$2.7b Lockerbie deal is only the beginning

With the expected United Nations Resolution which United Kingdom would table today to lift the sanctions against Libya, Col Muammar Gaddafi's regime is about to be re-engaged in world politics, blessed by a super power who, five months ago, led a controversial invasion in Iraq to disarm its regime from allegedly Weapons of Mass Destruction.

The $2.7 billion deal over Lockerbie's Pan Am passenger airplane bombing should, in its second phase lead to the U.S. lifting its unilateral sanctions, and taking Libya off its list of terrorist list.

Britain, U.S.'s junior partner in Iraq's war, believes the deal carries great diplomatic and political significance. The Foreign Office junior minister Denis MacShane said it will open a new chapter in Libya's relations with the world.

"Libya has met the four obligations placed on it by the UN – it has accepted responsibility, met its obligations on compensation, renounced terrorism and has agreed on any further investigation," he said.

What has really changed between now and then, when the bombing of the airplane took place in 1988, killing 270 civilians? A Lockerbie-type atrocity in today's troubled world, might provoke a very different reaction from the superpower.

A country which blew up an American airliner today could not expect the patient treatment accorded to Libya over the 15 years since Pan Am 103 exploded over the Scottish town of Lockerbie. It could expect invasion.

What happened to Gaddafi after the Pan Am atrocity is a reminder of how a crisis was dealt with by diplomacy, threats, sanctions and international law. Such a broad approach would be unlikely today. The rules of engagement have changed: The other super power has collapsed and we are living under different international rules since 9/11.

Back in 1988, under President George Bush senior, international terrorism was considered a problem, among others, which was still tolerable in the circumstances of what was known as "balance of fear" between the super powers.

Libya was an active player. In 1984, its "People's Bureau" (Embassy) at St James' Square in London had shot at demonstrators in the square outside, killing a policewoman (Yvonne Flitcher) standing with other PCs to protect them.

In 1985, a bomb exploded in the La Belle discotheque in West Berlin, used by U.S. servicemen there. Libya was blamed. In a similar admition to Lockerbie's guilt, Gaddafi's government is offering compensations to the German victims families.

And the United States, under Ronald Reagan, retaliated not by invading, but by raiding. It sent 16 F111's based in Britain to attack and only narrowly missed getting Gaddafi himself, killing instead his adopted daughter.

The then Britain's Prime Minister, (Margarethe) Thatcher, expressed at first her doubts about that raid. She said in her memoirs: "I was worried that the U.S. action might begin a cycle of revenge. I was concerned that there must be the right public justification for the action which was taken, otherwise we might just strengthen Gaddafi's standing."

In the end, she swung behind her friend President Reagan and gave permission for the F111's to be used from their British base. France opposed the action and did not give permission to fly over its country. At the time, war was not really contemplated, and Gaddafi remained in power.

Instead, sanctions were imposed by the UN 1992 and in due course, one Libyan was found guilty by the Scottish court sitting in the Netherlands and another acquitted. Somehow, the Libyan leader has had to pay a price. He was isolated for years and became insignificant actor in world affairs.

He had to admit blame, though in a roundabout way (accepting responsibility for the actions of Libyan government officials) and he is having to pay large amounts of money.

In today's international rules and considering what has happened in Iraq, Gaddafi has got away with it. He must know though, the $2.7 billion Lockerbie deal would lead to many other lucrative business deals once Libya and oil companies are allowed to resume trade.