Sunday, September 20, 2009

Libya: Quickly increasing profile on anniversary of Gadhafi’s power

BBC: Italy PM opens North African road National Public Radio: U.S. Visit Marks Gadhafi's Makeover
Financial Times: Oil Groups Face Libya Ultimatum
New York Times: BP Conducts Seismic Survey Off the Coast of Libya
Aljazeera.Net: Libyans Await Economic Recovery

Libya is aggressively remaking its image and capturing a larger slice of the global spotlight. It has been growing in economic power since 2004 when American sanctions were lifted. But recent events coinciding with the 40th anniversary of Colonel Moammar Gadhafi’s successful coup d’état have refocused attention on this North African country.

An alignment of political victories and oil investment deals have fueled Libya’s assent. Col. Gadhafi is currently the chair of the African Union and Libya is poised to accept the leadership of the United Nations. This comes at the same time as major deals are being discussed for oil development between Libya, with its largely unexplored and untapped oil reserves, and Great Britain, Italy, and China.

The release of Lockerbie bomber Abdel Basset Ali al-Megrahi, the diplomatic flap surrounding Gadhafi’s visit to the United Nations in New York, and a collection of “eccentric” statements have become so divisive in the Western media that it is possible to overlook their connection to Libya’s economic and development projects. Regardless of whispers of backroom political dealings, BP is drilling its first well in Libya in 30 years as part of a US$900 million exploration program.

Other countries are also progressing in their development programs with Libya. Italy has provided generous help to its former North African colony to open the first section of a major road project. This project represents a major part of a US$5 billion settlement between Italy and Libya over their shared colonial past. This coastal road will stretch from Tunisia to Egypt, and replace a road originally constructed with help from Mussolini. Italy is financing the project with a tax on its national oil company ENI and it has led to very rewarding deals to extract Libyan oil reserves.

The ongoing strength of the oil market is likely to continue to provide a stream of dollars for Libyan development. Recent market liberalizations have increased hopes that some of the oil money will seep into the greater economy. However, many Libyan citizens are still skeptical. They feel that greater oversight and attention to corruption and governmental efficiency is required before everyone will benefit from these development programs.

1) Does allowing Libya to chair the United Nations help or hurt the credibility of this institution? Will the work of the United Nations in Africa be more effective?
2) Will more Western countries begin giving Libya diplomatic and economic concessions to increase their chances to invest in oil reserves?

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