Local Time

Wednesday, April 28, 2004

Libya

On March 16, U.S. Energy Secretary Spencer Abraham, under a white tent in a
parking lot of the Y-12 National Security Complex in eastern Tennessee, gave a
presentation to 45 journalists and espoused the connections between Pakistani
scientist Abdul Qadeer Khan and Moammar Gadhafi's government in Libya. Spencer
pointed to unopened wooden crates containing 22,500 kilograms of machine parts
for enriching uranium and said, "It is the president's hope that other nations
will find an example in Libya's decision to disarm." The reward for this
unprecedented cooperation was Washington's dropping of trade sanctions announced
on April 23, from which ConocoPhillips, Amerada Hess and Marathon Oil will be
able to flood the country with direct foreign investment. However, the
circumstances under which Libya chose to disarm are not present in any other of
the states Washington is pressing on non-proliferation issues.

Libya's cooperation and leadership in providing the concrete evidence of Khan's
black-market nuclear activities was the result of many years of gradual and
cautious change in Gadhafi's foreign policy and came about because of the unique
opportunity Washington's "war on terrorism" presented. Unlike Libya, North Korea
and Iran are not in a position to benefit from declaring their nuclear programs,
or disarming.

Following the 1969 bloodless coup in which Moammar Gadhafi seized power, Libya's
early attempts at courting regional and international influence failed. In
recent years, Tripoli has moved towards increasing its economic standing and
cooperation with the international community in an attempt to gain influence
through more traditional methods. In the aftermath of the coup, Gadhafi sought
to create a pan-Arab Union, but other Arab leaders refused to take his proposals
seriously because of the eccentric ideology he was promoting in his Green Book,
which banned private enterprise, disbanded the governmental bureaucracy and
transferred all power, at least symbolically, to local communities. Anwar Sadat
called Gadhafi "100% mad," and Tripoli began to seek other avenues to direct its
influence.

Gadhafi's government began to back militant organizations around the world. This
led Washington, under the Regan administration, to bomb Tripoli and Benghazi in
retaliation for a nightclub bombing in Germany that killed two U.S. servicemen.
Gadhafi cautiously continued to back militant organizations until 1999, while it
also began to seek normalized relations with other states in the region and the
United Nations.

This period was an extremely difficult time for Libya's economy, as foreign
investment dried up and Tripoli suffered from a rapidly increasing technology
gap with the rest of the world. Gadhafi's leadership began to feel domestic
pressure because of the isolation, and the terrorist organizations that Gadhafi
backed began pressuring him to take a more hard line approach to the West.
Gadhafi chose to cut his ties with various terrorist and militant groups in the
mid-1990s and pursue an economic recovery through reestablishing ties with the
international community. In 1999, Libya turned over two intelligence agents
suspected of planning the 1988 Pan Am bombing over Lockerbie, Scotland and saw
dramatic results from the dropping of U.N. sanctions. Tripoli's intelligence
chief also approached U.S. officials and offered to share information on
al-Qaeda. This integrationist approach to foreign policy and free market
principles has created a new force within Libya's government.

Seif al-Islam Gadhafi, Col. Gadhafi's son and heir apparent, and Libya's prime
minister, Shukri Ghanem, represent the new leadership of Tripoli -- a
technocratic elite dedicated to market principles and using direct foreign
investment to revitalize Libya's economy and global standing. Ghanem pushed for
last year's Lockerbie settlement, describing it as "buying better relations,"
and the decision to declare its nuclear weapons program as a "guns vs. butter"
issue. For this new force within the Libyan government, butter always trumps
guns.

Although Tripoli's future depends heavily on direct foreign investment and the
reduction of trade sanctions, Gadhafi's government is not willing to wait for
the U.S. and other governments to change their policies. Gadhafi has carefully
used the U.S.' "war on terrorism" to create a situation in which the U.S. will
have no choice but to drop all its sanctions. In March of 2003, Libya's chief of
intelligence, Musa Kussa, used channels in the British government to signal its
willingness to cooperate with Washington and declare its nuclear weapons
program. Seymour Hersh, in an article for the New Yorker, describes how Libyan
officials, with the approval of Gadhafi, quickly offered to give U.S. and
British intelligence agencies details about a centrifuge deal that was already
under way with Khan's underground network.

In October, a freighter was seized, and the incident was promoted as a major
intelligence success for the U.S. and those countries participating in the Bush
administration's Proliferation Security Initiative. The United States needed a
success in its non-proliferation efforts and Gadhafi handed it to them. For
this, Libya is being rewarded with the dropping of travel and some trade
sanctions. Occidental Petroleum Corp., Amerada Hess Corp., Marathon Oil Co. and
ConocoPhillips all have ownership stakes in Libyan oil interests; their
collective lobbying through the Oasis Group has been the domestic push for the
opening of Libya's markets. Although Washington still lists Libya as a state
sponsor of terrorism, this will certainly change as trade between the two
countries flourishes.

Tripoli and Washington were able to reach a mutually beneficial agreement on the
disarming of Libya because Gadhafi was able to use the "war on terrorism" to his
advantage. North Korea and Iran are not in a position to benefit in such a
dramatic way and are unlikely to make any major concessions. North Korea is
economically isolated; where as Libya was able to maintain a relatively decent
living standard for its citizens from the state's oil revenue, the government of
North Korea maintains its power by controlling the rations that its citizens
receive. Therefore, any flood of foreign investment, or opening up of
communication barriers, would only work to weaken Pyongyang's domestic power.
This dramatically weakens the U.S.' negotiating power in an already strained
process.

A nuclear program is critical to Pyongyang's negotiating position because it has
worked so effectively in the past. Most recently, North Korea had seen its
backdoor negotiations with the Clinton administration abandoned by Bush's State
Department after Colin Powell's public pronouncement that he would continue
along the path of Madeline Albright was chastised by President Bush. Only after
North Korea signaled that it was going to pursue enriching uranium did the Bush
administration seek to actively engage in talks with Pyongyang.

Iran sits between two U.S. led military engagements, in Iraq and Afghanistan,
and is reluctant to give in on what it considers its greatest deterrence to a
more intrusive U.S. policy. By keeping Washington focused on the nuclear issue,
the religious leadership in Tehran has been able to protect their power by
disqualifying reform minded candidates in the recent elections. The Western
powers let their disappointment be known about the flawed elections, but limited
their response because of persistent hopes that a dialogue would be opened on
Iran's nuclear program through the International Atomic Energy Agency
(I.A.E.A.).

Iran also has an important asset that Libya lacked -- the international
community is not united in its stance against Tehran's program as it has been
declared and reported by intelligence agencies. The I.A.E.A. would like to
reward Iran for allowing intrusive inspections; the U.S. sees it as Iran's
obligation to declare their entire program, while Russia, and to an extent
France, has an economic, and perhaps strategic, interest in seeing Iran build a
nuclear power plant. These conflicting interests are being exploited very
effectively by Tehran, and it sees no reason to change strategies at this
juncture.

So while Kenneth Brill, the U.S. chief delegate to the I.A.E.A., said, "A
country that truly comes clean with the agency and truly cooperates … gets a
constructive response," it is very unlikely that North Korea or Iran will heed
his advice. The U.S. needed a success story for its controversial Proliferation
Security Initiative and an example for other countries of the rewards that come
with declaring and disarming; Libya recognized this and used it to its
advantage, but Pyongyang and Iran do not stand to benefit from a similar move.

The Power and Interest News Report (PINR) is an analysis-based publication that
seeks to, as objectively as possible, provide insight into various conflicts,
regions and points of interest around the globe. PINR approaches a subject based
upon the powers and interests involved, leaving the moral judgments to the
reader. This report may not be reproduced, reprinted or broadcast without the
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