Britain extends diplomatic recognition to Libya

Britain is to send an ambassador to Tripoli, Libya next month, after 15 years without any diplomatic presence. This follows Libya's payment of compensation to the family of the policewoman Yvonne Fletcher, over accusations that the shot that killed her in 1984 during a demonstration outside the Libyan embassy in London had come from a gunman inside the embassy.

Announcing this to the British parliament, Foreign Secretary Robin Cook told MPs that an undisclosed sum—said to have been about £250,000—was paid to Fletcher's family in the summer. Cook made it clear that commercial interests were behind the decision to send an ambassador, saying Britain must “promote our prosperity by widening our commercial links”. United Nations sanctions against Libya were suspended earlier this year, after Libya handed over two suspects wanted for the bombing of a Pan Am jet over Scotland in 1988.

Britain is hoping to gain in a number of ways, both commercial and financial, by dropping its rhetoric about Libya's supposed “terrorism”. Banking, engineering, oil and construction companies are seeking contracts in Libya's planned $35 billion post-sanctions investment plan, due to run from 2001 to 2005. The UK Committee for Middle East Trade—a body of industrialists and officials that advises the UK government—intends to create a permanent UK-Libya business council. The sectors targeted for investment include infrastructure, tourism and oil, in partnership with Libyan and foreign private sector investors. Britain is also hoping that sending an ambassador will ease the way to securing repayment of $1.4 billion in debts owed by Libya to British and foreign banks based in London.

The United States, however, has refused to alter its hostile stance. It is maintaining sanctions “intended to limit Libyan access to funds and material for terrorist activities, weapons of mass destruction programmes and other destabilising military actions”. An official announcement on November 23 stated that it was still too soon to lift sanctions, and that Libya must end its support for “terrorism”.

Acting only just before the deadline for a decision, Secretary of State Madeleine Albright renewed a ban on the use of US passports for travel to Libya. Albright contended there was a continuing danger to US citizens from the regime, overruling the department officials who had concluded that Americans choosing to visit Libya would not be at risk. She sided with those arguing that the lifting of restrictions would send the wrong signal to Libya. Even if the ban had been allowed to lapse, other curbs on travel to Libya would have remained in place, including a prohibition on the spending of US dollars by Americans in that country.

The ban has been renewed annually since it was first imposed by President Ronald Reagan in 1981. Although the annual renewals usually attract little attention, this year the issue was more contentious. Some US officials held that the ban should be allowed to lapse. Libya criticised the decision by the US, saying that US citizens would be safer in Libya than in most American cities, while maintaining its hope that it could build a “balanced” relationship with Washington. There are pressures from some influential groups to widen US access to the Libyan market. Since restrictions on exports of food to Libya have been eased, agricultural exports such as wheat have increased, easing the glut in the US. Pressure to allow other sectors of US business to follow suit can only increase.

Playing down the decision of Britain and the European Union to resume relations with Libya, State Department spokesman James Rubin told a news briefing that the US would judge Libya on the basis of whether it acted on its assurances. “As far as the British decision is concerned, that's really for the British government to decide,” he added.

The US stance gives their European rivals free reign to capitalise on Colonel Muammar Gadhaffi's new policies to promote business. The visit by Italian Prime Minister Massimo D'Alema to Libya at the beginning of this month, becoming the first Western head of government for 15 years to meet the Libyan leader, illustrates the change that has taken place.

“Libya will become Italy's bridge to Africa and Italy will be for Libya its door into Europe,” Gadhaffi was quoted as telling Italian foreign minister Dini during an earlier meeting. Italy was the prime mover in persuading members of the Euro-Mediterranean Forum to admit Libya as an observer at a meeting in April. The forum was set up in 1995 to promote security and trade ties between the 15 member states of the European Union and countries bordering the Mediterranean.

Italy is keen to ensure easy access to Libya for Italian companies, notably the oil and gas concern Eni, which already has sizeable investments in Libya. Italy imports around 30 percent of its oil needs from Libya and provides 20 percent of Libya's imports. Eni began operations in Libya in 1959 and currently operates oilfields that in 1998 accounted for about 14 percent of Libya's total oil production.

Britain's move to normalise relations with Libya is motivated by similar concerns. John Shute, general manager for new business at Enterprise Oil (formerly the oil exploration arm of the state-owned British Gas), explained that “when the US comes in it will lead to an increase in competition and will tend to lead to a tightening of terms”. After months of British government officials repeating the US position that normalising relations with Libya would “send the wrong signal,” the pressure from business to change eventually won out. As one official put it during the summer, when the British government was equivocating on the issue, “European countries are falling over themselves to do business with Libya” while Britain “is now in danger of missing the boat”.