Global Viewpoint

With Qaddafi dead, Libya must repay its backers with a 'peace dividend,' not favors

Now that Qaddafi is dead and Sirte is captured, Libyans can repay those countries who helped in his ouster not through kickbacks or development contracts, but by establishing a stable, democratic, economically open future for Libya. That's the real 'peace dividend.'

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North Africans are famous for their culture of boundless hospitality. Yet as a result of their traumatic history with European colonialism, they understand that in international politics, “There is no such thing as a free lunch.”

With the capture of Sirte and the killing of Muammar Qaddafi provoking massive street celebrations, Libyans are constantly discussing how their victory over the colonel came about. Many believe that God alone is ultimately responsible for their liberation. While immensely grateful for the NATO-led alliance’s intervention, some Libyans question the alliance’s professed humanitarian motives. Common sense suggests that states do not spend hundreds of millions during a deep recession out of moral necessity.

From the perspective of the United States, Britain, France, Italy, Qatar, and other alliance members, now is the time to take stock of how the rebel victory may promote their national interests. Is it not fair for them to expect some sort of remuneration? Or looked at holistically, did the allied powers fight a moral war to protect a civilian movement seeking liberation from tyranny? Or did Libya’s National Transitional Council (NTC) surreptitiously hire the alliance as quasi-mercenaries on terms of open-ended credit with oil given as security – payable on a no-win/no-fee basis?

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With the interim government due to be announced any day now, as a result of the capture of Sirte, Libyan politicians are seriously considering their moral obligations to their allies. Should the NTC openly repay all the nations that supported them with contracts at the expense of those that did not? If the NTC were to engage in this type of behavior, would it be upstanding or venal? Most Libyans expect that such behavior will be the political reality. Many passionately believe it is virtuous. We think not.

There is a strong case for saying that those nations that backed Libya’s popular revolution will receive a good return on their investments simply by Mr. Qaddafi’s ouster. After the collapse of the Soviet Union, the Western powers promised their publics a “peace dividend.” The term was coined to refer to the worldwide “profit” that was anticipated as a result of the decline of wasteful arms spending and the concomitant transformation of the former communist countries into engines of economic growth and lucrative markets for Western goods and services.

Modern economics postulates that such “dividends” should be positive-sum in nature – i.e., helping the victor, vanquished, and third-party states alike. And in reality, the 1990s were a time of economic growth and global stability.

We believe that the rest of the international community will gain a similar, yet much smaller, “peace dividend” as a result of regime change. Previously, Qaddafi isolated Libya’s economy behind walls of bureaucratic inefficiency and corrupt quasi-socialism. He spent on arms and terrorism, periodically inflicting grave loss of life (e.g., Lockerbie, UTA bombing, Chadian war, Abu Salim massacre).

Even when he renounced terrorism and his weapons of mass destruction program after 2003, he continued to dabble in other countries’ internal politics, having a particular penchant for backing brutal African dictators and declaring jihad against the Swiss. The benefits of not having to deal with Qaddafi’s erratic diplomacy are an incalculable positive for the world system. A stable regime in Libya also vastly increases the probability of the consolidation of the Tunisian and Egyptian revolutions.

Economically, Libya boasts a stable currency, net foreign assets of over $150 billion, and is well-positioned to return to a perpetual budget surplus with the eventual full resumption of oil production. Libya, under a well-administered technocratic government committed to a market economy, is a foreign investor’s dream. Its strong macroeconomic prospects emanate from its small population, large virgin land area, strategic location, and potential to produce far more than its pre-revolution 1.7 million barrels of oil per day.

Libya also confronts immediate pressure to invest in its huge underemployed youth population. Specifically, Libya has development deficits in almost every sector, including oil refining, infrastructure, transport, education, and health. Put simply, there will be plenty of business opportunities for all qualified nations as Libya begins its long overdue development drive. NTC Prime Minister Mahmoud Jibril has cavalierly spoken of $450 billion in project spending over the next decade.

The world will benefit far more if Libya’s leadership decides to award these contracts on a meritocratic basis promoting innovation and efficiency, rather than by venally rewarding those countries that assisted it during the revolution. Sadly, some Western political leaders are already harming Libya’s transition to democracy and their national interests via their misunderstanding of the principle of the “peace dividend.”

French Foreign Minister Alain Juppe told Germany's RTL radio on Sept. 1 that it would be “fair and logical” for French companies to benefit from France’s prominent role in backing the rebels. Similarly, on Aug. 22 – the very day that Tripoli fell – Foreign Minister Franco Frattini of Italy crassly stated on RAI television that the Italian oil company Eni “will play a No. 1 role in the future” of Libya as a result of Italian support of the NATO campaign. These statements – and the political pressure that no doubt lies behind them – undermine Libyan attempts to defeat the endemic culture of corruption that characterized the Qaddafi era.

Now that Libya is officially “liberated” and US Secretary of State Hillary Clinton has returned from a well-timed visit to Tripoli, officials of the State Department will no doubt attend briefings about how to reap the strategic dividends of America’s intervention. They must resist the temptation to publically, or even privately, ask the Libyans for payback in the form of preferential contracts. Surely no amount of oil, construction, infrastructure, or defense contracts can be better than a strong, moderate, and stable Libya that learns to select its business partners based on their merits rather than their nationality.

We believe the alliance powers should not ask the NTC to prostitute Libya’s vast treasure. Doing so would only cheapen the tremendous value of what the NATO alliance has done for Libya. The only true way the Libyans can repay the rest of the world for liberating them from Qaddafi is not through kickbacks, but by making the tough choices required to lay the foundation of a democratic, meritocratic, and economically open future.

Jason Pack researches Libyan history at Cambridge University. He is president of Libya-Analysis.com. Sami Zaptia lives in Tripoli and is CEO of KnowLibya.

© 2011 Global Viewpoint Network/Tribune Media Services. Hosted online by The Christian Science Monitor.

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