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GW-2 Desert Shield June 28, 2016 Page 37 Chapter Two: Desert Shield: The Historical Framework1 The Gulf War occurred in the midst of a radical change in the balance of power that shaped the world after 1945. It was the first major conflict of the post-Cold War era, and the first time since World War II that the US and Russia cooperated in a major effort to repel aggression. It established a broad coalition between the West and Arab states that demonstrated the potential ability of cooperative defense to repel aggression and execute peace enforcement. While Bosnia and Somalia have already demonstrated that the Gulf War will scarcely be a paradigm for all future peacemaking operations, the Gulf War does indicate the potential that international peacekeeping and cooperative security can have when nations perceive their vital strategic interests are at stake -- even when this involves high intensity conflict. There are many lessons that can be learned from the history of the war, and this includes the preparation for the conflict. Iraq's invasion of Kuwait reveals important lessons about strategic warning and deterrence. The international reaction to Iraq's invasion tells much about the process of coalition building and the strengths and limits of the UN. At the same time, the changes in Coalition and Iraqi forces tell much about both power projection and the forces that shaped the outcome of the war. Iraq: Guns, Butter, and Bankruptcy There was nothing inevitable about Iraq's invasion of Kuwait. It came at a time when Iraq had emerged from the Iran-Iraq war with greatly enhanced status and prestige. Iraq was the dominant military power in the Gulf, and the most powerful military force in the Arab world. It had virtually destroyed the Iranian army during the final battles of the spring and summer of 1988 and had obtained billions of dollars in aid from southern Gulf states, including Kuwait. The West and many Arab states had accepted Saddam Hussein's regime as "moderate" and "pragmatic," while Iraq's military strength and possession of weapons of mass destruction gave it immense regional influence. Iraq was not being driven to further military expenditures by external threats. Iran had lost 40% to 60% of its major land force equipment during the final battles of the Iran- Iraq war. Most of the Iranian air force had limited or no operational capability, and Iranian sea power had been decisively checkmated by the Western presence in the Gulf. Although Iraq faced the problem of paying its wartime debts, many of these could have been renegotiated, and probably forgiven entirely, by its Southern Gulf neighbors. Other than Iran, Iraq faced no other military or political threats.2 Copyright Anthpony H. Cordesman, all rights reserved. GW-2 Desert Shield June 28, 2016 Page 38 Iraq had little justification in invading Kuwait in terms of historical legitimacy. While Iraq did claim it was "liberating" territory stolen from it by Britain, Iraq had no real claim to Kuwait as a successor state. Iraq had been created by Britain after the collapse of the Turkish empire at the end of World War I. Kuwait had technically been part of the Ottoman province of Basra, but it had signed a comprehensive agreement with Britain in 1899, and its boundary had been demarcated by the Anglo-Turkish convention of 1913. Iraq was created as a state in 1920, while Kuwait had existed for more than two decades as a small autonomous Bedouin settlement.3 The key pressures driving Iraq towards invasion were a combination of an economic crisis triggered by its search for further military power, and the belief of the Iraqi leadership that it deserved much more generous help from its southern Gulf neighbors. Iraq did not react to its victory in the Iran-Iraq by concentrating on economic recovery. Instead, it chose to spend billions of dollars on missiles and biological, chemical, and nuclear weapons and billions more on grandiose civil development projects. This decision followed a long standing pattern in Iraqi arms imports and military expenditures, and one that should have been a warning of Iraq's future intentions. Iraq's invasion of Iraq had already cost it dearly. Measured in constant 1991 dollars, Iraq's GNP peaked during 1980, with a total of over $85 billion. The Iran-Iraq war rapidly cut its GNP to $39.8 billion in 1981 and $35.5 billion in 1982, as the result of the impact of a combination of wartime damage, the inability to export oil through the Gulf and Syria, and lower oil prices. Aid for other Gulf states gave Iraq a GNP of $47.9 billion in 1983 and $48.3 billion in 1984, but cuts in the flow of such aid let Iraq's GNP drop to $41.1 billion in 1985, and levels below $40 billion during the rest of the 1980s. It was only $35.3 billion in 1986, and around $39 billion in 1986 and 1987 -- about half of Iraq's GNP in 1980. The ceasefire in the Iran-Iraq War did nothing to alter this trend. Iraq's GNP was only $37.4 billion in 1989.4 Military Spending Becomes a National Crisis In spite of this decline in national income, Iraq's military expenditures remained at around 30% of its percentage of GNP from 1978 to 1984. After 1984, when the Iran-Iraq war grew even more threatening, Iraqi military spending rose to 44% of its GNP in 1984, and stayed close to 40% for the rest of the war.5 Although it faced growing limits on its foreign borrowing capacity, Iraq could sustained this level of expenditures because aid from southern Gulf states like Kuwait and Saudi Arabia and credit from nations like France and Japan. Iraq's debt to its Arab neighbors totaled at least $37 billion by 1989.6 To put these Iraqi military expenditures in perspective, the US Arms Control and Disarmament Agency (ACDA) estimates that Iraq spent $16,820 million in constant 1989 Copyright Anthpony H. Cordesman, all rights reserved. GW-2 Desert Shield June 28, 2016 Page 39 dollars on military forces in 1978, $17,520 million in 1979, $28,030 million in 1980, $31,770 million in 1981, $30.4 million in 1982, $29,500 million in 1983, $29,200 million in 1984, and $20,730 million in 1985.7 It is not possible to compare these estimates directly with more recent ACDA estimates of Iraq defense spending, but ACDA has since estimated that Iraqi military spending in constant 1991 dollars, was $10.1 billion for 1981, $15.89 billion in 1982, $18.7 billion in 1983, $21.4 billion in 1985, $15.6 billion in 1986, $16.8 billion in 1987, $15.6 billion in 1988, $11.9 billion in 1989, $12.4 billion in 1990, and $9.5 billion in 1991.8 Iraq's arms imports represented a large part of the massive burden that military expenditures placed on Iraq's economy. During the latter half of the Iran-Iraq war, from 1984-1988, Iraq took delivery on $29.7 billion worth of new arms in current dollars, including $15.4 billion worth of arms from the Former Soviet union, $0.75 billion from Poland, $0.65 billion from Bulgaria, $0.675 billion from Czechoslovakia, and $2.8 billion from the People's Republic of China. Iraq obtained $3.1 billion from France, $0.37 billion from Italy, $0.03 billion from the UK, $0.675 billion from Germany, and $5.2 billion from other countries.9 During 1989 to 1990 -- which covers most of the period from the end of the Iran- Iraq war in August, 1988 to the beginning of the embargo on arms shipments to Iraq in August, 1990 -- Iraq ordered only $1.7 billion worth of arms. Some $200 million worth were ordered from the Former Soviet Union, $500 million from major West European states, $100 million from other European states, and $900 million from other countries. Iraq did, however, take delivery on $5.0 billion worth of arms during 1989-1992, including $1.5 billion worth of arms from the Former Soviet union, $400 million from the People's Republic of China, $2.1 billion from major West European states, $600 million from other European states, and $ 400 million from other countries. Deliveries exceeded orders because Iraq had a large pipeline of deliveries from prior orders.10 The data on Iraq's annual arms imports are controversial, but US sources estimate that Iraq maintained very high levels of arms imports during the Iran-Iraq War. These estimates indicate that Iraq imported $6,419 million worth of arms in 1981 in constant 1991 dollars, $9,981 worth in 1982, $9,320 in 1983, $11,900 in 1984, $6,113 in 1985, $7,289 in 1986, $6,947 in 1987, and $6,123 in 1988. In contrast, Iraq imported $2,495 worth of arms in 1989 and $2,912 in 1990 -- before UN sanctions reduced its arms imports to zero.11 Although Iraq cut its rate of new arms orders during 1989-1990, it still ordered $1,125 million more during the first six months of 1990, and took delivery on nearly $3 billion worth of military imports, of which $1,435 million went towards new arms. This level of expenditure raised Iraq's international debt to the West to at least $40 billion -- and Copyright Anthpony H. Cordesman, all rights reserved. GW-2 Desert Shield June 28, 2016 Page 40 some experts feel that Iraq's total debt was in excess of $70-80 billion including all of Iraq's debts to Arab states.12 By 1989, the year between the Iran-Iraq war and Iraq's invasion of Kuwait, Iraq's handling of its post Iran-Iraq War debt had already begun to create a serious economic crisis.