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Is Gaddafi too big to fail?

Analysis: Libyan leader Muammar Gaddafi has spent a lot of money in Africa, and now he is cashing in.

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Libyan Col Muammar Gaddafi welcomes South African President Jacob Zuma to Tripoli on April 10, 2011. Zuma was part of an African Union delegation to try to mediate in the Libyan conflict. (Ntswe Mokoena/AFP/Getty Images)

NAIROBI, Kenya — With news that Britain and France and Italy will send military advisers to help Libya's rebels, there remains a pressing need for a mediator to negotiate between both sides.  

The African Union tried to negotiate a ceasefire to Libya's civil war by sending South African President Jacob Zuma to Tripoli last week, but the effort failed. Libyan leader Muammar Gaddafi accepted the African Union's proposal but the rebels flatly rejected it.

The reason the African Union team has been ineffective is probably because Libya's rebels see the 53-nation group as being in the pocket of Gaddafi. It is well known that the Libyan leader has made large donations to the African Union and individual African countries.

When the AU delegation headed by Zuma went to Libya on April 11, clutching a freshly drafted peace plan, the reception in Tripoli and in Benghazi could not have been more different.

Gaddafi welcomed the AU negotiators with open arms. In contrast, the rebels sent the Africans packing, saying that any deal must begin with the departure of Gaddafi.

“No one is likely to outplay Gaddafi, a devoted reader of Machiavelli, in the cynicism stakes.”
~Africa Confidential

The AU proposal for a ceasefire, access for humanitarian aid, protection of foreigners and opening of dialogue won Gaddafi’s backing but was stillborn as a result of its rejection by the rebels’ Interim Transitional National Council.

With Zuma were the presidents of Congo-Brazzaville, Mali and Mauritania as well as the foreign minister of Uganda. Gaddafi seized power in a coup in 1969 and, while Zuma and Mali’s Amadou Toumani Toure were democratically elected, the leaders of the other three countries in the AU team are putschists and all are old friends of the Libyan leader.

Earlier this month the influential newsletter Africa Confidential wrote: “No one is likely to outplay Gaddafi, a devoted reader of Machiavelli, in the cynicism stakes.” Certainly when it comes to his southern neighbors in Africa, the Libyan leader has been playing a long game and now he is cashing in the favors.

The most obvious conflict of interest is Libya’s contributions to the AU and to the African Development Bank. Libya is one of five countries that provides 75 percent of the AU’s annual budget. The others are Algeria, Egypt, Nigeria and South Africa. Libya’s estimated $370 million stake in the African Development Bank makes it the fifth largest contributor in Africa.

Gaddafi has shown a willingness to invest where others would not, earning him friends and influence across Africa. The Libyan African Investment Portfolio (LAIP), financed by oil money and invested across Africa, is worth about $5 billion, part of Libya’s $65 billion sovereign wealth fund. The portfolio’s main investment vehicle is the Libyan Arab African Investment Company (LAAICO).

LAAICO has hotels, real estate, telecoms, mining and agriculture interests in 25 African countries, according to Charles Goredema of the Institute for Security Studies in Pretoria, South Africa.

Through LAAICO the Libyan state owns 14 luxury ‘Laico’ hotels and resorts in 11 countries, it has stakes in vast farms in Chad and Mali, plantations in Ghana and Madagascar, fruit factories in Benin and Guinea, mining companies in Democratic Republic of Congo and Central African Republic, forestry concessions in Congo-Brazzaville and Gabon … the list goes on and on.

Another arm of LAIP is Libya Oil Holdings with more than 1,200 petrol stations in 20 countries branded "OiLibya."

There is also a specialist telecoms fund called LAP Green Networks which has invested in mobile phone companies in Niger, Rwanda and Uganda and at least five other countries.

And then there are the impressive monuments to Gaddafi’s vanity and wealth that bear his name and litter the continent, often winning the approval of citizens and governments. From the 15,000-capacity Grand Mosque in Kampala, Uganda — one of the largest on the continent, completed last year by Gaddafi who finished a job started by his friend Idi Amin in the 1970s — to the new $100 million administrative quarter in Bamako, Mali.

But it is not so simple as Gaddafi’s oil billions buying unquestioning influence on an impoverished continent. Some may be pleased to see him go.

Last year Gaddafi made one of the characteristically long-winded yet rash pronouncements that win him few friends, offering Libya’s entire $97 billion worth of foreign reserves to develop Africa as long as African leaders renounced corruption. The offer was not well received by African leaders.

http://www.globalpost.com/dispatch/news/regions/africa/110419/why-african-mediation-failed-libya