IMPORTANCE OF SHOWCASE DEVELOPMENT PROJECTS TO QADHAFI

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R000200280003-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: November 21, 2007
• Sequence Number: 3
• Content Type: REPORT

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NSC Request
Importance of Showcase Development Projects to Qadhafi
Several ambitious development projects--specifically the
Great Man-made River Project--have been part of Libya's
development plan for sometime. Implementation has been slowed
for a variety of reasons, most recently because of the soft oil
market and its negative impact on Libya's financial situation.
In recent months, however, Qadhafi has reinvigorated the programs
for what we believe are basically political reasons.
-- He has been hyping the Great River Project in meetings
with Popular Committees (groups which theoretically run all
aspects of the Libyan government and economy) in terms
similar to the way Nasir hyped the Aswan Dam. We think he
is doing this because his revolution at home has stagnated,
his earlier reforms have been unpopular, and his leadership
has been tarnished by economic problems and foreign policy
reversals. The Great River Project has thus become a showcase
program.
-- We believe he is also using this project and others as a
means for attracting US and Arab financial involvement in
Libya. Qadhafi hopes that this commercial relationship will
reduce the "threatening" US posture toward Libya and give
Arabs--particularly the Saudis who are sponsoring a
consortium of Arab loans to finance the project--a stake in
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the protection of Libya from the US. 25X1
The Libyan public has not been especially stirred by
Qadhafi's development schemes. Most Libyans have a comfortable
life, comparatively good social and educational services, and
have little personal or immediate financial stake in development
programs. Foreign workers and contractors execute the projects,
and given the large scope and ambitious nature of many of them,
the payoff for the average Libyan is far in the future. Despite
Qadhafi's rhetoric to which most Libyans have become accustomed,
we doubt that even the more politicized segment of the population
will focus in any significant way on the progress of these
development schemes.
This fact of Libyan political life means there is likely to
be no significant "down side" for Qadhafi, if the United States
should decide to prohibit US firms from participating in Libyan
development. Other foreign firms--the French, West Germans, and
Soviets originally bid on the River project--presumably would be
more than willing to participate and the projects would probably
proceed apace. Under such circumstances, moreover, Qadhafi might
elect to use the US prohibition to further propagandize the
Libyan public, which is already largely convinced that the US is
an implacable enemy of the Arabs and of Libya specifically.
We think that such a US decision would probably be a
personal blow to Qadhafi, although not a substantial one. He has
long believed that Libyan largesse and his relatively good
relations with the US business community provide a way out of the
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contentious relationship he has with Washington. Fie has
repeatedly tried diplomatic overtures--none, of course, backed up
with any sincere committment--to accommodate US concerns over
Libyan involvement in terrorism and subversion against US
friends. We suspect, however, that he is now trying to engineer
a "live and let live" arrangement with the US government whereby
US business could profit in Libya and Libya would
efforts to hurt US interests directly.
Qadhafi's Recent Trouble-making
Libya has reduced its efforts to undermine US interests
since French military forces halted Libyan advances in Chad in
August. Qadhafi's new posture has been motivated by fear of a
potentially disastrous clash with the French as well as US
military retaliation for Libya's support of Syria and radicals in
Lebanon.
Qadhafi has also been deeply concerned about his isolation
in Arab circles following his humiliating defeat at the OAU
summit in June and has begun to mend fences. Qadhafi believes
~,` `art will forestall f3 i involvement in
'711.-i:7 by moderate Arab states, attract needed financial aid from
them for his showcase water development projects, quiet domestic
unease which tends to mount when he puts too much distance
between himself and other Arab leaders, and afford him some
protection from possible US military retaliation
Qadhafi nevertheless has continued over the past several
months to take advantage of some opportunities to undermine US
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? Lj 1. I[ F- L I I
interests. These have included:
-- In the Middle East, the sending of arms and money to
radical Lebanese Druze leader Junblatt as well as to Fatah
rebels and PLO radicals seeking to oust PLO Chairman
Arafat. Qadhafi also has strengthened Libya's advisory
presence among Sudanese dissidents based in Ethiopia and
sent them a large supply of arms.
-- In Africa, Qadhafi provided arms and logistical support
for Thomas Sankara's ouster of the pro-Western regime in
Upper Volta in August. He also has stepped up recruiting
efforts among Zairian and Central African Republic
dissidents and pressed an assortment ofl-
- )r1J-)1Le3e,
Sudanese, and Chadians into i n Ch ci. There is
unconfirmed reporting of direct Libyan involvement in plans
against the US Embassies in Lagos and Khartoum.
-- In Latin America, Qadhafi sent three planeloads of arms
to the leftist regime in Nicaragua during August and
September.
Qadhafi has a continuing interest in ousting the moderate
regimes of President Uabre in Chad, Pr,?; i.1 .rti. r'
" 1'k i i in Sudan,
and President Siad Barre in Somalia and can be expected to act
against them, although he has done little directly against the
latter two in the recent past.
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