As the Bush administration struggles to define its foreign policy, with sanctions slipping on Iraq and the prospect of missile defense raising complications around the world, a new question has emerged: How should Washington handle a "rogue" state that is gradually abandoning its objectionable practices? What should the United States do when its long-standing policy toward a maverick country such as Libya starts to pay off -- and that country finally begins to clean up its act? The question has recently become a pressing one as, in a surprising twist of events, the often and justifiably maligned Libyan regime of Colonel Mu'ammar Qaddafi has started to meet international demands and redress its past crimes. How the United States responds will serve as a test of Washington's ability to reintegrate a reforming "rogue" into the community of nations.

On January 31, three Scottish judges deliberating at a specially convened court in the Netherlands convicted a Libyan intelligence agent for the 1988 bombing of Pan Am flight 103. The attack, which occurred over Lockerbie, Scotland, killed 270 passengers (including 189 Americans) and passersby, dramatizing the threat that terrorism and its state sponsors pose to the United States. The recent verdict has achieved a modicum of justice. But it has only reconfirmed, rather than resolved, the quandary that Libya's behavior raises for U.S. foreign policy. On the one hand, the verdict seems to have validated long-held perceptions of Libya as a pariah state. But on the other hand, the very fact that Qaddafi surrendered the suspects suggests that international pressure has prompted subtle yet significant changes in his foreign policy. After decades of militancy, Libya seems to be accommodating itself to international norms.

Few have acknowledged the true dimensions of the challenge these changes pose for Washington. President George W. Bush must deal with the remaining Lockerbie-related issues -- including how to force Tripoli to accept responsibility for the crime -- while also figuring out how to move beyond them. Successive American administrations have proven adept at devising strategies for isolating offending regimes such as Libya's. But Washington has thus far neglected to plan what to do when it succeeds.


Mu'ammar Qaddafi came of age during the 1960s, as Libya and much of the developing world battled to escape imperial domination. This bitter struggle against colonialism shaped Qaddafi's political philosophy, infusing him with a deep suspicion of the West. It also convinced him of the inherent iniquity of the international order, and led him to the conclusion that Tripoli should be unfettered by international conventions or rules. Rather, as a vanguard revolutionary state, Libya should help liberate the rest of the Third World and reshape its political institutions.

With Libya's vast oil wealth at his disposal and a radical ideology as his guide, Qaddafi systematically attacked Western -- especially American -- interests, as well as conservative African and Arab leaders whom he routinely derided as "lackeys of imperialism." Libya lent its support to liberation movements, secessionists, and terrorists from the Philippines to Argentina, embarking on a course that culminated in the Pan Am explosion.

Then, in the 1990s, certain events pressed Qaddafi toward a pragmatic redefinition of his nation's interests. The collapse of the Soviet Union deprived Libya of its main counterweight to the United States and exposed it to the kind of unified international pressure that was once impossible. As Qaddafi became isolated, his ideology and methods came to seem hopelessly anachronistic. The colonel's anti-imperialism was eclipsed as the nonaligned bloc turned its attention to securing its position in the global economy. While Qaddafi remained rigid, much of the rest of the Arab world came to terms with Israel and grudgingly accepted the need for an American security umbrella. Libya's continuous interference in the internal affairs of other African states, meanwhile, estranged Qaddafi from that continent, the liberation of which he had often trumpeted as one of his highest priorities. Qaddafi thus spent the 1990s on the sidelines while his onetime revolutionary compatriots -- leaders such as Nelson Mandela and Yasir Arafat -- were feted in Washington and in European capitals. To remain relevant, Qaddafi realized, he had to accept the passing of the age of revolutions and the arrival of the age of globalization.

Another reason for Qaddafi's shift was the much-derided U.N. sanctions regime imposed on Libya after the Lockerbie bombing. The colonel had long believed that Libya's oil wealth and commercial appeal would undermine any cohesive opposition to his revolutionary excesses. But the Lockerbie sanctions, enacted by the United Nations in 1992, shattered that conviction. The United States managed to convince even states with close economic ties to Libya, such as Italy and Germany, to support the sanctions as a way to force Qaddafi to hand over the bombing suspects. As a senior Libyan official admitted, "when America imposed an embargo, the whole world followed it." For the first time, Qaddafi's militancy incurred a palpable cost.

Prior attempts to coerce Libya had proven ineffective: U.S. air strikes in 1986 only enhanced Qaddafi's domestic power and led to his lionization in the developing world. But the U.N. sanctions -- particularly the prohibition on the sale of oil equipment and technology and a ban on financial transfers -- hit Qaddafi where it hurt the most, undermining his government's ability to extract and export its main source of revenue. Libya estimates that the sanctions have deprived its economy of $33 billion, whereas the World Bank puts the damage at the lower but still daunting sum of $18 billion. Whatever their actual cost, the basic efficacy of the sanctions demonstrated Libya's special vulnerability to such multilateral coercion. Libya's economic vitality and its government's popularity depend on access to international petroleum markets. Thus the same resource that gave Qaddafi the power to upset the international order also let the world community undermine him.

Already, in the 1980s, low oil prices had sparked an economic recession from which Libya could not escape. The sanctions of the 1990s then exacerbated the woes of an economy that was plagued with 30 percent unemployment and 50 percent inflation rates. Tripoli embarked on an austerity program, freezing salaries and reducing subsidies, but this proved dangerous for a regime that depended for its survival on buying the population's acquiescence. Demonstrations in urban areas soon erupted, as did at least two military coup attempts and an Islamic insurgency in the eastern provinces.

As Libya approached the brink of chaos in the mid-1990s, an extraordinary dispute broke out in the higher echelons of the regime. The pragmatists in the bureaucracy -- led by the late General Secretary Umar al-Muntasir and Energy Minister Abdallah Salim al-Badri -- stressed the need for structural economic reforms and international investments to ensure Libya's long-term economic vitality and political stability. The hard-liners -- including long-time Qaddafi confidant Abdelssalem Jalloud -- wanted to continue defying the West, for they saw Libya's past radicalism as the basis of the regime's legitimacy.

As the debate raged, Qaddafi at first remained strangely silent, unwilling or unable to make a decision. But in 1998, the colonel seemed to resolve the debate in favor of the pragmatists. A series of articles in the official daily Al-Jamahiriya began to criticize the intransigence of the hard-liners and their inability to recognize prevailing global realities. The Revolutionary Committees -- informal groups of zealots, drawn from the lower echelons of Libyan society and indoctrinated in radical ideology, that served as the hard-liners' power base and had dominated Libyan politics since their creation in the late 1970s -- were purged and relegated to the margins of society. Meanwhile, the pragmatists were granted an all-important advantage: proximity to the colonel. "We cannot stand in the way of progress," announced Qaddafi. "No more obstacles between human beings are accepted. The fashion now is the free market and investments." In April 1999, Qaddafi accepted U.N. demands for the trial of the Lockerbie suspects in the Netherlands, announcing shortly thereafter that "the world has changed radically and drastically. The methods and ideas should change, and being a revolutionary and a progressive man, I have to follow this movement."

In the last few years, Qaddafi has begun to offer a new vision for Libya. In a September 2000 speech commemorating the Libyan Revolution, he not only proclaimed an end to his long-standing anti-imperialist struggle but also suggested that it was time for former antagonists to start cooperating with one another. In a series of seminars and speeches, the colonel outlined his new ideas to his restive constituents, declaring, "Now is the era of economy, consumption, markets, and investments. This is what unites people irrespective of language, religion, and nationalities." The hoary policies of subsidizing rebellions and plotting the overthrow of sovereign leaders have become unsustainable in the era of economic interdependence -- even for oil-rich Libya. As a sign of the times, the regular procession of visitors to the colonel's tent no longer includes guerrilla leaders and terrorists, but instead features investment consultants and Internet executives.

Qaddafi has also begun to shift his international focus toward Africa. After decades of involvement in the Middle East, in March 1999 the colonel proclaimed his new orientation with a typical flourish, announcing, "I have no time to lose talking with Arabs. ... I now talk about Pan-Africanism and African unity." There is a certain logic to this new focus; after all, the Organization of African Unity (OAU) was the only regional group to defy the U.N. sanctions on Libya, and Nelson Mandela, Africa's elder statesman, was instrumental in resolving the Lockerbie crisis. While Arab politicians equivocated during the 1990s, African leaders warmly embraced Qaddafi. Mandela even hailed him as "one of the revolutionary icons of our time."

Libya's new Africa policy has become the first test of Qaddafi's evolving ideology and newfound moderation. Previously, Libya had tried to export revolution through Africa by subsidizing insurgencies and destabilizing local states. Now Qaddafi seems to have abandoned his radical heritage. He has focused on mediating crises while claiming a place at the African roundtable. The colonel has embarked on a high-profile diplomatic campaign to settle conflicts in the Democratic Republic of the Congo, the Horn of Africa, Sudan, and Sierra Leone. Libya has also signed bilateral trade and cultural pacts with Niger, Senegal, and South Africa, while extending aid to Ethiopia, the Ivory Coast, Mali, Tanzania, Uganda, and Zimbabwe. Tripoli has even demonstrated an uncharacteristic appreciation for multilateral institutions. Not only has it participated constructively in various regional forums, but it has hosted an extraordinary OAU meeting to press for the creation of a "United States of Africa" as a means to promote solidarity and economic integration. Most of these initiatives have yet to produce substantial practical results. But their importance lies in the fact that, after decades of attempting to subvert Africa's state system, Qaddafi is now making positive contributions to the continent's political cohesion and economic rehabilitation.


Qaddafi's philosophical evolution and his African endeavors have sparked some interest in the international community. But further changes must occur before rapprochement with the United States will be possible. Three problems in particular loom large: Libya's support for terrorism, its attempts to acquire weapons of mass destruction (WMD), and its opposition to the Arab-Israeli peace process.

American objectives in Libya have never been explicitly directed at toppling Qaddafi. This is explained by the fact that the colonel's adventurism, while disturbing to Americans, has never actually destabilized fundamental U.S. interests. This puts Qaddafi in a very different category from that occupied by a leader like Saddam Hussein, who twice invaded his neighbors and continues to seek hegemony over the Persian Gulf. Qaddafi has also shown himself to be more susceptible to international pressure than Saddam. Successive American administrations have stated that they would welcome resumed relations with Libya if Qaddafi would just abandon his provocative behavior. Now he may finally be doing just that.

Although Libya has a long history of supporting outlawed organizations such as Italy's Red Brigades and the Irish Republican Army, Qaddafi has recently severed his links to his terrorist clients and abandoned terrorism as an instrument of policy. In 1999, for example, Libya expelled the Abu Nidal organization from its territory and broke its ties to other radical Palestinian groups such as the Popular Front for Liberation of Palestine-General Command and Palestinian Islamic Jihad. In addition, in accordance with an Arab League agreement, Libya has extradited Islamist militants and suspected terrorists to Egypt, Yemen, and Jordan. Once-notorious training camps have been closed down, and terror groups have been told to find other sources of arms and supplies.

Apart from terrorism, U.S. policymakers have also been concerned by Libya's attempts to acquire WMD. Here there seem to be fewer signs of improvement. Since the April 1999 suspension of the U.N. arms embargo, Libya has sought to modernize its decrepit armed forces by acquiring advanced weapons from North Korea and Russia. And the CIA recently announced that "Tripoli has not given up its goal of establishing its own offensive [chemical weapons] program."

Although Libya has made progress toward acquiring chemical weapons, it has not yet managed to become a nuclear threat. As the Pentagon describes it, Libya's nuclear project "lacks well-developed plans, expertise, consistent financial support, and adequate foreign suppliers." And Libya's nuclear infrastructure is limited to a Soviet-made research reactor operating under the auspices of the International Atomic Energy Agency.

Washington should recognize that Tripoli's attempts to acquire WMD make a certain kind of sense. After all, Libya is richer than its neighbors but is sparsely populated and has long, unsettled borders. The country's lucrative oil fields have, at various times, been coveted by neighbors such as Algeria. And Libya's unsteady relations with Egypt have caused sporadic tension on Libya's eastern flank. Little wonder, then, that Tripoli has chosen to build up its air power, missile force, and chemical weapons in order to deter potential adversaries with larger armies. Both of these factors -- the rudimentary level of Libya's WMD program and the genuine basis for its regional insecurity -- suggest that it might be possible to persuade Tripoli to abandon its plans for WMD. U.S. diplomacy should persuade Libya that its WMD projects will only precipitate a regional arms race that will exacerbate, rather than alleviate, its vulnerability. Even if Qaddafi remains unpersuaded, Libya's primitive facilities and poor technological infrastructure ensure that the country will not become a nuclear threat anytime soon.

A third major obstacle in U.S.-Libyan relations has been Qaddafi's ferocious rejection of efforts to settle the conflict between Israel and its neighbors. But here again Libya seems to have undergone a conversion in the past few years. Although the colonel still makes shrill calls for the "battle of the century" to end the "Zionist occupation," on a practical level Libya has yielded to American demands by terminating its support for rejectionist Palestinian groups and accepting the Palestinian Authority's right to negotiate with Israel. In the past, the kind of violence now occurring in the West Bank and Gaza would have led to the dispatch of Libyan arms and aid to Palestinian militants. This time, Qaddafi has limited himself to sporadic rhetorical fulmination and avoided tangible measures that would add further strain to an already tense situation. Qaddafi may never cross the existential barrier that some other Arab leaders have traversed by recognizing Israel. But in practice, he has already extricated Libya from Arab-Israeli confrontations.

Libya's ongoing reintegration into the world community has already started to pay off, and the rewards it has won from reclaimed trade partnerships have generated a desire within the country to come to terms with the Americans as well. Unlike Iran, which refuses official contact with the United States, Libya is eager to open a diplomatic dialogue. Abuzed Dorda, Libya's U.N. envoy, has said, "I expect that we will sit down with the Americans and put the past behind us." Even Qaddafi, in his own eccentric manner, has made overtures to the new American president, stressing, "I believe that George W. Bush will be nice. As a person he is not malicious or imperialist. I believe that he attaches importance to the United States and does not have world ambitions." A modest level of trade has already quietly developed between the two states. Last year, Libya took advantage of the newly eased sanctions on food and medicine to purchase 50,500 tons of wheat and 26,100 tons of corn from the United States. In a further, subtle signal to the United States, last November Libyan General Secretary Mubarak al-Shamikh dismissed reports that U.S. oil companies' assets in Libya have been nationalized and pledged that American investments are "protected and waiting for them to return." All of this suggests that a flexible yet determined American policy toward Libya stands a good chance of convincing Qaddafi to make further pragmatic adjustments.


The challenge that Libya poses for the Bush administration is how to acknowledge Qaddafi's partial rehabilitation while continuing to press for further changes. Until now, the United States has relied on a range of unilateral and coercive measures (such as sanctions) to contain Libya. But in the aftermath of the Lockerbie trial, with U.N. sanctions having been suspended, the United States can hardly isolate Libya on its own. Unless it adds incentives to the mix, Washington will have little in the way of leverage.

Unlike the United States, Europe has responded to Libya's overtures with uncritical dialogue and greatly increased trade. But whereas U.S. policy may be too unyielding, the European model goes too far in the other direction. By warmly welcoming Libya back into the international fold, Europe has rewarded (or, at best, ignored) Qaddafi's continued refusal to accept basic responsibility for the Pan Am bombing and turned a blind eye to his noncompliance with other international demands. Still, since Europe is Libya's foremost trading partner and the market for nine-tenths of its oil exports, the success of any U.S. policy will depend on European compliance and support.

A U.S.-Libyan dialogue should start by focusing on the remaining U.N. demands relating to Lockerbie -- namely, that Tripoli pay compensation to the families of the victims and formally renounce terrorism. For symbolic reasons and to deter future crimes, these two points should be made non-negotiable prerequisites to any softening of U.S. policy toward Libya. Fortunately, the chances for success on these issues are good. Despite Libya's refusal to compensate Americans for state-sponsored crimes, recent history suggests it may eventually offer restitution. In 1999, for example, after a court in France convicted six Libyan intelligence officials for the 1989 bombing of a French UTA flight over West Africa, Libya paid out $25.7 million in reparations. Now, in exchange for both direct compensation and a Libyan admission of responsibility, Washington should consider removing Tripoli from its list of state sponsors of terrorism, rescinding its ban on American citizens' travel to Libya, and unfreezing the country's assets in the United States.

A similar approach should be used to dissuade Libya from acquiring WMD. The chances that Libya will manage to assemble nuclear weapons anytime soon are remote, but Qaddafi's pursuit of chemical weapons and delivery systems remains a threat. The United States should therefore mount a concerted diplomatic campaign involving not just Libya but also Europe. The political cost of the five-year-old Iran-Libya Sanctions Act (ILSA) has been considerable and its impact on deterring investments in "rogue" states negligible. The Bush administration should thus allow ILSA to expire in August in exchange for a European ban on the export to Libya of sensitive technology.

In a similar vein, the United States should start talking to Russia about preventing arms sales to Libya. Since these sales have been stymied by long-outstanding Libyan debts for prior purchases, the Russians may be more inclined to cooperate here than they have been on arms sales to Iran. In the end, however, keeping WMD technology out of Libyan hands will require a complex, broad-based, and multilateral policy.

In addition to coordinating international measures, the United States should also use its own set of incentives to get Tripoli to acquiesce to various WMD treaties. Libya has already signed the nuclear Nonproliferation Treaty. It should be pressed to sign the Chemical Weapons Convention as well, and to permit the inspections that treaty mandates. In exchange for such compliance, the United States could stop blocking Libya's access to international capital markets, establish low-level diplomatic representation, and allow U.S. investment in Libya's non-oil sectors. The flow of investments into Libya need not be limited to the energy sector: Tripoli is also trying to refurbish its airline and financial services industries and its national infrastructure, and these projects offer lucrative opportunities for U.S. firms.


It may take a number of years before U.S.-Libyan diplomatic relations are fully restored at the ambassadorial level and American oil firms return to Libya. Until then, the United States should monitor Libya's compliance with international standards and offer concessions only after judging Tripoli's record. The current administration should aim simply to establish a framework that can be used for the gradual resumption of U.S.-Libyan ties.

American policy, furthermore, should not try to directly alter Libya's international orientation. Instead, it should provide various inducements and pressures designed to help Libya move along its own path of moderation. This incremental normalization would reward constructive Libyan conduct and punish intransigence. It would also have the advantage of reconstituting international -- particularly European -- cooperation, an essential part of any Libya policy.

Most important, the Bush administration ought to accept the possibility of "rogue" states' rehabilitation. U.S. policy should employ a full complement of economic, political, and diplomatic tools not just to frustrate these states' nefarious designs but also to show them that, should they temper their policies, they can be reintegrated into global society. The Libyan case can provide a model for how to deal with a revolutionary regime that has grown weary of its isolation and ostracism. The United States should not waste the opportunity. Libya -- and the world -- will be watching.

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  • Ray Takeyh is a Soref Research Fellow at the Washington Institute for Near East Policy.
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