LAST January the Reagan administration announced that Col. Muammar Qaddafi no longer posed a serious threat to his North African neighbors. Unfortunately, Washington added that its policy remained one of seeking to isolate Colonel Qaddafi politically and economically from the rest of the Arab world. Recent events in Algiers, Cairo, Tripoli, and Tunis indicate that the ill-considered American strategy has failed. Qaddafi is quietly mending fences with his fellow Muslims, both in North Africa and the Middle East. He is being encouraged in this endeavor by Saudi Arabia and the United Arab Emirates. These moderate nations have been working behind the scenes for some time to bring Qaddafi back into the pan-Arab fold. At the same time, Riyadh has been pressing Egypt's President, Hosni Mubarak, to be more accommodating to the Libyan leader. One important reason for the Saudi diplomatic offensive has been Riyadh's fear that an isolated Qaddafi might decide to back Tehran in the Iran-Iraq war.
The Reagan administration appears to resent the willingness of Algeria, Tunisia, and other states to establish closer political and economic ties with Qaddafi. When Defense Secretary Frank Carlucci III called on the new Tunisian President, Zine al-Abidine Ben Ali, he warned against Tunisian overtures to Qaddafi. Since he became President in November 1987, after ousting longtime United States ally Habib Bourguiba, President Ben Ali has been aggressively pursuing a foreign policy among his fellow Arab nations that includes reestablishing stronger ties with Tripoli. Tunisian officials made clear to Mr. Carlucci their own foreign policy goals. While some of these might seem to conflict with US policy, they are considered to be in the best interests of Tunisia and North Africa.
Washington fails to appreciate that a new generation of leaders has come to power in Algeria, Tunisia, and Egypt. They are alike in their wish to modernize their backward economies and raise the standard of living of their people. Their goal is to foster greater economic cooperation among their countries and to encourage Libyan, Saudi Arabian, and Gulf Arab investment in agricultural and industrial projects. While the ultimate dream remains the creation of a ``Greater Maghreb'' (Algeria, Libya, Mauritania, Morocco, and Tunisia), the leaders are sophisticated enough to realize that a more realistic short-term goal is the step-by-step integration of their economies. Qaddafi, who never was accepted by Mr. Bourguiba or other older leaders, can now relate to these new men, none of whom present a threat to his regime.
Many Americans do not realize that Libya is a small country, with a population of less than 4 million in an area that is 93 percent desert. Only the discovery of oil made it possible for the Libyans to abandon their nomadic way of life. Unfortunately, the initial financial flush created by high oil prices has disappeared. Libyan oil revenues dropped from $22.6 billion in 1980 to $4.5 billion last year. Assuming stable oil prices, Tripoli will earn only about $3.3 billion in 1988. Given the desperate need for investment in agriculture, water projects, and industry, little money will be left Qaddafi for foreign adventures. Just as important, Saudi Arabia and other moderate Arab states have warned Qaddafi to forgo any new terrorist support. Thus it seems reasonable to assume that the Libyan leader will turn his energy to bettering relations with his neighbors and to placating his own increasingly restless population. There have been a number of indications recently that the Libyans are weary of Qaddafi's economic austerity program, which has led to severe shortages of basic consumer and agricultural products.
Qaddafi has also recognized his mistake in invading Chad, where he met a series of devastating military reverses during the 13-year war. The Libyan leader wisely announced his recognition of Chad and the cessation of all hostilities. This decision was made in response to Saudi Arabian pressure, and in recognition of the terrible drain the military operation made on the Libyan treasury.
The end of the war with Chad and a new policy of reasonableness vis-`a-vis his neighbors have given Qaddafi new popularity at home. Also, it has won him more positive attention in Arab capitals than he has had in the last 10 years.
The latest in Qaddafi's fence-mending efforts with Turkey was rewarded by the recent visit to Tripoli of Prime Minister Turgut Ozal. Ankara announced that Mr. Ozal's visit was to improve bilateral political and economic relations. The prime minister was accompanied by more than 100 bankers and businessmen interested in discussing new financial and trade deals. Libya is Turkey's third-largest oil supplier, after Iran and Iraq. Current two-way trade is estimated to run at about $600 million annually.
It would behoove Washington to recognize that its strategy of attempting to punish Qaddafi by pressuring his fellow Arabs to keep their distance has no chance of success. Rather than discouraging Tunisia and other states from pursuing closer political and economic relations, the US should openly encourage such moves. Any regional policy of reining in Qaddafi and focusing his attention on inter-Arab affairs would certainly pay long-range dividends in reducing political tensions in the area.
It is time for Washington to move from a negative to a positive policy vis-`a-vis Qaddafi. After all, if President Reagan can come to consider that the ``evil empire'' is no more, surely he can be made to appreciate that a Qaddafi inside the Arab tent is far less dangerous than a Qaddafi frustrated in isolation.
John T. Haldane, a specialist in Middle East affairs, has served as a Foreign Service officer in Baghdad, Beirut, and Cairo and as an international economist in the Departments of Commerce and Treasury.