Persian Gulf War
Iraq's Grievances with Kuwait
After the Iran-Iraq war, faced with a disrupted society and a debt-ridden economy, Saddam Hussein strove to achieve a balance between constructive reform and characteristic authoritarian control. A new constitution was promised and also a range of economic reforms that would relax the Ba'athist grip on the nation. Saddam also tried to build on what he declared as the Iraqi victory over Iran, a supposed triumph that had - according to Saddam - established the Iraqi leadership of the Arab world.
Saddam also flew to Cairo to discuss with President Mubarak the creation of a council of the non-Gulf Arab states (Egypt, Jordan and North Yemen) which had supported Iraq during the long conflict with Iran. On Feb. 16, 1989 the Arab Co-operation Council (ACC) was formed in Baghdad. The ACC emerged as an organisation commited only to economic and other non-military cooperation. Washington welcomed the development, reckoning that Iraq's strengthened ties with pro-Western Arab states would help to consolidate US control in the region. The US 'tilt' towards Iraq in the Iran-Iraq war had already illustrated American designs in the Gulf. Now, it seemed, was another opportunity to secure Iraq in the US orbit.
On March 27, 1989 King Fahd of Saudi Arabia signed a non-agression pact with Saddam, an agreement that received little publicity during the period when Saudi Arabia hosted the forces that were to launch the most devastating onslaught on Iraq in modern times. It is interesting to note that in Feb. 1989 Saddam offered a similar agreement to Kuwait. Kuwait did not respond.
In an effort to reduce public expenditure some 200,000 soldiers were demobilised and public assets were sold to private citizens; already $2.2 billion-worth of public-sector companies had been sold off. In late 1989, Iraq's deputy prime minister commented that "Iraq is economically and politically commited to paying back its debts, but our country's resources are limited mainly because our oil production share in OPEC is limited".
Various events - the Bazoft affair (in which a Journalist from the British Observerwas executed on accusations of spying for Israel), the assassination of Gerald Bull (helping in Iraq's Project Babylon for development of superguns) in a way that was reminiscent of the murder o fthe Egyptian physicist Yahya Mashad (in charge of Iraq's nuclear programme) in June 1980, and the much publicised arrests at London's Heathrow airport of men trying to smuggle th ekrytron triggers (for nuclear weapons) to Iraq - contributed to the deterioration in Iraqi-Western relations. In addition, the Western media and the American political establishment were critising Iraq for its human rights record and political posture, even though no word was being raised against Western allies with equally dismal records.
On April 2 Saddam Hussein announced that the attempt to block Iraq's acquisition of the high speed krytrons was part of a "Western-Zionist plot" to deprive Iraq of the means to defend itself and facilitate an Israeli attack on Iraq. When Saddam declared that Iraq would use "binary chemical weapons" to attack Israel if Israel, possessing atamic bombs, dared to launch another military strike on Iraq, Washington branded the speech "inflammatory, outrageous and irresponsible." After seveal weeks, Washington then announced that further credits for American grain would not be forthcoming to Baghdad. On May 21, a request by Iraq for $500 million loan gurantee was suspended, decisions that Baghdad took as further evidence of America's growing hostility to Iraq. Washingtons response to the Israeli bombing of the Iraqi nuclear facility was a mere condmenation.
While Saddam was concerned at the likelihood of another Israeli attack on his developing military capacity, he had also long been preoccupied with what he judged to be inadequate oil revenues. The main barrier to higher oil prices is overproduction of oil within the OPEC cartel. It only takes one members willingness to disregard OPEC protocals to start an adverse price trend. The first country to violate OPEC regulations was the United Arab Emirates which served as a precedent for Kuwaiti non-compliance.
The facts are plain. Kuwait was flooding the oil market in violation of the agreed OPEC production quotas. The consequence was a massive drop in oil prices which in turn hurt Iraq, which was already short of funds. Iraq's oil revenue then slumped by $7 billion. Iraq was now facing economic suffocation.On May 30, the Iraqi president commeneted to participants at an Arab summit in Baghdad that
.. for every US dollar drop in the price of a barrel of oil, the Iraqi loss amounted to $1 billion annually.. War is fought with soldiers and harm is done by explosions, killing and coup attempts, but it is done by economic means as well. I say to those who do not mean to wage war on Iraq, that this is in fact a kind of war against Iraq. Were it possible we would have endured.. But I say that we have reached a point where we can no longer withstand pressure (1).
Kuwait, like Iraq, had an interest in trying to make up the revenue lost during the Iran-Iraq war, though its chosen method would obviosly damage Iraq. Kuwait had suffered damage to oil installations from Iranian attacks, though losses were small compared to those in Iraq. Kuwait and the UAE continued to produce as they wished, to the point that the price per barrel sank to $11 in June 1990. At this level, Iraqi revenues were such that they could scarcely service current expenses, much less repay foreign loans or fund the required national reconstruction.
In a fresh move to resolve the deteriorating situation, Saddam proposed a new OPEC meeting. King Fahd agreed but (acting not surprisingly as a Westren client) rallyed the Gulf leaders against the Iraqi suggestion for an increased price of $25 a barrel. Fahd was unsympathetic to Saddam's belligerent posture, anxious about the Iraqi-Israeli situation, and prepared to discuss with other Gulf states a way of countering Iraqi designs - or supporting American designs.
A document, unknown to Saddam at that time, showed collaboration between the Kuwaiti Security Department (SSD) and the US Central Intelligence Agency (CIA). Issued on Nov. 20, 1989 summarises agreements reached at a meeting with CIA director William Webster at the CIA headquarters in Langley, Virginia, on Nov. 14 1989. Paragraph 5 of the memorandum stated;
We agreed with the American side that it was important to take advantage of the deteriorating economic situation in Iraq in order to put pressure on that country's government to delinate our common border.
This document is an important piece of evidence suggesting a US-Kuwaiti conspiracy against Iraq.
Since 1980 Kuwait had been extracting oil from the "Iraqi Rumeila oilfield", resulting in a loss to Iraq of $2.4 billion; through the Iran-Iraq War Iraq had lost $106 billion in oil revenue, a decrease in exports that had benefited Kuwait and the UAE.
In addition to the strangulation of the Iraqi economy through the US-inspired overproduction of oil, the historic Iraqi claims to territory of Kuwait were also an underlying theme to the mounting tension in the Gulf. In 1922, when Sir Percy Cox delineated the modern borders of Kuwait, Iraq, and Saudi Arabia he decided to make Iraq a virtually landlocked country. He had given Kuwait a coastline of 310 miles, allowing the much larger Iraq a mere 36 miles. Iraq's claim to Kuwait hinges on the extent to which Kuwait was part of the province of Basra within the Ottoman Empire. Britain, as an imperial power concerned with strategic and commericial advantage, had a clear interest in separting Kuwait from the Ottomans. After the collapse of the Ottoman Empire all the subsequent Iraqi governments, despire their domination by Western interests, from 1921 to the end of the British mandate in 1932, during the rule of King Feisal I, King Ghazi and King Feisal II refused to accept the separation of Kuwait from Iraq.