Libya - Executive summary 2006

EXECUTIVE SUMMARY, Libya
Date Posted: 06-Jan-2006

Jane's Sentinel Security Assessment - North Africa

EXECUTIVE SUMMARY
RISK POINTERS TOP

National Overview TOP

With a dominant position in the central Mediterranean and larger proven oil reserves
than any state in Africa or Europe, the Socialist People's Libyan Arab Jamahiriya has
achieved an importance in Arab, African and Southern European security affairs out of
all proportion to its tiny population and technical capacity. Since 1969, when political
power was seized from the monarchy by a group of young officers led by Colonel
Muammar Ghadaffi, Libya has styled itself as a revolutionary Arab state. In the 1980s,
the most notorious element of Ghadaffi's anti-imperialist ideology was his support for
radical liberation movements against Western powers. Relations with the West reached
their nadir in April 1986 when the US launched air strikes against Libyan cities in
retaliation for alleged Libyan support for terrorist attacks against its forces in Europe.
Libyan impotence against such action led Ghadaffi to undertake a major covert
unconventional weapons and ballistic missile development programme. UN sanctions
were imposed in 1992, relating to the 1988/89 terrorist bombing of US and French civil
airliners. Since the late 1990s Libya has attempted to improve its international image
and has ceased its support for anti-Western terrorist groups, although concerns remain
over links to several African insurgent groups. While the US continues to designate
Libya a state sponsor of terrorism and subject it to unilateral arms and technology
embargoes, the UN suspended its sanctions in April 1999 and repealed them in
September 2003, leading to a surge in European investment interest in the country. In
late December 2003, Libya publicly disclosed its unconventional weapons programme
and agreed to its monitoring and the disposal of all equipment and munitions under UN,
US and UK supervision. Major re-investment by US oil firms in early 2005 appeared to
be the final stage in Libya's re-orientation from 'rogue' state to strategic and
commercial partner in the 'war on terrorism'.

Diplomacy and Foreign Policy TOP

While Libya has broadly achieved its foreign policy goal of the last decade - to restore
diplomatic and commercial relations with Western states - Ghadaffi has not renounced
his anti-imperial activism and is sufficiently distrusted that he will remain indefinitely
on a 'good behaviour bond' with these states pending eventual transition to a more
conventional regime. For example, while Washington had repealed all remaining
unilateral non-military sanctions by December 2005 it has maintained Libya's position
as a "state sponsor of terrorism" although it does not appear to have made it clear to
Tripoli what it is expected to do to resolve the issue. In response to this latent instability,
Ghadaffi regularly shuffles a strong reserve hand of diplomatic and economic contacts
This page was saved from http://search.janes.com Did you know Jane's Strategic Advisory Services can provide
impartial, thoroughly researched market evaluation, providing
© Jane's Information Group, All rights reserved you with the same reliable insight you expect to find in our
publications and online services?

with Maghrebian, African and Asian states. Keen to play a statesman role in Africa and
court the support of many poor and weak states, he has placed his diplomatic capital of
Sirte at the disposal of the African Union and publicly played the role of peacemaker in
several African conflicts, most recently in the troubled Darfur region of Sudan.
Simultaneously, he is accused of playing a covert destabilising role in numerous North
and West African countries in order to install pro-Tripoli regimes or to prevent existing
leaders aligning against him. Mauritania, in August 2004, was the latest of at least a
dozen African states to allege Libyan attempts to destabilise or overthrow its
government. At the same time, Libya's relations with the Arab world continue to be
somewhat problematic. Many Arab states and populations viewed Ghadaffi's
abandoning of WMD as a sop to the West and Libya has received much negative press
in the Arab region for this move. Relations with Saudi Arabia have become particularly
strained following Saudi allegations in 2004 that Ghadaffi was behind a plot to
assassinate the Crown Prince. However, by the end of 2005 these appeared to be on the
mend.

Domestic Difficulties TOP

Ghadaffi is facing numerous problems at home as the population becomes increasingly
frustrated by ongoing socio-economic problems. These include an unemployment rate of 30
per cent and the burden of a state sector that employs 700,000 people, around 13 per cent of
Libya's population. State sector wages have not increased since the early 1980s and as prices
continue to rise the population is becoming increasingly restless as they are being forced to
take on additional jobs or find alternative ways of making money in order to survive. In the
past, Ghadaffi was able to blame Libya's economic woes on the UN sanctions and the US.
However, this excuse is no longer valid and the regime has to find a way to manage the
potential for increased social unrest. Despite repeated assertions by the regime that it intends
to regenerate the economy in order to create jobs in the private sector, it appears that for the
time being it is continuing to rely on security measures as a means of keeping the population
in line. Although high international oil prices and new investment since 1999 have inflated
government revenues in recent years, the benefits are not filtering down to the majority of the
population. Moreover, because Ghadaffi has built up a highly developed system of patronage
over the years, corruption and nepotism are endemic. US and European officials say that
Libya still owes hundreds of millions of dollars to European creditors, whose accounts were
frozen when UN sanctions were imposed in 1992, and meeting reparations commitments for
terrorist actions in the 1980s are likely to cost Libya in excess of USD3 billion. These factors
will hamper economic development and increase tensions throughout the country.

Islamist Threat TOP

The Ghadaffi regime has had problems with Islamist militants in the past. This dates
back to the 1980s, but came to the fore in the mid 1990s when a number of extremist
groups began to emerge. There was a series of clashes between security forces and
Islamic militants around Benghazi in 1996 and to a lesser extent in 1997. Many of the
attacks were claimed by the Fighting Islamic Group of Libya (FIGL) that was set up by
a group of veterans of the war in Afghanistan in 1990. Major counter-insurgency
operations were launched in the east of the country under the guise of military exercises
or anti-crime operations and suppressed the insurgency in concert with a vigorous
intelligence operation against dissidents. However, some remnants of these militants are
still active in the mountains in the east of the country, although they are thought to

consist of a few pockets of individual jihadists who are not linked to any particular
organisation or group. It also appears that a number of Libyans have joined the jihad in
Iraq. Despite this, the regime remains vigilant against any potential Islamist opponents
and as such these elements cannot be considered to pose a real threat to the security of
the regime for the time being.

Illegal Immigration TOP

Illegal migration from sub-Saharan Africa has been of increasing concern to Libya and
its northern Mediterranean neighbours in the 21st century, with negative implications
for internal and external stability. Libya is both the richest country in Africa north of
the equator and one of the closest to the illegal labour markets of the European Union.
Per capita income in Libya is estimated to be around 20 times higher than in the
adjacent states of the Sahel, making its southern desert frontiers one of the sharpest
economic divides in the world. Because of its enormous and empty extent, it is also one
of the easiest countries for illegal migrants to transit, a problem exacerbated in the late
1990s as Ghadaffi sought to strengthen his position in Africa by providing incomes to
migrant southern workers. A violent xenophobic backlash by unemployed Libyan
Arabs in coastal towns in 2000 led to attempts to reverse this policy and tarnished
Tripoli's positive image with some African states. Conversely, Libya has subsequently
been able to play the situation to its advantage, claiming it was incapable of stemming
the flow of African migrants from its shores to Italy unless the EU allowed it to buy new
paramilitary equipment. This resulted in the lifting of a number of EU sanctions in
2004. Along with safeguarding oil and gas supplies, deterring illegal migration is central
to EU policy towards North Africa.

Ghadaffi and the Succession TOP

After 36 years of charismatic personal leadership, the Libyan Jamahiriya is unimaginable
without the central figure of Muammar Ghadaffi. Despite his apparently erratic approach to
policy and lack of constitutional authority, the "Brother Leader" must be seen as a
prerequisite for Libyan stability in the medium term. Within Libya there are strong
suggestions that Ghadaffi is preparing his son, Saif el-Islam, to succeed him. Despite repeated
denials that he is earmarked as heir, Western educated Saif el-Islam has succeeded in
consolidating his position in Libya's reformist political and economic circles and played a
major role in representing the public face of the regime to the international media. However,
he remains deeply unpopular at home, including within some of the regime's more reformist
factions, which view him as inexperienced and immature. He also has extremely limited
influence within the all-powerful security services. In the absence of his father, it is uncertain
whether Saif el-Islam would have the skill, maturity or authority to control Libya's complex
factions and increasingly resentful population. However, having seized power at the age of
27, Muammar Ghadaffi is still not an old man and, short of an assassination, there is no
reason to believe that he will cease to lead the country and its esoteric revolution in the near
future.

Regional Military Balance TOP

Defence TOP

· Despite its small population and available manpower, Libya has attempted to maintain

armed forces of comparable strength to its much larger neighbour Algeria. The
capability of these forces has been largely untested since the late 1980s but is understood
to have deteriorated significantly from an already low level. The view in the West is that
Ghadaffi's disastrous 1977-87 military operations in Chad, the military's only real
experience of sustained conventional combat, proved how ineffective the armed forces
are. The military was further disabled by purges of the senior ranks that followed a coup
attempt against Ghadaffi in 1993. Such conventional weakness doubtless spurred Libya
in its pursuit of unconventional and strategic weapons systems in the 1990s.
· The UN sanctions, imposed in 1992, suspended in April 1999 after Tripoli surrendered
two suspects indicted for the 1988 Lockerbie bombing, and finally repealed in
September 2003, prevented Libya acquiring any significant amounts of spare parts for
its Soviet-supplied equipment. The armed forces consequently degenerated to the point
where only around 50 per cent of its inventory could be called battle-ready and critical
systems such as submarines, battle tanks and interceptors were inoperable in large
numbers. Maintenance of surviving equipment and advanced training has relied heavily
on contract expertise from the former Warsaw Pact states and Yugoslavia. While
separate US sanctions will continue to cover military technology transfers until Libya is
designated free of links to terrorism, the EU arms embargo was relaxed in September
2004 to allow for provision of systems and equipment to guard the Libyan coast and
borders against massive illegal migration from sub-Saharan Africa towards the Union's
Italian coast.
· UN sanctions were barely suspended before Russian defence firms were lining up to sell
Libya new weapons systems - such as the S-300PMU1/2 (SA10d 'Grumble') low-to-high
altitude air-defence missiles and MiG-31 'Foxhound' interceptors - and upgrade
programmes for its ageing fleet of MiG-21s and MiG-25s. However, Libya owes
Moscow some USD2.4 billion in military debt dating from the Soviet era and this may
hinder any plans Ghadaffi has for modernising his military forces. There is also a
substantial body of opinion among the younger generation in Libya that the armed
forces should move away from Soviet-designed equipment and reorganise and re-equip
according to more flexible Western standards. South African defence suppliers have
lobbied to supply replacements for Soviet generation equipment but Tripoli is likely to
wait for all remaining embargoes to be lifted before ordering major new systems.
However, France and the UK have also expressed an interest in supplying Libya's
defence needs. Libya has also begun military co-operation with the British Ministry of
Defence and the US military has expressed its interest in doing the same.
· The military intervention in the Central African Republic (CAR) in May and November
2001 demonstrated the interventionist capability of the Libyan forces and Ghadaffi's
intention to field a rapid reaction force for action in Africa. Reports indicated that three
Ilyushin Il-76 'Candid' aircraft flew several hundred Libyan troops, along with armoured
vehicles and two helicopter gunships, into Bangui airport. The Libyan forces remained
there as a presidential guard unit until December 2002, being joined by two Libyan
fighter aircraft in November 2002. Tripoli also organised the deployment of Chadian
troops in the Democratic Republic of Congo (DRC) in 1998-99 and sent security forces
to assist Zimbabwean counterparts from 2001. Although Ghadaffi's plans for an African
Army have been rejected by the African Union (AU), the February 2004 agreement on a
Common Defence and Security Policy for Africa envisaged the establishment of an AU
intervention force of 15,000, which Ghadaffi would like to be based in Libya.
Nonetheless, Libya remains behind the African mainstream in making troops available
for multilateral peace support operations, including AU and UN missions.

Politics TOP

· Although theoretically a democracy, Libya is actually governed by a highly personalised
military-based dictatorship. Its political system, known as the Jamahiriya or 'state of the
masses', is the highly esoteric product of Ghadaffi's thinking, incorporating neither
formal constitution, head of state nor political parties. It is based upon the Third
Universal Theory espoused in Ghadaffi's 'Green Book', which attempts to reconcile
socialist and Islamic theories. All Libyans are expected to participate in Basic People's
Congresses, which theoretically enable them to participate in all political decisions
related to the country. Each Basic People's Congress has its own committee and
secretariat. Local basic congresses mandate representatives to the General People's
Congress (GPC), which then elects a General People's Committee that is the official
embodiment of People's Authority. Ghadaffi plays no formal part in the Congress
structure but in reality all power lies with him, supported by a clique of advisors and
informal power networks made up of members of his own family and tribe, the Ghadafa
as well as loyalists that have been with him since the time of the revolution. He also uses
a range of security services and the Revolutionary Committees movement to ensure
conformity and control.
· Signs of Ghadaffi's commitment to genuine reform and opening of the Jamahirya system
are ambivalent at best. A new technocratic Secretary of the General People's Committee
(prime minister), Shukri Ghanem, was appointed in a cabinet reshuffle in June 2003. An
economist, Ghanem had previously served as Minister of Trade and Economy and his
appointment reflected a perceived desire among the leadership to change course from
socialism and open up the economy to privatisation and free enterprise. Harvard-
educated Ghanem is considered a more approachable figure for Western governments
than his predecessors and is very close to Ghadaffi's reform-minded son and presumed
heir, Saif el-Islam, who has increasingly become the international face of the regime.
However, Ghadaffi has given Ghanem very limited room for manoeuvre and the leader's
reshuffle of the General People's Committee in March 2004 introduced several
hardliners from the Revolutionary Committees and served to block Ghanem's reform
initiatives. Moreover the power of the General People's Committee itself remains limited
in relation to other informal power bases within the leadership. Few expect real changes
in the closed Libyan system before the demise of the Leader of the Revolution, and -
born in 1942 - he is young in relation to many of his African and Arab counterparts.

Economy TOP

· The oil-dependent economy has allowed what is, by North African standards, a high
level of income per capita. However, this reliance on one commodity leaves the
economy highly responsive to world fuel prices. Economic hardships during the oil price
slump of 1997-98 seriously affected government stability and the threat of economic
collapse led to cuts in public spending. Failure to release reliable economic data has
meant that Libya's economic performance can only be guessed at but it is believed that
the economy has grown at a low level since 1999 due to rising oil prices after the prior
slump. Even so, GDP growth in 2004 and 2005 is predicted at just 5 per cent per year.
· The limited UN sanctions imposed by the Security Council in April 1992 were
suspended in April 1999 and formally repealed in September 2003. The damage
inflicted on the Libyan economy - along with a slump in oil prices in 1997-98 that cost
billions of dollars in lost revenue - was considerable. Tripoli estimated that the sanctions
- an air and military sales embargo that also blocked the supply of oilfield equipment -

had caused USD26.5 billion in economic losses, about half from the oil sector. Two-
thirds of the fleet owned by the national carrier, Libyan Arab Airlines, was grounded for
lack of spares and only five aircraft were operational by May 1999. The airline claimed
losses and damage totalling USD3 billion. Unilateral US economic sanctions imposed in
1986 remained in force until April 2004; a technological embargo remained in force and
continued to restrict the Libyan civilian aerospace sector until September 2004. The oil,
industrial and agricultural sectors suffered the biggest losses, totalling USD15 billion.
The sanctions delayed the development of a number of oil and gas fields and oil
recovery projects. Production from some fields declined because of the lack of spare
parts, which were embargoed.
· Libya has benefited handsomely from its decision to surrender the Lockerbie bombing
suspects and abandon its development of weapons of mass destruction. European leaders
and business delegations - especially those states that depend on Libya for oil and gas
supplies and had lobbied for lifting the UN embargo - have flocked to Tripoli since late
2003, seeking to secure lucrative contracts for developing Libya's proven energy
reserves: 39 billion barrels of oil and 52 trillion cubic feet of natural gas. The lifting of
US unilateral sanctions in September 2004 also opened the way for US companies to
return to the country. Unlike their European rivals, these firms benefited greatly from
the long-awaited EPSA IV licensing round for 15 exploration areas, the results of which
were announced in January 2005. The second EPSA IV round, the results of which were
announced in October 2005, saw Asian companies making the most gains, although
some argued that the companies had paid too dearly for their triumph as they had offered
some of the lowest production shares among the bidders.

UPDATED
2006 Jane's Information Group


Libya - Executive summary 2006

Recommended

Recommended

More Related Content

Featured

Featured (20)

Libya - Executive summary 2006