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Italy vow paves way for Libya investment

September 1, 2008

By Guy Dinmore in Rome and Heba Saleh

Published: September 1 2008

Italy’s pledge to pay Libya compensation for its colonial rule paves the way for further Italian investments, such as in energy and infrastructure, but raises uncomfortable issues for former colonial powers in Africa.

In a tent outside Benghazi on Saturday, Silvio Berlusconi, Italy’s centre-right prime minister, returned a headless statue of Venus carted away by Italians decades ago and signed a friendship pact with Muammer Gaddafi, the Libyan leader.

The agreement, in which Italy pledges to pay $5bn (€3.4bn, £2.75bn) over 25 years in reparations through various projects – including a highway across Libya from Egypt to Tunisia – follows a decade of difficult negotiations under a succession of Italian governments.

Mr Berlusconi, on his second visit to Libya since returning to office in May, apologised for the wrongs committed under Italian colonial rule, from 1911 to 1943. Historians say Italian forces were responsible for up to 100,000 Libyan deaths, many in desert prison camps.

“We have written a page in history. Now we will have fewer illegal immigrants leaving from the coast of Libya and coming to us, and more Libyan oil and gas,” declared Mr Berlusconi, according to Italian reports.

Italy is Libya’s biggest trading partner, importing gas via a pipeline to Sicily and developing oilfields. According to Italian officials, who did not wish to be named, Libya also “exports” large numbers of illegal immigrants to Italy by boat, facilitating the dangerous voyages in which many die.

Mr Berlusconi may have set an important precedent in negotiating energy-driven diplomatic deals. In June Eni, the oil and gas company part-owned by the Italian state, also set the tone for the rest of industry by accepting worse terms from Libya in return for 35 more years of access to one of the world’s most important reserves. Russia is also seeking to expand in Libya and build another gas pipeline to Europe. Significantly, Mr Berlusconi was joined in Benghazi by Sergei Ivanov, Russia’s deputy premier.

Condoleezza Rice is due to visit Libya, the first US secretary of state to do so for 25 years, confirming Mr Gaddafi’s rehabilitation since the payment of reparations for the 1988 bombing of a Pan Am flight over Scotland, and his renunciation of plans to develop weapons of mass destruction.

Reparations for colonial misrule are not new but are often couched differently, such as the billions of dollars Japan loaned to China in the 1980s.

However, Italy’s apology to Libya and its agreement to a “compensation” package marks the first time in the Arab world that a former colonial power has agreed to pay for its occupation.

“The Libyans feel they were very badly treated and this is still an issue,” said Oliver Miles, deputy chairman of the Libyan British Business Council. “But, having said that, I think one has to look at the $5bn figure with a sceptical eye.”

He said both Libyan and Italian explanations of the figure “were vague” and referred to investments rather than payments. “I think there is an element of smoke and mirrors,” said Mr Miles. “I see it as the two governments here seeking to thicken the commercial relationship between them.”

Mr Gaddafi’s insistence on reparations from Italy is a way of saving face at home, some analysts believe. Mr Berlusconi also faces an angry reaction from the estimated 20,000 Italians, most of them Jews, who were deported by Libya in 1970.

Algeria has repeatedly sought an apology from France for its 132 years of occupation that ended in 1962 after a fierce independence struggle, during which Algeria’s official history says 1.5m Algerians were killed.

Last year Nicolas Sarkozy, president of France, said that an apology was unnecessary and both countries should look to the future rather than the past.

“What happened in Libya could spur the Algerians to renew their demand to an apology,” said Abdennasser Jabi, an Algerian sociologist. “Here there is consensus on the popular level that an apology is needed, though not on the political level. French interests in Algeria are too huge and there are some in power and in the opposition who do not want to anger the French.”

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