Libya and the name Muammar Gaddafi were once terms associated with despotism, terrorism, international intransigence and pariah activity. In 2010, those terms for some may still hold, but both now wield an ever increasing influence, not only in Africa, but also on the global stage. Brought in from the cold in 2003 when Gaddafi announced policy changes in the wake of the USA and her allies invading Iraq on the premise of Weapons of Mass Destruction, Libya has taken little time to flex their newly found power.
Libya is the most well off country in Africa, with the best Human Development Index indicators at 0.847, the fourth highest GDP/capita in Africa at US$14 381, and the highest literacy rate in North Africa at 86%, all supported by the vast oil reserves in the country that exceed 2 million barrels a day in production. Such reserves have allowed Libya to invest heavily in education and the public sector, whilst also making ground breaking public infrastructure investments such as the Great Man Made River Project to extract ‘fossil water’ at a cost of US$33 billion or funding the state Gumhouria Bank which has US$21 billion of assets. GDP growth was hit by the financial crisis, falling from 3.4% in 2008 to 1.8% in 2009, the economy is expected to bounce back to 5.2% in 2010.
So why has Libya become so ‘strong’? Firstly, with vast resources, there have been opportunities for foreign companies to exploit, and despite some investments being at a premium, the grip of authority by Gaddafi ensures there is no disruption to business, unless Gaddafi sanctions it. Secondly, it is the corridor to Europe, where African migrants take boats off the Libyan coast to reach Europe via Italy. The settlement between Libya and Italy in 2008 to the tune of US$5 billion over colonial disputes, saw Libya promise to take firmer action in preventing migration from their beaches to Europe, so this essentially makes Libya the gate keepers from Africa to Europe, a very powerful position to be in. The third reason is their intelligence from their former days in aiding ‘terrorists’. For instance, they have aided the Palestinian Liberation Organization, the Irish Republican Army and ETA in the past, and with a intelligence on how such organizations operate, they have become a key ally to the West.
Libya has shown their ability to exercise their power, they were able to secure the release of Lockerbie Bomber Ali al-Megrahi from a Scottish jail, much to the protestations of the USA, and were able to give him a hero’s welcome after flying on one of Gaddafi’s private jets. The recent spat with Switzerland over the arrest of his son Hilal Gaddafi which saw Libya issue a ban on all nationals from the Schengen European area, promptly the EU patched the issue up and bowed to Libyan pressure. On the African front, many within the African Union wanted Libya to continue as the head of the organization after the 1 year period had lapsed because they had the financial muscle to pay the dues of smaller nations, and that Libya would be able to lobby for better deals in negotiations globally. This has also not stopped Gaddafi airing his controversial views, recently stating that Nigeria should be split between ethnic and religious lines.
The next decade will see Libya gain even more clout, it is one of the countries in the gargantuan Desertec Solar Project that could see them rake in millions from exporting their solar energy to Europe, as well as joining the top table in gas exporters with proven reserves of 54 trillion cubic feet of gas, the third largest reserves in Africa, with Europe looking to reduce dependency on Russian gas, Libya will be even more important to the EU.