For decades, terrrorist attacks -- most notably the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland -- and an active weapons of mass destruction program had alienated the North African nation from the U.N., as well as any government with a conscience.
But Col. Qaddafi has spent the better part of the last ten years enlisting consultant firms to transform the country from a pariah state into one now seen as a lucrative investment market.
The first major step was in 2003 when Libya claimed responsibility for
its role in the Lockberbie bombing, which killed 170 people. In 2006 it renounced its weapons of mass destruction program, winning a reversal of U.N. sanctions. The final piece of the political puzzle came late last year when Libya agreed to a payout for the families of the Lockerbie victims. Libya's recent handling of Lockerbie and its weapons program has allowed the U.S. to start work on a bi-lateral trade agreement.
And paving the way are top private equity firms like Goldman Sachs and Carlyle Group. Both well-known investment companies have benefitted from hundreds of millions of dollars thanks to the Libyan Investment Fund. And the U.S. State Department is encouraging an even closer relationship.
The attraction between the two countries is mutual. For Libya, the U.S. is like the captain of the high school football team - a star player on the world stage, with political and economic clout. With the U.S. on its side, Libya can gain access to almost any party. There's no greater seal of approval than American investment deals, particularly for a country long-despised by the West.
So what's in it for America? Easy - vast resources, both mineral and monetary. Gasoline in Libya goes for less than 70 cents a gallon. Do the math. That's a lot of oil and for now, there's little foreign investment. And that's not all. The Libyan Investment Authority has tens of billions of untapped dollars.
Libya is a fresh source of capital at a time when the traditional sovereign wealth states of the Gulf are over-invested in the troubled U.S. and European markets, and even Asia is feeling the crunch.
Libyan leaders are so excited about the prospects of their new status., they're trying hard to impress. The Mediterranean capitol by the sea is getting a makeover. Twenty different construction projects obstruct the coastal views of Tripoli, all part of a plan to make Libya more mainstream. Officials are keen to improve the very basic tourism infrastructure, not least to provide the kind of 5-star accommodation and shopping complexes bankers are accustomed to, but which are presently lacking. Local officials and guides hope if they build it, tourists will come. Fifteen-hundred miles of sandy beaches line turquoise waters where shrimp and squid are among the abundant local fish cooked on open flames for hungry adventurers. And there are enough archaeological sites to keep history buffs criss-crossing the Sahara in four-wheel drives for days.
But, like all relationships with a rocky past, it's not that simple. While some observers, like Libyan expert Molly Tarhuni, of London's Chatham House, maintains the nation is now "stable and their money is as clean as any other countries," human rights watchers contend there is still an absence of a free press, as well as non-governmental organisations, and there is a current record of torture and abuse.
And despite government proposals to share oil wealth with the populus, an idea fraught with other complications, like inflation, unemployment and poverty rates remain high.
Libya has a long way to go before it gets the equivalent of the football star's class pin. You can't even say Libya and the U.S. are "going steady." But they're definitely dating. Tarhuni says "neither side will be led anywhere they don't want to go. The U.S. and Libya will walk hand in hand."
And if Libyan officials can work out a way to simplify the visa process - a process even more complex and tangled than their political history, they can court more than the bankers and the Lonely Planet junkies.
The Bank of Tripoli