International -- European Business: Libya
The Lockerbie Trial May Actually Help Qaddafi (int'l edition)
It's a major step in the rehabilitation of the Libyan regime
The painful memories are flooding back in full force. As the victims' relatives converged on a courthouse in the neutral Netherlands, Scottish authorities on May 3 started the trial of the suspected bombers of Pan Am Flight 103, which exploded over Lockerbie in December, 1988. The trial, expected to last a year, is sure to refocus world attention on that horrible event and on the alleged involvement of Libyan agents in the act.
Such coverage would hardly seem like good news for Libyan President Muammar al-Qaddafi, who has been ritually excoriated for years by the West, especially by the U.S. Yet the truth is more complex. The start of the trial marks a major point in the rehabilitation of Qaddafi. It has been a year since the U.N. lifted the heavy sanctions imposed on Libya for its alleged role in backing the Pan Am bombers. The U.N. removed the sanctions after Qaddafi handed over the suspects for trial. Since then, Qaddafi has made no major moves to impede the wheels of justice. Encouraged, European Union leaders are moving to restore relations with Libya and bring Qaddafi in from the cold.
The rapprochement has already started. At a Cairo summit of African and European leaders in April, the Libyan President pitched his nomad's tent on the presidential palace grounds--and invited European Commission President Romano Prodi to meet with him under a tree. Not only did Prodi meet with Qaddafi--so did the heads of state of Portugal, Germany, Ireland, Spain, Austria, and Italy. Said Prodi: "I think the decision to open a dialogue with him has found the right moment."
Rapprochement would reopen one of the world's great oil fields--with 13 billion barrels in estimated reserves--to new foreign investment and exploration. Europe's companies have been relentlessly pressing their governments to resume relations. The U.S. also seems to be feeling the warming trend. Although harsh restrictions on Libya still stand, the U.S. is considering lifting its ban on travel by Americans to Libya. That seems to suggest a key shift, even though Administration officials say the aim is to protect Americans' right to travel, not overhaul Libya policy.
Qaddafi is desperate to get investment flowing again. The Libya government estimates the sanctions have cost the country $33 billion in lost growth and foreign investment. Shortages of spare parts have dramatically cut the productivity of the oil fields. And Libya needs major upgrades in everything--civil aviation, ports, railroads, electricity, and telecommunications.
Europe's companies are keen to snap up these contracts. More than 100 companies and universities are participating in a British trade exhibition in Tripoli in mid-May. The list includes the likes of SmithKline Beecham, British Airways, and Royal Dutch Shell. Says Embassy Commercial Secretary Bill Ridout: "There's tremendous potential." Italy's oil giant, ENI Group, is now moving ahead with a pipeline project from Libya crossing the Mediterranean.WAIT AND SEE. The new era of good feelings will still have difficult moments. Continuing U.S. sanctions impose a limit of $40 million per year in investment by any oil company--not just those from the U.S.--in Libya. Washington is waiting to see if Libya cooperates fully with the Lockerbie trial before considering lifting its sanctions. A May 1 report on terrorism from the U.S. State Dept. did note that Tripoli has made a lot of progress reducing its links with terrorist groups. But Libya still keeps its place on the department's list of nations that sponsor terrorism. One potential flash point: a recently leaked Pentagon report that Libya is seeking outside help, possibly from China, to build a longer-range ballistic missile. The West may yet learn to live with Qaddafi. But Libya's boss still has a lot of explaining to do.By Susan Postlewaite in Cairo, with Stan Crock in Washington