya covering air links, the work of Libyan diplomats abroad
and the sale of some equipment for its oil industry, but would retain an arms embargo. The
UK government has also been effectively lobbied by British firms in the oil, defence,
aerospace and construction sectors to re-engage with Libya and in 2003 it was the Blair
government that led the UN Security Council to repeal sanctions and acted as the crucial link
between Tripoli and Washington in negotiating an end to Libya's unconventional weapons
programme.
The arms embargo remained in place into 2004 and is thought to have been discussed when
Ghadaffi met with Commission President Romano Prodi in Brussels in April. Within the
context of normalising relations, Italy lobbied hard within the EU for the sanctions to be
lifted. This is because the embargo prohibited the sale of equipment to Libya that would help
it better patrol its borders in the struggle to prevent illegal immigrants from using Libya as a
base from which to reach Southern Europe. At the end of September 2004, the EU reached a
consensus and agreed to lift the remaining sanctions and to ease the arms embargo. One of the
reasons such a deal had become possible was that the ongoing dispute between Libya and
Germany over compensation payments for the victims of the Berlin La Belle disco bombings
of 1986 was resolved. Agreement was finally reached in August with Tripoli, represented by
Seif el-Islam Ghadaffi, agreeing to pay more than USD35 million to more than 150 non-
American victims of the attacks.
Euro-Mediterranean Partnership
Libya has yet to join the Euro-Mediterranean Partnership (also known as the Barcelona
Process). European and Mediterranean foreign ministers had promised Libya in April 1999
that it would be given full membership of this co-operation programme for southern
Mediterranean states once all UN sanctions were lifted. This ambitious EU initiative is
designed to strengthen ties between EU members and southern Mediterranean countries and
aims to create a free trade zone throughout the Mediterranean region by 2010. Libyan

6. representatives attended some meetings of the Euro-Mediterranean Partnership as observers
before then. Full Libyan membership is dependent on written guarantees pledging to uphold
human rights, democracy, regional stability and free trade and despite having been invited to
join, Libya has always refused to sign up on the pretext that it would not join a process in
which two of the parties (Israel and the Palestinian Authority) were at war.
The Libyan Foreign Affairs Secretary, General People's Secretary (prime minister) and Seif
el-Islam Ghadaffi are all reportedly keen for Libya to join the partnership, but Ghadaffi
himself still has reservations. In any case, there is unlikely to be any progress on this front
until the case of the Bulgarian medics sentenced to death on charges of deliberately infecting
over 400 children in a Benghazi hospital with the HIV virus is resolved. In fact, this issue
remains a major obstacle to the full normalisation of relations between the EU and Libya,
although on a bilateral level many European governments do not appear to be letting this
crisis get in the way of improving relations. The medics' appeal verdict that was due to be
delivered at the end of May 2005 was postponed until November. The delay appears to signal
that some sort of compromise deal is being worked out. The Libyans are keen for the
Bulgarians to pay compensation to the families of the children who were infected in return for
their being released. The Bulgarian government initially rejected this offer claiming that it
would be tantamount to admitting guilt. However in view of the regime's intransigence on the
issue, it seems that some compromise might be reached. The case is difficult for the Libyan
regime because of the intense public anger it has provoked. The families of the victims have
indicated that nothing short of the sentences being carried out would be sufficient to satisfy
them. However, this clearly would remain an impediment to the full restoration of relations
with the European Union.
In November 2005, whilst attending the Euro-Mediterranean summit in Barcelona in his
capacity as a permanent observer, Libyan Foreign Affairs Secretary Abd el-Rahman Shalgam
announced that the death sentences against the medics could be dropped providing enough
international aid could be supplied to Libya to fund hospitals and treatment for those infected
with HIV. He also noted that the case should be regarded as a humanitarian one, enabling the
Libyans to take it out of the problematic judicial arena. In December 2005 a meeting was held
at which all sides agreed to set up a financial mechanism in order for humanitarian assistance
to be provided to the Libyan victims and it appears that a solution might be approaching. One
of the reasons why a deal looks closer to being struck is that the Bush administration has
stepped into the debate and is indicating that a resolution of the case is directly linked to
Libya's removal from the State Sponsors of Terrorism list.
More broadly, despite the integration of its hydrocarbon sector with Europe via Italy, Libya is
still a long way behind regional states such as Tunisia and Morocco in integrating its economy
with Europe.
Illegal Migration
Libya is being strongly encouraged to co-operate with European governments in stemming
the flow of illegal migrants from Africa to the EU. It has signed a bilateral agreement with
Italy to this effect and is likely to work more closely with the EU on this in the future.
Relaxation of the arms embargo in September 2004 was specifically designed to allow Libya
to upgrade its coast guard and border surveillance capabilities to impede the flow of migrants
to the EU.
In spite of these efforts a delegation of MEPs that visited Libya in December 2005 were
surprised to discover that the Libyan authorities have only assigned two patrol boats and

7. around 100 officials to patrol their entire coastline. They also reported that Libya does not
assign any military personnel to control its sea borders against crossings by illegal immigrants
and as such sea crossings are unhindered. As a result the EU has announced that it intends to
develop a package deal with Libya that will include a number of incentives for it to assist in
the struggle against illegal immigration.
Relations with Algeria TOP
Relations with Libya have generally been amicable, with both finding shared interests in
supporting the Polisario Front in the Western Sahara and combating Islamist insurgents.
However, Algeria has consistently backed away from Libya's enthusiastic initiatives to turn
the Arab Maghreb Union into a full-scale political union. Relations have also been soured by
Algeria's closer relationship with Tunisia, which has traditionally aligned itself with its
western neighbour in order to offset Libya's more unpredictable advances. Libya reacted to
the 1983 signing of the Algerian-Tunisian Treaty of Fraternity and Concord by signing the
'unification' Treaty of Oujda with Morocco, Algeria's main rival, in 1984. But Algeria still
supported Libya when it was attacked by the US in 1986 and against the UN sanctions regime
that was subsequently imposed on Libya.
A bilateral agreement signed in April 1995 between Tripoli and Algiers marked a significant
improvement in the countries' relations. The main focus of the agreement was security -
Algerian forces, with Libyan co-operation, would work to cut supply lines to the Algerian
rebels through Libyan territory. The deal also involved the upgrading of frontier policing and
of the cross-border highway. Airports were to be built at Ein Amenas on the Algerian side and
Ghadames in Libya, and joint economic projects were to be set up in the area. The Algerian-
Libyan Joint Executive Commission has met regularly ever since. With surviving factions of
Algeria's Salafist Group for Preaching and Combat (GSPC) reported active on the northern
border of Niger and Chad in early 2004, it is possible that the group is still able to operate
through the Libyan Fezzan.
In July 2004, a number of alleged GSPC members who had been captured by the rebel
Chadian group the Movement for Democracy and Justice in Chad (MDJT), often seen as a
Libyan proxy in northern Chad) were reportedly handed over to Libya after Tripoli threatened
to bomb the Chadian rebels if they did not keep to their promise of passing the militants over.
Among those handed over was the GSPC faction commander Amari Saifi, otherwise known
as Abderrazzak el-Para. Algeria stepped in to calm the situation as it was anxious to gain
custody of the rebels. In November 2004, Libya handed El-Para over to the Algerians.
Relations with Chad TOP
Over the years Libya, which has close ties with some of Chad's ethnic groups, has been
extensively involved in Chad and relations have veered from a proposed political unification
to outright warfare. The most significant issue between the two states has been the disputed
Aozou strip in northern Chad. This desolate 114,000 km2 area, rumoured to be rich in
minerals, was originally part of Italy's north African territory, but in the wake of the Second
World War another treaty was signed that favoured the French territory to the south.
Throughout much of the 1980s and into the 1990s Libyan troops were deployed in the strip as
Tripoli backed Goukouni Oueddei against his rival Hissen Habré. This led to a series of
conflicts in the 1980s with Libya and its Chadian allies fighting other Chadian factions
supported by France. The war did not always go Libya's way and Habré's forces, supported by
French troops, inflicted serious losses and even made an incursion into Libyan territory.
Libya's defeats helped bring about a peace agreement and relations were normalised by

8. October 1988. Habré, however, remained wary of the Libyans and asked France to maintain
its military presence.
There has been some speculation that continuing Libyan subversion helped Idris Déby to
overthrow Habré in 1990, although Déby denied these allegations and initially maintained
closer ties with France than Libya. Chad's relations with Libya, however, did subsequently
improve when both parties agreed to take the Aozou strip dispute before the International
Court of Justice (ICJ). The ICJ ruled in favour of Chad and the UN's Aozou Strip Observer
Group (UNASOG) verified that all Libyan personnel had withdrawn by June 1994.
Chad's deteriorating relations with France from 1998 led to improved relations with Libya.
Annoyed by criticism of his human-rights record and by France's refusal to supply arms,
President Déby hosted a visit from Ghadaffi, who was looking to garner African support
against UN sanctions. Déby later made two return visits to Libya and various energy and
security agreements were subsequently signed. In the same year, Libya financed the
deployment of the Chadian troops in the northwest of the Democratic Republic of Congo
(DRC) in support of President Laurent Kabila. Although the Chadian military performance in
the DRC was far from spectacular, Libya used Chadian troops again in May 2001 as part of
its military intervention in the Central African Republic (CAR) to help President Ange-Félix
Patassé crush an attempted coup.
Thus, by mid-2001, despite the persecution of immigrant Chadians and other Africans in
Libya in September 2000 and speculation that Libya was supporting the rebel Movement for
Democracy and Justice (MDJT) in northern Chad, Idriss Déby increasingly resembled a close
Ghadaffi ally, with Chad and the CAR forming an axis for the extension of Libyan political
and military involvement into Central Africa. However, when Libyan troops returned to the
CAR in November 2001 to assist Patassé against another coup attempt, they were not
supported by Chadians and by 2002 Libyan forces were operating against Chadian proxy
allies of the insurgent forces in northern CAR. Although Libyan forces were withdrawn from
the CAR in December 2002, the fall of the capital to Chadian-backed forces the following
March was certainly not appreciated in Tripoli. The period of hostilities coincided with an
upsurge in fighting by the MDJT at the other end of Chad and clearer evidence of Libyan
support for the rebels.
Relations with Egypt TOP
Egypt fought a brief border war with Libya in 1977 but relations have since improved; foreign
affairs are now conducted with civility between the two countries. Cairo was quite supportive
of Tripoli over the 1992-99 UN sanctions regime and actively sought to mediate between
Tripoli and the West, despite incurring the anger of the US administration and particularly the
US Congress, which threatened to cut aid to Egypt. In 1996, Libya returned four Egyptians to
face trial in Egypt for hijacking a domestic Egyptian flight to Libya to highlight its new
compliance. The eventual resolution of the crisis in 1999 was in no small part due to Cairo's
persistent intervention and this reflected well on bilateral relations.
There is an ongoing dispute concerning offshore rights between Cairo and Tripoli, but it is
unlikely that either side will take direct action to enforce its claims. Like several other North
African states, Cairo has pursued a more favourable foreign policy towards Tripoli than the
US and other Western countries, viewing pragmatism and regional unity to be more
productive than toeing the Western anti-Ghadaffi line. This was reinforced when an injured
Ghadaffi was visited by President Mubarak, who made several overland trips to Tripoli during
the 1990s. This time, however, Mubarak was permitted by the UN to fly to Libya as this was a

9. 'humanitarian' mission, taking medical specialists to examine the Libyan leader.
Libya has worked closely with Egypt in an attempt to end the Sudanese civil war and preserve
Sudan's territorial integrity. In December 1999, President Mubarak made a surprise visit to
Tripoli. The Egyptian and Libyan leaders issued a statement assuring Sudan's President
Bashir of their complete support in his successful campaign to sideline Hassan el-Turabi. The
following month, Egyptian Foreign Minister Amr Moussa visited Khartoum on a joint
mission with his Libyan counterpart. Part of the joint Libyan-Egyptian co-operation in Sudan
involved agreement on the separation of hostile rebel forces on the Sudan-Uganda border.
Relations between the two countries became somewhat tense in 2004 after the Egyptian press
criticised Ghadaffi for his decision to abandon weapons of mass destruction, accusing the
Libyan leader of selling out to the West and Libya's decision to begin expelling large numbers
of Egyptian illegal immigrants back across the border was a source of further tension. Despite
these upsets, the two regimes continue to co-operate closely and relations look to be
improving again in 2005. As a sign of this, Libya has handed over an Egyptian suspect
wanted in connection with a terrorist attack carried out against tourists in Cairo in April 2005.
Relations with Israel TOP
Following Libya's decision to end its non-conventional weapons programme, which was seen
to have a direct impact on Israeli security, the Israeli Foreign Ministry confirmed in January
2004 that it had launched efforts to open a dialogue with Libya. Although the initiative could
potentially lead to the establishment of diplomatic ties between the two traditional enemies,
the Israeli Foreign Ministry stressed that the contacts were only preliminary, and the prime
minister's office was reported to remain sceptical. The success of the Israeli initiative is likely
to depend largely on Ghadaffi, who was reported to be furious that the Israelis leaked the
story to the press. However, behind the scenes contacts are reportedly continuing between the
two sides.
Seif el-Islam Ghadaffi, who is believed to have conducted negotiations with Israeli
representatives, said in March 2004 that Libya was ready to compensate Libyan Jews whose
assets were confiscated in the mid-20th century, when almost all of the 40,000-strong
community emigrated to Israel. He encouraged Israelis of Libyan descent to return to Libya
and leave Israel/Palestine for the Palestinians. Muammar Ghadaffi also backed this proposal.
As yet, Libya has not formally followed Morocco and Tunisia in welcoming Israeli tourists to
its Jewish heritage sites. However in 2005 Seif al-Islam stated that Libya would have no
problem in dealing with Israel because it considered itself more African than Arab. This
however was announced to the outside world and not conveyed to the Libyan population who
continue to strongly identify with the Palestinian cause.
Relations with Italy TOP
As the colonial power in Libya between 1911 and 1943, and, together with Greece and Malta,
the nearest EU neighbour to Libya, Italy has long taken an active diplomatic and commercial
interest in Libyan affairs. Italy is the principal customer for Libyan oil and gas, buying over
40 per cent of Libyan crude and drastically increasing its gas supplies for the future. Libya has
at various times also posed a threat to Italy. With the US Mediterranean fleet based near
Naples, Libya attempted to launch a missile attack on the Italian island of Pantellaria in 1986
and could easily reach mainland Italy with its ballistic missile programme. The current threat
is seen to arise more from the flow of African immigrants sailing from Libya to Italy, and
both states have an interest in countering this. In December 1999, Italian Prime Minister

10. Massimo D'Alema became the first Western head of government to visit Tripoli and meet the
Libyan leader since UN sanctions were imposed. Prime Minister Silvio Berlusconi has made
four visits to Libya since 2002, including in February, August and October 2004.
Italy and Libya have signed an agreement to build a USD5 billion 600 km gas pipeline from
Melitah across the Mediterranean to Cape Passera on Sicily, where it will connect with the
TransMed pipeline from Algeria and Tunisia. The project was finalised in July 1999 as a joint
venture between Libya's state-held National Oil Company and the Italian firm ENI, which is
to market the gas in Italy and France. The pipeline is planned to commence operation in 2006.
Italian companies ENI and Agip are both major operators in the Libyan hydrocarbon sector
and the Libyan firm Tamoil plays a significant role in the Italian downstream sector.
The other sector of particular mutual interest is the flow of illegal migrants from Libya's coast
to the Italian (EU) shores of Sicily and especially Lampedusa island. These migrants come
mainly from the Sahel states and the Horn of Africa and tend to use Italy as a route to other
destinations in Western and Northern Europe. In July and August 2004, Italy and Libya
strengthened co-operation in this respect and Italy agreed to assist Libya in stemming its flow
of immigrants through helping it with its repatriation programme and offering training advice
on border patrol. It was Italy that pushed for EU sanctions to be lifted from Libya in order for
it to be supplied with the necessary equipment to tackle the immigration problem more
effectively. Italian police have also begun training Libyan police officers in how to tackle
illegal immigration and trafficking at the Polgari police school in Pescara.
As a reward for Italy's assistance, in October 2004, Ghadaffi formally lifted the ban on return
of former Italian settlers, who had been expelled from the country shortly after the revolution.
The return of these settlers had been banned despite the warming Libya-Italian relations
because Ghadaffi had tied it to the idea of Italy's paying compensation for the colonial period.
However, it seems that the Colonel's desire to prove Libya's openness to the world pushed
him to allow not only the Italians to return, but for them to also apply for compensation for
confiscated property and assets. The first group of returnees made a visit to Libya in
November 2004.
Given the warmth of bilateral relations, Italian oil giant ENI was surprised to have been left
out of the EPSA IV energy licensing round announced in January 2005 and criticised by Saif-
el-Islam Ghadaffi for being arrogant. This was particularly surprising given that ENI
remained in Libya as the largest foreign oil company throughout the sanctions period.
Moreover to the irritation of the Italians, despite Ghadaffi's agreement in 2004 to abandon the
Day of Revenge against the Italians during a meeting with Italian President Silvio Berlusconi,
the day was commemorated in Libya in 2005 along with the usual anti-Italian demonstrations
and speeches.
Relations with Malta TOP
Libya and Malta have traditionally had close ties and Libya has looked to Malta as its
gateway to Europe. Both countries were members of the Non-Aligned Movement during the
Cold War and Libya has generally perceived neutral Malta as a friendly neighbour. While the
issue of maritime boundaries between the two countries soured relations during the early
1980s, this dispute was finally resolved in mid-1985 when the International Court of Justice
ruled in favour of Libya.
Many Libyans own property and assets in Malta and the island is a popular tourist destination

11. for the more wealthy Libyan citizens. Malta continued to support Libya when it was under the
international embargo in the 1990s during which time travelling by ferry from Malta was one
of the few ways to enter Libya. Since the suspension of UN sanctions in April 1999, the two
governments have taken further steps to increase their political, economic and cultural links.
In July 2002, Libya and Malta further cemented their relationship by signing an extradition
treaty. This was the first such treaty that Malta has signed with a North African country.
Prior to Malta's joining the EU in May 2004, Libyans did not need a visa to enter the island
and Maltese citizens did not require visas to enter Libya. There is now a new bilateral
agreement in place. After joining the EU, Maltese Prime Minister Lawrence Gonzi stated that
one of the key benefits of EU membership was that Malta could act as a diplomatic and
economic stepping stone to southern Mediterranean countries like Libya.
Relations with Niger TOP
Libya's short and isolated border with Niger has been out of proportion to the influence
Tripoli has been able to exert on its southern neighbour. Indeed, the influence has more
accurately reflected the gulf between Libya's status as Africa's richest state and Niger's
destitution. In the 1990s Libya was believed to have influenced and possibly armed Niger's
Tuareg insurgency and was feared to have had designs upon the large uranium deposits in
Niger's Aïr mountains. Libya was also suspected of links to at least one military coup in
Niger.
Libyan rapprochement with Niger began in mid-1997 with several pan-Saharan/Sahelian
states subsequently convening in Tripoli under Ghadaffi's leadership to commit to 'solidarity,
security and stability' in the region. President Maïnassara developed good relations with Libya
and Ghadaffi declared national mourning following his assassination in 1999, condemning
Major Wanké's action. In May 2001, Niger and Libya agreed to revive security co-operation.
The central Saharan belt of Niger, Chad and Mali has gained importance for Libya since 1998
in providing links to wider sub-Saharan Africa in line with Ghadaffi's aspirations to pan-
African leadership. In this respect, Libya has sought to fund physical infrastructure within
Niger, paving roads in the interior, extending Agadez airport and planning new roads across
the border. Possible future pipeline links to the Mediterranean have also been discussed
should Niger prove to host substantial oil deposits, but these would be as unlikely as the
proposed trans-Saharan railway (again proposed in December 2001) and Niger's own
communications infrastructure is likely to remain oriented south and west to Nigeria and West
Africa. In December 2001 Libya also provided finance for a new Nigerien airline to supersede
Air Afrique, along with Nigerien private investment and Moroccan technical assistance.
Many Nigeriens have emigrated to work on Libya's coast and Niger is to some extent
economically dependent on the repatriation of their incomes. The anti-immigrant pogroms of
late 2000 and the subsequent repatriation of thousands of West Africans demonstrated the
vulnerability of these links.
Relations with Sudan TOP
Western suspicion that there is a clear political link between Libya and Sudan is reinforced by
the history of military support that Tripoli has rendered Khartoum. A feeling of 'brotherhood'
has developed through ties of religion and their mutual suspicion of the West. However,
reports of violent incidents in Libya between security forces and Islamists in 1995 prompted a
cooling of Tripoli's relations with Khartoum. Tripoli appeared to be concerned about the role

12. of Sudanese Islamists. In September 1995, Libya began expelling large numbers of Arab
expatriate workers who lacked proper work documents, including many Sudanese.
Nevertheless, Sudan's President Omar Hassan el-Bashir was the only foreign head of state to
attend Libya's 1995 anniversary celebrations of the 1 September 1969 coup that brought
Ghadaffi to power. Ghadaffi also telephoned President Bashir to express Libya's support for
Sudan following the US air strikes of August 1998.
Libya's role in Sudan has become increasingly constructive. Ghadaffi, with Kenyan
assistance, has helped to improve Sudan's troubled relations with Uganda. Under this
initiative the two states revived direct diplomatic representation in 2001; Ugandan diplomats
were previously based in the Kenyan embassy in Khartoum while Sudanese diplomats were
based in the Libyan embassy in Kampala.
Ghadaffi has played a notable role in trying to mediate in the Darfur crisis. He hosted a series
of informal talks and then a summit on the crisis in October 2004 that brought together a
number of African leaders, including the Sudanese government. Ghadaffi remains anxious
that an African solution be found to the Darfur crisis. In February 2005 he attacked UN
Secretary General Kofi Annan's call for the EU and NATO to help end the crisis, saying that
it would risk creating another Iraq. He threatened to stop his mediation efforts if such
intervention went ahead. The Sudanese government appears to favour Libya's role, as do the
pro-insurgency tribal leaders in Darfur with whom Ghadaffi has some influence, although
they are thought to fear that confining any solution to an African one may allow Sudan to
wriggle out of its commitments. Libya has also allowed international humanitarian assistance
through the World Food Programme to be transported through its eastern territory from
Benghazi port via Chad to the displaced population in Darfur.
Ghadaffi has also attempted to mediate in the crisis in the east of Sudan. Despite drawing
initial criticism from some parts of the Sudanese regime for meddling in the country's internal
affairs, Ghadaffi went ahead in October 2005 and hosted a delegation from the Sudanese
Eastern Front (EF) rebel movement. As a result of the meeting the rebels agreed to engage
seriously in peace talks with Khartoum - something that was welcomed by the Sudanese
government.
Relations with Tunisia TOP
Ghadaffi's relations with Tunisia have been erratic. Conservative and pro-Western but
economically and militarily weak, Tunisia has felt particularly threatened by Libya's
aggressive forays into radical Arab and African politics in the 1970s and 1980s but seems to
have found more recent common cause over Maghrebian unity, especially as Tripoli realigns
from its position as a 'rogue' state.
In January 1980, Ghadaffi denied Tunisian government accusations that Libya had armed and
trained the small group of dissident Tunisians that attacked police and army barracks in the
central town of Gafsa. Tunisian forces defeated the insurgents, but only after heavy fighting.
A partial rapprochement was pursued and the two countries signed a co-operation agreement
in 1982. However, Tunisia broke diplomatic relations in August 1985 and expelled 280
Libyans accused of spying. Libya retaliated by expelling some 30,000 Tunisian workers.
Diplomatic relations were restored in December 1987 but the periodic deployment of Libyan
troops and equipment on the border concerned Tunisia, which devotes a smaller percentage of
its economic resources to defence than its Maghrebian neighbours. Each country accused the
other of internal destabilisation and border security was a continual source of tension into the
1990s. Ghadaffi found particular fault with Tunisia's participation in NATO's Mediterranean

13. Initiative and the signing of economic agreements with the EU.
With Libya constrained by sanctions in the 1990s, bilateral relations gradually improved and
joint infrastructure projects were initiated to allow Tunisia to gain from Libya's transport
isolation. President Ben Ali frequently called for an end to the UN embargo against Libya,
arguing in 1999 that "The achievement of stability and development in our region remains
linked to the provision of security arrangements, stability, concord, the treatment of the causes
of tension and the settlement of the current problems, foremost of which is the lifting of the
embargo on the brotherly Libyan people." In October 1998, President Ben Ali held talks with
Colonel Ghadaffi in Tunisia, covering the implementation of joint development agreements
and projects, the strengthening of trade and the importance of greater bilateral co-operation in
the fields of infrastructure and investment. Contrary to the Moroccan-Algerian rivalry, both
countries agree on their interest in reviving the AMU and Libya has emerged as Tunisia's
primary trade partner outside of the EU.
In April 2005 it was announced that a new border gate is to be built between Tunisia and
Libya in the Ras Ejdar region to facilitate and better regulate the flows of goods and people
across the border.
Relations with the US TOP
Relations between Washington and Ghadaffi's Libya have always been problematic due to the
Libyan leader's radical anti-Western politics. As the US and the Soviet Union vied for
influence in the Middle East, it was inevitable that Libya would look towards Moscow for
support rather than Washington, which supported Israel and the conservative Arab regimes.
Libya also participated in the Arab oil blockade that targeted the US in the wake of the 1973
Arab-Israeli war.
US-Libyan relations, however, did not deteriorate seriously until the 1980s when President
Ronald Reagan began to take action against Libya for its involvement in international
terrorism. The Libyan People's Bureau was closed in Washington and the Libyan diplomats
expelled. Then in August 1981 two Libyan fighters were shot down by the US Navy in the
Gulf of Sirte, where Libya was claiming additional territorial waters, and in December
Washington ordered all US citizens to leave Libya. Although Libyan oil imports were
embargoed in 1981, US companies continued to operate in Libya until January 1986 when the
economic sanctions were significantly widened. Relations continued to deteriorate in 1986
after Libyan agents were accused of planting a bomb in a Berlin nightclub that killed a US
serviceman. In retaliation the US launched punitive airstrikes against Tripoli and Benghazi,
which reportedly killed 37 people including Ghadaffi's adopted daughter. Libya was then
accused of involvement in the bombing of a Pan Am airliner over Lockerbie, Scotland in
1988 that killed 270 people. Washington asked the UN Security Council to impose sanctions
against Tripoli; this duly happened in 1992. In January 1989 two more Libyan fighters were
shot down by the US Navy over the Gulf of Sirte.
The US repeatedly accused Libya of stockpiling weapons of mass destruction. The State
Department believed that Libya had been stockpiling chemical weapons since at least 1988
and that a massive underground chemical weapons plant was being constructed inside a
mountain near Tarhuna. The underground construction, which Ghadaffi always maintained
was part of the Great Man-made River Project, stopped in 1997. The US also showed serious
concern that Libya may have received long range No-dong missiles from North Korea and
was engaged in its own ballistic missile test and development programme in the Sahara.

14. Despite accusations and rhetoric, US-Libyan relations became less belligerent during the
1990s. Although the UN sanctions were suspended when Libya handed over the two
intelligence agents suspected of the 1988 Lockerbie bombing, Washington chose to maintain
its unilateral sanctions despite lobbying by the US oil industry, saying that Ghadaffi would
have to pay compensation to the victims before the sanctions were lifted. Ghadaffi responded
by saying that "all the victims of the United States from Vietnam to Tripoli" would have to be
paid damages before Libya paid reparations for Lockerbie. In 2000, State Department
spokesman James Rubin stressed that Libya had "a very long way to go before it meets the
standards required to be removed from the terrorism list". After George W Bush became
president, Libya was demoted from 'state of concern' back to 'rogue state' and the sanctions
were renewed in August 2001 for another five years, despite Libya's efforts to improve
relations.
Real rapprochement with the US began following the events of September 2001, as the
Libyan regime seized the opportunity of its common opposition to political Islam and jihadi
movements to lobby for a strategic re-alignment. From 2002, this alignment of interests
increasingly coincided with Ghadaffi's disillusionment with his African projects and his
rejection of the Arab League over its failure to mediate growing crises in Palestine and Iraq.
While Washington responded by excluding Libya from President Bush's original 'Axis of
Evil' (Iran, Iraq, North Korea) in January 2002, four months later, Under Secretary of State
John Bolton listed Libya as well as Cuba and Syria within the 'Axis' as developers of weapons
of mass destruction.
US rhetoric continued to denounce Ghadaffi, albeit linking him to proliferation rather than
terrorism issues. It appears that secret trilateral talks to end Libya's unconventional weapons
programme and bring it back into the fold appear to have begun on a British initiative in
March 2003. On 19 December 2003, British Prime Minister Tony Blair announced that Libya
had decided to dismantle its WMD programme. Libya guaranteed that the process would be
verified by the International Atomic Energy Agency (IAEA), which began inspections of
Libyan facilities within 10 days.
Libya's apparently sudden renunciation of its WMD programme was trumpeted by the White
House as evidence of the success of its "pre-emptive" war against Iraq in 2003, in that it
indicated to recalcitrant and rogue states the futility of resisting US military prowess.
According to this analysis, the war was necessary to force states into better behaviour. To this
end, Libya ratified the Nuclear Test Ban Treaty in January 2004 and announced that it would
renounce the use of chemical weaponry by joining the Chemical Weapons Convention in
February 2004.
The repeal of the main part of the economic embargo - on US investment in Libyan oil and
financial sectors - in late April 2004 opened up possibilities for new investment in Libya by
US oil and gas companies. This followed the late February 2004 announcement that the US
was lifting a 23-year old ban on travel to Libya by US citizens, which was clearly intended to
aid companies wishing to do business with Tripoli. Libya is an attractive proposition for US
corporations as the country is not wracked by war or civil disturbance and much of Libya has
not yet been parcelled out for resource exploration, thus offering the possibility of major long-
term increases in returns on investment. US firms Marathon Oil, ConocoPhillips and Amerada
Hess (collectively the Oasis Group) plus Occidental Petroleum all had concessions in Libya
before sanctions. The April 2004 opening also allowed for Libyan students to study in the US
and removed all barriers to the restoration of full diplomatic relations, although plans were not
immediately announced for the opening of a US Embassy in Tripoli.

15. In September 2004, the Bush administration announced that it had ended the National
Emergency that had been declared under President Reagan in 1986. The US also formally
revoked all remaining trade sanctions, lifted the remaining economic restrictions on aviation
services, permitted direct flights between the two countries and unblocked approximately
USD1.3 billion in assets that were frozen under the Libya Sanctions Programme. In
November 2004, US Congressman Tom Lantos made a visit to Libya during which he
reportedly inspected several potential sites for the US Embassy and indicated that full
diplomatic relations would be resumed in May or June 2005.
The re-election of George Bush to the US Presidency in November 2004 was welcomed by
the Libyan regime, which was anxious to retain the good relations it had built up with key
personnel within the administration. In February 2005 US Assistant Secretary of State
William Burns visited Tripoli, after which the State Department lifted its restriction barring
Libyan diplomats in the US from travelling more than 25 miles from Washington and New
York. The Libyan government scrapped a similar restriction on US diplomats in Libya.
Further visits have been made by US officials during the first half of 2005, most notably,
David Welch, Assistant Secretary for Near Eastern Affairs in the State Department, stopped
off in Tripoli in June 2005 where he met Ghadaffi to discuss the improving bilateral relations.
The EPSA IV oil bidding round in January 2005 also served to strengthen US-Libyan
relations as US oil firms were awarded the majority of licences to the frustration of a number
of European companies. The normalisation of relations between the two countries looks set to
continue as, despite its repeated assertions that it wants to see internal reform in Libya, the US
has done little to try to enforce this. There remain elements within the Bush administration
and among congressional Republicans that doubt Ghadaffi's sincerity in turning over a new
leaf. These elements cannot have been heartened in June when Ghadaffi gave a fiery anti-
American speech warning that Libyans would not allow colonial forces to step on their land.
However, this was primarily for a domestic audience that for the most part continues to be
fiercely against US activities in Iraq.
Libya's remaining aim is to get itself removed from the US state sponsors of international
terrorism list so that it can undertake the modernisation of its defence and transport sectors
and acquire the necessary technical competence to overhaul its energy sector. It is anticipated
that this will occur during 2005, despite the apparent lack of clarity as to what the Libyans
need to do to actually get themselves off the list. Most concretely, the US will need to be
reassured over incidents such as the alleged Libyan plot to assassinate the Crown Prince of
Saudi Arabia. However, with the relaxation of the EU arms embargo in mid-October 2004,
US contractors are likely to seek to be allowed to compete alongside their European rivals in
2005.
Relations with Zimbabwe TOP
Libya supported the liberation struggles of Southern Africa during the 1970s and 1980s and
formed close links to the Zimbabwe African National Union - Patriotic Front (ZANU-PF)
political party. These links have become much more important in recent years as President
Mugabe has alienated Zimbabwe's donors in the West and Libya has emerged as an
alternative source of patronage. In return, Mugabe has fallen in with the more radical
diplomatic agenda of Colonel Ghadaffi and his vision of African development. During
January 2000, it was reported that Mugabe had obtained a USD100 million loan from Libya
to alleviate Zimbabwe's economic problems. A fuel supply deal was also arranged in July
2001, when Ghadaffi paid a very high profile visit to Harare after attending the OAU leaders'
summit in Lusaka. Mugabe paid a follow-up visit of 10 days duration to Tripoli in late August

16. 2001.
In line with security co-operation begun in the initial years of the DRC war (1998-2002),
Libyan agents have been sent to Harare to provide security for Mugabe and to train members
of the Central Intelligence Organisation (CIO). A number of MiG-23 fighter-bombers and
possibly Mi-24 helicopter gunships, plus pilot and technician training, have also been
provided to Zimbabwe since 2001. In return for Libyan financial and security assistance,
Zimbabwe has become a provider of agricultural produce, especially beef, to Libya;
confiscated commercial farms are reported to have been allocated to Libyan interests since
2001.
During April 2002 Mugabe again visited Libya in an attempt to extend the oil deal. It was
reported that a further deal was negotiated, under which Zimbabwe would supply agricultural
products in exchange for oil. Libya already owns tracts of land in Zimbabwe. However, in
May 2002 it was reported that no further Libyan oil would be supplied due to poor payment
by Zimbabwe. Despite this, it was reported in September 2002, when Mugabe again visited
Libya, that Zimbabwe had renewed an annual USD360 million fuel deal with Libya. In terms
of this, Libya would supply 70 per cent of Zimbabwe's fuel needs for one year. Libya would
also invest in tourism, mining and agriculture in Zimbabwe. However, by December 2002, it
was reported that talks with Libya over fuel supplies had collapsed, due to arrears in
payments.
In May 2003, Libya was again approached to supply oil to Zimbabwe and, in June, Zimbabwe
state radio announced that a successful oil deal had been negotiated. It is debatable whether
Zimbabwe can continue to supply agricultural products in exchange for oil. The new deal was
apparently to involve Zimbabwe mortgaging its key oil pipeline from Beira and storage
facilities to Libya. It has been stated that this was part of Libya's vision to supply fuel to other
Southern African countries. By end of year, no Libyan oil had yet reached Zimbabwe, but an
assurance was given that the Libyans would gain a share in the National Oil Company of
Zimbabwe (Noczim). Prices of the assets held by the Company had not yet been agreed upon.
Noczim would also have to pay USD5 million per month to Libya to ensure a steady supply
of fuel.
Zimbabwe supports Libya's opposition to the New Partnership for African Development
(Nepad), a peer review of democracy and human rights observance linked to the AU and
development assistance, as a Western attempt to divide and dominate Africa. Zimbabwean
opposition supporters in London have, however, called on South Africa and Libya to put
pressure on Mugabe over political violence linked to land reform. Libya's 2003-04 attempts to
gain Western acceptance by dismantling its capabilities to produce weapons of mass
destruction, may also entail less willingness to be openly seen defending Mugabe, despite
sizeable Libyan interests in the country.
Trade and External Assistance TOP
Exports TOP
Libya exports very little except oil and gas. Despite the existence of the Arab-Maghreb Union
and the proximity of vast markets in Egypt, Libya's main trading partners form part of the EU,
which takes over 80 per cent of all exports. Turkey is the only other significant market. The
rest of the world takes just 10 per cent of Libyan exports, with Africa and the Americas
buying almost nothing from Libya.

17. Destination of Exports
Per cent of total, 2003
Italy 39.6
Spain 14.7
Germany 14.7
Turkey 7.7
France 2.6
UK 2.4
Greece 2.2
Asian States 4.9
Arab and African States 4.6
Other 6.6
Note: Source:IMF, based on Libyan customs statistics
Imports TOP
Libya imports mainly machinery and vehicles (ovr 40 per cent, mostly for the oil industry),
manufactured goods (up to 30 per cent) and foodstuffs (about 15 per cent). About two-thirds
of imports usually come from the EU, with Japan also important. Again, little is traded with
the rest of Africa or the Americas.
Per cent of total, 2003
Italy 18.4
Germany 8.9
Japan 8.7
UK 5.4
France 4.9
Turkey 2.1
USA 1.9
Canada 1.1
Other European States 32.1
Arab and African States 10.5
Other Asian States 5.1
Other 0.9
Note: Source: IMF, based on Libyan customs statistics
External Assistance TOP
The wealth of the Libyan oil economy and the pariah status of the Ghadaffi regime has long
made Libya ineligible for international development assistance from donor states or
international financial institutions, although the Soviet Union provided soft loans for arms
procurement deals in the 1970s and 1980s. A very limited amount of funds is provided
annually by European states and UN agencies for social programmes in support of refugees in
the country.
Libya has long been a significant donor to various allies in Africa and further afield,
apparently on the whim of Ghadaffi and usually in reward for adopting some kind of 'anti-
imperialist' stance. For example, Libyan lobbying for its radical agenda within the new
African Union saw it promising large sums or oil supply equivalents to a wide range of poor
states. However, erratic Tripoli has a bad reputation for not fulfilling the terms of promised

18. aid. It is also increasingly likely to seek material gain from its assistance programmes. For
example, the provision of oil to Zimbabwe since mid-2001 has not been for free, merely on
soft terms and has envisaged the provision of Zimbabwean agricultural commodities for the
Libyan market. When Harare has been unable to meet these conditions, the oil has not arrived.
Libya has also provided a range of defence equipment to African clients in return or
expectation for their diplomatic support. Recipients have often complained of the
inappropriate sophistication of such systems and the inadequate technical back-up provided.
Historical Background TOP
Date Event
1911 Area was conquered by Italy.
1934 Became a colony, named Libya.
1942 Libya divided into three provinces: Fezzan
(under French control), Cyrenaica, and
Tripolitania (under British control).
1951 Independence - United Kingdom of Libya
formed as a federal state.
1971 Federation of Arab Republics formed with
Syria and Egypt.
1972 Occupation of Aozou Strip (Chad).
1977 General People's Congress formed.
Libya and Egypt at war (lasted four days).
1980 Libyan invasion of Chad failed.
1981 US authorities banned Libyan crude oil
imports.
1982 German firms pulled out of rocket programme.
1983 Supported ex-President Oueddei in Chad.
1985 Libya threatened Tunisia.
More failed military initiatives in Chad.
Arab-African Union with Morocco failed.
1986 US bombed Tripoli and Benghazi.
All US trade with Libya made illegal.
1987 Libya defeated in Chad.
1988 CIA accused Libya of making chemical
weapons.
Pan Am flight 103 destroyed over Lockerbie
(December).
1989 Bomb destroys UTA DC-10 airliner over
Niger during flight from Brazzaville to Paris.
170 killed, Libya blamed.
US Navy shot down two MiG-23 aircraft
(January).
Formation of Arab Maghreb Union
(February).
1992 UN sanctions applied against Libya (April).
1993 UN sanctions tightened (November).
1994 Libya withdrew from Chad (30 May).

19. 1995 Security and economic agreement signed with
Algeria (April).
Expulsion of Arab expatriate workers.
1998 Reported assassination attempt (denied by
Libya) on Ghadaffi near Dernah (2 June).
Libya facilitated the deployment of Chadian
troops in support of President Laurent Kabila
in the Democratic Republic of the Congo.
1999 Libya agreed to surrender two suspects
indicted for the 1988 Lockerbie bombing
(March).
French courts handed down life sentences in
absentia on six Libyans for bombing UTA
flight 772 in 1989 (April).
UN Security Council formally suspended
sanctions.
UK restored diplomatic relations with Libya
following Tripoli's acceptance of
responsibility for the murder of a
policewoman in 1984.
2000 Libyan mediators help free hostages held by
Philippine Islamic separatist group Abu
Sayyaf.
Rioting Libyans killed over 100 African
immigrants (September).
2001 The controversial Lockerbie verdict was
announced (January).
Libyan-Chadian military intervened in the
Central African Republic (CAR) to help
President Ange-Felix Patassé quash an
attempted coup (May-June).
The African Union, championed by Ghadaffi,
succeeded the OAU at the Lusaka summit
(July).
Ghadaffi visited Zimbabwe, offered to provide
USD340 million worth of fuel in exchange for
Zimbabwean products (July).
Washington renewed sanctions against Libya
for another five years (August).
Libya threatened to sell US assets if US
companies did not re-establish their Libyan
operations within a year (September).
Second Libyan military intervention in the
CAR (November).
2002 Libya and US hailed positive bilateral talks
(January).
Ghadaffi threatened to withdraw from the
Arab League due to the origination's
impotence (March).
Libya denied that it offered a USD2.7 billion

20. compensation deal to the families of the
Lockerbie victims in exchange for the removal
of all sanctions. The US rejected any deal that
did not involve a Libyan admission of guilt.
Ghadaffi attended inaugural summit of
African Union in Lusaka, where he promoted
his radical agenda for continental political and
military union (July).
Libyan fighter-bomber aircraft reinforce CAR
army against Chad-backed rebels (November)
2003 Libya commenced secret negotiations with the
US and UK over an end to its weapons of
mass destruction programme (March).
Libya completed payment of USD2.7 billion
to Lockerbie victims' relatives (August).
UN Security Council approved a
UK/Bulgarian proposal to repeal 1992
sanctions against Libya (September).
Spanish PM Aznar made an official visit to
Tripoli (September).
Libya admitted publicly to having advanced
chemical, biological and nuclear weapons
programmes and to the monitoring of their
dismantlement by UN inspectors (December).
2004 Libya agreed to increase compensation
payment to the relatives of victims of UTA
bombing from USD33 million to USD170
million (January).
US Congressional delegation made first
official US visit to Libya since 1966
(January).
Italian PM Berlusconi made his second visit to
Tripoli for talks with Ghadaffi (February).
Libyan foreign minister visited London for
talks with UK PM Blair (February).
US lifted travel ban on Libya but kept other
sanctions in place; US oil company
representatives visited Tripoli to prepare for
re-engagement (February).
US Middle East envoy William Burns met
Ghadaffi in Tripoli (March).
UK PM Blair made an official visit to Tripoli
to meet Ghadaffi (March).
US lifted its embargo on firms' involvement in
the Libyan oil and finance sectors (April).
Ghadaffi made an official visit to the
European Commission in Brussels and was
invited to join the Barcelona Process (April).
A Libyan court passed the death sentence on
five Bulgarian nurses and a Palestinian doctor

21. found guilty of deliberately infecting over 400
children with the HIV virus in a Benghazi
hospital (May).
US Compensation deal reached with Germany
over payments to non-American victims of the
La Belle disco bombing of 1986 (August);
Chancellor Schroeder visited Tripoli with a
German business delegation (October).
US formally lifted remaining trade sanctions
and unblocked Libya's frozen assets
(September).
EU lifted economic sanctions against Libya
and relaxed its arms embargo following Italian
PM Berlusconi's fourth visit to Tripoli
(October).
Ghadaffi hosted an informal mini-summit on
the Darfur crisis with leaders from Sudan,
Egypt, Chad and Nigeria (October).
French President Chirac visited Tripoli with a
French business delegation (November).
Saudi Arabia withdrew its ambassador from
Tripoli (December).
2005 EPSA IV oil bloc licensing round greatly
favoured US and Asian oil companies at the
expense of European operators already in
Libya (January).
South African Deputy President visited Tripoli
to boost Libyan-South African commercial
ties (March).
Libya tried to host Arab Maghreb Union
summit in Tripoli, but this was called off at
the last moment due to differences between
Morocco and Algeria (May).
US Under Secretary of State for Near East
Affairs, David Welch visited Libya to meet
Ghadaffi (June).
The death of King Fahd and the crowning of
King Abdullah in Saudi Arabia appears to
have opened a phase of reconciliation between
Libya and the Saudi ruling family. Saudi
Arabia also released the Libyan suspects
accused of being involved in the alleged plot
to assassinate the then Crown Prince (August).
The second round of EPSA IV was held. This
time Asian, particularly Japanese, companies
were successful (October).
Independence and the royalist period TOP
The grandiose ambitions of Italian fascism collapsed with defeat in the Second World War
and the majority of Italian settlers had left by the end of 1942. Libya, impoverished and

22. under-populated by violent colonisation and the Second World War, was divided between
British and French control. In 1949, after considering various options for the future of Libya,
the UN called for the country's independence. This was to be achieved by 1952 and a complex
political situation was partially resolved by UN Commissioner Adrien Pelt in 1951.
Essentially, the UN plan provided for a federal monarchy under Sayyid Idris el-Sanusi, a
candidate whose strong British connections had been forged through anti-Italian co-operation
during the Second World War. However, King Idris only commanded real support in
Cyrenaica where he built his capital. The newly independent state accepted a British and
American military presence (notably at El-Adem and Wheelus Field Air Force Base).
Although Libya joined the Arab League in 1953 and in 1956 refused to allow Britain to use
Libya as a base during the Suez crisis, the monarchy maintained a strong Western orientation
even as the influence of Nasser and pan-Arabism began to sweep through the region.
The discovery of oil in 1959, heralded a time of rapid change as Libya began transforming
from a pauper state, dependent on aid and rent from US and UK military bases into a nation of
considerable wealth. In 1963 Libya joined OPEC and by 1964 oil exports exceeded 800,000
barrels a day.
The rise of Ghadaffi TOP
In the late 1960s the anti-western Arab nationalism began making an impact on Libya and the
country became increasingly unstable. In 1969 a military coup lead by a group of young
officers under 27 year-old Colonel Muammar Ghadaffi overthrew the monarchy and re-
established Libya as a republic. While Libyans welcomed Ghadaffi as a strong nationalist
leader, relations with the West predictably deteriorated with the US and the UK being told to
surrender their Libyan bases. Libya's oil industry was nationalised and the revenues generated
were channelled back into the country's infrastructure. While Ghadaffi claimed to have
invented an alternative ideology in his Green Book (based on a combination of Marxism and
Islam) Libya remained a military dictatorship.
Throughout the 1970s and 1980s Libya adopted a high international profile based on pan-
Arabism, the support of liberation movements fighting 'Western imperialism' around the
world and military adventurism in neighbouring African states. Libya was particularly
involved in Chad due to the disputed border and tribal links, and Ghadaffi's military
intervention caused a direct confrontation with France, Chad's old colonial ruler. Ghadaffi
also supported Ugandan dictator Idi Amin in return for Amin's disavowal of Uganda's
previously close relationship with Israel, and has been accused of meddling in Sudan. More
recently Libya apparently financed the deployment of Chadian soldiers in the Democratic
Republic of Congo and has been connected with Charles Taylor's National Patriotic Front of
Liberia and the Revolutionary United Front in Sierra Leone.
Support for Terrorism and international isolation TOP
It was Ghadaffi's apparent support for liberation/terrorist movements around the world that
particularly offended the West and hastened Libya's relegation to the status of international
pariah. Ghadaffi, keen to export his revolutionary ideas, saw the world divided into 'freedom
fighters' and 'imperialists' saying that "national liberation can only be achieved through armed
struggle". As such it is widely agreed that Libya has supported a large number of insurgent
groups around the world - the only criteria being opposition to the Western powers. Support
has included supplying weapons to insurgent groups including the distribution of the 1,000
tons of Semtex that Czechoslovakia admitted supplying to Libya, supplying financial aid to
such groups, training insurgents in Libya, and offering asylum to wanted terrorists. The list of

23. groups allegedly supported by Libya includes: various Palestinian groups, Basque separatists
in Spain, the IRA in the UK, the Red Brigades in Italy, the Sandinistas in Nicaragua, M19 in
Colombia, the Moro Islamic Liberation Front in the Philippines, and many more.
Initial US sanctions were imposed by the Reagan administration in 1981, when Libyan oil
imports were embargoed, although US companies continued to operate in Libya. These
measures were strengthened in January 1986, involving a boycott prohibiting US firms from
operating in Libya and banning the import of Libyan crude oil and products. It also froze
Libyan financial assets in the US and stopped US banks and financial institutions or branches
of foreign banks in the US from dealing with Libya.
Apparently in retaliation, Libya was blamed for the killing of an American serviceman in a
bomb attack in Berlin on 5 April 1986 and the killing of a UK policewoman outside the
Libyan embassy in London. These attacks prompted the air raids on Tripoli and Benghazi by
US aircraft based in the UK and onboard US aircraft carriers. Thirty-seven people were
reported to have been killed, many of whom were civilians. Arab countries condemned the
raids. Ghadaffi was apparently seriously shaken by his own narrow escape and he played little
part in world politics for the next 18 months.
Most seriously Ghadaffi's Libya was also implicated in the bombing of Pan Am flight 103
over Lockerbie in Scotland on 21 December 1988, which killed 259 people in the air and 11
on the ground, and of a UTA flight over Niger on 19 September 1989, in which 171 people
died. Libya strongly denied involvement, and there are many who hold strong suspicions that
a Palestinian terrorist group, protected by Syria and in Iranian pay, was responsible. In March
1999 a French court handed down life sentences in absentia to six Libyans found guilty of the
UTA bombing, and demanded compensation from Libya. International arrest warrants were
issued in case the suspects ever left Libya. The most senior among them was Abdallah
Senoussi, Ghadaffi's brother-in-law and believed to have been the deputy head of Libya's
intelligence service at the time.
It was Libya's involvement in the two airline bombings, specifically the refusal to hand over
the two intelligence officers suspected of involvement in the Lockerbie bombing and lack of
co-operation over the UTA bombing, that led the UN to impose economic sanctions in April
1992. The sanctions, which were tightened in 1993, included an embargo on air travel, arms
imports and certain equipment related to the oil industry. It also imposed a selected freeze on
funds and financial resources abroad belonging to the Libyan government, companies and
some individuals, and banned the supply of aircraft, components, engineers, maintenance
services and aircraft insurance.
The US also maintained its unilateral sanctions on nearly all trade with Libya in an effort "to
limit Libyan access to funds and material for terrorist activities, weapons of mass destruction
programmes and other destabilising military actions". In 1996, the US Iran-Libya Sanctions
Act passed by Congress threatened sanctions against any non-US company that invested
USD40 million a year (reduced to USD20 million in 1997) in the Iranian and Libyan energy
sectors, although this has been hard to enforce in practice.
Ghadaffi in Africa TOP
For most of the 1990s Libya did its best to undermine the UN sanctions. The decision to fly
Libyans to Saudi Arabia in April 1995, was in direct violation of the UN sanctions but it was
also designed to highlight Libya's ongoing plight in the Arab states which were only offering
low key support. However, Ghadaffi, the most vocal advocate of pan-Arabism since Nasser,

24. continued to become increasingly frustrated with the Arab world and began to look elsewhere
for support over the sanctions issue and to form a regional forum for co-operation. To this end
Libya began to focus its foreign policy on Africa where impoverished states, whose votes still
had equal weight in the UN General Assembly, could be won over more easily than the
reticent Arab governments. A major breakthrough in Libya's relations with Africa came in
February 1998 when a treaty was signed with the Saharan countries of Chad, Mali, Niger,
Sudan and Burkina Faso. While the pact's details remained undisclosed, the move was widely
seen as a re-orientation of Libyan policy away from the Arab nationalist cause that Ghadaffi
had espoused for so long, towards the rhetoric of African unity. The other Saharan states
involved probably saw Libya as a viable alternative focus for regional power, rather than
relying on ambiguous and unreliable Western support.
Events in September 2000, however, indicated that Ghadaffi's African policies had become
seriously unpopular at home. As part of Libya's pro-African policies, over one million African
refugees and migrant workers had been admitted. These immigrants quickly became the target
for Libyans' social and economic resentment. This anger boiled over in September 2000 as
anti-black riots swept through Libya's coastal towns killing as many as 500 immigrants. In the
wake of the widespread violence the authorities began the mass deportation of thousands of
illegal immigrants. Although black Africans from Chad, Ghana, Niger and Sudan were
affected, it was the Nigerians who were singled out for attack as many Libyans held them
directly responsible for the rising crime rate. Although extremely serious, Libyan officials
sought to play down the scale of the confrontations and the few reports in the heavily
censored Libyan media suggested that the unrest was the work of agent provocateurs
attempting to subvert African unity. The events were strongly condemned by African leaders,
including Chad's usually pliant leader, Idriss Déby.
Although the riots were extremely embarrassing and certainly a setback, they did not end
Tripoli's African ambitions, which remained undeterred even though Libya was already
emerging from its isolation (see below). During the course of 2000 and 2001 Ghadaffi's
African Union initiative, which he had championed since the OAU's Sirte summit in 1999,
proceeded apace. By April 2001, 36 OAU members had ratified the Consultative Act of the
African Union - the two thirds majority needed to bring the organisation into existence. The
African Union officially superseded the OAU at the end of the organisation's Lusaka's summit
in July 2001. The details of what the African Union will entail remain unclear, although it is
believed to be similar to the European Union with a central bank, parliament and court. Many
observers remain highly sceptical that the new organisation will be anymore effective than its
predecessor. Ghadaffi's diplomatic credibility in Africa remained high, however, even after he
instructed Ugandan President Yoweri Museveni to forget about elections and rule forever in
June 2001.
Despite Ghadaffi's anti-imperialist rhetoric, May 2001 saw Libya launch the kind of military
intervention normally associated with former colonial powers. Libyan aircraft flew several
hundred Libyan and Chadian military personnel, along with armoured vehicles and helicopter
gunships, to the Central African Republic (CAR) to help President Ange-Felix Patassé quash
an attempted coup. The intervention demonstrated Ghadaffi's willingness to support friendly
African governments and brought Patassé further into Tripoli's sphere of influence.
In the wake of Ghadaffi's triumph at the Lusaka summit, the Libyan leader went on to visit
Zimbabwe where he brought President Robert Mugabe further into his sphere of influence.
Ghadaffi and Mugabe brokered a deal that would provide fuel worth USD340 million a year
in exchange for Zimbabwean products. The deal came at a crucial time for Mugabe as the

25. crippling fuel shortages were proving to be one of the most painful symptoms of the economic
crisis that threatened to topple his regime. Zimbabwe had already named Libya as a supporter
of its military intervention in the DRC (the economic burden of the conflict being one the root
causes of Zimbabwe's economic crisis) and received Libyan financial aid in 2000. Ghadaffi
also expressed his support for Mugabe's land reform programme even though the associated
invasion of Zimbabwe's white-owned farms had only exacerbated the country's economic
woes.
Rehabilitating Libya's international relations TOP
Although Ghadaffi successfully gathered international support, not only amongst Africa and
Arab states but also in European countries keen to pursue economic opportunities in the
country, Libya's past record as a terrorist sponsor needed to be addressed if Tripoli was to
achieve its paramount foreign policy objective of ending Libya's international isolation. A
rare outbreak of pragmatism in the late 1990s provided an important turning point. Faced with
waning support for sanctions, London and Washington dropped their demand that the
Lockerbie suspects should be tried in either the UK or the US. Instead a unique trial was
proposed whereby the two Libyans would be tried in the Netherlands under Scottish law. As it
was made apparent that compliance with the proposal would effectively end Libya's isolation,
Ghadaffi agreed to hand over the two suspects in March 1999. After France expressed
satisfaction with USD31 million Libya paid in compensation for the UTA bombing, the
sanctions were suspended - but not lifted - in April 1999. In another display of moderation,
Libya admitted culpability in the 1984 fatal shooting of a policewoman outside its London
embassy, and agreed to assist London police to investigate the murder and pay compensation
to the victim's family. The UK, which severed relations with Libya following the killing,
restored ties on 7 July.
Once sanctions had been suspended, European governments and companies rushed to
normalise relations and get in line for lucrative infrastructure, oil industry and transportation
projects worth an estimated USD14 billion. Libya was promised that once the UN sanctions
were formally lifted it would be granted full membership of the European Union's co-
operation programme for southern Mediterranean countries following a meeting of European
and Mediterranean foreign ministers in Stuttgart on 15-16 April 1999. Membership of the
Euro-Mediterranean partnership would be dependent on Libya committing itself to principles
regarding respect for democracy and human rights.
Libya's participation in the first EU-Africa summit, which was held in Cairo during early
April 2000, sent out mixed messages regarding Ghadaffi's commitment to renewing ties with
the developed world. In one sense Libya's progress towards international rehabilitation was
reinforced as Ghadaffi met a number of European leaders at the summit including European
Commission President Romano Prodi and Italian Prime Minister Massimo D'Alema. Prodi's
spokesman, Ricardo Levi, said the private talks between them were intended to assess Libya's
"new ideas" after it began to rebuild bridges with Europe. Ghadaffi also met German
Chancellor Gerhard Schröder, who described the meeting as "cordial and productive".
Despite the apparently conciliatory tone adopted in these private meetings, Ghadaffi launched
a scathing attack on Europe in his speech to the summit. In addition to accusing the Europeans
of looting African and Arab resources and imposing their culture on the region, Ghadaffi
criticised international capitalism and urged the Europeans to expel the US Navy from the
Mediterranean. He also dismissed European pleas for the introduction of democracy
throughout the continent."Leave us alone as your ideas and culture differ from ours" he
argued. Romano Prodi, said he was "strongly disappointed" with Ghadaffi's speech.

26. Tripoli reacted angrily to the Senate resolution on 28 April 2000 that reasserted its support for
the ban on US citizens travelling to Libya. A statement issued by the Libyan Foreign Ministry
claimed that the US would be the "main loser" as representatives of international oil
companies flooded into the country to conclude co-operation agreements. "We are surprised
that one country should forbid its nationals to go to another when all constitutions and
international laws recognise the right of citizens to free movement," a statement said.
In early May 2000 the trial of the two Libyans accused of carrying out the Lockerbie bombing
finally commenced at Camp Zeist, a former US Air Force base in the Netherlands that was
designated as Scottish territory for the duration of the trial. While promising to accept the
judgement of the court, Ghadaffi argued that further investigations into the actions of Libyan
officials or himself were unnecessary as he had "no connection" with the bombing. He also
maintained that he had no idea who the perpetrators were.
Ghadaffi's continuing efforts to present himself as a modern and responsible leader were
underlined in August 2000 when he launched a major initiative to free foreign hostages held
in the Philippines. Former Libyan prime minister Rajab Azzarouq played a key mediating role
between Muslim separatist guerrillas, seeking an independent Muslim state in the south of the
country, and the Philippine government. Azzarouq, a former Libyan ambassador to the
Philippines and a close confident of Ghadaffi, denied newspaper reports, which claimed Libya
paid USD25 million to the rebels. Libya maintained that it only offered development projects
to secure the release of the hostages. Tripoli is known to have long-standing ties with Muslim
rebels in the mostly Catholic Philippines and has provided assistance to build schools and
mosques in the impoverished, largely Muslim south. The Libyans have been accused of
training rebels from the Moro Islamic Liberation Front (MILF), a large Muslim rebel group.
In October 2000 the Libyan leader paid a visit to Jordan, his first for 17 years, before
travelling to Syria and Saudi Arabia. This tour of Arab states was partly a response to the
Palestinian uprising but it was also aimed at raising Libya's profile in the region after years of
isolation. Ghadaffi boycotted the emergency Arab summit of 21-22 October, convened to
discuss the crisis in the Middle East. Prior to the summit he read out and ridiculed exerts of
the draft communiqué to underline his point that the meeting would produce no meaningful
results. Libya was represented at the summit by its Arab League ambassador but he walked
out on the first day.
In late October a Paris court ruled that Ghadaffi could stand trial in France for the shooting
down of the UTA airliner over Niger in 1989. The court rejected a defence argument that, as a
serving head of state, he should have immunity from prosecution.
In January 2001 the Lockerbie trial was concluded when the judges announced that one of the
defendants was guilty and the other innocent - a verdict that failed to satisfy the relatives of
the victims and brought demands for Libya to admit its involvement. Ghadaffi rose to the
occasion with the kind of rhetoric that typified his formative years. After a celebratory dance
with the acquitted defendant he denounced the proceedings as a show trial, stated that he had
evidence that would vindicate the other defendant (if it exists, it was never released), and
demanded a complete halt to sanctions. The US and UK, however, insisted that Libya would
have to accept responsibility and pay compensation before the sanctions are dropped.
While el-Megrahi, the Libyan convicted of the Lockerbie bombing, pursued an appeal
through the Scottish legal system (which was quashed in March 2002), Ghadaffi continued his
efforts to lift the US sanctions against Libya. Unfortunately for Ghadaffi, the Bush
administration, which is using the threat from rogue states to justify its national missile

27. defence programme, remained determined to maintain the sanctions, which were duly
renewed for another five years in August 2001.
Libya's ambiguous relationship with the US continued into September when Tripoli
announced both that it wanted to improve relations with Washington and that it would sell the
oil concessions held by US companies, who withdrew from Libya in 1986, to other oil
companies unless they restarted their operations within a year. While Washington responded
by saying that it would take a negative view of anything that amounted to the confiscation of
US assets, the dispute was subsequently overshadowed by the events of 11 September. Libya,
although one of Washington's usual suspects, was not considered to be involved in the
terrorist attacks and diplomatic activity increased, with both the Spanish foreign minister and
French minister for co-operation meeting Ghadaffi, as the West attempted to secure Libyan
support in the fight against terrorism. Ghadaffi said that the US had the right to retaliate
although he commented that bombing London would be a more effective way of fighting
terrorism than bombing Afghanistan.
In May 2002 a New York law firm representing the families of Lockerbie victims announced
that Libya had offered USD10 million compensation for every individual killed in the
bombing. The money was linked to the sanctions: 40 per cent would be released after the
lifting of UN sanctions, another 40 per cent released after the US dropped its sanctions and
the final 20 per cent after the US State Department removed Libya from its list of states
sponsoring terrorism. The US rejected the offer, however, stating that Libya would have to
accept responsibility. Libya then denied that it had made an official offer.
Admission of responsibility (albeit still ambiguously) was finally forthcoming in August
2003. With the completion of payment of the USD2.7 billion package into the Bank of
International Settlement the same month and an agreement to raise compensation for the
victims of the UTA bombing, the UK co-sponsored a Security Council resolution to repeal the
UN sanctions, which was passed on 12 September 2003.
Weapons of Mass Destruction TOP
Unfortunately for Libya, the Bush administration's diplomatic agenda was not solely
motivated by its anti-terrorism campaign but also by its opposition to proliferation of
chemical, biological and nuclear weapons technology. In this respect, despite having
renounced support for anti-Western terrorist groups and made available its counter-Islamist
intelligence resources, the Ghadaffi government was still seen as of belligerent character
through its attempts to develop, acquire and stockpile WMD and strategic missile delivery
systems. While Libya had been denying such activities since the 1980s, the US was well
aware of its research and test facilities and sporadic intercepts of suspect materials and
equipment en route to Libya as late as October 2003 indicated that development programmes
were continuing. These allegedly included collaboration with Iran and North Korea, although
it later emerged that US ally Pakistan was a leading collaborator.
Libya made some gestures over WMD, signing up to the International Code of Conduct
Against Ballistic Missile Proliferation at a meeting at The Hague in November 2002.
However, this failed to impress the US administration. Ghadaffi then made a series of
overtures to the UK government during the course of 2003. This finally resulted in Libya
making public its WMD arsenal in late December 2003 after it had concluded nine months of
secret talks with the UK and US governments by agreeing to terminate all programmes
unconditionally, albeit in expectation of normalised relations with the US. In May 2004,
Libya also made a declaration stating that it would not deal in military trade with countries

28. who have yet to sign up to the Missile Technology Control Regime (MTCR). While it had not
managed to build a nuclear weapon by 2003 and still had some way to go in perfecting an
accurate long-range ballistic missile, its programme was more advanced than most analysts
had predicted and included the manufacture of small amounts of plutonium as well as large
quantities of chemical and biological agents.
Insufficient to protect Libya in the event of a renewed intervention by the US, the significance
of these materials did provide Libya with something of a bargaining chip in its attempt to
normalise its relations with the US. Part of this significance lay simply in permitting the
monitoring and safe disposal of all facilities by UN International Atomic Energy Agency
(IAEA) and US experts. Part of the significance lay in Libyan co-operation with the US in
tracing the origins and trafficking of equipment and materials on the nuclear black market.
Having renounced a credible nuclear capability, Libya also gained some of the moral high
ground of continental rival for influence, South Africa, which terminated its programme in
1989, and a moral advantage over Israel, which it has called on to disarm. Ultimately the
decision to comply over WMD gave Libya what it had been seeking for many months - the
opportunity to restore relations with the US and thereby kick-start its economy.