Italy' President Silvio Berlusconi and Colonel Muammar Gaddafi.
By Peter Boyle
Updated February 25, 2011 -- Links International Journal of Socialist Renewal/Green Left Weekly -- On February 22, Muammar Gaddafi was boasting on state TV that the Libyan people were with him and that he was
the Libyan revolution, even while his dwindling army of special guards
and hired mercenaries attempted to drown a popular revolution in blood.
Civilians were strafed and bombed from helicopters and planes.
Snipers with high-powered rifles fired into unarmed crowds. Two pilots
flew their fighter jets to Malta rather than bomb their own people and
another two are reported to have crashed their jets rather than attack
civilians. Sections of the armed forces, several diplomats and a couple
of ministers have abandoned the regime and, at the time of the writing, the
east of Libya was in the hands of popular revolutionary committees.
And as more sections of his armed forces stared to go over to the
people, Gaddafi ordered troops who refused to shoot their own people to be
Gruesome footage of the carnage was revealed to the world despite the
Gaddafi regime’s desperate attempts to seal the country by blocking the
internet and locking out journalists.
First Gaddafi’s son Saif al Islam
(a darling of greedy US and European corporations in recent years) and
then Gaddafi himself tried to deny these massacres while simultaneously
threatening the Libyan people with ruthless retribution against
those who dared to rise up against the regime.
While the regime’s genocide against the Libyan people unfolded, it
took days before the US and other Western governments were prepared to
condemn the regime for this monstrosity. Even as late as February 23,
US President Barak Obama had not condemned Gaddafi by name.
From ‘rogue state’ to neoliberal client
Yet in the 1980s and most of the 1990s the Gaddafi regime was
attacked by the same Western governments as a “terrorist rogue state”
because of its political and material support to numerous national
liberation movements around the world. The administration of US President Ronald Reagan imposed
economic sanctions on Libya and carried out bombing raids to try and
In 1988, I visited Libya as a journalist for the
left-wing newspaper Direct Action and visited Gaddafi’s bombed out home. I wrote several articles describing and defending the 1969 Libyan revolution.
However, in the late 1990s secret negotiations for a rapprochement
with the US and other Western governments began. First, UN sanctions
were lifted in 1999 and by 2006 the US lifted its own sanctions and
European leaders flocked to Libya with greedy businesspeople hanging on
to their coat tails and before long several European oil companies were
back in business, with banks, airlines and hotel chains following.
Former British Labour PM Tony Blair and scandal-plagued, right-wing
Italian President Silvio Berlusconi played leading roles in the process.
Gaddafi’s son Saif was the the neoliberal frontman for Libya. He
offered greater access to capital, tax concessions and privatisation.
According to an April 2010 report
from the Libyan government, over the previous 10 years the the regime
privatised 110 state-owned companies. The same report promised to
privatise 100% of the Libyan economy over time. The prospect of the
privatisation of the oil refineries and other downstream sectors of the oil
industry promises lucrative profits.
Worried that they were missing out to European competition, a group
of powerful US companies (including BP, Chevron, ConocoPhillips, Dow
Chemical, ExxonMobil, Fluor, Halliburton, Hess Corporation, Marathon
Oil, Midrex Technologies, Motorola, Northrop Grumman, Occidental
Petroleum, Raytheon, Shell and United Gulf Construction Company) set up a
US-Libya Business Association to catch up.
Among the Gaddafi regime’s new lobbyists in Washington was
arch neocon Richard Perle, a former Reagan-era US Defense Department
official and George W. Bush-era chair of the US Defense Policy Board.
According to US political reporter Lauren Rozen,
Perle traveled to Libya as a paid adviser to the Monitor Group, a
prestigious Boston-based consulting firm with close ties to leading
professors at the Harvard Business School:
A 2007 Monitor memo named among the prominent figures it had
recruited to travel to Libya and meet with Gaddafi "as part of the
Project to Enhance the Profile of Libya and Muammar Gaddafi" Perle,
historian Francis Fukuyama, Princeton Middle East scholar Bernard Lewis,
famous Nixon interviewer David Frost, and MIT media lab founder
Nicholas Negroponte, the brother of former deputy secretary of state and
director of national intelligence John Negroponte.
Several major US oil companies, including ConocoPhillips, Marathon
Oil and Hess Corp, now have significant stakes in Libya's oil
industry, according to a fact sheet prepared by Reuters on February 23. However, 80-85% of Libya’s oil exports go to Europe and companies
such as British Petroleum, Italy’s Eni, Spain’s Repsol and Royal Dutch
Shell have some of the biggest stakes.
In the February 23 issue of the British Guardian, Tom Bawden and John Hooper described the role of Berlusconi in Europe’s courting of the Gaddafi regime:
Gaddafi and Berlusconi have a famously warm personal relationship.
Less well-known, however, is the fact that Berlusconi is in business
with one of the Libyan state’s investment vehicles.
In June 2009, a Dutch-registered firm controlled by the Libyan Arab
Foreign Investment Company, took a 10% stake in Quinta Communications, a
Paris-based film production and distribution company. Quinta
Communications was founded back in 1990 by Berlusconi in partnership
with Tarak Ben Ammar, the nephew of the late Tunisian leader, Habib
The Italian prime minister has a 22% interest in the company through
a Luxembourg-registered subsidiary of Fininvest, the firm at the heart
of his sprawling business empire. Last September, the Libyans put a
director on the board of Quinta Communications to sit alongside
Libyan investors already hold significant interests in several
strategic Italian enterprises. They reportedly own around one per cent
of Italy’s biggest oil company, Eni; the LIA has an acknowledged 2%
interest in the aerospace and defence group, Finmeccanica; Lafico is
thought to retain more than 2% of Fiat and almost 15% of a quoted
telecommunications company, Retelit.
The Libyans also own 22% of the capital of a textile firm, Olcese.
Perhaps their best-known investment is a 7.5% stake in the Serie A side
Juventus. But undoubtedly the most controversial is another 7.5 per cent
interest in Italyís largest bank, Unicredit.
The European Union’s latest annual report on arms exports revealed Libya’s biggest military suppliers in Europe, reported Deutsche Presse-Agentur:
Italy granted export licences totalling 112 million euros, with a
single 108-million-euro licence for military aircraft making up most of
the amount, [was the largest supplier]…
Malta emerged as the second-largest exporter, having authorized the sale of an 80-million-euro consignment of small arms…
Germany was third in the list, with 53 million euros of licences,
mostly for electronic jamming equipment used to disrupt mobile phone,
internet and GPS communication…
France was next with 30.5 million euros, followed by Britain with 25.5 million euros, and Belgium with 22 million euros.
According to the Guardian’s Bawden and Hooper:
About 150 British companies have established a presence in Libya
since the US and Europe lifted economic sanctions in 2004, after the
country renounced terrorism, ceased its nuclear weapons programme and
handed over two suspects in the Lockerbie bombing case.
The most high profile have been the oil companies, keen to tap
Libya’s vast reserves of fossil fuels. In a deal brokered in 2007 by
Tony Blair, BP signed a £560m exploration agreement allowing it to
search for oil and gas, offshore and onshore, in a joint venture with
the Libya Investment Corporation. Shell is also exploring for oil in
Libya as western companies seek to capitalise on a country with the
largest oil reserves in Africa and substantial supplies of gas.
High street retailers such as Marks & Spencer, Next, Monsoon and
Accessorize have also set up in the country to serve the growing
middle-class population, as oil revenues have 'trickled down' into the
broader Libyan population.
Companies such as AMEC, an engineering firm, and Biwater, a waste
treatment company, have supplied services to Libya, which is using its
oil revenues to reshape the country through an infrastructure spending
spree that will cost about £310bn over the next decade.
British exports to Libya have soared to about £930m in recent years,
while the business momentum in post-sanctions Libya is so great that
the economy managed to grow by about 5% last year, while much of the
rest of the world struggled.
Gaddafi’s son Saif, speaking in his private suite in Mayfair’s five-star Connaught Hotel, told the British Daily Mirror in June 2010:
Tony Blair has an excellent relationship with my father.
For us, he is a personal family friend. I first met him around four
years ago at Number 10. Since then I’ve met him several times in Libya
where he stays with my father. He has come to Libya many, many times.
Libya considered Blair to be a trusted adviser to the Libyan Investment Authority, a role that Blair now denies.
But Blair’s done his dirty job well. As a February 19, 2011 ,report in the British Independent revealed:
Since the warming of relations between Libya and Britain, officers
travelled frequently to Tripoli between 2008 and 2009 to train police,
and Britain has authorised the export of tear gas, crowd-control
ammunition, small-arms ammunition and door-breaching projectile
Three years ago, ministers agreed to send Libya vehicles armed with
water cannons. There are also unconfirmed reports that riot vans made by
British companies have been present during crackdowns in the Libyan
city of Benghazi, where scores have been killed.
One of the murderous special battalions headed by another Gaddafi
son, Khamis, is a British-trained unit, according to a February 21 Associated Press report.
People lose out
While Libya’s oil exports have enabled it to build up foreign
reserves of US$150 billion, almost half of its youth are unemployed,
according to African Online News, an independent African news agency:
Libya is the richest North African country… But that does not
reflect the real economy of the average Libyan, with around half the
population falling outside the oil-driven economy. The unemployment rate
is at a surprising 30%, with youth unemployment estimated at between
40% and 50%t. This is the highest in North Africa.
Also other development indicators reveal that little of the
petrodollars have been invested in the welfare of Libya’s 6.5 million
inhabitants. Education levels are lower than in neighbouring Tunisia,
which has little oil, and a surprising 20% of Libyans remain illiterate.
Decent housing is unavailable to most of the disadvantaged half of
the population. A generally high price level in Libya puts even more
strains on these households.
But the key of popular discontent is the lack of work opportunities,
which strongly contrasts the Libyan image of a rich nation constantly
propagated by the regime and its Soviet-style media.
The few options for ordinary Libyans include the police or armed
forces, construction works and petty trade. But even here, contacts and
corruption are needed to have a chance.
The oil sector employs only 4900 Libyans with a further 1000 training overseas, according to an October 2010 report by Libyan National Oil Company (NOC).
A revolution betrayed?
In the 1980s, the Gaddafi regime came under attack from the Reagan
administration because it took a strong anti-imperialist line and gave
financial and material aid to many national liberation movements at the
time. There were also some weird right-wing sects seeking and sometimes
obtaining Libyan largesse. The Gaddafi regime meddled disastrously
and sometimes bloodily in factional disputes within the Palestinian
The Gaddafi regime also claims to have provided its citizens with
free education and health, though quality and access was not even.
Tellingly, Libyans, who could afford it, have preferred to go to neighbouring Tunisia (which is not an oil-rich state) or to Europe for serious medical treatment.
It provided its workers with some welfare but did not allow trade unions
and it certainly it did not treat its significant number of “guest”
workers equally or fairly. There were closed labour camps for some of
these workers from other countries and trade unions were not allowed. A
bizarre personality cult around Gaddafi was obvious and while there was
a pretence at popular democracy of sorts through a system of “people’s
congresses” these only had a nominal existence.
Left commentator Tariq Ali dismissed the Gaddafi-led 1969 revolution as “all for show, like his ghosted science-fiction short stories”.
But there was a political revolution in 1969 that did result in the
nationalisation of the Libyan oil industry and some broader
redistribution of oil wealth, which contrasted sharply with that in countries
like Saudi Arabia. This was a nationalist revolution, similar to
that led by Gamal Abdel Nasser in Egypt in 1952, which also called itself “socialist”.
The US and other imperialist governments at the time saw the 1969 revolution as an
attack on their presumed right to exploit Libya’s oil resources. David Mack, a former US diplomat and State Department official,
explained how the US reacted in the January 2011
Foreign Service Journal:
By 1969, the US and British air bases in Libya were of declining
strategic importance, but Tripoli had become a producer of energy vital
to the economies of our West European allies and profitable for American
companies. While the US still enjoyed a cozy relationship with an
aging monarch and his sclerotic political system, Libyan popular
attitudes were not isolated from the rest of the Arab world. The war of
June 1967 had left Arabs everywhere with a feeling of humiliation and a
conviction that Washington had aided Israel’s victory, achieved in
large part by its devastating surprise attack on the Egyptian Air Force.
This set the stage for the Libyan Revolution of September 1, 1969.
Eventually, U.S. policy adapted to these new realities. Henry
Kissinger, who was President Richard Nixon’s national security adviser,
claims in his memoirs that he favored a covert action program to
overthrow the new Libyan leaders and keep the airbase, but yielded to
the State Department view of the primacy of the oil interests and
declining value of our military base. Much later, during the Reagan
administration, the U.S. supported and provided some military training
to Libyan émigré opponents of the Gaddafi regime. They proved
According to Henry Kissinger’s memoirs, the government of US President Richard Nixon had
prepared a covert program to assassinate Gaddafi and other Libyans who
had led the1969 revolution against a corrupt monarchy, but this was
abandoned because big oil companies like Exxon and Mobil prefered to cut
a deal with the regime, albeit on tougher terms.
The Gaddafi regime has come a long way since then. It was
increasingly betrayed promises and gains of 1969, earning
an IMF tick of approval for progress in neoliberal reform:
An ambitious program to privatise banks and develop the nascent
financial sector is underway. Banks have been partially privatized,
interest rates decontrolled, and competition encouraged. Ongoing efforts
to restructure and modernize the Central Bank of Libya are underway
with assistance from the Fund…
Structural reforms in other areas have progressed. The passing in
early 2010 of a number of far- reaching laws bodes well for fostering
private sector development and attracting foreign direct investment… A
comprehensive civil service reform is needed to facilitate more
effective [read lower and stricter] wage and employment policies that
would address the needs of a young and growing labor force.
Recent developments in neighboring Egypt and Tunisia have had
limited economic impact on Libya so far. To counter the impact of higher
global food prices, the government abolished, on January 16, taxes and
custom duties on locally-produced and imported food products. Later in
January, the government also announced the creation of a large
multi-billion dollar fund for investment and local development that will
focus on providing housing for the growing population.
The IMF will have to eat that prediction. The stifling political
repression (which has been fiercest in the eastern part of the country,
which is also the poorest), the corruption, nepotism and flamboyant
lifestyles enjoyed overseas by Gaddafi’s children have proved too much.
And the stirring example of the youth of Tunisia, Egypt, Bahrain,
Algeria, Yemen, Syria, Jordan and Djibouti added the spark.
What has led to this new Libyan revolution is the degeneration of the
regime born of the 1969 revolution into a crony capitalism. The popular
character of the new revolution is undeniable, it is far from clear
what sort of regime will emerge out of it. The same greedy and powerful
Western interests that first attacked and then propped up the Gaddafi
regime are preparing for a change of tack, including considering direct
As the 19th century British Prime Minister Lord Palmerston famously observed:
We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual ...
Hopefully the makers of the new Libyan revolution will heed the lessons of its own history.