Colonel Qaddafi was buoyant this week when he addressed his fellow Libyans on the 34th anniversary of the coup that brought him to power. The French had just agreed to accept increased compensation for families of victims of one of their airliners, downed by a bomb in 1989, and the way appeared open for the multibillion-dollar settlement for the Lockerbie victims.
The Libyan leader assured his audience that the money involved in the settlements, which also include an offer to victims of the Berlin club bombing, was of no importance. What really mattered was that Libya was about to be freed from most, if not all, international sanctions and the country could look forward to re-establishing its place in the world.
But Qaddafi’s bullishness about Libya’s future may be premature. There are two factors that could prove it wrong. The first is Libya’s admission, implicit in the substantial compensation settlements it has made, of state terrorism. The Libyans may argue that they had been forced over a barrel, and even though they were innocent of any wrongdoing they found the only way they could escape international economic isolation was to pay up for something they did not do. This, even if true, is not going to cut any ice with the hawkish Bush White House. For them, an admission of guilt is followed by retribution. Signing a check, even for billions of dollars, is not retribution. Washington is going to want something more. Then there is a second factor. Libya’s economy is a mess because of the sanctions, but it was a mess before them. Tripoli had state-run supermarkets that rivaled the worst of Communist Eastern Europe, and in the souk narrow streets that once hummed with commerce had hardly a merchant in them.
For the moment Qaddafi’s administration will be able to blame sanctions for Libya’s economic woes, especially its high unemployment rate among well-educated young graduates. But this will not wash for very long. Unless the Libyan government can introduce genuine and far-reaching economic reforms, including further liberalization and the removal of the state from its dominant role in the economy, and fast, it will rapidly become clear where the blame for the country’s economic woes lies.
On the 35th anniversary of his revolution, Qaddafi may be feeling a whole lot less confident. Washington’s retribution may well take the form of fomenting unrest among disaffected young Libyans. Bombarded with the best and worst of US culture in a sanctions-free era, many Libyans are going to feel growing dissatisfaction with the way that their country has been governed for three-and-a-half decades. At the very least, they may simply want a different way of living. The challenge for Gaddafi’s government will be to guide and survive those changes.
