San José State University
Department of Economics
& Tornado Alley
The Economic and|
Political History of Libya
The modern nation of Libya was a political form imposed upon the indigenous social structure of tribes and clans of a portion of North Africa. The original population was of the ethnic group known a Berber to the outside world and as Imazighen (the free people) to themselves. From the nature of their language the Imazighen indicates that they came into North Africa from the Middle East, but that would have been before 3000 BCE. They may have been agriculturalists spreading into new lands.
The Phoenicians and Greeks established coastal cities in the era of about 1000 BCE. The Phoenicians established three cities in now what is the western Libyan coast. They were Oea, Labdah and Sabratah. This area became known as the area of the three cities, Tripolis and later as Tripolitania, and eventually Oea became known as Tripoli.
In the eastern coastal area Greeks established in the era about 600 BCE five cities. The first city was Cyrene. One of the other four became the Benghazi, the second largest city of Libya. The region became known as Cyrenaica rather than Pentopolis.
The regions of Tripolitania and Cyrenaica were heavily influenced by a series of alien cultures; Phoenician, Greek, Roman, Egyptian and Arabic. There were even limited amounts of Persian, Jewish, Vandal and Byzantine influence. The third major region of Libya, the interior desert region of Fezzan, was only significantly influenced by the Arabic culture. In ancient times there was a powerful kingdom of the Garamentes in the Fezzan. The Garamentes were not just a tribe of nomads. They controlled the oases and the caravan trade. They even managed to create a limited amount of irrigation in their territory.
As a rough approximation the population of Libya is 65 percent in Tripolitania, 30 percent in Cyrenaica and 5 percent in the Fezzan.
Libya came under Greek control when Alexander of Macedonia conquered Egypt. Libya remained under the control of the Macedonians until the time of Cleopatra.
The Romans managed to defeat and subdue the Phoenicians, the Carthagenian Empire and the Greek city states. As a result of the Roman capture of Egypt, Libya then came under Roman control. At first the Romans relegated control of Libya to their allies in North Africa, the Numidans. In the civil war between the Roman leaders, Julius Caesar and Pompey, the Numidian king took the side of Pompey. When Caesar defeated Pompey he took control of Libya. The Romans then built cities and made Libya a major source of grain for Rome. The ruins of Roman buildings are still there in Libya, some of the very best remnants of Roman architecture.
(To be continued.)
Sayyid Mohammad bin Ali al-Sanussi was born in Algeria in the late 18th century. The Sayyid in his name indicates that he was a descendant of the Prophet Mohammad. He journeyed to Fez in Morocco for religious study and then began to advocate a return to a simple, austere form of Islam and greater unity among Moslems. He began traveling and collecting followers. He made the holy pilgrimage to Mecca and Medina. In the region of the Hijaz in Arabia north of the Holy Cities he organized the Order of the Sanusssi among the Moslem mystics, the Sufi. This was to be a fraternity of missionary ascetics to spread the teachings of Sanussi. He became known as the Grand Sanussi and was accepted as being a marabout, the Berber version of a saint. He said that his mission was that of
[…] reminding the negligent, teaching the ignorant, and guiding him who has gone astray.
Because the French had taken control of Algeria in 1830 the Grand Sanussi did not want to return to Algeria. In 1840 he settled in Cyrenaica in Libya. Cyrenaica was sparsely populated and had almost no towns. In 1843 he created a monastery that was to be the source place of the Sanussi Order. It was called the White Monastery and the members of the order were the Ikhwan. Their assignment was to carry the teachings of the Grand Sanussi to the inhabitants of Cyrenaica and beyond to the Sahel south to the Sahara. They established monasteries that became schools, courts and places of rest for the caravan traders. They were also sources of care for the needy. The Grand Sanussi established a style of life quite different from that of the Sufi orders. The Ikhwan were not to engage in the dancing that the Sufis pursued as a way to religious ecstasy. The Ikhwan were to earn a living rather than live in poverty and beg.
The Turks nominally controlled North Africa until the French began taking control. After the French invasion of Algeria in 1830 the Turks decided to take direct control of Libya, at least of the coastal areas. They left the Sanussi order to administer the desert regions in return for maintaining order and collecting taxes. The Sultan of Wadai, in what is now the nation of Chad, became a follower of the Grand Sanussi so the influence of the Sanussism extended well into the Sahel and beyond. The Sanussi provided order and services on the trade routes. For example, the Order dug new wells.
The Grand Sanussi
The French rightly perceived the Sanussi Order as opposed to the extension of French control and therefore were hostile to the order. This French hostility to the Sanussi encouraged the Turks to help and collaborate with the Order. However the seat of Sanussi power and influence was the trade routes from the south. When steamboats began to open up faster, easier trade routes by rivers flowing to the west the trade on the north-south routes diminished. About half of the trade from south to north was slavers. The ongoing campaign by Britain and other European powers against the slave trade slowly suppressed it. However, the last caravan bringing slaves to Benghazi arrived in 1929.
The Grand Sanussi died in 1859. He had built the Sanussi order up from one monastery in 1843 to a whole network throughout the region. The location of the headquarters of the order was transferred by the Grand Sanussi from Cyrenaica to the place where the north-south trade routes crossed the east-west pilgrimage routes to and from Mecca. The very able son of the Grand Sansussi took over management of the order. He managed so well that he was accepted as being divinely guided; i.e., al Mahdi. The order had grown to 146 monasteries by the time he died. His successor, Muhammad Idris, was too young to assume control of the order but a cousin ruled in his name. Idris eventually became the King of Libya.
Until 1860 the Italian-speaking areas were not united. Once united the Italian state then proceeded to try to acquire colonies and become an empire. This happened as well with the German-speaking areas. In the case of Germany the imperialist venture abroad can be interpreted as a continuation of the imperialist venture of Prussia to gain control of German-speaking territories in Europe. Probably the Italian imperialist venture stems from a similar source.
In any case, when the rulers of Italy looked abroad they found that France had already taken control of Tunisia, the prime target for Italian expansion. That left Libya, a mostly desert, sparsely populated territory under the nominal control of the decrepit Ottoman Empire. Italy first engineered the acceptance by the other European powers that Italy had a sphere of influence in Libya.
When the Ottoman Empire tried to protect its control of Libya by giving arms to the desert nomads in Libya, Italy in 1911 chose to interpret this as a threat to Italian interests in Tripolitania. Italy issued an ultimatum to Turkey and, when it was not complied with, sent in an invasion force of 35,000 troops. Turkey had only five thousand troops in Libya and they withdrew from the coastal area. Consequently the Italian invasion met virtually no resistance in Tripolitania. In Cyrenaica the Sansussi Order offered some organized resistance, but the Ottoman Empire sued for peace. Under the treaty of October of 1912 Tripolitania and Cyrenaica were granted independence by the Ottomans and immediately annexed by the Italians.
The Sansussi continued to offer resistance to the Italians in 1914 and 1915. When the First World War broke out in 1914 the resistance in Libya became considered as part of it with Italy representing the Allied Powers of Britain, France and Russia against Turkey the ally of the German and Austro-Hungarian Empires. Consequently when the Allied Powers won in 1918 the Italian control in Libya was accepted. However Tripolitania and Cyrenaica were treated as separate colonies by the Italians and the Fezzan was a military territory.
In 1920 Italy and the Sansussi Order reached an agreement. Idris, as head of the Sansussi Order, was accepted as an amir in Cyrenaica and the desert area to the south. This gave the descendants of the Grand Sansussi status as a Libyan dynasty. In November of 1922 Idris accepted the role offered by nationalists in Tripolitania to be the amir of all Libya. To avoid being taken prisoner by the Italians he moved to Egypt and continued to direct the Sansussi Order from there.
Benito Mussolini came into power in Italy in 1922 with his Fascist movement. The consolidation of Italian control in Libya then became part of his program of greater glory for Italy. The Sansussi continued to fight a guerilla war, but in 1931 the last stronghold of the Sansussi was captured and the military commander of the resistance was hanged publically to emphasize the collapse of the resistance.
A program of settlement of Italians in Libya was instituted in the 1930's and by 1940 about one eighth of the population of Libya was Italians.
(To be continued.)
Qadhafi seems to have been around forever wreaking havoc, but he is only 68 years old. He was born June 7, 1942 in a tent near the city of Surt. Qadhafi (Gaddafi) is the name of his tribe, an Arabized Berber tribe associated with the oasis of Hun. He attended an Islamic school as a child in which he was taught in Arabic by Egyptian teachers. It was a time of momentous events in the Arab world. Gamal Abdul Nasser's rise to power from a military officer to ruler of Egypt and leader of Pan-Arabism had a powerful impact on Qadhafi as a boy. So did the defeats of the Arab world against Israel. To understand some of his more bizarre actions as an adult one must understand that Qadhafi did not just aspire to becoming rich and powerful but to being a new Al Mahdi, the divinely guided one.
Like the leader of the rebellion in Sudan in the late 19th century Qadhafi espouses a puritanical devoutness to Islam combined with a populist nationalism. He distrust the life and culture of the city as being morally inferior to that of the desert nomad with its emphasis on simplicity, family values and codes of honor.
The obvious first, and only possible, step in his quest for power was to join the military. Qadhafi entered the military academy of Libya in Benghazi in 1961. After he graduated about four years later and was commissioned as an officer he went to Sandhurst, England for further military training.
Given the admiration so many Arab young men felt for the career of Nasser in Egypt it was no surprise that Qadhafi and some of his fellow cadets at the military academy formed a secret organization called the Free Officers Movement. When war broke out between Israel and its Arabic neighbors Qadhafi and his fellow officers followed the events closely. When Israel so easily defeated its opponents Qadhafi and the others of the Free Officers Movement were outraged and humiliated. They then decided that they would do whatever they could to promote Arabic unity. The one thing they could do was to overthrow the Libyan king, Idris.
The coup détat was marvelously simple. Many members of the Free Officers Movement were in the military division responsible for communication. This made communications between the leaders of the coup with the military effortless. The coup was launched on September 1, 1969 in Benghazi. The Libyan monarch, Idris, was out of the country. In less than two hours the takeover in Benghazi was complete and army units around Libya were communicating their support. It took only a few days to extend the takeover to Tripoli and the rest of Libya.
The leaders of the coup announced the formation of a twelve-member Revolutionary Command Council (RCC) that would be the effective government henceforth. The RCC declared Libya to be the Libyan Arab Republic. Other countries, including the United States, recognized the RCC government within days. The RCC government announced that treaties and agreements by the government would be abided by. Even the old king and his heirs renounced their claims to the throne announced their recognition of the RCC government.
At first the identities of the members of the RCC were kept secret. However on September 8, 1969 the RCC announced that Muammar Qadhafi was to be the commander of the Libyan Army and that his rank was to be raised from captain to colonel. At first the age of Colonel Qadhafi was kept secret because he was only 27 years old.
The RCC announced the formation of a cabinet and prime minister to be the formal government. The parliament and its institutions were abolished and political parties continued to be prohibited. However the real power remained in the hands of the RCC. The RCC publically announced its dedication to Islam and Pan-Arabism. It declared its neutrality in the political competition between the communist states and the West. It also declared that communism was incompatible with Libya dedication to Islam. What was not being revealed is that growing dominance of Qadhafi and his ideological fervor. In effect, he was the one who appeared to know what to do and why. Without mentioning the title he was being perceived as the divinely guided one.
It did not take long for dissension to develop. In December of 1969, only three months after the coup, the Ministers of Defense and the Interior were arrested and charged with planning a coup. The cabinet was reorganized and Qadhafi at the chairman of the RCC appointed himself as Prime Minister and also as Minister of Defense. Another member of the RCC was appointed Deputy Prime Minister and Minister of the Interior. The new cabinet had thirteen members, one more than the first cabinet. Five of the thirteen were also members of the RCC.
In June of 1970 there was another reorganization of the cabinet in which a majority of the cabinet were members of the RCC.
In 1971 the RCC began trying official and members of the royal family of the old regime. Over a two year period two hundred people were tried. Many were tried in absentia. Five death sentences were imposed but four of those for people, including the former king, who were living outside of the country. The former queen and prince of Libya were given four and five year prison sentences. The trial and conviction of people living outside of the country were not necessarily just formalities. Later Qadhafi was infamous for arranging for the assassination of people in other countries.
Also in 1971 Qadhafi began to implement his program for the restructuring of Libyan society. He created a political party named The Arab Socialist Union (ASU), modeled and named after the political party Nasser created in Egypt. Labor unions were incorporated into the ASU and their independence suppressed. Qadhafi vastly increased the size of the Libyan army. He began to leave the details of running the government to a fellow member of the RCC, Major Abdel Salaam Jallud, who in 1972 was made Prime Minister. This left Qadhafi free to devote his attention to ideological and international matters.
In 1973 Qadhafi created something analogous to the Cultural Revolution in China. Like the Chinese version the Libyan people were supposed to challenge authority to eliminate bureaucratic inefficiency. They were supposed to form people's committees in businesses, bureaucracies, universities and media organizations. Once functioning these people's committees were supposed to take over local administrative duties and sent representatives to higher levels such as national people's congresses and ultimately to a General People's Congress that would replace the RCC. The theory for such political structures was laid out in 1976 in Qadhafi's first book, called in analogy with the book of Mao's sayings in China, The Green Book.
In 1975 there was dissent within the army and even within the RCC. The Minister of Planning, Major Umar Mihayshi, organized thirty army officers to carry out a coup d'état. The coup failed and Mihayshi fled into exile. Those involved in the coup who did not escape were put on trial and 22 were executed in 1977.
By March of 1977 enough of this political structure was in place for Qadhafi to have the General People's Congress to declare that Libya was the Socialist People's Libyan Arab Jamahiriya. The term Jamahiriya was to denote a political concept of Qadhafi's which meant something like people's tribe. The GPC dutifully a governing body called the General Secretariat and designated Qadhafi as its General Secretary. The General Secretariat was made up of the members of the RCC. The former cabinet became the General People's committee and were not titled as Secretaries rather than Ministers.
To further revolutionize the political structure of Libya Qadhafi had created 187 Basic People's Committees (BPC's). Every Libyan had the duty to participate in the operation of their local BPC. The BPC's were supposed to pass the results of their deliberations up to the GPC for its review.
To make matters even more complex and revolutionary Qadhafi in 1977 had created Revolutionary Committees (RC). These RC's had the responsibility to supervise the BPC's and guard against deviations and oppositions in the BPC's.
In 1979 Qadhafi gave up his political positions such as being General Secretary of the GPC but remained commander of the armed forces of Libya. He had continued to write and the second volume of his Green Book appeared in which he declared retail trade, rental housing and wage payments were forms of exploitation. Thereafter workers were encouraged and authorized to take control of the businesses in which they were employed and make them state enterprises.
Dispossessed owners and professionals began leaving Libya in great numbers. When some of these Libyan emigrants organized political opposition to his rule, Qadhafi, in 1979, demanded that such opposition leaders return to Libya or face liquidation. These leaders of course did not return to Libya and Qadhafi ordered assassination teams to hunt them down and kill them. Again in 1982 Qadhafi ordered Libyan opposition leaders to return to Libya or face liquidation.
Orthodox Islamic leaders disagreed with some of Qadhafi's writings in his Green Book. Qadhafi responded to this criticism by nationalizing the property of religious orders and exhorted the people to take control of mosques.
In 1970 more army officers were executed for alleged opposition to Qadhafi's regime. In 1980 two hundred people were killed during another army revolt.
Because of its desert condition there was a lot of drilling activity in Libya long before there were any suspicions of there being petroleum. The search for water involved drilling very deep wells. Back as far as 1915 deep water-wells drilled by Italians sometimes found natural gas. This was of interest but natural gas was not a prime commodity at that time. In the U.S. the natural gas from oils was burnt off (flared) as a nuisance.
In 1935 a professor from Milan University who was in charge of a water-well drilling program made it a point to watch for petroleum. This was probably more out of academic interest than a serious concern for finding a significant economic resource. A couple of year later petroleum was detected in a water-well drilled near Tripoli.
This find was enough to prompt a geological survey in Tripolitania. One well was drilled searching for petroleum but none was found. Nevertheless in 1940 a program of exploration was initiated but the available equipment was inadequate to deal with the severe conditions of the Saharan Desert. Shortly thereafter war came to Libya and all exploration stopped.
Immediately after World War II the political status of Libya, which had been controlled by Italy, was uncertain. There was no state which could guarantee petroleum exploring companies the rights to what they might find. Therefore no exploration was carried out until after Libya became an independent kingdom in 1951. The new kingdom developed mineral rights law through consultation with the international petroleum companies. In 1953 Libya granted prospecting permits to eleven petroleum companies. Geologic surveys were undertaken by those companies. In 1955 a petroleum well was successfully drilled under desert conditions just across the border in Algeria.
The Libyan leaders were determined to keep the market for exploratory permits in Libya rather than granting a concession to one company or a consortium of a few companies. Furthermore even when one company was given a concession in a particular area it would have to relinquish one quarter of the concession after five years. This was to allow the government to grant that territory to a new company in hopes that a new company might succeed where another had failed.
The conditions were that the oil companies would have to pay a 12.5 percent royalty on their revenues and a 50 percent tax on profits. The royalty and other operating expenses were of course deductible in computing the profits of the company.
Oil companies were highly interested in developing sources of petroleum in Libya because it was located on the Mediterranean Sea. Their sources from Iran were limited by a political crisis there in the years 1951 to 1954. The Suez Crisis of 1956-57 resulted in the closing of the Suez Canal. All petroleum from east of Suez had to be brought around the southern tip of Africa at great additional expense. Additionally Libya was thought to have a stable, pro-Western government.
By 1957 there were about a dozen companies operating in Libya on about sixty different concessions. The companies operating there included the seven majors and the French para-statal Compagnie Française des Pétroles. There was also Oasis, a consortium of three companies new to international petroleum exploration, Amerada Hess, Conoco and Marathon. There was also the oil company of Bunker Hunt, the son of the American oil magnate H.L. Hunt.
In 1957 Esso decided to drill in the area across the border from where the Algerian oil well had been brought in. It drilled three wells and one of them was successful. It was brought-in in January of 1958 with a flow of 500 barrels per day. This was not much considering the expenses of drilling.
In 1959 Esso drilled in the Siritica region, which is the north central part of the country. It brought in a well flowing at 17,500 barrels per day. This followed by another well flowing at 15,000 barrels per day. Later in 1959 other oil wells in Siritica were brought in. Altogether six major oil fields in Libya were discovered in 1959. Esso and Oasis were the leaders in the field.
In 1960 Esso decided that its discoveries and the prospect for more justified its building a pipeline and export terminal. It chose Marsa Brega as the site for the terminal and contracted for the construction of a 110 mile long 30 inch in diameter pipeline from its Zelten field. That gave it a capacity for delivering 200 thousand barrels per day for export. The terminal was inaugurated on October 25th of 1961 and the first shipment went to Great Britain. The total shipments of Libyan oil for 1961 was in the neighborhood of seven million barrels.
The Oasis group was not long behind Esso in developing a pipeline and export terminal. By May of 1962 it had an 88 mile pipeline linked to an export terminal about a hundred miles west of the Esso terminal, at a place called Es Sidra.
At the end of 1964 a third terminal was opened at a site about twenty miles east of Es Sidra by a subsidiary of Mobil and Amosea oil companies. It received oil from a pipeline about 170 miles long.
As a result of new discoveries Esso and Oasis extended their pipelines.
British Petroleum was eager to develop sources of petroleum that were not vulnerable to closures of the Suez Canal. It had eight concessions in Libya but found no oil. It then decided to buy a half share of the concessions owned by Nelson Bunker Hunt. On the Hunt concession British Petroleum brought in a four thousand barrel per day well in November of 1961 and then went on to develop other wells which brought in about 21 thousand barrels per day. The drawback for this field is that it is located more than 300 miles from the coast in eastern Libya. The terminal was built at a natural deep water harbor near the city of Tobruk at a place called Marsa Hariga. The petroleum from this field was so waxy that it had to be heated to get it to flow in the pipeline. Given the length and other difficulties it was not surprising that it was not until 1967 that the British Petroleum did not commence exporting Libyan oil until 1967.
A distinctive feature of the Libyan concessions was that one quarter of the original concession had to be relinquished after five years and more after eight and ten years. This was to give other companies the chance to try to find oil at sites where the original concessionaires had failed. Concessions on the land that was handed back were awarded on a competitive basis. This system allowed the entry of new companies into the Libyan search for oil.
One of the companies new to the field was Occidental Petroleum, a company being created by Armand Hammer. Hammer was from a New York Jewish family with close ties to the Communist Party. Armand Hammer successfully managed a medical supply and pharmaceutical business as a young man. Later he created a system in which he could safely trade with the Soviet Union in the 1930's. Hammer would send a ship loaded with the commodities the Soviets wanted and they would load the ship with their trade goods. Initially those trade goods were art treasures of Russia. Armand Hammer was adept at dealing financially successfully with politically sensitive situations.
Occidental did acquire a concession, in part because its bid involved a proposal to invest five percent of its profits in an agricultural project in Libya. Soon after the award of its concession in 1966, on land handed back by Oasis and Mobil, Occidental had survey teams operating and within six months had drilled its first well. In November of 1966 Occidental had brought in a fifteen thousand barrel per day well and in early 1967 had discovered a new oil field. By the end of April of 1967 the Occidental oil well on that field were producing sixty thousand barrels per day. In May of 1967 Occidental brought in a well on a new field that produced forty thousand barrels per day.
In February of 1968, only two years after Occidental had received its concession, it was exporting oil from a terminal at Zueitina on the east coast of the Gulf of Sirte. The terminal was fed by a pipeline 40 inches in diameter and 125 mile long. By 1970 Occidental Petroleum was vying with Esso and Oasis for being the second largest exporter of oil from Libya.
The Italian para-statal Azienda Generale Italiana Petroli (AGIP) in 1968, after years of failure, found a new oil field near the Occidental operations. It was going to be able to feed its production into Occidental's pipeline and export from Occidental's terminal. However in 1969 a group of military officers carried out a coup de'état, deposed the king and began restructuring the rules of government. The oil companies in Libya survived but only with diminished opportunities.
(To be continued.)
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