Almost ten years on, Iraq’s 1990 invasion of Kuwait remains puzzling. The operation appears not only to be incommensurate with the actions that Baghdad claims provoked it-persistent Kuwaiti overproduction from the disputed Rumailah oilfeild and Kuwait’s outright refusal to discuss relinquishing control over the strategically situated islands of Bubiyan and Warbah-but also to be patently inefficient as a means of persuading the Kuwaiti regime to alter its longstanding petroleum and security policies. Moreover, the attack represented a blatant infringement on the sovereignty of a fraternal Arab state, providing Iraq’s regional adversaries-most notably Egypt and Syria-firm grounds for rallying overwhelming opposition to the invasion both inside the Arab League and in the international community at large. Why then did the leadership in Baghdad pursue such an evidently suboptimal course in its dealings with Kuwait?

It is all too easy too solve the puzzle by asserting that the invasion grew out of some sort of decision-making pathology on Iraq’s part. Such a view has consistently been propounded by the governments of the United Kingdom and the United States, and finds ready acceptance among the general public in most western countries. Nevertheless, scholars have hesitated to accept megalomania or craziness as an adequante explanation for the Iraqi military offensive¹. Even if it were in fact true that Iraq’s foreign policy were completely determined by inexplicable whims of President Saddam Husain, one might legitimately demand to know the circumstances under which irrational or counterproductive policies can be implemented. It is therefore worth revisiting the existing literature on the events that precipitated the 1990 invasion, to see whether or not it provides a satisfactory account of this episode.

Conventional explanations for the Iraqi invasion

Two different kinds of explanations for the Iraqi invasion of Kuwait can be found in the existing literature. The first focuses on the objectives and incentives that prompted the regime in Baghdad to carry out a large-scale military operation against its southern neighbor in the late summer of 1990. The second highlights the peculiar regional circumstances that set the stage for the Iraqi offensive. Neither line of argument is convincing as it stands, and although neither is in principle incompatible with the other, the two perspectives fit together at best uncomfortably.

Iraq’s motivations

Conventional accounts of the factors that predisposed the Iraqi leadership to launch a military thrust into Kuwait invoke two contradictory trends. On the one hand, Iraq is generally pictured as having emerged from its eight-year war against the Islamic Republic of Iran in a powerful, even potentially hegemonic, position in regional affairs. John Cooley suggests that events in the Gulf in the months following the August 1988 ceasefire constituted a form of “protection racket”, in which Baghdad  played “the role of ’godfather’, threatening recalcitrant smaller neighbours, domestic Kurds and even Israel, with its growing, Western-supplied military-industrial power”². Janice Gross Stein asserts that by the summer of 1990 “Iraq had unquestioned military capability to engage in expansionism in the Gulf; it was by far the preeminent military power in the region”³. Richard Herrmann claims that “Saddam presented a vision of an Arab great power emerging from the demise of Soviet and American bipolar hegemony. ...Iraq’s strength and the failure of the Baker Plan”, he continues, “increased Saddam’s levrage over the conservative Arabs. Externally he could intimidate them with vastly greater military force; internally he could constrain their efforts to seek American protection by stoking anti-Israeli, anti-American, and arab nationalist symbols”⁴. Fred Halliday concurs: “Following [the August 1988] ceasefire, it was expected that, exhausted, Iraq would accept peace and rebuild. But it did not: having forced Iran to accept peace on its terms, it then blocked the peace process by raising new demands... and began to assert itself more forcefully in the Arab world. Iraq sought hegemony, not coexistence”⁵.

In a similar vein, Steve Yetiv lists three ways in which the outcome of the Iran-Iraq war “contributed to Iraq’s decision to invade Kuwait” by augmenting Iraqi strength: “First, American support of Iraq during the Iran-Iraq war made Iraq more self-assured and confident and thus more likely to invade Kuwait than it otherwise would have been”; “Second, Iraq emerged from the war with a considerably more developed military capability”; and “Third, the war weakened Iran militarily. ...That Iraq did not have to contend with a powerful Iran on its border probably made an invasion of Kuwait more plausible for Iraq”6. More recently, Simon Murden argues that “the Iraqi offensives that brought the war to an end had reversed the long-standing situation of Iranian control on the battlefield, and the Iraqi Army now occupied large areas of Iran. Iraq”, he goes on “had developed the largest military force in the Arab world, and the Iraqi regime basked in a new prestige, looking forward optomistically to its role as a regional power”⁷.

On the other hand, the devastating 1980 - 88 war with Iran is usually credited with precipitating a severe crisis in the Iraqi political economy. Stein reports that the Iraqi leadership insisted both during and after the crisis that there existed “a direct link between Iraq’s deteriorating economy and the invasion of Kuwait”.⁸ Halliday notes that Baghdad’s decision to invade Kuwait reflected a burgeoning “economic crisis within Iraq”, as a result of which, and “despite government attempts to promote the private sector and domestic agriculture, Iraq remained in a weak position even after 1988".⁹ The fourth item on Yetiv’s list of factors that convinced the Iraqi leadership to attack Kuwait is the fact that “the Iran-Iraq war devastated Iraq’s economy and left Iraq heavily indebted to Kuwait and Saudi Arabia, both of which had loaned it monies for its war against Iran.”¹⁰ And Murden writes that “the year 1989 was difficult for Iraq, and prospects for 1990 looked little brighter. Iraq could not pay its debts, market deregulation had gone badly and development was stalling”. Furthermore, the one bright spot in the local economy-relatively high petroleum revenues-was beginning to cloud over: “The Iraqi regime must therefore been particularly frustrated by the downward pressure on oil prices from the beginning of 1990 when overproduction by the Gulf States sent oil prices heading [downward].”¹¹

Iraq’s postwar economic crisis receives exhaustive treatment by Lawrence Freedman and Efraim Karsh. According to their account, the authorities in Baghdad incurred massive debts during the course of the Iran-Iraq war, and when the United Kingdom “decided in 1990 only to give Iraq further credit to the amount required to turn over existing debts,” payments quickly fell into arrears.¹² At the same time, the country’s devastated industry and agriculture were in no position to supply the goods demanded on local markets, leading to a jump in imports which generated unprecedented balance of payments difficulties.         ¹³ Moreover, troops returning home from the battlefield found themselves unable to secure satisfactory employment, while “the repressive nature of the regime and its arbitrary convulsions left [private] entrepreneurs wary, investing the barest minimum in future expansion and reaping as much profit as they could in the short term.”¹⁴ Under  these  circumstances, the Iraqi regime calculated that “adding Kuwait’s fabulous wealth to the  depleted Iraqi treasury” might with one stroke “slash Iraq’s foreign debt and launch the ambitious reconstruction programmes [Saddam Husain] had promised his people in the wake of the war with Iran.”¹⁵

 Existing scholarship recognizes no contradiction between the assertion that Iraq represented a nascent hegemon in the Gulf in 1989 - 90 and the claim that the regime in Baghdad confronted a severe domestic political-economic crisis during this same period. On the contrary, virtually all accounts see the country’s growing military strength as a means whereby escalating internal difficulties might be ameliorated or resolved. Freedman and Karsh write that by the summer of 1990 “Saddam’s revenue problem was ...becoming chronic. If he could not get OPEC discipline from these small Gulf states then an alternative was to go to them directly and demand the money with menaces-especially to Kuwait, to which Iraq owed some $10 billion.”¹⁶ Murden concludes that a conjunction of military strength and economic weakness persuades the Iraqi leadership to “set out along an alternative route to power and prosperity in 1990, and a great political and military gambit would emerge as the regime’s solution to the country’s economic problems.”¹⁷ Bassam Tibi asserts simply that “Iraq wanted to cure its economic ills by increasing its income from oil, to gain greater access to the sea in order to reduce its geographical dependance on its neighbors and last, but not least, to establish its dominance in the gulf and strengthen its claim of leadership over the entire Arab world.”¹⁸ The lone exception is Stein, who at least presents military strength and economic vulnerability as equally plausible alternative “construction[s] of the [Iraqi leadership’s] motives and intentions.”¹⁹

What is remarkable about all this is that Baghdad is generally agreed to have moved against Kuwait as an aggressor, rather than as a state trying to shore up its deteriorating strategic position. Halliday claims that when Kuwait failed to take steps to mollify Iraq, “the Iraqis saw an opportunity to assert their power, and when negotiations failed they took a sudden decision to invade.”²⁰ Similarly, Freedman and Karsh argue that once Baghdad became convinced that the United States would not intervene to defend Kuwait, Iraqi officials toned down their denunciations of the Kuwaiti ruling family and agreed to take part in Saudi-sponsored talks negotiations. But just as soon as “the Kuwaitis were lulled into a false sense of security and persisted with their intransigence,” the Iraqi leadership “did not search for a compromise or string the crisis out any longer. Rather [Saddam Husain] exercised his military option while he could and for maximum gain, accepting that if he waited much longer the option would decline and could be difficult to recreate in the future.”²¹ Stein’s synthesis is perhaps the most sophisticated: “It is likely that Saddam was initially driven by the acute economic weakness of Iraq and its inability to finance basic imports, angered by Kuwait’s unwillingness to guarantee higher oil prices, and frustrated by the reluctance of the al-Sabah family to compensate Iraq for its huge expenditures incurred during the war with Iran. In this context, he saw an opportunity to reassert Iraq’s long-standing claim to Kuwait.”²² In short, there is general consensus that the Iraqi occupation of Kuwait resulted from a failure of deterrence, rather than eventuating out of what Robert Jervis calls a conflict spiral. Oddly enough, the consensus extends even to the most recent study of the Iraq-Kuwait conflict, which purports to offer a dissenting view of the most important aspects of the episode.²³

Regional trends

A second line of argument accounts for Iraq’s thrust into Kuwait in terms of broader developments in the Arab world. For the most part, the Iraqi move is linked to an escalating crisis in regional affairs as the 1980s drew to a close. Yezid Sayigh, for instance, argues that the consolidation of autonomous regimes severely undermined whatever community may have existed among Arab states. By taking steps to bolster their individual sovereignties, “Arab governments in effect downgraded their commitment to the regional order and weakened both collective and their own state security.”²⁴ Under these circumstances, better-endowed states began using offers of financial assistance to gain leverage over their less-advantaged neighbors: “this increasingly took the form of ‘bribes‘ from oil-rich Gulf states to such governments as Iraq, Syria, even Jorden. These in turn tended to use political or strategic ‘blackmail‘ to obtain support.”²⁵ The steady deterioration of regional community culminated not only in decisions by Kuwait and the United Arab Emirates to renege on their earlier agreements to limit oil output, but also in the evident unwillingness of other petroleum-producers to punish these two states for doing so.²⁶ Under these circumstances, Baghdad’s adoption of military force as a means of regaining leverage vis-a-vis Kuwait can be seen to have been both understandable and virtually inevitable. As Sayigh remarks, “the regional order had been asking for trouble for a long time, and trouble it got, in plenty.”²⁷

Dan tschirgi offers a similar characterization of the crisis that gripped the region in the months surrounding the Iraqi invasion. The problem, he suggests, can be traced to “a single, overriding reality of Middle East politics: the extent to which politics at all levels has become void of purposes other than the mere acquisition and expansion of power.”²⁸ This trend has been exacerbated by the spread of rentier political economies throughout the Arab world. Rentier wealth “has proved effective, not in converting opponents of the rentier value-system but in buying (more accurately, renting) the uneasy acquiescence of the more powerful of those who are most threatening. The result is that with few exceptions neither pro nor anti status quo elites have shown much consistency in adhering to the values supposedly defining their respective visions of the Arab World’s destiny.”²⁹ Thus Iraq harbored no qualms about resorting to force when its dealings with Kuwait reached an impasse.

Fouad Ajami locates the origins of the crisis in a pervasive sentiment among Arabs that they “were being passed over by history” as the 1990s opened.³⁰ The fall of authoritarian regimes in eastern Europe and Latin America, combined with persistent difficulties in the economies of virtually all of the Arab countries, encouraged Saddam Husain to rescessitate the themes that had driven regional politics during the Nasirist era: “He was a second Nasser, said a Jordanian, but a Nasser with teeth.”³¹ Baghdad’s fulminations against the “colonial borders” that kept the Arab world divided and impotent won widespread support among the “frustrated masses” of the Arab world. More specifically, the drive into Kuwait signalled the collapse of “the old order in the gulf.” In Ajami’s words,“ the files lands in the north-the ruinous politics, the burdened state-run economies, a demographic explosion that provides young foot-soldiers for the politics of despair and banditry” vented their growing frustration upon the more fortunate rulers and citizens of the southern Gulf.³² Thus “Saddam’s bid closed a circle; the pan-Arab arguments and radical sensibility of the 1950s returned” at Kuwait’s expense.³³

This second line of argument is much less convincing than it might be on two grounds. First, the purported regional crisis takes shape long before the summer of 1990, and is in fact usually presented as a constant feature of contemporary Middle Eastern affairs. It is thus unclear why perennial tensions related to the consolidation of sovereignty, the emergence of rentier values or the persistence of economic disparities precipitated an Iraqi military into Kuwait that August. Second, the persistent regional crisis fails to explain why Baghdad resorted to armed force instead of adopting less belligerent ways of dealing with Kuwait and the United Arab Emirates. Even on terms of unmediated power politics, seizing control of Kuwait was certain to elicit at least as much resistance as support. It is thus unclear why any state that harbored pretensions of leading the Arab would opt to pursue such a self-evidently provocative course of action.

An alternative view of crisis dynamics

A more compelling solution to the puzzle of why Iraq sent troops into Kuwait in August 1990 is suggested by Charles Glaser’s comprehensive analysis of “the political consequences of military strategy.”³⁴ Glaser argues that whether or not international crises escalate into outright warfare is largely determined by three interrelated factors: 1) the motivations that prompt each state to adopt a confrontational foreign policy; 2) the  salience and severity of the security dilemma for the states concerned; and 3) the extent to which each state’s domestic political structure either reinforces or mitigates against hostile interpretations of other’s intentions and actions.

Motivations for expansion

Glaser observes that the conventional distinction between aggressors and status quo powers obscures a crucial difference between two quite different kinds of motivations that might lead states to adopt a confrontational or expansionary foreign policy. Some states take steps to extend their borders in order “to gain the benefits of nonsecurity expansion, “while others do so as a way “to increase their security.”³⁵ The former objective is associated with “the state’s desire to increase its wealth, territory, and/ or prestige, to spread its ideology, and so forth;”³⁶ the latter is tied to the state’s often-desperate efforts to parry threats to its vital interests, and sometimes to ensure its very survival as an autonomous entity. Glaser designates states that are “willing to incur costs or risks for nonsecurity expansion” as “greedy,” and he labels those “unwilling to run risks for nonsecurity expansion” as “not-greedy.”³⁷

Glaser complements this distinction with a characterization of states’ respective interests in concerning themselves with security-producing programs at all. “In broad terms,” he claims, “we can speak of potentially insecure states and always-secure states.”³⁸ The former are liable to face severe threats to their strategic interests or survival from the actions of others, while “an always-secure state is not made insecure by the deployment of capabilities that threaten its ability to protect the status quo.”³⁹ The conjunction of these two dimensions generates four possible types of states: “[always-] secure greedy, [potentially] insecure greedy, [potentially] insecure not-greedy and [always-] secure not-greedy.”⁴⁰ On the basis of this differentiation, Glaser revises Robert Jervis’s analysis of the dynamics inherent in the security dilemma, proposing that always-secure, greedy states can most successfully be blocked through deterrence, whereas potentially insecure, not-greedy states tend to be highly susceptible to conflict spirals.⁴¹

Impact of the security dilemma

Underlying conditions that either heighten or ameliorate the security dilemma facing states in an anarchic arena provide the second component of Glaser’s analysis. Following Jervis, Glaser argues that the security dilemma will tend to be more salient and more severe whenever offensive forces and strategies have an advantage over defensive ones, and whenever offensive forces and strategies cannot be distinguished from defensive ones.⁴² Under these circumstances, a state that abjures security-producing programs not only risks being defeated by an adversary possessing comparatively efficient offensive weapons, but also finds it impossible to calculate the relative distribution of capabilities with any degree of certainty. Leaders thus have a double incentive to implement offensive programs, no matter what the adversary does or intends to do. By the same token, the security dilemma diminishes markedly whenever defensive forces and strategies have an advantage over offensive ones and defensive forces and strategies can reliably be distinguished from offensive ones. Under these circumstances, a state may safely hesitate to adopt security-producing programs, since even a moderate level of defense can offset a great deal of offensive weaponry and, at the same time, it is perfectly clear when an adversary takes steps to build up its offensive capabilities.

These considerations have a direct impact on states confronting one another in a crisis situation. If the offense enjoys an advantage over the defense, then even not-greedy states will have a strong incentive to obtain and deploy offensive weaponry. Similarly, if offensive weapons and strategies cannot be differentiated from defensive ones, then it will be much harder to tell whether any particular state is greedy or not, since all kinds of states will build or deploy the same sort of armaments and adopt identical strategic postures. If, on the other hand, the defense enjoys an advantage over the offense, then greedy states will find it virtually impossible either to extend their control over additional territory or to enhance their prestige through conquest. and if it is possible to distinguish offensive weapons and strategies from defensive ones, then not-greedy states will have a much easier time keeping track of their. surroundings and will be able to react effectively and speedily to counter any actual threats that may arise.

In light of such observations, it may in the end be more useful to spell out the impact of the conditions that affect the virulence of the security dilemma than it is to classify states as “always-secure” or “potentially insecure.” States rarely face a fixed or stable security environment, so always-secure states must be rarities indeed. Glaser himself tends to conflate these two variables: “For example, as the adversary’s insecurity increases, expansion becomes more attractive if acquiring additional territory would provide a buffer zone against invasion or additional resources for defense and/ or would deny those resources to the defender.”⁴³ Whether the hypothesized increase in insecurity arises from changes in the strategic circumstances in which the adversary finds itself or results instead from the adversary’s character as a potentially insecure entity is on the whole unclear.

What is better articulated in Glaser’s account is the straightforward deduction that even always-secure or not-greedy states will have a strong incentive to launch an attack whenever the security dilemma becomes particularly dangerous. Specifically, such states may well resort to “necessary offense” in an effort either to “defend the status quo” or to deter an adversary from initiating a strike of its own if conditions favor the offense, or if offensive and defensive weapons and strategies cannot be distinguished from one another.⁴⁴ The incentive for always-secure or not-greedy states to engage in offensive operations diminishes as the security dilemma grows less severe, providing all states with the luxury of adopting policies that either emphasize defense or entail a large measure of “unilateral restraint.”⁴⁵

Domestic political structure

Glaser  posits an intimate connection between the structure of the policy-making apparatus and the policies that states adopt in confrontations with one another. In particular, military organizations and “interest groups that would benefit from large investments  in  military  capabilities  and/or  expansion”  are  likely.” (1) to exaggerate the offensive potential of opposing forces, which creates an ‘evaluative security dilemma‘ that fuels insecurity, and (2) to impute malign intentions to the opponent, even when the purpose of the defender’s forces is ambiguous.”⁴⁶ Any government dominated or heavily influenced by “groups that would benefit from large investments in military capabilities and/or expansion” can be expected systematically to “misperceive” or wrongly interpret the nature of an adversary’s actions, prompting it to implement belligerent policies that provoke equally hostile responses from those toward whom such policies are directed.

In much the same way, states that lack well-developed networks of advisers, analysts and experts who enjoy unhindered access to policy-makers are more likely to suffer the deleterious consequences of misperception and faulty evaluation. Sophisticated “national-level evaluative capabilities” are necessary to ensure that the subtleties of crisis bargaining will be apprehended and appreciated, thereby reducing the possibility, for instance, that “necessary offense” will be misinterpreted as aggression.⁴⁷ Rudimentary intelligence systems predispose states to react at the first signs of threat, whereas more accurate and appropriate intelligence permits policy-makers the luxury of hesitating before they commit themselves to implementing potentially counterproductive security-producing programs.

Moreover, states wrestling with severe domestic political conflict can be expected to manipulate foreign policy in an effort to shore up the regime. The conjunction of three particular internal conditions is particularly likely to precipitate expansionary or confrontational foreign policies: the eruption of a crisis of accumulation in the domestic political economy, the rise of powerful challengers to the regime and the adoption of programs to meet such challenges by individual forces inside the dominant social coalition that put their partners‘ interests in jeopardy.⁴⁸ Leaders who find themselves confronting a conjunction of these three domestic circumstances have clear incentives to escalate external crises not out of inherent aggressiveness, but rather as a way to preserve the ruling coalition’s increasingly-precarious collective predominance.

The Iraq-Kuwait conflict spiral

This alternative framework provides a more satisfactory account of why Iraq invaded Kuwait than does the conventional view. Elaborating the explanation involves first a fundamental recharacterization of Iraq’s motivations for launching the operation. One must then specify the nature of the security dilemma that shaped the interaction between Iraq and its neighbors during the spring and summer of 1990. The argument then situates Iraqi foreign policy in the context of the domestic political situation that confronted the regime. Taken together, these components suggest that the 1990 Gulf crisis bore the hallmarks of a classic conflict spiral, rather than those of a failure of deterrence.
 

Iraq as a potentially insecure, not-greedy state

Despite its sizable armed forces and substantial oil wealth, Iraq cannot be categorized as an always-secure state in the period immediately following the end of the Iran-Iraq war. In the first place, surrounding states controlled not only a major portion of the fresh water upon which the country’s agriculture relied but also the primary routes through which Iraqi goods entered the international market. The extent to which Iraq’s increasingly precarious water supply was vulnerable to manipulation by its northern neighbors became evident in January 1990, when Turkey interrupted the southward flow of the Euphrates River for thirty days, ostensibly to fill the massive reservoir behind the newly-completed Ataturk Dam. Similarly, the disruption of transport in and out of Basrah caused by the Iran-Iraq war had led Iraq to reorient its most important links to the outside world northward across southern Anatolia. By early 1990, more than 60 per cent of Iraqi oil exports were moving through Turkish channels.⁴⁹ Continuing reliance upon Turkey for the distribution of its petroleum prevented Iraq from protesting Ankara’s increasingly audacious manipulation of Euphrates water.

Second, Iraq’s pervasive vulnerability is indicated by its reliance upon an inordinately limited range of exports and an equally narrow range of purchasers for those products. After 1985, Iraq replaced Libya as the Arab economy having the highest export concentration index.⁵⁰ Consequently, the Iraqi economy found itself especially vulnerable to shifts and disruptions in its foreign trading relations, especially those with the richer industrial countries, as the 1980s drew to a close.

Third, Baghdad was unduly affected by the vicissitudes of regional diplomacy in the months after the Iran-Iraq war. No sooner had the August 1988 ceasefire taken hold than the members of the Gulf Co-operation Council took steps to improve relations with Tehran. These initiatives culminated in Kuwait’s unexpected resumption of formal diplomatic relations with the Islamic republic at the end of 1989, and the appointment of an Iranian ambassador to the Kuwait the following spring. The rapprochement led Kuwaiti officials to authorize the start of regular ferry service between Kuwait and ports along the Iranian coast at the very time that Kuwait was ignoring Iraqi requests to set up a commercial air corridor linking Kuwait with Basrah. To the extent that Kuwait pursued closer relations with Tehran-and by extension with Iran’s longstanding ally Syria-Iraq would sooner or later find itself encircled.

Heightened security dilemma in the Gulf

During the Iran-Iraq war, the Iraqi armed forces developed intermediaterange ballistic missiles capable of inflicting accurate retaliatory strikes against Iran. The spring of 1988 alone saw some 300 such strikes launched against Iranian cities in response to Iranian attacks on Iraqi population centers⁵¹. Iraq continued to test sophisticated ballistic missiles after the fighting stopped that August. A variety of locally-produced weapons systems went on display at the April 1989 arms exhibition in Baghdad; most of these systems were manufactures under license from foreign firms, but some were designed and manufacured by Iraqi firms using imported parts.

By the spring of 1990, Iraq’s armed forces were estimated to possess some 1000 short-and medium-range missiles, including the comparatively accurate al-Husain and the longer-range al-'Abbas. Newer missiles with even greater reach were in the final stages of development⁵². The drive to deploy such armaments accompanied the enunciation of a doctrine of strategic deterrence by the Iraqi leadership. Editorials in the Iraqi press argued that peace in the region demanded that Israel’s monopoly of strategic weaponry be offset by a credible Arab strategic arsenal, echoing Syrian calls for the Arab states to pursue “strategic parity” with Israel. More significantly, Iraqi strategists recognized that the limited number of strategic missiles in Iraq’s arsenal precluded their use as first-strike weapons: there were simply not enough missiles available for the country’s military commanders to contemplate launching an attack while holding sufficient missiles in reserve to ward off the inevitable Israeli counterstrike.

But even as Iraqi engineers were perfecting ballistic missiles with sufficient range to reach Israeli targets, the United States took steps to integrate Israel into the Strategic Defense Initiative. Throughout 1989 - 90, US experts provided financial and technical support for Israel’s Arrow anti-missile program.⁵³ Embarking upon the production and deployment of weapons systems specifically designed to limit the damage resulting from an exchange of nuclear or chemical strikes signalled not only that the US and Israel had abandoned the tenets of strategic deterrence, but also and more disturbingly that they had begun to contemplate the first use of nuclear weapons in the region. Nadim Jaber reported in April 1990 that “observers close to Iraq argue that Saddam was genuinely convinced an Israeli attack was imminent” as Israel’s anti-missile program progressed, and it was this conviction that precipitated the Iraqi president’s infamous 2 April speech warning that Iraq would retaliate by “burning up half of Israel” if Israeli forces ever again attacked Iraqi territory.⁵⁴

At the same time, a prounounced naval arms race had begun to take shape in the Gulf. The impact of maritime operations during the Iran-Iraq war inspired regional military commanders to order sophisticated warships for their arsenals when the fighting came to an end. Iran contracted with Poland for six new frigates, as well as an unspecified number of support vessels; at the same time, the authorities in Tehran initiated negotiations with Romanian engineering companies to design and construct a modern naval base on Qishm Island.⁵⁵ Saudi Arabia responded by purchasing a squadron of advanced frigates from France, as well as looking into ordering a number of submarines. These initiatives prompted Baghdad to order additional frigates from Italy. The new warships could only be docked at Khor Zubair, a facility whose approaches were dominated by the Kuwaiti islands of Bubiyan and Warbah.
 

Domestic political-economic crisis

Iraq’s drive into Kuwait took place in the context of a sharply escalating domestic accumulation crisis⁵⁶. Throughout the late 1980s, the regime in Baghdad adopted a series of policies intended to encourage the growth of private enterprise and market-based relations of production. This program was evident as early as 1985, when forty-two state industrial plants were sold to private entrepreneurs; but is was in 1987, with the sale of an additional forty-seven government firms to private interests, that the drive gathered momentum. When this second set of transactions was completed, the private sector gained a firm foothold in local heavy industry and food processing, complementing its existing predominance in light manufacturing, construction and real estate. The government’s commitment to privatization was underscored that fall by the replacement of the minister of heavy industry by the director of the multinational Arab Industrial Investment Company and the creation of a new planing agency charged with determining the feasibility of new private enterprises and supervising their establishment throughout the country.

These measures generated a severe shortage of operating capital in the Iraqi economy, which state officials attempted to ameliorate through increased borrowing from foreign financial institutions. The country’s total external debt was estimated at around fifty billion dollars in August 1987, a “sharply increasing portion” of which was coming from private commercial banks that charged nondiscounted interest rates. In addition, as a result of the continuing Iran-Iraq war, the economy suffered persistent disruptions in the flow of crucial machinery and spare parts from outside suppliers; difficulties in maintaining the productivity of local factories prompted the forced resignations of the ministers of the interior and of trade at the end of the summer. The regime responded to the crisis of 1987 by extending the privatization drive to include virtually all sectors of the local economy. Government officials leased agricultural lands held by state farms to private landholders and supported the activities of the new lessees with low-interest loans from the Agricultural Cooperative Bank. They opened the domestic market to private importers and commercial agents and doubled the reserves of the semiautonomous commercial bank in an effort to expand its lending and investment operations. The trend toward privatization was reinforced by a presidential memorandum circulated that fall that encouraged greater competition on the part of private entrepreneurs; in early October the regime announced that new private industrial investments would be exempt both from taxation and from mandatory contributions to employee profit-sharing arrangements for their first ten years in operation.

Privatization picked up speed following the Iran-Iraq war. Finance Minister Hikmat ‘Umar al-Hadithi told reporters in October 1988 that banking would be the next sector of the Iraqi economy to be deregulated and privatized. The first step in this process was to be the inauguration of a new investment bank to operate on equal terms with the existing Rafidain Bank, a move designed to inject a significant degree of competition into local financial affairs. In mid-November state officials publicized plans to establish a free zone for industrial enterprises and began soliciting German and Korean firms to participate in joint ventures with local companies. Meanwhile, a new company with a majority private shareholding was set up “with the approval of the president’s office” to process and export domestically grown dates. This move signalled the demise of the state-run Iraqi Dates Commission, Whose operations had already been severely undercut by an earlier decree permitting private traders to purchase dates directly from farmers and thus avoid the regulations imposed by the commission.

In April 1989, the Revolutionary Command Council adopted a new law allowing private commercial agents to operate as brokers between government agencies and foreign firms. The measure, know as Law 45 of 1989, removed all restrictions on the type of goods such agents could bring into the country; it also permitted agents to import capital goods worth up to 100 per cent of their commissions and other commodities worth up to 30 per cent of the commissions. Three months later, the RCC approved sweeping changes in the law regulating the number of branch offices that foreign companies could operate inside the country. The new rules allowed firms to open branches by contracting with local agents instead of with government agencies, significantly expanding opportunities for private commercial entrepreneurs. As 1989 drew to a close, the Agricultural Co-operative Bank published plans to offer low-interest, long-term loans to support the construction of a network of private warehouses equipped with modern refrigeration plants “in a bid to promote and accelerate agricultural development”, while the general public was invited to invest in a newly formed private pharmaceuticals company.

Wholesale privatization precipitated growing friction between public sector managers on the one hand and private manufacturers and merchants on the other. The state’s 1990 budget earmarked greater resources for industrial and agricultural investments, even as it slashed government support for financing imports. In addition, state planners indicated that  the ministry of industry and military industrialization would assume a larger role in supplying local factories with necessary inputs, ostensibly as a way of reducing the country’s mounting balance of payments deficit. As the new budget took effect, shortages of commodities and operating capital began to appear throughout the local economy, driving up prices and creating isolated pockets of black market activity. By mid-January the ministry of trade was forced to reintroduce subsidies on cereals, sugar, tea and cooking oil, while the president’s office released an additional five million dollars‘ worth of hard currency to enable private manufacturers around the northern city of Musil to import the raw materials and machinery they needed to keep their factories operating profitably. A subsequent presidential tour of provincial markets and shopping centers in Baghdad and Basrah convinced the government to authorize the expenditure of another 50$ million to support the importation of additional foodstuffs and other stapes. A further 600$ million was released at the president’s command in mid-February.

State officials complemented injections of funds with an intricate strategy of augmenting the country’s short-term indebtedness in order to finance new projects designed to lay the foundation for the expansion of nonpetroleum exports, thereby supplementing oil revenues as a future source of hard currency. In an effort to keep up with the payments on these relatively expensive loans, the regime dispatched high-ranking representatives to Iraq’s primary foreign creditors to request that the country’s longer-term financial obligations be rescheduled pending the resolution of the “short- term liquidity difficulty” gripping the country. Japan’s ministry of international trade and investment indicated a willingness to accept larger shipments of petroleum as a substitute for currency in repayment of outstanding loans, but the French government joined the United States Export-Import Bank in expressing doubts that Baghdad could reduce its debt service enough to make new loans secure.

Using the monies it borrowed from overseas, the Iraqi regime embarked upon a massive program of expanding and improving the port facilities at the adjacent southern termini of Khor al-Zubair and Umm Qasr. The former became the site of a 113$ million liquefied petroleum gas treatment plant and storage complex, linked to a new offshore loading dock, and of a $61 million, three-ship drydock capable of repairing vessels of up to six thousand deadweight tons. The latter site was earmarked to become the country’s main commercial port: plan to double the capacity of the grain storage silos at the terminus were announced in March, while ten additional berths capable of handling some 2.5 million tons of cargo per year were opened at the end of April, with another twelve berths under construction.

Iraq’s liberalization program created a relatively compact and powerful class of wealthy private interests inside the country. Kiren Chaudhry observes that the trend toward privatization sharply skewed the distribution of wealth: “Ownership of the newly privatized enterprises is highly concentrated. Thirteen of the 70 factories that were privatized were bought by one family. Not counting agricultural projects, this same family owns 36 of the very largest industries and over 45 million square meters of land”. The members of the resurgent bourgeoisie for the most part cultivated intimate personal and family ties to the ruling elite. Nevertheless, their very compactness endowed them with a degree of collective leverage that posed a long-term challenge to the Ba’thi regime. State officials attempted to preclude the emergence of overt opposition on the bourgeoisie’s part by taking steps to create a liberal-democratic political order. The vice chair of the RCC indicated on 30 March 1989 that the members of the National Assembly would be charged with ratifying a new constitution whose articles would permit the formation of authorized political parties and guarantee freedom of the press; he went on to hint that in time the RCC itself might be disbanded and the president chosen or confirmed by popular election. President Saddam Husain presided over a pair of joint sessions in March 1990 at which the special constitutional committee of the RCC and high-ranking members of the Ba’th discussed the implementation of a draft constitution. The draft was approved by the Regional Command of the Ba’th Party on 7 July and passed on to the National Assembly for ratification.

But at the same time the president and his allies in the RCC were harvesting the first fruits of their efforts to guarantee their continued predominance by incorporating Iraq’s re-emergent private interests into liberal-democratic institutions, officials in the party-controlled central administration implemented initiatives that threatened to undermine the autonomy of private sector enterprises. A number of new heavy industrial projects administered by the ministry of industry and military industrialization started operation in the spring of 1990. The most important of these produced metals, chemicals and other inputs used by the country’s privately-owned light industry. Meanwhile, the ministry of trade cut back the range of items that private importers were allowed to bring into the country using  funds  held  overseas.  Such  developments  promised  to buttress the position of the ministry of industry and military industrialization as a major competitor to private manufacturing.

State agencies recaptured a more prominent role in Iraq’s domestic and foreign economic affairs as the amount of subsidized foreign credit available to local enterprises shrank during and summer of 1990. Persistent Iraqi borrowing led France to curtail new lending to Baghdad at the beginning of the year, although the french minister of defense met with Iraqi minister of industry and military industrialization at the end of January to discuss arrangements whereby French aircraft and missiles could be assembled in the ministry’s plants. Rising anti-Iraq sentiment in the United States Congress culminated in the introduction of two bills in mid-April that dramatically reduced the level of credits open to Baghdad from the US Department of Agriculture and the Export-Import Bank; USDA credits contracted even further as the summer passed. Complicated alternatives to these credits proved largely unworkable, pushing Iraqi officials into greater reliance on barter arrangements whose terms fluctuated in line with the price of crude oil on world markets.

Gender- related co-ordination problems exacerbated the difficulties facing the regime during the first half of 1990. Women played an exceptionally active role in the Iraqi economy throughout the Ba’thi era. But during the course of the eight-year war with Iran, the rate of female participation skyrocketed in virtually all sectors of the local economy. As early as the summer of 1983 a British observer noted that “over the last year, the war has had a very significant impact on manpower. Nearly all experienced young men have been drafted, and have been replaced by well-qualified, but inexperienced, young women.”⁵⁷ The General Federation of Iraqi Women projected in the fall of 1983 that 28 per cent of the country’s industrial workers would be women by the middle of the decade, while the proportion reached even greater levels in some plants. The women’s federation estimated that more than fifteen thousand women passed through its industrial training programs in the 1980s. Federation members organized some seven thousand public markets during these years as well. Young women moved into the central administration and state-supported educational institutions en mass as the Iran-Iraq war dragged on; by the time of the August 1988 ceasefire female students made up the great majority of those enrolled in even the most technical degree programs at the country’s universities. As a result of all these activities, the General Fedration of Iraqi Women became the strongest of the party-affilitated popular organizations: more than 56 per cent of all adult women belonged to the federation by mid-1988.

Given the firm position of the country’s women in the domestic labor force, not to mention the rising level of unemployment among Iraqi men during the winter of 1989-90, the regime found it impossible to carry out a comprehensive demobilization of the country’s armed forces in the wake of the 1988 ceasefire. President Saddam Husain presided over a meeting of the military high command in late September 1989 at which the general staff decided to decommission five regular army divisions, releasing some 35,000 additional young men into the bursting domestic labor market. It is probably no accident that this move virtually coincided with a major change in the regulations governing the amount of Iraqi money that expatriate Arab workers could remit to their home countries. The Egyptian authorities in particular interpreted the sharp reduction in permissible remittances as a means of forcing foreign laborers out of Iraq. Those who tried to protest the new regulations were quickly arrested and deported by the state security services. By the spring of 1990, the difficulties arising from the reintegration of Iraqi soldiers into the local economy had become so pressing that the head of the women’s federation was taking an active part in the deliberations of the Revolutionary Command Council and was reported to have the ear of the president himself.

Under these circumstances, adopting a belligerent posture toward Kuwait could be expected to provide the regime in Baghdad with just the resources its constituent forces needed both to ameliorate their conflicts with one another and to prevent nascent opponents from acquiring a solid base from which to challenge their collective predominance. Most obvious, capturing the rich oilfields of Kuwait was likely to give the Iraqi government secure access to an even greater pool of hard currency, which could be put to good use in smoothing the rocky transition to a market-driven domestic political-economic order. Kuwait’s proven reserves of petroleum totalled some 94.5 billion barrels as of the end of 1989, a figure almost equalling that estimated for Iraq. Sale of this petroleum earned the Kuwaiti government almost 8$ billion  during 1988. Furthermore, by taking direct charge of production from Kuwait’s reservoirs, Iraq’s rulers would be in a position to regulate output from its neighbor’s wells in such as way as to stop-and perhaps even reverse-the slide in international oil prices that Baghdad blamed on Kuwaiti overproduction. Deputy Prime Minister Hammadi told a local radio audience on 1 September 1990  that “the new united Iraq” would adhere to the production quotas set for Iraq and Kuwait by the Organization of Petroleum Exporting Countries; he went on to say “Iraq’s returns, if estimated in view of its current quota, which is 4.6 billion [sic: million] barrels per day, and at the minimum price, which is now 25$ per barrel, will amount to 38.3$ billion annually”. Moreover, he speculated that the world market price would soon rise to 30$ per barrel, resulting in annual revenues of around 436$ billion. This sum would enable Iraq “to repay its debts in two to four years and invest in development between 10$ and 30$ billion”.

In addition, escalating the crisis could be expected to re-establish the position of the Ba’th Party apparatus and central administration as the primary actors in the Iraqi political economy, thereby providing a more orderly framework in which subsequent expansion of the private sector could occur. The Revolutionary command council announced on 11 August that anyone caught hoarding or speculating in foodstuffs would be executed; the decree noted that “the party and mass organizations and the competent authorities are responsible for monitoring hoarders very closely”. Rationing of flour, tea, sugar and rice was reinstates on 1 September, and the ministry of industry and military industrialization took over the distribution of fertilizers to farmers later that same month. Within the boundaries set by government agencies, private enterprise continued to be encouraged: a decree dated 5 September opened state lands to cultivation by individual farmers at greatly reduced rents. Deputy Prime Minister Hammadi observed that as a result of the incorporation of 833 industrial establishments located in the former territory of Kuwait into the southern economy of Iraq, “the private sector in new Iraq has expanded. ... Consequently, Iraqi industrial capacity has expanded and become more effective and active than it was in the past”.

Finally, heightened tensions with Kuwait provided the regime with the opportunity to relieve Iraq’s growing unemployment and gender-related coordination problems by remobilizing the country’s male population into military formations. On the morning of the invasion, the president promulgated an order rescinding the limitations that had been placed on the size and duties of the Popular army. Meanwhile, the general staff of the armed forces reactivated thirteen regular infantry divisions and the headquarters division of the al-Ahwar district and ordered “all demobilized reservists born in 1961, 1962, 1963, 1964, 1965 and 1966 [to] join their recruiting so that they can be sent to their unit’s training centers”. The remobilization of the armed forces accompanied a notable shift in the regime’s general orientation toward the women left behind as the men marched off to war: on 12 August the president broadcast a personal appeal to all Iraqi women that acknowledged that their “services in the home. the factory, the educational institutions, and the fields of culture and art, as well as in all other fields of activity and work, constituted a wide door to victory” during the course of the war with Iran. Nevertheless, he continued, “today, O glorious Iraqi woman, you have an additional role and responsibility to what you carried out under the previous circumstances and conditions. You are required to play a leading and distinct role in all walks of life, and in the home in particular. It differs slightly from the previous role due to the difference in circumstances and tasks. The leading role which I am urging you to play today, O glorious Iraqi woman, is to reorganize the family’s economic life. Such reorganization and the activities in all other fields will help us reorganize the economic life of the entire country”. This move was legitimated as a response to the embargo imposed upon Iraq by the United Nations Security Council. But it addressed the far deeper problem of how to reorder relations between the sexes so as to lessen both the friction that remained from the 1980s and the new problems that were likely to arise from attempts to balance work and family interests in the deregulated Iraqi political economy of the 1990s.

driving the conflict spiral

Iraq therefore assumed an increasingly belligerent posture toward Kuwait during the summer of 1990 not from a position of strength, but rather out of growing vulnerability and weakness. Iraqi criticism of the Kuwaiti government’s failure to adhere to the production quotas mandated by the Organization of Petroleum Exporting Countries became more strident after the authorities in Tehran rejected a proposal by President Saddam Husain that the two sides appoint high-ranking representatives to negotiate such outstanding issues as the exchange of remaining prisoners of war, the clearing of the Shatt al-'Arab and the demarcation of a permanent boundary between the two states⁵⁸, Baghdad’s concern over strategic developments along its southern borders heightened following an official visit to Kuwait by the Iranian foreign minister, ‘Ali Akbar Velayati, in early July 1990. At the conclusion of this talks with Kuwait’s rulers, Velayati announced that “the way is now paved for further co-operation in various fields” between the two governments.⁵⁹

More important, persistent Kuwait overproduction accompanied unprecedented United States military activity in the Gulf. The Baghdad newspaper al-Thawrah suggested in mid-July that “some rulers of the Gulf states are using oil in accordance with a subversive and short-sighted policy that serves only the enemies of the Arab nation. ...The paper described the policy of those Arab rulers as ‘American‘ and said it is being implemented upon instructions from the United States.”⁶⁰ On 22 July, al-Thawrah claimed that Kuwait policy was designed “to facilitate the sending of foreign forces that seek to intervene in the region. ... [T]he Kuwait rulers have kept the US flag on their tankers to provide the excuse for elements of the US Navy to remain in the Gulf waters despite the cessation of hostilities” between Iraq and Iran.⁶¹ Radio baghdad was especially critical of the joint naval and air exercises carried out by warships of the US and United Arab Amirates the third week of July, labelling them “part of a comprehensive conspiracy against the Arab nation and against Iraq in particular by US imperialism and Zionism.”⁶² President Saddam Husain had warned in late February 1990 that more active United States military intervention was to be expected in the Gulf following the end of the cold war and the retreat of Soviet influence from the Middle East; events that summer merely confirmed his reading of the strategic situation in the region.

Conclusion

To the extent that Iraq resorted to blatant coercion in its dealings with Kuwait during the spring and summer of 1990 from a position of growing vulnerability, overt Unite States military intervention in the Gulf that July generated a classic conflict spiral. Iraq’s character as a potentially insecure, not-greedy state made it virtually impossible for deterrence to operate as US policy-makers may have intended. In fact, unprecedented forms of American military involvement in the region generated further threats to Iraqi security, eliciting even greater belligerence on Baghdad’s part. Washington’s evident willingness to exercise military muscle in Gulf affairs led the Iraqi leadership to conclude that it must take desperate measures to buttress the country’s strategic position before the United States and its allies succeeded in circumscribing Iraq’s ability to influence the course of future events in the region.

From this point of view, the desultory debate that occupied the United States Congress during the fall of 1990 over whether Iraq should face immediate punishment or be subjected to economic sanctions largely missed the point. In light of Iraq’s underlying vulnerability, any peaceful resolution to the crisis would have demanded a subtle and complex admixture of threats and reassurance on washington’s part. different kinds of sticks would have made little if any difference to the way situation unfolded.

Last, the argument advanced here implies that the eventual outcome of the 1990 crisis left Iraq in an even more vulnerable position than it had been before the invasion. It therefore should come as no surprise that the leadership in Baghdad continues to probe the margins of the postwar order in the Gulf. Iraq’s persistent unwillingness to acquiesce in the new status quo arises not from the essential aggressiveness of the current regime, nor from Saddam Husain’s dogged refusal to learn his lesson, but out of the simple fact that almost all of the major sources of Iraqi insecurity that precipitated the 1990 invasion of Kuwait remain intact.