March 10, 2010 / 6:00 PM / in 9 years

Libya's row with West reflects Gaddafi inner circle

RABAT (Reuters) - The crisis in relations between Libya and its Western partners is an expression of Muammar Gaddafi’s inner circle: a family he protects fiercely but which is torn between old habits of isolation and a desire to open up.

Libya's leader Muammar Gaddafi speaks at the U.N. Food and Agriculture Organisation (FAO) food security summit in Rome November 16, 2009. REUTERS/Filippo Monteforte/POOL

How far Gaddafi will take his row with the West is as hard to read as the opaque workings of his administration, but some commentators warn if he overplays his hand, years of effort to repair Libya’s ties with the outside world could be undone.

What started as a row with Switzerland has spiralled into a ban on entry for citizens from most European countries and threats to take contracts away from U.S. energy firms after a State Department official made acerbic comments about Gaddafi.

At stake for Western countries are billions of dollars in investment from energy firms such as ENI and Exxon Mobil, and lucrative deals to upgrade Libyan infrastructure that crumbled during the years of sanctions.

Libya’s motivations for taking its stance, analysts say, revolve around an internal struggle for control over Libya, Gaddafi’s desire for respect on the world stage, and — perhaps most importantly — a determination to defend his own family.

“Libya and the Libyan people will lose out in this crisis, but this accounts for nothing in Gaddafi’s mind when it’s about his family,” said a European analyst, who asked not to be named for fear of retribution by Libya as he often travels there.

The dispute with Switzerland began in July 2008 when one of Gaddafi’s sons, Hannibal, was arrested in Geneva on charges — which were later dropped — of mistreating two domestic employees. Gaddafi saw that as a humiliation of one of his own.

Family matters to Gaddafi. In an annual ritual, Libyan dignitaries mark the anniversary of the night in 1986 when his adopted baby daughter was killed in a U.S. bombing raid.

Most of his surviving children hold key roles. Saif al-Islam helped lead the talks that led to international sanctions being lifted. His brother Mutassim is national security adviser. Another son, Saadi, is a prominent businessman.

Hannibal is the head of the national shipping company and yet another brother, Khamis is a senior military leader.

Gaddafi’s campaign against Switzerland, “was probably a father’s instinct, coming to the aid of his son,” said Ashur Shamis, editor of pro-opposition online newspaper Akhbar Libya.

FAMILY ARGUMENT

Libya signalled the end of its row with Washington on Wednesday when it accepted a U.S. apology. But it is still locked in the European visa row and what Gaddafi has called a “jihad” against Switzerland.

Those disputes are an outward sign of the divisions that run through Gaddafi’s inner circle and his own family.

A reform-minded camp headed by Saif al-Islam has long been competing for influence with hardliners who, analysts say, move in the same military and security circles as Mutassim.

Saif has not hidden his distaste at the conflict with the West. “I feel sad about these quixotic battles,” he said in comments from his office that were published by the London-based Arabic newspaper Asharq al Awsat.

Meanwhile, a coterie of hardliners is urging Gaddafi deeper into confrontation, and exploiting the diplomatic row to strengthen their hand, said pro-opposition editor Shamis.

Libya’s newly assertive stance could also reflect Gaddafi’s disappointment that the West has not embraced him more since Libya emerged from diplomatic isolation in 2003.

The concessions he made to end international sanctions — including renouncing banned weapons programmes and handing over suspects in the 1988 bombing of Pan Am flight 103 over Lockerbie — were big political risks at home.

“Gaddafi certainly says he has not got the payback he expected,” said George Joffe, a Maghreb expert at Britain’s Cambridge University. “He certainly expected closer relations with the United States.”

One Western analyst on the region said Gaddafi was particularly slighted when, on a visit to United Nations headquarters last year, New York’s municipal authorities barred him from pitching the tent he usually stays in on foreign trips.

Libyan officials point out that their stance against Switzerland has won support from Arab governments.

But there are risks for Libya. It has come to rely on Western firms for infrastructure projects and the know-how to maintain its oil output, while many Libyans have savoured the fact their country is no longer a pariah.

“Gaddafi has got to be careful not to overplay his hand,” said Joffe. “If he goes much further I think there is going to be a very bad reaction.”

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