In the 1970s and early 1980s, Libya was widely suspected of financing international terrorist activities and political subversion around the world. Recruits from various national liberation movements reportedly received training in Libya, and Libyan financing of Palestinian activities against Israel was openly acknowledged. There were also allegations of Libyan assistance to such diverse groups as Lebanese leftists, the Irish Republican Army, Muslim rebels in the Philippines, and left-wing extremists in Europe and Japan. Some observers thought support was more verbal than material. However, in 1981 the GPC declared Libyan support of national liberation movements a matter of principle, an act that lent credence to charges of support for terrorism.

Support for international terrorism was a major issue in Libya's relations with the United States and Western Europe. The United States, in particular, viewed Libya's diplomatic and material support for what Tripoli called "liberation movements" as aid and comfort to international terrorists. In general, after the early 1970s relations between the two countries went from bad to worse, even while the United States continued to import Libyan crude.

Qadhafi opposed United States diplomatic initiatives and military presence in the Middle East. As a protest against Washington's policies in Iran, the United States embassy in Tripoli was stormed and burned in December 1979. In the late 1970s, Washington blocked delivery to Libya of equipment judged of potential military value and in May 1981 ordered Libyan diplomatic personnel to leave the United States to prevent assassination of anti-Qadhafi Libyan dissidents. The most serious incident occurred in August 1981 when United States jets shot down two Libyan jet fighters during naval maneuvers in the Gulf of Sidra. That same month, Libya signed an economic and political agreement with Ethiopia and South Yemen, the so-called Tripartite Agreement, aimed at countering Western, and primarily American, interests in the Mediterranean and Indian Ocean. After a series of joint consultations, however, the pact became largely a dead letter.

Libya's income from oil came from sales to Western Europe as well as to the United States, and to ensure a steady supply of oil most European nations tried to remain on reasonable terms with their Libyan supplier. Some protests arose over the wave of political assassinations of Libyan exiles in Europe in 1980, but only Britain with its independent supply of oil took a strong stand on the issue. Qadhafi's call that same year for compensation from Britain, the Federal Republic of Germany (West Germany), and Italy for destruction of Libyan property in World War II brought no response, even when the Libyan leader threatened to seize property if adequate compensation were not negotiated.

By the early 1980s, Libya was a country embroiled in controversy. Libyan ventures in Chad and elsewhere in North Africa and the Middle East had earned a good deal of opprobrium for Qadhafi, who often pursued his goal of Arab and Islamic unity and extended Libyan influence at what seemed any price. Indeed, suspicion if not hostility were the usual response to Qadhafi's initiatives in the Arab and Western world.

Domestically, the government had attempted to ensure a more equitable distribution of wealth, a step that pleased many but by no means all of its citizens. A new political system with new institutions was also in place with the aim of involving as many citizens as possible in governing themselves. But overlapping jurisdictions and responsibilities had led to confusion, and there were questions as to the viability of the committee system of government. A sizable number of Libyans seemed uninterested in political participation, while others had gone into opposition, active or passive, at home and abroad. The country's oil revenues had been channeled into agricultural and industrial projects that the regime hoped would provide employment and lessen dependence upon imports and foreign labor. Even in these areas, the results were less promising than had been expected, and falling oil prices diminished the financial resources that could be devoted to continued economic and foreign policy initiatives.

The decline in oil revenues and consequent economic slowdown, the continued reliance upon non-Libyan expertise, and the generally unfavorable state of foreign relations and persistent dissidence in the military and society at large posed grave problems for the Qadhafi regime in the early 1980s.

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Source: U.S. Library of Congress