Libya, from ally to devil in six months !

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 The big question now is which foreign power will dominate Libya. The United States, which has waged this little war from well offstage? Italy, which gets most of its oil from Libya? France, where President Sarkozy has been hinting at a Mediterranean union – bien sure, under French tutelage?

Image via Wikipedia

By Eric S. Margolis

WATCHING rebel gunmen rampage through Col Muammar Gaddafi's Bab al-Aziziya compound – once Tripoli's Forbidden City – was a strange experience for me.

I spent an evening there with Gaddafi in 1987, a year after it was bombed by US warplanes. Libya's "Brother Leader" talked about the Middle East, Palestine, North Africa. He led me by the hand through his ruined private quarters, still reeking of fire and smoke, and showed me the bed in which an American 1,000kg laser-guided bomb killed his two-year-old adopted daughter.

We sat in his gaily coloured Bedouin tent, talking into the night. He opened up to me about his love for fancy dress and beamed happily when I told him, tongue in cheek, how attractive he was to western women.

Call this dictator nostalgia – a feeling not of course shared by a majority of Libyans who are now trying to hunt down their deposed leader of 42 years. Few will miss him. Gaddafi was a blight on Libya and an embarrassment to the Arabs.

Meanwhile, Libya is literally turning into a gold rush as the big western oil firms pile into Libya and pay court to the new government in Tripoli, the National Transitional Council.

Police units and troops from Britain, France and Italy may soon follow – all, naturally, as part of the west's new "humanitarian intervention" strategy that has replaced "counter-terrorism".

Libya is in semi-chaos and its economy devastated by six months of conflict. The food distribution system has broken down. Thousands of heavily armed "rambos" make their own law. There are barely any state institutions aside from the national oil company and central bank. The secret police have evaporated.

As a modest historian, I am delighted when history draws striking parallels. We now see the fascinating spectacle of those old colonial powers, Britain, France, and Italy, starting to move back into their former overseas possessions.

Britain ruled Libya until a young colonel named Muammar Gaddafi overthrew the doddering old British puppet, King Idris. The US lost one of its largest bomber bases at Libya's Wheelus Field. Neither nation was to forgive Gaddafi.



Imperial Britain had seized Libya from Italy's fascist regime in 1943. Italy colonised Libya after tearing it away from the crumbling Ottoman Empire. Italy used concentration camps and poison gas to terrorise Libyans into submission.

France, whose colonial empire included neighbouring Tunisia, Algeria, Morocco, Chad, and Niger, long competed with Italy and Spain for regional domination. Mussolini's Fascist regime pressed claims to Tunisia, Corsica, Nice and Cannes.

An obscure colonial border dispute over Chad's Aouzou Strip dating from the 1920's between France and Italy led to a nasty little Franco-Libyan border war there in 1987.

French Foreign Legionnaires in jeeps, disguised as Chadian nomads, drove the wretched Libyan army from Aouzou in what became known as the "Toyota War". Disguised French special forces and Legionnaires, as well as Britain's SAS, just used the same theatrical tactics in Libya.

The big question now is which foreign power will dominate Libya. The United States, which has waged this little war from well offstage? Italy, which gets most of its oil from Libya? France, where President Sarkozy has been hinting at a Mediterranean union – bien sure, under French tutelage?

Oil is a potent aphrodisiac. Libya has vast reserves of premium, low-sulphur oil and gas, and a hundred-year supply of ancient artesian water.

Energy-rich Libya will become an important market for European consumer products and industrial exports, as well as a huge major supplier of investment funds from its estimated US$50 billion worth of annual oil exports.

There are more prizes to be had: Libya's gold reserves, estimated at US$4-5 billion; and its nearly US$100 billion of foreign deposits and investments.

The files of its intelligence agencies which may reveal the true story behind the bombings of a French and US airliner in the 1980's.

Western intelligence will also want to talk to Gaddafi's intelligence chief, closest confidant and brother-in-law, Abdullah Senoussi, with whom I spent a most interesting evening in Tripoli. France has a warrant out for his arrest for the 1989 bombing of a UTA airliner over Niger.

It's likely US, British and French intelligence have already grabbed Gaddafi's files.

Eric S. Margolis is an award-winning, internationally syndicated columnist, writing mainly about the Middle East and South Asia. Comments: letters@thesundaily.com

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Why the US is the greatest threat to Lagarde at the IMF?

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"It's a victory for France," President Nicolas Sarkozy said of Christine Lagarde's appointment as the new head of the International Monetary Fund.

Christine Lagarde leaves a private TV studio after appearing on prime time news in Boulogne Photo: REUTERS

By Richard Blackden, US Business Editor

It should come as no surprise that the unpopular French leader is trying to put a positive spin on losing his highly-regarded finance minister. And, in one sense, Sarkozy is spot on.

Lagarde becomes the IMF's fifth French leader, and her appointment ensures that the Gallic republic keeps a powerful voice at an institution that has made a comeback thanks to the financial crisis. But Lagarde won't have appreciated her former boss airing his sentiment in public. The 55-year old will start her first day in the job next Tuesday with three question marks hanging over her appointment.

The first and least troublesome one is some inevitable concern within the IMF that she's not an economist. Lagarde trained as a lawyer and spent 25 years working at US law firm Baker & McKenzie before moving into politics in 2005. Some of this will be intellectual snobbery, but some will be legitimate concern over whether she's qualified for the job. She's regarded as highly intelligent and the fund already has an army of economists that matters can be delegated to.

The second is whether her selection was a stitch up. And it was. Europe still wields a disproportionately large amount of votes at the IMF's top table - a gift from history that the continent is understandably reluctant to relinquish. There's nothing she can do about that, and Lagarde has already pledged to make changes to the voting system so it better reflects the shifting balance of economic power in the world.

The third is by far the most serious. As the French finance minister intimately involved in Europe's debt crisis during the last 12 months, will she be able to give the IMF an independent voice and protect the interest of its creditors? Lagarde certainly thinks so. During her job interview last week she told the IMF's Executive Board that "I will not shrink from the necessary candour and toughness in my discussions with European leaders." Adding that "there is no room for benevolence when tough choices must be made."

The former lawyer spent much of the past month visiting China, India and Brazil to assure them that she will not throw good IMF money after bad to solve Europe's debt dilemma. The fund, which means its donors, is supplying about a third of the €110bn that was pledged to Greece as part of the first bail-out in May, 2010. Such assurances appear to have won over those three economic heavyweights, who declared for her rather than Agustin Carstens, the head of Mexico's central bank, and Lagarde’s only rival.

Victory, though, only came when the Obama administration threw its weight behind Lagarde this week. US Treasury Secretary Tim Geithner sang the praises of his former counterpart and new neighbour in Washington DC. But it's politicians in the US capital, rather than Beijing, Delhi or Sao Paulo, that pose the greatest threat to Lagarde.

Despite the warm and no doubt genuine words from Geithner, The White House is increasingly frustrated at Europeans' handling of their own debt debacle. Its latest flaring comes as the US economic recovery is losing momentum, and Obama is trying to wrestle back the political initiative from a Republican party emboldened by the recent US slowdown. The irritation was likely behind an unusual public rebuke to European leaders from Geithner last week when he said it would be better if they could speak with one voice.

A still bigger threat comes from Congress. The Obama administration struggled to push through an extra $108bn in funding for the IMF in June 2009. If bail-out was a toxic word in Washington then, it has only become more so since. So far the contributions from the IMF, where the US is the biggest single donor, have raised relatively few heckles in the House of Representatives or Senate. But with Republican candidates currently vying for the right to challenge Obama next year, the chances are that will change. And any money required from the IMF for Greece's second bail-out will receive far more political scrutiny in the country that will have to dig deepest into its own pockets.

It's to her new neighbours in Washington, more than anyone else, that Lagarde needs to prove that her appointment is no victory for France.