Libyan Arab Republic

Assertion of Gaddafi's control

From the start, RCC spokesmen had indicated a serious intent to bring the "defunct regime" to account. In 1971 and 1972 more than 200 former government officials—including seven prime ministers and numerous cabinet ministers—as well as former King Idris and members of the royal family, were brought to trial on charges of treason and corruption in the Libyan People's Court.

Many, who like Idris lived in exile, were tried in absentia. Although a large percentage of those charged were acquitted, sentences of up to fifteen years in prison and heavy fines were imposed on others. Five death sentences, all but one of them in absentia, were pronounced, among them, one against Idris. Fatima, the former queen, and Hasan ar Rida were sentenced to five and three years in prison, respectively.

Meanwhile, Gaddafi and the RCC had disbanded the Sanusi order and officially downgraded its historical role in achieving Libya's independence. He also attacked regional and tribal differences as obstructions in the path of social advancement and Arab unity, dismissing traditional leaders and drawing administrative boundaries across tribal groupings.

The Free Officers Movement was renamed "Arab Socialist Union" (ASU) in 1971, modeled after Egypt's Arab Socialist Union, and made the sole legal party in Gaddafi's Libya. It acted as a "vehicle of national expression", purporting to "raise the political consciousness of Libyans" and to "aid the RCC in formulating public policy through debate in open forums". Trade unions were incorporated into the ASU and strikes outlawed. The press, already subject to censorship, was officially conscripted in 1972 as an agent of the revolution. Italians and what remained of the Jewish community were expelled from the country and their property confiscated in October 1970.

In 1972, Libya joined the Federation of Arab Republics with Egypt and Syria but the intended union of pan-Arabic states never had the intended success, and was effectively dormant after 1973.

As months passed, Gaddafi, caught up in his apocalyptic visions of revolutionary Pan-Arabism and Islam locked in mortal struggle with what he termed the encircling, demonic forces of reaction, imperialism, and Zionism, increasingly devoted attention to international rather than internal affairs. As a result, routine administrative tasks fell to Major Jallud, who in 1972 became prime minister in place of Gaddafi. Two years later Jallud assumed Gaddafi's remaining administrative and protocol duties to allow Gaddafi to devote his time to revolutionary theorizing. Gaddafi remained commander in chief of the armed forces and effective head of state. The foreign press speculated about an eclipse of his authority and personality within the RCC, but Gaddafi soon dispelled such theories by his measures to restructure Libyan society.

Alignment with the Soviet bloc

After the September coup, U.S. forces proceeded deliberately with the planned withdrawal from Wheelus Air Base under the agreement made with the previous government. The foreign minister, Salah Busir, played an important role in negotiating the British and American military withdrawal from the new republic. The last of the American contingent turned the facility over to the Libyans on 11 June 1970, a date thereafter celebrated in Libya as a national holiday. On March 27, 1970, the British air base in El Adem and the naval base in Tobruk were abandoned.

As relations with the U.S. steadily deteriorated, Gaddafi forged close links with the Soviet Union and other Eastern Bloc countries, all the while maintaining Libya's stance as a nonaligned country and opposing the spread of communism in the Arab world. Libya's army—sharply increased from the 6,000-man pre-revolutionary force that had been trained and equipped by the British—was armed with Soviet-built armor and missiles.

Petroleum politics

The economic base for Libya's revolution has been its oil revenues. However, Libya's petroleum reserves were small compared with those of other major Arab petroleum-producing states. As a consequence, Libya was more ready to ration output in order to conserve its natural wealth and less responsive to moderating its price-rise demands than the other countries. Petroleum was seen both as a means of financing the economic and social development of a woefully underdeveloped country and as a political weapon to brandish in the Arab struggle against Israel.

The increase in production that followed the 1969 revolution was accompanied by Libyan demands for higher petroleum prices, a greater share of revenues, and more control over the development of the country's petroleum industry. Foreign petroleum companies agreed to a price hike of more than three times the going rate (from US$0.90 to US$3.45 per barrel) early in 1971. In December, the Libyan government suddenly nationalized the holdings of British Petroleum in Libya and withdrew funds amounting to approximately US$550 million invested in British banks as a result of a foreign policy dispute. British Petroleum rejected as inadequate a Libyan offer of compensation, and the British treasury banned Libya from participation in the Sterling Area.

In 1973, the Libyan government announced the nationalization of a controlling interest in all other petroleum companies operating in the country. This step gave Libya control of about 60 percent of its domestic oil production by early 1974, a figure that subsequently rose to 70 percent. Total nationalization was out of the question, given the need for foreign expertise and funds in oil exploration, production, and distribution.

1973 oil crisis

Insisting on the continued use of petroleum as leverage against Israel and its supporters in the West, Libya strongly urged the Organization of Petroleum Exporting Countries (OPEC) to take action in 1973, and Libyan militancy was partially responsible for OPEC measures to raise oil prices, impose embargoes, and gain control of production. On 19 October 1973, Libya was the first Arab nation to issue an oil embargo against the United States after US President Richard Nixon announced the US would provide Israel with a $2.2 billion military aid program during the Yom Kippur War. Saudi Arabia and other Arab oil producing nations in OPEC would follow suit the next day.

While the other Arab nations lifted their oil embargoes on 18 March 1974, the Gaddafi regime refused to do so. As a consequence of such policies, Libya's oil production declined by half between 1970 and 1974, while revenues from oil exports more than quadrupled. Production continued to fall, bottoming out at an eleven-year low in 1975 at a time when the government was preparing to invest large amounts of petroleum revenues in other sectors of the economy. Thereafter, output stabilized at about two million barrels per day. Production and hence income declined yet again in the early 1980s because of the high price of Libyan crude and because recession in the industrialized world reduced demand for oil from all sources.

Libya's Five-Year Economic and Social Transformation Plan (1976–80), announced in 1975, was programmed to pump US$20 billion into the development of a broad range of economic activities that would continue to provide income after Libya's petroleum reserves had been exhausted. Agriculture was slated to receive the largest share of aid in an effort to make Libya self-sufficient in food and to help keep the rural population on the land. Industry, of which there was little before the revolution, also received a significant amount of funding in the first development plan as well as in the second, launched in 1981.