Clarification to This Article
This article quotes Libyan Foreign Minister Abdel-Rahman Shalqam as saying that the United States and Libya had signed an accord to reassure American investors their properties in Libya would not be nationalized and that the United States had committed to accepting 1,000 Libyan students for education and training. A spokeswoman at the U.S. Embassy in Tripoli says that no such accord has been signed, and that the United States has not committed to accepting a fixed number of Libyan students.
Oil Wealth Fuels Gaddafi's Drive For Reinvention

By Ellen Knickmeyer
Washington Post Foreign Service
Tuesday, November 6, 2007

TRIPOLI, Libya -- Brother Leader Moammar Gaddafi still exhorts his people to greatness from billboards, banners and murals. But these days a different kind of command is driving Libya's transformation as the newly opened country taps into oil wealth: "izala," Arabic for "raze it to the ground."

Surveyors are spraying the word in red paint up and down Libya's Mediterranean coast. The orange-vested road crews are tagging for demolition the old Libya -- low-rise, stucco Libya, sleepy under decades of Gaddafi's socialist economy and international sanctions.

To rise in its place, Gaddafi's officials say: the increasingly capitalist Libya, with new buildings for the country's new stock exchange. Airports to ferry in and out a dreamed-of annual flow of 30 million oil workers, tourists and other travelers. The world's second-largest port after Singapore. Railways. Highways. Hospitals. Schools. Luxury beachfront hotels.

Libyans and Westerners here cite a statement attributed to Gaddafi: Libya must destroy in order to rebuild.

"I can't believe they're going to do it," one white-haired shopkeeper said this past weekend at his snack shop on the coast road east of the capital, Tripoli. "Izala" was scrawled across the front of his sandstone shop, marking it for bulldozing to clear the way for a highway.

"It's going on all over the country," the shopkeeper said, speaking out of earshot of the government officials who still often trail foreign reporters here. "They're coming up with all these wild schemes, and no one knows if it's going to happen."

The lifting of international penalties and the ensuing exploitation of its oil fields are changing Libya from a stunted pariah state to a courted oil giant. Libya has Africa's largest proven oil reserves; expanded investment would make this nation one of the world's top 10 oil producers, industry experts say.

The country's oil and gas fields stood neglected for decades under sanctions imposed by the United Nations, United States and European Union in response to Gaddafi's alleged sponsorship of terrorism and pursuit of nuclear weapons.

In 1986, President Ronald Reagan called Gaddafi the "mad dog of the Middle East." Days later, following a bombing at a Berlin nightclub frequented by American soldiers, U.S. airstrikes barely missed the Libyan leader.

By 2003, Gaddafi was changing his ways. Many American officials credit the U.S.-led invasion of Iraq for his change of heart; Libyan officials insist that only negotiations and internal reflection prompted Gaddafi to abandon his pursuit of weapons of mass destruction and take other steps demanded by Western nations.

British Prime Minister Tony Blair visited in 2004. In 2006 the United States stopped listing Libya as a state sponsor of terrorism. Blair and French President Nicolas Sarkozy traveled to Libya this year, bringing with them oil and defense contracts. Sarkozy's trip followed Libya's release of five Bulgarian nurses and a Palestinian doctor convicted in a highly disputed case alleging they had infected children with the virus that causes AIDS.

U.S. Secretary of State Condoleezza Rice has said she hopes to visit Libya soon. The State Department has taken two floors of a tony Tripoli hotel for a new embassy, restoring full diplomatic relations for the first time since 1979.

The rapprochement faces lingering objections by families of victims of Pan Am Flight 103, blown up over Scotland in 1988 in an attack blamed in part on Libya. Congress has yet to approve President Bush's nominee for ambassador.

But Libyan Foreign Minister Abdel-Rahman Shalqam, in an interview, cited progress. "We sat down together, we succeeded in solving the big problem," he said. "With America, now we have a sequence to follow."

The two governments have signed an accord to try to reassure American investors that their properties in Libya will not be nationalized, Shalqam said. The United States also has committed to accepting 1,000 Libyan students for education and training, he said, a vital step for Libya's unskilled workforce.

In a recording released this past weekend, al-Qaeda pledged to attack Libya for Gaddafi's opening to the West. Gaddafi was serving his "Washington masters," said Ayman al-Zawahiri, al-Qaeda's No. 2 leader. Al-Qaeda and a Libyan armed group announced their alliance in the same recording. "After long years," said Abu Laith al-Libi, the Libyan group's leader, Gaddafi "suddenly discovered that America is not an enemy . . . and is turning Libya into another crusader base."

The first signs of greatly disparate oil wealth in Libya, and the arrival of foreigners with different outlooks, are straining the homespun fabric of a country that its leader calls a "Republic of the Masses."

In the capital, the marble frieze across the front of the country's central bank still declares: "Revolution Forever. Power, wealth and weapons are in the hands of the people." The Ray-Bans, Dior perfumes and diamonds on sale on Tripoli's Galgamesh Street are not.

"Libyans ask us, how can you sell chocolates for 60 dinar?" or $48, said Osama al-Mougrabi, behind the counter at a boutique selling Belgian candy. Most of the customers are foreign oil companies, buying chocolates for Libyans with whom they do business, Mougrabi said.

Average monthly household income in Libya is 300 dinar, or $247.

In Tripoli, crew-cut Americans occasionally appear on the streets, taking their places at cafes on the capital's Green Square next to a gossipy panoply of Russians, Kazakhs, Syrians and others.

"Now we see the world, and the world sees us," said one Libyan man, playing cards and drinking tea past midnight with two friends at tables set on bare ground next to an ancient Roman wall.

The man was cautious in discussing the changes coming to Libya. "All of us have something in our heart we cannot say," he said.

A friend next to him switched from Arabic to French. "There are people listening," he explained. "But listen, there is a family here, and every day that we try to rise, it pushes us down, down," he said, referring to Gaddafi and his relatives.

Oil would bring wealth to some, a third friend observed. "The ones who have investments will get richer," he said. "We and Libya will remain the same."

Gaddafi built his state, and steeled his people against its troubles, on the slogan that Libyans were all and equally in it together. He refused the title of president or king for that of Brother Leader of the Revolution, the 1969 military coup in which he seized power.

Libya is taking steps to cushion the shock of the country's planned transformation, said Shalqam, the foreign minister. Infrastructure projects would spread the oil wealth to Libya's 6 million people, he said.

Subsidies on bread and other staples remain. Authorities have increased salaries slightly and promised loans of as much as $5,000 for 200,000 Libyans to help them start businesses.

Gaddafi has blessed the new stock exchange, giving $24,000 in shares in Libyan enterprises to "simple" Libyan families this year, said Ahmed Mohammed Karoub, manager of the Tripoli branch. "We want to cope with the world. We want to cope with catching up," Karoub said.

At the exchange last week, plastic shrouded the legs of new office chairs bought for traders. An employee in a head scarf talked on a cellphone, studying her fingernails on one hand, next to a black computer screen. Trading will begin next year, Karoub said.

Libya has said it wants to retain majority share in some of the first enterprises that it is nominally privatizing, including telephone companies, and may hold positions in other firms.

Libya's big dreams have big problems, Western analysts warn. Libya ran a million-ton shortage of concrete in 2006, according to industry estimates. The country lacks raw material and labor for current construction needs, let alone its ambitious 2009 plan.

Libyan officials have argued publicly over whether to stick to the 2009 goal, the 40th anniversary of Gaddafi's coup, or ease to a less-punishing pace.

Officially, people's committees govern Libya. In fact, true power and affluence still seem to lie with Gaddafi and his family, comrades-in-arms and tribal allies, according to Western diplomats. International rights groups call the government authoritarian and corrupt.

In Gaddafi's home town of Sirte, a mural shows a giant image of the leader looming over oil derricks. "Oil for development in peace, oil for weapons in war," the slogan declares.

At the town's entrance, a banner shows Gaddafi, always ready to pour out his heart to his people through billboards, books and hour-long monologues, lamenting the passing of simpler times: "The olive tree is sacred. The palm tree is sacred. But petroleum has made us lose our reverence."

Staff researcher Robert E. Thomason in Washington contributed to this report.

View all comments that have been posted about this article.

© 2007 The Washington Post Company