Dealing with Libya

March 14, 1986

Report Outline
Qaddafi's Power Base
Pursuit of Revolution
Exporting Terrorism
Special Focus

Qaddafi's Power Base

Consequences of Shrinking Oil Money

American efforts to restrain Libyan terrorist activities have so far shown little success. The diplomatic offensive to win European support for economic sanctions was unsuccessful. Lines of policy are confused. Secretary of State George P. Shultz advocates military retaliation when necessary. Defense Secretary Caspar W. Weinberger urges a more cautious approach, and Vice President George Bush admits “there isn't any simple answer” on an appropriate response to terrorism. What President Reagan has been unable to achieve in Libya through sanctions and threats, however, may now be accomplished by the collapse of world oil prices.

The prospect invites tentative optimism in Washington. The State Department's chief of counter terrorism, Robert B. Oakley, told a Senate subcommittee recently that Libya might soon be forced to concentrate its declining oil revenues on domestic needs, leaving less to devote to stirring unrest abroad.

However, foreign-affairs analysts disagree on the likely effect of Libya's economic decline. Professor Lisa Anderson of Harvard's Center for Middle Eastern Studies thinks that the drop in oil prices will cause domestic political problems only after a longer period of austerity, but notes that there is already a tendency by Libyans to equate declining living standards with the revolutionary excesses of Col. Muammar el-Qaddafi. William B. Quandt, a senior analyst of Middle Eastern affairs at The Brookings Institution, says the state of the economy is of marginal importance: “Efforts to remove Qaddafi took place even when the economy was strong. What is important is paying the military and keeping the security apparatus intact.”

ISSUE TRACKER for Related Reports
International Energy Trade and Cooperation
Regional Political Affairs: Africa
Terrorism and Counterterrorism