The Russian-Libyan Reproachment: What Has Moscow Gained? Just A Little Food For Thought As To WHY Russian TV (RT) Has Been the ONLY News Defending Gaddafi! INFORMATION IS KEY FOLKS!

The Middle East Council

The Russian-Libyan Reproachment: What Has Moscow Gain?

written by Mark N. Katz

In mid-April 2008, outgoing President Vladimir Putin went to Libya. He was the highest-level Russian official ever to visit this petroleum-rich North African country. A number of agreements were reached then, including a resolution to Libya’s Soviet-era debt to Moscow, a contract for Russian Railroads to build a railway line between two Libyan cities (Sirte and Benghazi), and a memorandum of cooperation between Gazprom and the Libyan National Oil Company. There were also reports that major Russian arms sales to Libya may be forthcoming. In addition, Gazprom appears set to become heavily involved in Libyan gas exports to Europe through a swap of some Gazprom assets in Russia in exchange for some of the assets in Libya of ENI, Italy’s multinational oil and gas company. In July 2008, Gazprom proposed that it buy all Libyan petroleum intended for export.

Gazprom’s growing Libyan presence has led some to fear that Moscow is attempting to dominate European gas imports not just from the east, but also from the south. This fear has only been furthered by Libyan leader Colonel Muammar Qadhafi’s enthusiasm for a “gas OPEC” and, despite his recent rapprochement with Washington, for Putin’s confrontational approach toward America and the West. Far from presaging a Russian-Libyan alliance, however, the April 2008 Putin visit to Libya may actually have been an attempt to play catch-up with the West (especially Europe), which had benefited from the end of Libya’s isolation following the lifting first of UN and later U.S. sanctions against it. Nor is it clear that Gazprom’s offer to buy all of Libya’s petroleum exports will be accepted. Finally, as some Russian analysts have noted, the benefits that Moscow receives from improved relations with Tripoli may turn out to be relatively limited.

BACKGROUND

Although Libya was not as firm a Soviet ally as many Third World Marxist regimes were, Moscow developed close ties with the anti-Western regime of Qadhafi, who had overthrown Libya’s pro-Western monarchy in 1969. The number-two Soviet leader at that time, Aleksei Kosygin, went to Libya in 1975, and Qadhafi visited Moscow in 1976, 1981 and 1985. Soviet-Libyan trade volume during the 1970s and 1980s was approximately $100 million per year. During this period, Moscow also supplied $4.6 billion in weaponry to Libya, providing about 90 percent of that country’s arms inventory. According to Kommersant, “Libya was one of the Soviet Union’s few partners that paid in full for the military equipment it purchased from the USSR.” Libya, however, did run up a debt to Moscow during these years.

With Russian support, however, the UN Security Council imposed sanctions on Libya in 1992 (at the height of Yeltsin’s pro-Western foreign-policy orientation). Russian-Libyan trade dwindled to $1 million per year by the mid-1990s. Due to the UN sanctions, Libya claimed it was unable to repay its debt to Moscow.

In April 1999, UN sanctions against Libya were lifted. Yeltsin suspended Russian sanctions against Libya the following month, but America’s remained in place. It initially appeared that Russian-Libyan economic relations would resume. Aeroflot service between Moscow and Tripoli started up again in June 1999.7 A contract was signed for a Russian firm to build a 117-kilometer natural-gas pipeline inside Libya. In mid-2000, Promeksport began implementing contracts signed in 1999 and 2000 to sell ammunition to Libya and repair its Soviet-supplied armored vehicles and air defense systems.

BREAKTHROUGH

A breakthrough in Russian-Libyan relations occurred in December 2007. According to Rossiiskaya gazeta, it began when Qadhafi telephoned Putin to congratulate him on the victory of the pro-Putin political party, United Russia, in the Duma elections earlier that month. Shortly afterward, they reportedly agreed that Putin would visit Libya soon. Russian Foreign Minister Lavrov went to Tripoli at the end of December to talk about Russian-Libyan military and economic cooperation, including Russia’s willingness to “provide assistance for Libya to realize its right for atomic-energy peaceful use,” the debt issue and the upcoming Putin visit. According to an unnamed Russian government source, the scheduling of Putin’s visit “depended, in particular, on the achievement of an agreement on settling the Libyan debt.”

As it turned out, the debt issue would not be resolved until Putin went to Tripoli in mid-April 2008. By then, Libya’s debt to Moscow amounted to $4.6 billion. This figure was reduced by $100 million to cover Libyan financial claims against Russia. Moscow agreed to write off the remaining $4.5 billion “in exchange for the signing of important contracts — not only in the area of military-technical cooperation, but also in the civilian realm. The money will be progressively written off as Russian enterprises start receiving payments from the Libyans under various contracts.”

During Putin’s visit, Libya signed a contract with Russian Railroads to build a 554 km rail line between Benghazi and Sirte worth 2.2 billion euros. According to Vremya novostei, about half this sum would count toward Libya’s debt obligation. In addition to signing a memorandum of understanding on cooperation in gas production with the Libyan National Oil Company, Gazprom signed a memorandum of understanding with the Libyan Arab African Investment Group “about the possibility of setting up a joint venture for working in third countries in Africa.” The two sides also signed an agreement on developing friendship and cooperation, declarations of intent to cooperate in various fields (including the peaceful use of nuclear energy) as well as others.

Although not signed at that time (nor as of this writing), there were reports that Russia’s Technopromexport was hoping to obtain a contract to build power-generating facilities in Libya worth over $6 billion. There were also reports that Libya might buy $2.5 billion worth of arms from Russia. One optimistic Russian estimate claimed that Libya might actually buy $11 billion worth of arms from Moscow. An agreement on a major Russian arms sale to Libya, however, has not yet been reached.

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