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Libya Defence and Security Report Q1 2008Published by: Business Monitor International Published: Feb. 1, 2008 - 43 Pages Table of Contents
AbstractAs part of his rapprochement with the West, Colonel Muammar Qadhafi turned up in Paris in December2007 for his first visit in 34 years. President Nicholas Sarkozy rolled out the red carpet, welcoming big Libyan orders for Airbus aircraft, Rafale jet fighters, a nuclear reactor and assorted other pieces of military equipment. From Tripoli’s point of view, the visit has to be counted as a success. Yet it was also controversial, with a wide range of French political and cultural figures - some of them within Sarkozy’s ministerial cabinet - questioning the degree of support given to a regime which, although now realigning itself with the West, remains authoritarian and with a very poor record on human rights. The message is that Libya’s new diplomatic course will not absolve it from pressure to carry out internal reform. The normalisation of relations with the US in 2006 opened the door to many opportunities for Libya. Whilst the republic has been edging towards normal relations with the international community for a few years, the US was Tripoli’s ultimate goal. The announcement has paved the way for US investment in Libya’s oil sector and if Tripoli plays its cards right, the sale of arms to the North African state. The move may prove to be beneficial for both parties, with Washington deepening its involvement in another country’s oil sector and befriending another ally, this time on the African continent, in the fight against terrorism. Relations with Europe are also strengthening. However, as many states have experienced, closer relations with the US can have adverse affects amongst the population. The conservative old guard is already stirring over Qadhafi’s economic reforms. Whilst BMI does not anticipate a revolt, there will be issues regarding Qadhafi’s succession to think of in the not too distant future - Qadhafi may be able to contain a conservative backlash but his more reformist son, Seif, may struggle to do so. The potential for US military assistance will be of great interest to Qadhafi. At present the Libyan defence industry is practically non-existent, and what does survive is almost entirely state owned. Multinational involvement has been legalised only relatively recently, with the lifting of the UN arms embargo in September 2003 and of the EU arms embargo on September 22 2004, and foreign companies are beginning to penetrate the market. It has been reported that authorities in Tripoli have been in low-level talks with several European defence companies, eager to establish themselves in what should become a significant market now that the EU arms sales restrictions have been lifted. The resumption of full political and commercial relations with the US on May 15 2006 should also ease the pressure on Libya’s economy by removing some of the restrictions on investment in the sector. As larger foreign companies move into Libya, its domestic defence sector is likely to experience a large expansion. Libya’s extensive military equipment is in desperate need of modernisation. Precise details of the modernisation path to be taken are not yet known. Providing Qadhafi continues along his current path then the prospects for Libya’s defence industry look good. Defence expenditure is forecast to remain at about US$670mn in 2007, rising to some US$730mn by 2010, as the defence industry opens for foreign investors and new technology and hardware become available to Libya. The signing of new defence contracts and the trading of Libya’s valuable oil reserves will provide further funds for military expenditure. This will see import figures rise substantially over the coming years, as Libya updates and replaces its ageing Soviet equipment. Get Full Details About This Report >> |
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