The imposition of the no-fly zone in Libya, the absence of either a solid coalition to enforce it or an exit strategy once the mission is accomplished, and the muddled manner in which it is proceeding all imply a potentially lengthy stalemate in which the rebels fail to dislodge Gaddafi, who will remain in power. Gaddafi has remained defiant and belligerent. Given that he has sponsored numerous terror attacks in the West in the past, is there any reason to believe he will not do so in the near future?
Gaddafi's terror credentials are well established. He has provided weapons and training to numerous terrorist organizations around the world during his four decades in power, including the Irish Republican Army, Spain's ETA and Colombia's FARC. Amnesty International lists at least 25 assassinations of critics of the Libyan regime abroad between 1980 and 1987 committed by the Colonel's extensive network of diplomats and spies, though the actual figure is estimated to be much higher. In 1986 Libyan agents bombed the La Belle nightclub in West Berlin, killing three people and injuring 229. In 1988 Gaddafi ordered the bombing of Pan Am flight 103 over the Scottish town of Lockerbie which resulted in the loss of all 243 passengers, and in 1989 he ordered the bombing of UTA flight 772 over Niger, killing all 171 passengers.
A decade ago, Gaddafi was welcomed back into the international fold after he accepted responsibility for the Lockerbie bombing, paid compensation to its victims, and renounced his nuclear program and sponsorship of terror. Libya has since become one of a number of dictators/allies in North Africa close to the European Union (EU) and United States (U.S.). Libya participates closely with the EU on migration issues by detaining thousands of African migrants in holding camps in Libya, and Gaddafi has provided the Americans in particular with key anti-terrorism support, monitoring the presence of Al-Qaeda in the Maghreb. Approximately 75% of Libya's oil exports flow to the EU and U.S., making its current absence from the market felt where it hurts most.
Much of Gaddafi's capacity to launch terror attacks going forward will depend in part on his funding capabilities. While his forces currently control the larger part of Libyan territory, the major oil fields are located in the east of the country and are controlled by rebel groups. Neither the rebels' nor Gaddafi have the capacity to export oil in the near future, given Gaddafi's bombing of the key oil ports Ras Lanuf and Marsa el Brega. If the rebels were to be routed, they would presumably ignite key oil installations, rather than hand them over to Gaddafi, resulting in a lengthier supply interruption.
Gaddafi will in any event be unable to profit from any oil fields he controls given the UN naval blockade. Libya has an estimated US$100 billion in foreign exchange reserves, although the regime's access to these in light of UN financial sanctions is unclear, but likely limited. What Gaddafi does have access to however is an estimated US$6 billion in gold reserves, the bulk of which are thought to be held in Libya. Should he overcome the substantial obstacles involved in physically selling the gold, Gaddafi should be able to fund his forces for some time.
Whether he has access to substantial funds or not, Gaddafi may well seek to pressure the West by staging or sponsoring terror attacks on Western soil or against its interests. His rationale would be to turn public opinion heavily against further involvement in Libya and force the withdrawal of allied air and naval patrols. In truth, it would not be difficult to generate attacks in the West, given that the cunning Gaddafi undoubtedly has sleeper agents in place in the West, and, as has unfortunately been proven numerous times in the past decade, attacks do not need to cost much money.
At this juncture, we do not believe Gaddafi would be likely to sponsor terrorist attacks on the West. International support for the allied intervention is already wavering, just days after enforcement of the no-fly zone, and President Obama is in the hot seat at home for not having properly consulted Congress prior to authorizing U.S. involvement. Gaddafi is a master at timing. Sponsoring terror attacks now would only serve to turn that part of the international community that still favors non-intervention against him, and is more likely to result in foreign ground troops being deployed on Libyan soil than in a foreign withdrawal.
Furthermore, Gaddafi does not enjoy the same level of recognition and admiration among his fellow Arab leaders that he used to command. Given that even the Arab League supported allied action against him and he lacks the support of Arab public opinion which appears firmly in support of the allied intervention, it would seem that terror attacks at this time would only serve to hasten his departure. But if he believes his end is near, our guess is that he would not hesitate to attempt to utilize the terrorism option.
What is more likely in the near term is that Gaddafi will try to ensure that the West is bogged down in another attritional war, thereby enabling evolving international divisions to further widen, and military and human costs to spiral. The West is keen to avoid a situation akin to the first Iraq war, which resulted in an ineffective no-fly zone lasting 10 years at a cost of more than US$1billion per year. The West has also ruled out the possibility of putting troops on the ground (for now), but more worryingly, lacks an exit strategy let alone any type of Marshall Plan for North Africa (which it is ill prepared to be able to fund, in any event, given fiscal realities).
Gaddafi is likely to concentrate his immediate efforts on shoring up the support of his military forces, and more importantly, his paramilitary groups -- such as the Khamis Brigade, People's Security Organization and the Revolutionary Guards Corp -- as these provide the backbone of his support, and are thought to be better trained and equipped than his regular armed forces. To this end he has already copied the modus operandi of dictators past and present by deliberately using civilians as human shields to protect strategic targets. Indeed, our view is that a prolonged period of stalemate in Libya would actually make Gaddafi more likely to return to terror as a means to force his way out of a corner. With rebels and government forces unable to definitively 'win' the war, Gaddafi may be convinced to sow as much mayhem as possible by making Libya a magnet for all would-be terrorists around the world to be supplied with training and weapons.
All sides in the conflict hope to avoid the long-term partition of Libya into two opposing camps, but the longer that a de facto partition lasts, the more emboldened Gaddafi is likely to become, and the shakier the international alliance's motivation or resolve to stay the course will become. The option of once again sponsoring terror remains open to Gaddafi as long as he remains in control of some part of the country. He has certainly shown he is capable of great vindictiveness but also of great pragmatism. We expect his vindictive side will in the end prevail.
This post has been updated from a previous version.
Daniel Wagner is managing director of Country Risk Solutions (CRS), a political risk consulting firm based in Connecticut, and also senior advisor to the PRS Group. Daniel Jackman is a research analyst with CRS, based in London.