LIBYA - The OPEC Decision Makers - Part 8.

After nearly a decade under a limited UN embargo, Libya is now once again seen as one of the best investment zones in the Middle East. To a large extent this is because of its decision makers, including leader Col. Moammar Qadhafi whose eccentricity often hides a pragmatic economic sense. He has shown himself capable of adapting to the changing realities of the Middle East in practice, although his rhetoric is not much different from what it was during the cold war years. This is what has managed to keep Libya away from the type of quarantine that Iraq has been under for a decade. It is also what has kept Libya as one of the important players within OPEC.

There are two types of decision makers in Libya, with each following a logic different from that of the other. The first logic functions under Libyan ruler Col. Moammar Al Qadhafi's own way of thinking and his own time zone, which to some foreign oilmen may not matter but to long-term strategists should mean a great deal. The second logic, of technocrats who run Libya's day-to-day affairs, functions by the Western time zone.

It is the second logic which is increasingly taking hold, with Qadhafi having given enough room for the technocrats to carry out sound policies. But it is the first logic under Qadhafi that allowed his regime to survive more than 20 years of Western pressure, mainly a US embargo since the early 1980s and UN sanctions from April 1992. As such, the first logic is not likely to be abandoned so long as Qadhafi remains in power, even if it is watered down to some extent.

Survival-oriented pragmatism by Col. Qadhafi and progressive approaches by his technocrats had ensured that Libya remained in relatively good standing with Europe during the 1980s and 1990s. Thus, one day after the UN sanctions were suspended on April 5, 1999 - hours after Qadhafi's regime handed over for trial two Libyans suspected in the Lockerbie air disaster which killed 270 people in late 1988 - Italian Foreign Minister Lamberto Dini was the first top foreign official to fly to Tripoli to discuss Italy's share of the Libyan market; ENI is the biggest foreign oil and gas investor in this country.

Tripoli then indicated that it would pay a $40m compensation for the 270 Lockerbie victims and cover the legal fees. Shortly thereafter US oil company executives said Washington might normalise relations with Tripoli before the American presidential elections - due in November. On July 7, 1999, the UK government decided to resume diplomatic relations with Libya as Tripoli agreed to pay compensation to the family of a young British policewoman shot dead outside Libya's London embassy in 1984. On July 16 the French foreign ministry said Libya had transferred to Paris funds (said to be worth FF200m) to compensate for 170 people killed in a UTA DC-10 airliner which exploded in mid-air over Niger - with six Libyan agents convicted in absentia for this including a brother-in-law of Col. Qadhafi.

In the meantime, Libya's technocrats had been working hard to improve the regime's image abroad in terms of economic prospects. This paid off virtually immediately after the sanctions were lifted, with a rush of media reports emphasising the potential benefits of investing in Libya, in particular the Libyan energy sector. To carry out their jobs, the technocrats can draw on huge hydrocarbon reserves and over $22 bn worth of assets invested outside Libya. They also rely on many Western PR figures paid generously to project a better image for Libya.