Russia writes off Libya debt – $4.6bn
The high point of President Putin’s visit to Libya this week was the announcement that Russia was to write off Libya’s $4.6 billion debt. In exchange, a number of massive bilateral trade deals have been agreed.
A cheerful, but slightly over-heated President Putin told reports
“I am satisfied by the way we have solved the debt problem. The deal will not only employ Russian defence enterprises but will also help strengthen Libya’s defences.”
I must say, I find it fascinating that both Putin and the world’s press have been majoring on the military aspects of this deal.
True, the Russian defence industry will benefit to the tune of a couple of billion dollars worth of new business as Libya modernises its military after decades of sanctions. But in pure money terms, the $3 billion deal to build a new coastal railway line and Gazprom’s proposed gas exploration deal are likely to be far more valuable.
For the press, the attraction of explaining the deal in terms of debt for arms is obvious. But for Putin, it’s yet another opportunity to emphasise Russia’s remerging military muscle. After all, selling arms to an African country is a much better way to promote your military prowess than invading a neighbouring country. And much less risky…
But, I digress. Next stop for Putin is a trip to Sardinia, where he’ll be meeting new Italian PM Silvio Berlusconi. No debt to forgive there, and no chance of arms sales. But Italian energy giant Eni has significant business interests in Libya, and would make a useful partner.