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When Gaddaffi took power he took over a non-country with a large number of tribes composed of a small population on a tremendously big area. The country was ruled by a king who took the oil revenue as  his private income as it was the use amongst the bedu tribes, the chief took all.
Gaddaffi was a very poor boy with a brilliant mind, born in Sirte and his local teachers advised his father to send him to a better school.
His father didn’t have the money and sent Gaddaffi, aged 11/12 on a 250 km donkey trip through the desert  from Sirte to an uncle, a chieftain in Misurata. The boy went to school and continued to the military academy.
After he graduated he was confronted with a hopelessly divided extremely poor non-country under the rule of king Idriss.
Idriss was of Cyrenaica origin and a religious leader of the Senussi, a sufi sect. He was born at Al-Jaghbub, near the Egyptian border.
He became the Emir of Cyrenaica with the approval of the Britiish after WWII
When the British made him Emir of Tripolitana he could become king of Libya, with British approval.
This was one more idiotic British decision. Joining Cyrenaica(Benghazi area) with Tripolitana(Sirte and Tripoli area) under a Cyrenaica king was a disaster waiting to happen.
The oil was originally found exclusively in Sirte Basin and the Tripolitana tribes saw their riches disappear in a Cyrenaica pocket, literally, the country got nothing.
When Gaddaffi graduated the country was extremely poor and the oil exploitation was in the hands of American and British companies, which paid royalties to Idriss.
Agriculture, Libya has about 500.000 sq. km. rich agricultural land, was in the hands of Italian families, who had fled during the war but were still owners-in-absentia.
After Gaddaffi took power he invited the Italian families and arranged a payment for the Libyan State to aquire the property.
The biggest property, Al Khadra, was an olive plantation, started by the Italians in the 1930’s and probably one of the biggest and best in the world.
Today, after many pieces of the plantation were developed for modern construction projects, the remaining plantation is still covering 40.000 hectares with 6 milliom olive trees. It has natural irrigation by 6 months rain each year.
Gaddaffi went  with 3 Willy’s jeeps to the old palace of the king, who was for medical treatment in Turkey, and took over the country.
He declared immediately that the oil and the riches of the country belonged to all Libyans and reinforced the power of the tribal chiefs.
The old tribal customs were respected and every Libyan, respected as an honest man in his own tribe, could at any time go to his tribal chief for his requests, problems or justice.
This was of course a Libya for the Libyans system.
It has been said that Libya followed the Marxist system of the Soviet Union.
Here you have a young officer,with absolutely no friend in the world, hated by the biggest corporations in the world, which are leaving the country and the oilfields, and he has no clue what a modern society or country looks like, nor how the Western democracies function.
All he knows about Western democracies is the Italian colonialism, the German and British warfare on Libyan soil and the Libyan deaths it all created.
Talk about values? What values? Exploitation and warfare.
On the other hand the Russians offer a hand in the construction of his country and they are introduced by an Arab hero: Nasser from Egypt.
Of course he accepted Russian help and advise, of course he went his own socialist ways, equality and freedom for all, no kings, the people aare sovereign, poor people are having finally a voice.
So Gaddaffi accepted Russian help and advise, and created his own socialist muslim brand.
The only people who were not satisfied were the people from Benghazi, Tobruk and the Egyptians who lost all privileges, Idriss significantly had fled to Egypt and lived in a Cairo luxury home until his death at the age of 93.
Gaddaffi made sure that all Libyans were treated equally and he made it a point of honor that each and every Libyan had direct access to him in case of abuse of power by any other authority.
In the beginning he took tea in the small tea-houses in Tripoli or Sirte together with the common people until the assassination attempts started, all coming from Benghazi and/or Egypt.
He slept in army barracks and had no home of its own.
The Chief of Air Staff told me the story that one day he came in his room and found the body of a soldier, wrapped in a blanket on the concrete floor, next to his bed.
He kicked the soldier to wake him up and move so that he could go to bed himself and Gaddaffi unwrapped himself out of the blanket. The Chief of Air Staff apologized profusely but Gaddaffi told him to shut up, that it was his fault and he apologized to the Chief for using his room.
When the assassination attempts started he constructed himself a fortress in Tripoli, but spent most of his time in a tent in the dessert, moving all the time.
When the Americans bombed his fortress he was in a tent in the dessert.
Gaddaffi knew that he had a tribal patchwork which had disaster incorporated in it, aggravated by the Beduïn character of the people. When a Beduin meets another Beduin for the first time they will identify themselves first through the tribe, then the family and afterwards they will look for mutual relations. This can last normally half an hour. After that they will decide if it’s worth continuing talking or not. A foreigner like me is identified through his Libyan friends. If there are absolutely no connections between the two it’s better not to continue, there will be no trust until such time that there is a connection somewhere.
State structure
Gaddaffi made following structure:
–          Every tribe has its own tribe council and tribal representatives who represent the tribal council
–          The tribal council representatives are seated in the Revolutionary Council(the Libyan type parliament), which takes all decisions.
–          Moammar Gaddaffi is the brother leader who takes and gives advice to the Revolutionary Council. We know what that means, but it is true that all projects, claims and complaints are really discussed by that Revolutionary council and Gaddaffi is no fool, he knows when something is false or true, he takes serious notice of everything which is happening in his country at grass-roots level.
–          On television, during hours of speeches he really tells his people the truth, he really talks to them like a father and admonishes them.
–          Further every province has a local governor-administrator, mostly a very honest old guard general.
The ones I met are normally clad the poorest of the delegation with old battle dresses and open sandals of rough leather. They are simple Bedu’s who command very serious budgets.
The problems, inherent in this system, are the lack of real professional technocrats. The discussions are between people who trust each other and they trusted us for organizing the projects correctly. If their counterpart is a crook and has bribed the tribal chiefs the Libyan government is taken to the cleaners.
The Libyans have literally lost billions of euro  to crooked contractors. Because of their position as a pariah state they never win a fraud case against foreign nationals. Libya can be stolen from by anybody, unpunished.
The biggest crooks are the foreign banks, the stories I KNOW are just unbelievable.
So now Gaddaffi has un unfinished state with a functioning tribal system with a major problem: no professionals, except the rare few who graduated in foreign universities, a couple of thousand of them from the old guard.
The most brilliant of them is Shokri Ghanem, an economist from several Western universities and the creator of the new economic plans of Libya, started in 2005 and planned to bring Libya up to Western level by 2025.
Shokri Ghanem is today chairman of the National Oil Corporation (NOC) of Libya and minister of Petroleum. He is considered the most respected chairman of any State Oil Corporation or Major Oil Corporation. He was elected Oil Manager of the year by his peers a couple of years ago.
Shokri is also the mentor of Saif Gaddaffi, the brilliant, university (Vienna and LSE) educated son of Moammar Gaddaffi.
Saif and Shokri are (were) preparing Libya for the most modern future.
The Family
Here we have to give a little bit of information about the Gaddaffi family.
Gaddaffi has 8 children, one daughter, Ayesha, the toughest and smartest of the lot, an educated lawyer and a very shrewd investor.
The eldest son, Mohammed,is a quiet unambitious man who stayed out of the picture all the time.
Saif is the very well educated polished, modern born politician. He has been groomed by several good people, Shokri Ghanem the most significant amongst them. He abhors violence as such and has admonished his brothers many times. He refused every single title and/or military or security position.
He proposed a constitution to the family and wanted open elections. His clashes about this theme with the old guard cronies in his family and with his brothers  are many and well known by the Libyans.
Moattassam, an intelligent shrewd military man, educated in the military academy of Russia, chief of the security forces, but with a terrible temper, and I mean terrible, with all negative connotations attached to the word.
Saadi, a playboy football fanatic with its own security regiment. Not sophisticated at all and full playboy lifestyle with an ego the size of the Eiffel Tower. He was brought down a notch by his Juventus misadventure.
Kamis, a career military man with his own security brigade, very well equipped.
Hannibal, a walking disaster.
Saif al Arab, a quiet unassuming  individual.
The other little daughter was killed as a young child by the American bombardment of his fortress in Tripoli.
Moattassam was silently fighting with Saif for the Crown Prince position but, since the riots, that seems to be settled now in favor of Saif. The family seems to be unified now.
An interesting tidbit: the 2nd wife of Gaddaffi, the mother of the older Saif comes from Bayda, Cyrenaica, and is related through her sister’s marriage, to the Idriss/Senussi family.
Finances
Gaddaffi is certainly one of the shrewdest investors in the world.
He beat the Italian bankers, the Agnelli family, who came begging to him to rescue Fiat. He complied and sold his shares afterwards, doubling the money. He also bested   the US government and he did it all alone.
The biggest coup was the way he got the Libyan seized money out of the US with a whopping profit. He put the American Government to shame. And it was completely legal. He was not allowed to take the money out of the US by bank transfer or any other direct means. He was only allowed to invest in the US, which he did. He bought shares of all main US corporations and at the top of the market a couple of years ago he sold the shares in European Stock Exchanges and cashed in. I am not going to reveal the amount but it is more than any amount mentioned in the world press about the Libyan reserves and that’s only part of the Libyan reserves.
Gaddaffi didn’t take any personal money whatsoever, he has no personal bank accounts and neither has Saif.
All the money is Libyan Sovereign money through official Libyan government organizations, headed by shrewd professionals, like LIA, Libyan Investment Authority. There are many of such State Investment Funds.
All real estate either Gaddaffi father or Saif live in is Libyan Sovereign property. Every foreign property belongs to the Libyan State and not to the Gaddaffi family.
I estimate the total Libyan reserves far over one thousand billion dollars.
The Oil Business
First of all I want you to read these links to understand a little bit about the oil business and what happened around the time Gaddaffi took over the leadership of Libya.
End of part 1.
I hope to continue in a short while.
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